Seattle City Council votes to ban surveillance pricing in sale of groceries
Thread
Unofficial Hacker News client; not affiliated with Y Combinator.
Seattle City Council votes to ban surveillance pricing in sale of groceries
Unofficial Hacker News client; not affiliated with Y Combinator.
apparent · · focus · HN ↗
> The bill also permits a vast array of discounting practices while requiring increased transparency around discounts and placing some limitations on how consumers can be profiled.
The issue isn't "hey, you gave me a custom price that was disadvantageous". The issue is that "you gave me the regular price for some item but gave discounts to other people". That's trickier to outlaw because the "bad price" is the regular price, not a special discounted price.
If businesses are behaving badly, what they're doing is setting high regular prices and then discounting items that they don't think you'd otherwise buy. For items that you buy all the time, they're giving you minimal or no discounts.
But if you tell them they can't do this profiling, then they'll presumably resort to some mix of (1) no discounts with slightly lower overall pricing or (2) some loss leaders but otherwise regular pricing.
It's not especially clear to me that in the long run this is much better for consumers. They might get slightly more consumer surplus, but I doubt it will make that much of a difference. People in a given area probably have fairly similar buying patterns, plus they can still use loyalty programs, student/senior discounts/etc., as well as traditional coupons, to let customers sort themselves into "I'm generally price conscious" and "my time is worth more than my money".
jsrozner · · focus · HN ↗
> But if you tell them they can't do this profiling, then they'll presumably resort to some mix of (1) no discounts with slightly lower overall pricing or (2) some loss leaders but otherwise regular pricing.
That's not true. Competition with other market participants should in theory (assuming competition) be sufficient. The firms are in general already charging the profit-maximizing price. They could, however, increase profits with more information.
But there is the additional problem that they will also monetize this information by selling it into advertising markets. The whole point of this business model is to capture previously uncaptured value that would otherwise have been shared in the commons.
Legend2440 · · focus · HN ↗
Not necessarily. Look at airlines for example, which make heavy use of price discrimination. This allows them to offer a lower economy price to people who have less money, while subsidizing the flight by charging a higher price to business or luxury travelers.
If they were only allowed to offer one type of ticket at one price, it would mostly benefit richer passengers while pricing the poorest passengers out of air travel.
cogman10 · · focus · HN ↗
The practice that needs to be outlawed is invisible and per customer pricing. It would be the airline for the same class of seat charging different amounts because, for example, their profile of the flier shows they recently searched for "casket" and so they are likely heading to a family funeral.
It would be as if the airline for their economy class offered the flight for $1000 if you don't play, $600 to attract customers into buying, and $800 if they find their customer is desperate. All for the same seat.
Legend2440 · · focus · HN ↗
You've picked an "evil" example, but what price discrimination really tends to look like is charging richer people more.
Prices are generally lowered for poor people because they'd rather have your $300 than have an empty seat. If you don't have $800, no amount of desperation will make you pay it - you'll just miss the funeral.
lokar · · focus · HN ↗