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The quote is a good way to summarize what economists call "price discrimination" or "differential pricing." I think the practice generally results in a lower pr

The quote is a good way to summarize what economists call "price discrimination" or "differential pricing." I think the practice generally results in a lower price for the people who "do care" than what they would have gotten with no price differences, because they end up getting a below average price. Although my understanding of that is sketchy.

Eridrus 9y ago
I think it depends a little on how you define "do care". I think people are concerned that prices will rise to an extent they will care about, but that they are still willing to pay, i.e. demand is not very elastic. E.g. if your tank is empty, you're willing to pay an exorbitant price, but you certainly won't be happy about it. So, I think it depends a little on the actual implementation. If this really is about giving people who are very price sensitive a discount I don't think people will mind a lot, but if these algorithms learn to gouge people who are in a predicament, they won't be happy.
- nucleardog 9y ago
  If you're price sensitive then you don't wait until your tank is near empty and fill up when the price may be high. You try and plan ahead a little and fill when prices are at a lower point than average. Me? When I hit a quarter tank I go fill up. It's a fuel hungry sports sedan that runs on premium, I resigned myself to the fuel expenses before I even purchased the car. I honestly don't even look at the prices because it's just really not worth the time to worry about for me.
gefh 9y ago
It's the doublespeak justification for it - "we're helping people by maximizing our profits" - that gets me.
- bmelton 9y ago
  Airplanes not being the best example, since they control the entirety of the supply chain, but if they were more like arena ticket sales, or sports-team ticket sales, then they actually would be helping people by maximizing their profits. In the case of musicians, most of them undersupply and underprice their tickets, which means that there's a market for reselling. For a variety of reasons, they keep prices low so as to ensure a sold out venue as best they're capable, and when prices are lower than they ought to be, ensures a market for resellers. Resellers help offload the risk to the original sellers, but if the sellers were capable of maximizing profits in the first place, buyers would benefit by not having to deal with the perils associated with gray market sales. Also, the artists / venue / middlemen would make more money. http://www.aei.org/publication/ticket-scalping-as-an-efficient-market-for-risk-management-that-helps-not-hurts-mick-jagger-and-the-rolling-stones/ http://www.aei.org/publication/ticket-scalping-as-an-efficie...

Eridrus 9y ago

I think it depends a little on how you define "do care". I think people are concerned that prices will rise to an extent they will care about, but that they are still willing to pay, i.e. demand is not very elastic. E.g. if your tank is empty, you're willing to pay an exorbitant price, but you certainly won't be happy about it. So, I think it depends a little on the actual implementation. If this really is about giving people who are very price sensitive a discount I don't think people will mind a lot, but if these algorithms learn to gouge people who are in a predicament, they won't be happy.

nucleardog 9y ago
If you're price sensitive then you don't wait until your tank is near empty and fill up when the price may be high. You try and plan ahead a little and fill when prices are at a lower point than average. Me? When I hit a quarter tank I go fill up. It's a fuel hungry sports sedan that runs on premium, I resigned myself to the fuel expenses before I even purchased the car. I honestly don't even look at the prices because it's just really not worth the time to worry about for me.

gefh 9y ago

It's the doublespeak justification for it - "we're helping people by maximizing our profits" - that gets me.

bmelton 9y ago
Airplanes not being the best example, since they control the entirety of the supply chain, but if they were more like arena ticket sales, or sports-team ticket sales, then they actually would be helping people by maximizing their profits. In the case of musicians, most of them undersupply and underprice their tickets, which means that there's a market for reselling. For a variety of reasons, they keep prices low so as to ensure a sold out venue as best they're capable, and when prices are lower than they ought to be, ensures a market for resellers. Resellers help offload the risk to the original sellers, but if the sellers were capable of maximizing profits in the first place, buyers would benefit by not having to deal with the perils associated with gray market sales. Also, the artists / venue / middlemen would make more money. http://www.aei.org/publication/ticket-scalping-as-an-efficient-market-for-risk-management-that-helps-not-hurts-mick-jagger-and-the-rolling-stones/ http://www.aei.org/publication/ticket-scalping-as-an-efficie...