[dynm]

Like most people, surveillance pricing feels gross to me. But I think we need to separate two things: Surveillance pricing is a combination of (a) price discrimination and (b) surveillance.

If it were up to me, I'd probably give people much stronger legal rights to control their personal information, which would in turn decrease "surveillance".

But I haven't seen a convincing argument to ban price discrimination. There seems to be some kind of implicit assumption that price discrimination reduces consumer surplus on average. But I've never seen a convincing argument to that effect.

For example: Pharmaceuticals are often priced much low in poor countries. That's price discrimination. (You could think of it as a primitive form of surveillance pricing.) But if that were banned, pharmaceutical companies wouldn't lower prices for everyone. That would destroy almost all their revenue which comes from high prices in rich countries. Instead, they'd charge rich-country prices to everyone, and most people in poor countries would simply have to go without. That seems like it would be pure harm.

It's entirely possible that some kind of "coarse" price discrimination is OK/good but "fine-grained" price discrimination is bad. But where's the argument?

[ndriscoll]

Well for one it undermines the currency by making my dollar worth something different from your dollar, makes it impossible for individuals to make informed choices, and makes it so that there's no reason to try to be more productive/chase some higher paying endeavor since it will be extracted for your basic necessities anyway and you'll end up in the same position. So now labor price signals fail.

We already see the results of this in the US in the medical and educational systems, where planning is nearly impossible because the price is hidden until purchase (or even afterward) and the other side is trying to price it at "whatever you have". Unsurprisingly, both of those have absurd debt loads and are causing society-wide discontent/destabilization.

Now imagine that grocers can individually price to you, and you find out what you owe (and whether you need to put some items back) at the register, and this information about you is available to be purchased by anyone so all available grocers have that same knowledge. What are you going to do?

[pc86]

> It's entirely possible that some kind of "coarse" price discrimination is OK/good but "fine-grained" price discrimination is bad. But where's the argument?

This seems entirely reasonable - they're obviously a point where tax rates are too low and revenue isn't being brought in, but also a point where tax rates are too high, incentivizing tax shelters or outright crime, and revenue starts decreasing again. The price discrimination side is the same thing just on "optional" purchases instead of taxes so it makes sense there is some Laffer curve corollary.

[inigyou]

For some reason things that are considered bad for the government to do are considered fine for corporations to do more. Rent is a tax.

[Schiendelman]

It's not necessarily obvious that tax rates can be too low. If you're a government and you issue the currency, you can get much of the same outcome as taxation by printing the money you need to spend. What you don't get by doing that is natural redistribution the way graduated marginal rates give you. You have to spend to redistribute.

[inigyou]

You get too much inflation that way. Taxation is a mechanism of destroying currency to cause deflation to offset the inflation caused by government spending.

[Schiendelman]

I'm not sure any currency gets destroyed. We run a deficit anyway.

[pydry]

Price discrimination isn't about wealth. A poor person who books a flight the day before because of an emergency pays more than a rich person who books it 3 months out.

Pharmaceuticals lobbying hard to get the UK to stop buying drugs on the national level (where they have enormous pricing power) and make hospitals responsible for buying drugs. This would be terrible for the UK.

[cameldrv]

For airline tickets, it's mostly not about wealth yet, at least on U.S. domestic routes. I know that for some international tickets, especially between a rich country and a poor country, the price can be different depending on whether you are buying in the currency of the rich country or the poor country, and I think, if it's a round trip, whether it's originating in the rich country or the poor country.

You really see this in spades with Uber/Lyft though. I've often compared Uber prices with friends of mine and there can be a big difference for the same trip at the same time with two different people.

This phenomenon unfortunately makes me much less bullish on the AV future, because robotaxi providers will try to do this to extract the maximum cash out of users. Someone who decides to sell their car and just take automated rides is going to get gouged because the algorithm is going to figure out that they have no alternative.

One thing I've found with a lot of adversarial algorithms is that you have to demonstrate to the algorithm that you have an alternative. For example, if you consistently check prices on the Uber and Lyft apps and pick the lowest cost one, they will notice when you price out rides and then don't take them, and you will get better prices.

Similarly, with feeds, I have been finding that Facebook and YouTube want to push me short video content, even though I don't like it and don't watch it. You can push the button that says "Show Less" or "Not Interested", but they generally don't care. What works is when they show you something you don't like is to close the app and do something else. That is a signal that they respect.

[randycupertino]

> You really see this in spades with Uber/Lyft though. I've often compared Uber prices with friends of mine and there can be a big difference for the same trip at the same time with two different people.

This even happens with your own Uber accounts- when I'm logged into my work Uber account the prices are always $5-$25 more expensive but if I toggle to my personal Uber account they drop immediately for the same ride. I asked our work accounting team (with screenshots!) if I could just use the cheaper ride via my personal account and expense it to save the company money and they said no lol.

[fluoridation]

>You can push the button that says "Show Less" or "Not Interested", but they generally don't care. What works is when they show you something you don't like is to close the app and do something else. That is a signal that they respect.

I just added a rule to uBP to delete the element from the DOM.

[TheCoelacanth]

Yeah, surveillance pricing might sometimes result in poor people paying less because they care more about low prices, but it can just as easily result in them paying more because they have less economic power.

If we want to subsidize poor people, we should probably just transfer money to them instead of trusting for-profit companies to charge them less.

[johnnyanmac]

>But I haven't seen a convincing argument to ban price discrimination.

It's in the name. Does having a Mexican person pay more for taco shells than a Caucasian not immediately ring legal bells?

>Pharmaceuticals are often priced much low in poor countries. That's price discrimination. (You could think of it as a primitive form of surveillance pricing.)

That's not surveillance pricing in the same way that utilizing local cookies isn't personal data farming. It's the first step to a much more nebulous web, but no one is saying that businesses can't price based on the area. It's only when amassing millions of user's data that unexpected trends arise that such data becomes dangerous.

[stillwaitingla]

> But I haven't seen a convincing argument to ban price discrimination.

The very definition of "price discrimination" is the convincing argument.

    "How much does this candy bar cost?"
    "Well, you social credit profile says you payed $700 for pair of shoes last week so... twelve grand."
    "But the guy in front of me just paid 35 cents for the same candy bar."
    "Well, I mean, *he* is white."

Meanwhile, dynm:

> But where's the argument?

Looking to big pharma for guidance is depressingly hilarious.

[gruez]

>The very definition of "price discrimination" is the convincing argument.

>...

Your inflammatory wording is doing a lot of the heavy lifting here. Remove that and it seems far more acceptable

    "How much does this candy bar cost?"
    "$3"
    "But the guy in front of me just paid $1 for the same candy bar."
    "He's rewards club member so he pays the members' price of $2, then used a $1 off coupon on top"

[tavavex]

You didn't remove the inflammatory wording, you quietly swapped their argument for a completely different one.

Coupons are not the same as surveillance pricing, because coupons only adjust the price down. They're the way manufacturers get people to try products they wouldn't have bought otherwise. Very importantly, coupons are used by very few people, most still pay the retail price, which forces that price to still remain competitive. Also, anyone can choose to use or not to use coupons. Surveillance pricing is a mandatory price cut or hike that's assigned to you personally by seeing how desperately you want an item and how much you can afford to pay. It's just abusing your customers for the last scraps of cash they have left in exchange for the same product.

Member-only prices are closer to surveillance prices because they make you trade away your purchasing and location data, or even enter some kind of a financial contract with the company, in exchange for a lower price. But it's still nowhere as evil because most people still pay the normal retail price, so the difference between the two prices can't be too disconnected from reality, and because the hoops they make you jump through are still technically free, so it's not dependent on your ability to pay.

[inigyou]

More relevantly, someone who sees $70 for a chocolate bar and has a $69 off coupon probably won't be back to "that store with the stupid prices."

[NoMoreNicksLeft]

Poor countries aren't in danger from this... we can't ban price discrimination in other countries because they have sovereignty, and the pharmaceutical company isn't monolithic. The one operating in another country is another corporation that must follow that countries rules, and will be granted a license from the American parent company to decide for itself what pricing to impose there (which will be controlled by that country's laws on drug pricing).

It's how it works now, and we don't much have the ability to change that. If we tried, the pharmaceutical companies would be in danger... those countries can spin up factories to make the same drugs and just ignore the patents. A behavior/strategy they want to avoid encouraging.

[zzo38computer]

Different countries use different money, and also if they sell in the place then it can still be a price for the different place, which does not necessarily involve surveillance, nor does it necessarily involve hidden fees, etc.

(If they try to prevent someone from buying them and using them elsewhere or buying one for a specific other person who requested it who they do not know, then that is different, but it might lead to different issues (e.g. liability of tampering with medications, different regulations in different countries, etc).)

[toss1]

Simple

There are two ways to legally "earn" money. The first is to provide a product or service that is sufficiently valuable the buyer willingly parts with the money for the price.

The other is extractive — to find a way to exploit the customer with limited choices and extract the maximum value from them. Monopoly pricing is the primary example — people need electricity, housing, food, etc. and if someone corners those markets, or colludes, they can extract a far higher amount of money from people than they would willingly spend in an actually free market of multiple competitors and fully available information (wherein another competitor would offer prices closer to the cost of production and take the business from the overpriced competitor).

Production of value is the essence of the value of capitalism. Extracting value by coercion is fundamentally corrupt, and at the extreme end is nothing more than mob rule ("nice store windows you got there, it'd be a shame if something happened to them; pay us for protection").

Surveillance pricing is simply a fundamentally dishonest form of the latter, exploiting massive amounts of information on customers to extract more money from a person than they would be freely willing to pay for a product, because you found a temporary or permanent vulnerability and 'have them over a barrel'.

A society that permits surveillance pricing will inevitably become more impoverished because the few players doing surveillance pricing will extract more money from the society WITHOUT creating any more value. This impairs everyone else's ability to provide value.

Allowing it is fundamentally stupid and self-destructive.

[gruez]

>A society that permits surveillance pricing will inevitably become more impoverished because the few players doing surveillance pricing will extract more money from the society WITHOUT creating any more value. This impairs everyone else's ability to provide value.

Why can't it be both? SpaceX created starlink, which I don't think anyone doubts is "a product or service that is sufficiently valuable the buyer willingly parts with the money for the price". Yet at the same time it engages in price discrimination. They have different service tiers with various restrictions placed on them. For instance, the cheapest tier costs $55 but must be stationary. The unlimited aviation tier costs $200k[1] but works on a plane. While I'm sure there's some cost differences between serving the first plan vs the second, it's pretty clear there's some discrimination going on. Does that SpaceX is "extracting more money from the society WITHOUT creating any more value"? Would society be better off if starlink was forced to charge one price?

[1] https://www.corporatejetinvestor.com/news/starlink-price-ris...

[toss1]

Good distinction! Varying service tiers are different from surveillance price discrimination.

It is not a difference for each person; it is a difference for a different category or type of person or service.

It is not exploiting spying on a person's private life and seeing when they are desperate or get the DGAF discount.

The SpaceX stationary/mobile distinction actually provides a better service - for more money, you get to move around. I'm not sure if it puts any higher load on the system but my guess would be the excess profit exceeds the extra cost of tracking a mobile terminal.

They aren't great, but are at least fair. Airlines have also been doing it for decades, beyond economy/biz/first but also cheaper if your flight includes a Saturday stayover (extra $$ for typical biz travelers) and far more sophisticated schemes now.

Similar for parking lots charging more per hour during business hours vs nights/weekends.

The key is the category-type prices are not exploiting an unfair advantage by prying into individual customer's private lives.

Is it on a similar (slippery) slope of charging more without providing more value? Sort of. But they really are very different things.

[8note]

i expect rather than being a couple stores doing it, it will be a separate company acting as a cartel across stores forcing some people to always pay more no matter where they go

[tekno45]

Take control of medicine away from private interests.

[pc86]

OK maybe but that's a completely different thing unrelated to the point of the article or comment.

[stronglikedan]

And give it to who, governments? The ones that can't even get universal healthcare right anywhere it's been implemented?

[lux-lux-lux]

That’s…the exact opposite of what the data says?

[inigyou]

Americans pay more taxes for healthcare than Europeans do. And it doesn't even give them healthcare, so then they have to pay again to buy their healthcare. And then when they get to the hospital they find it's out of network so they have to pay a third time.

[bryanlarsen]

Reductio ad absurdum:

Your local water monopoly has perfected price discrimination. Since water is a necessity, the water monopoly sets the price of water to "everything you own".

[gruez]

>Your local water monopoly has perfected price discrimination. Since water is a necessity, the water monopoly sets the price of water to "everything you own".

This says more about monopoly power abuse than problems with "price discrimination". Food is also essential, yet prices don't rise to "everything you own" (even for the poorest) because of competition.

[bryanlarsen]

That's called "the consumer price surplus". It's one of the major reasons that market economies are better for everyone than command economies. And it's the antithesis of price discrimination.

You're right about monopolies -- price discrimination is a symptom of monopolistic pricing powers. It's not that price discrimination should be illegal, it's that successful price discrimination is a strong symbol of monopoly, and the FTC should be cracking down.

Patents and copyright are legal monopolies. Price discrimination is rampant in fields like pharmaceuticals and software which use these. If we can't get rid of the monopoly, at least we should crack down on price discrimination.

[gruez]

>That's called "the consumer price surplus". It's one of the major reasons that market economies are better for everyone than command economies. And it's the antithesis of price discrimination.

I'm not denying this exists, just pointing out your Reductio ad absurdum is absurd and fails rhetorically. If your point is that without surveillance pricing legislation, people selling us essentials will milk us for the last dime we have, that simply isn't happening today.

> It's not that price discrimination should be illegal, it's that successful price discrimination is a strong symbol of monopoly

This isn't obviously true. For instance, airlines engages in intense price discrimination, with different fare classes, discounts, and changing princes per day, yet the industry has famously poor margins - the exact opposite of a monopoly. Same for games and movies (they get heavily discounted after release), and while you can argue the copyright system gives them a monopoly, it's only on that particular work. There are plenty of other games or movies to choose from.

[bluefirebrand]

> If your point is that without surveillance pricing legislation, people selling us essentials will milk us for the last dime we have, that simply isn't happening today

https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada

They don't even need surveillance pricing, they already try to do it. This wasn't some 1920's scheme, this was very recent.

It seems to me that the level of surveillance we're talking about, with dynamic pricing, would make it both easier for them to gouge and harder for price fixing to detect. Win win for slimy capitalists.

Edit: so maybe you're right that given the opportunity, no one is trying to milk you for literally every dime you have. Still, we should probably not allow businesses to milk the average person for every dime they can get away with, either. That's still bad for society.

[WarmWash]

>For example: Pharmaceuticals are often priced much low in poor countries. That's price discrimination. (You could think of it as a primitive form of surveillance pricing.) But if that were banned, pharmaceutical companies wouldn't lower prices for everyone. That would destroy almost all their revenue which comes from high prices in rich countries. Instead, they'd charge rich-country prices to everyone, and most people in poor countries would simply have to go without. That seems like it would be pure harm.

Well you simply make it illegal to charge more than the poor country prices and, bare with me here, you also make it illegal to go bankrupt.

[everdrive]

I think very few people are thinking about the harder economic arguments here. We know that if companies are drawing prices, they'll do it in the way that most hurts the consumer and most benefits the company. Or more realistically, in the way that the company _perceives_ it benefits them the most.

I'm not necessarily opposed to the ideas you're talking about, I just have zero faith that anything positive will be stood up if companies have their say.

[Schiendelman]

In the real world, the best examples of price discrimination I'm aware of are lowering published prices for those who can't afford as much. Wwre you thinking of another example?