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“Markets Today Are Not What We Believe” – The Façade of Competition

sharemywin 9y ago
That's what worries me about things like Alexa and Siri, they turn just about every market into winner take most. Siri I'd like a pizza. "no problem I have a Domino's pizza delivered with your favorite toppings." I was in the mood for pizza hut. "No problem...wait domino's is having an alexa preferred partner special...would you like $4 off?"
- iamacynic 9y ago
  and of course, this is to amazon's benefit. the more concentrated their buying power, the more leverage they have over the vendor, the more profits they can squeeze from the entire supply chain, because shit rolls downhill. most vendors of course will dive head-first into this arrangement with their eyes wide open, because most of them don't think long-term, they want that revenue now cost-be-damned, and quite frankly they're just not as good as the executives running amazon. see: walmart from 10 years ago. wonder how many of those nice folks made the move from arkansas to seattle recently...
  - losteric 9y ago
    Inevitably to the detriment of most worker's wages, and regions that are outside of Amazon's logistical hot paths.
  - digi_owl 9y ago
    I find it interesting that Dell decided to take the company off the stock market so they could focus on the long term. You get all these perverse incentives towards the short term via the board and the CEOs they pick (never mind the whole stock option bonuses etc the CEOs are offered).
  - gizmo686 9y ago
    Amazon benefits from being the winner in its winner-take-all market. It also benefits from having competition in the upstream markets. For example, if Dominos were the only pizza provider, they would be able to offer whatever terms they wanted. Amazon only leverage would be mutually assured destruction [0] of not offering any pizza. If there is a diverse markets of pizza providers, Amazon can dictate the terms and drop any provider who does not play ball. In fact, many companies make a point of having multiple upstream providers to limit the leverage any one provider has over them. [0] Not quite an existential threat to either, but painful for both.
- splintercell 9y ago
  > That's what worries me about things like Alexa and Siri, they turn just about every market into winner take most. What you're really seeing is not that there is a winner takes all, rather every product is being turned into such a unique experience that there can only be one. Lets go back to 19th century. You received grain which could have been produced by any farmer. Yes there was different quality of grains and you judged every grain you bought based on it's individual quality, but at the end of the day, there were thousands of farmers providing you with grain. In 20th century when 'branding' arrived, then although there were different kinds of products, at the end of the day once you chose Pepsi, you stuck with it, if you chose Wonder bread, then that's mostly what you ate. In many ways, Pepsi had a monopoly in providing Pepsi cola drink and Wonder bread had a monopoly in providing Wonder bread. In 21st century, the experience would even more extremely brandized. We have seen this with Apple computers. When you buy a Macbook, you automatically buy the different hardware devices Apple chose for you, and many people are completely ok with (in fact love) this echosystem. If you don't like it, then you go ahead and buy yourself an Android phone and a PC.
  - canoebuilder 9y ago
    (in fact love) this echosystem That's a nifty little portmanteau of echo-chamber and ecosystem, though I do recognize it could have just been an innocent misspelling.
- smacktoward 9y ago
  Just wait until it's built into your self-driving car and you can't drive anywhere else but McDonald's during the dinner hour.
  - theseatoms 9y ago
    Solution: Don't buy cars that do that.
    - mikejmoffitt 9y ago
      The future of self-driving cars is not going to be one based around ownership.
      - problems 9y ago
        If the future of self-driving cars involves trapping them to reverse engineer them, I for one am really excited for that future.
        clock_tower 9y ago
        Better yet, it involves trapping them in summoning circles. (https://creators.vice.com/en_us/article/meet-the-artist-using-ritual-magic-to-trap-self-driving-cars https://creators.vice.com/en_us/article/meet-the-artist-usin...)
        paulddraper 9y ago
        The fastest ones are hardest to catch.
        problems 9y ago
        Sounds like the plot for a new shitty Fast and the Furious movie. For the record I also look forward to that.
    - electricEmu 9y ago
- problems 9y ago
  Do people shop this way? I haven't bought anything blindly like that in years, I've had too many experiences going "oh shit, I just got ripped off" to do that. Particularly on Amazon, where many people are selling re-branded stuff from Chinese vendors which can be obtained much cheaper on AliExpress or eBay.
  - creepydata 9y ago
    Yes, Amazon [Prime] customers shop that way.
    - dsacco 9y ago
      What? How? You choose the specific product you want from a specific seller or reseller on Amazon.
      - sharemywin 9y ago
        Win the Buy Box To give customers the best possible shopping experience, Sellers must meet performance-based requirements to be eligible to compete for Buy Box placement. All Buy Box eligible offers are then further evaluated to determine the Buy Box winning offer. One "New" and one "Used" condition offer, as applicable, will receive Buy Box placement. https://www.amazon.com/gp/help/customer/display.html/ref=hp_rel_topic?ie=UTF8&nodeId=201687810 https://www.amazon.com/gp/help/customer/display.html/ref=hp_... --- No reason to think Alexa will work differently
        Toast_ 9y ago
        The buy box is based off of performance records and shipping nexus availability, not business partnerships.
sharemywin 9y ago
Wonder why there isn't something like ebates with a paid plan. Finds best price with affiliate money as a rebate.
mortenjorck 9y ago
“If you want, run an experiment this evening. Instead of using your MacBook, use a PC, you will get a cheaper price. Leave your house, go to a different house, book the same holiday or buy the same product, you will get a cheaper price." Um... no? The Mac/PC pricing thing was one travel site, and to my knowledge, this practice is limited to travel booking sites. Amazon prices may often be algorithmically adjusted, but not per-user. There is an entire industry of price trackers and deal blogs that would not exist if online retail used travel-booking-style real-time price discrimination adjustment.
- zeteo 9y ago
  > The Mac/PC pricing thing was one travel site, and to my knowledge, this practice is limited to travel booking sites. Amazon prices may often be algorithmically adjusted, but not per-user. Yeah why worry about it if it's only happening on travel booking sites? I mean, these practices would never be taken up by big companies with lots of data to really tailor prices per-user.
  - cavanasm 9y ago
    There's too much same product price comparison available for online retail to do such things without being noticed. It's not that they couldn't do it and have some level of results, it's that people would quickly become aware of it.
    - deleted 9y ago
      [deleted]
    - problems 9y ago
      Exactly, noticing things like this is just too easy - Friends and I frequently discuss it when comparing prices, usually it turns out to be that one of us found a product from a vendor via the search and one found it via a sale page. You'll get caught all the time if you're doing this.
  - DINKDINK 9y ago
    The Mac/PC pricing phenomenon is being misrepresented. The price of a specific hotel was completely independent of the OS you booked from. What was dependent on what OS you booked at was the price percentile of the market that was shown to you as a default. If you were a PC customer and thought "Hmm why are all these low rent places being shown to me" and filtered to the 'high rent' places you'd be able to see the same market as a Mac customer who thought "Hmm why are all these high rent places being shown to me" and filtered to the 'low rent' places. Is there a anti-trust issue? no-> there isn't an issue with competition, the author is just angry someone isn't giving a good or service to them for free.
mcrad 9y ago
Makes you wonder, is Ethics even a required course in a typical software engineering curriculum?
- deleted 9y ago
  [deleted]
- navait 9y ago
  ABET requires an ethics course.
- draw_down 9y ago
  *business curriculum
- IIIIIIIIIIII 9y ago
  It doesn't matter how many ethics courses are offered and taken. The only thing I ever retweeted on my otherwise completely empty and unused Twitter account so that I could copy and paste it when needed: "For evil to triumph, all that is required is for good men to respond rationally to incentives." You learn all your basic ethics during early childhood, not in university courses. Most of the rest is the quote above. University classes talk to and train parts of the brain whose involvement in the ethics of your decisions is minimal.
  - podviaznikov 9y ago
    > "For evil to triumph, all that is required is for good men to respond rationally to incentives." This is a great insight. Where does it come from? Your thought or someone else?
  - gizmo686 9y ago
    >You learn all your basic ethics during early childhood. The ethical questions a software engineer (or almost any professional) faces are not "basic". More specifically, the "basic" ethics we learn as children relate to direct interpersonal relations and small group dynamics (including excessive deference to authority, which "good" ethics must unlearn). These lessons to not prepare us to deal with questions that involve millions of people whom we know very little about.
_rpd 9y ago
> “Today almost all the prices that you see online are actually designed for you. Dynamic pricing is the art of squeezing every dollar out of your pocket.” Is "almost all" actually true? I know that dynamic pricing capability is being built, and I have detected a few cases of it myself, but right now the actual prevalence seems really low.
- j-c-hewitt 9y ago
  False. When most people talk about dynamic pricing or repricing, it's about competing with other sellers or other retailers. Retailer A may reprice according to what the going price is at Retailer B to try to avoid losing the business. This goes on quite a lot, but it's not on a per user basis because that would make no sense. People already self segregate into pricing groups: some people buy from high end retailers and other people buy from discount retailers, often for identical manufactured products. If it's showing different prices to different users it's usually something specifically B2B where you need to have a relationship with some kind of vendor to even see the prices. The public nature of most consumer prices makes it so that this kind of scheme is not all that tenable. Sure you could show different ads to people who use different devices but most of the time the different prices are the ones you pay to the advertising provider -- the consumers generally pay the same. When people try to geographically discriminate for digital products you often wind up with a big retail arbitrage trade that appears out of nowhere -- see the market in digital PC game keys purchased in one area with lower prices and sold in another area with higher prices. >He continued: “The second problem here is that even if I were to switch, we have to understand that the consequences of the switch could quite easily be service degradation. I have, in a way, created a partnership with Google over 10 years of searches. They have literally tens of thousands of emails from me, thousands of points of search data. If I were to suddenly switch to Yahoo or to Bing, that is a massive loss for me because Yahoo and Bing don’t have that data. I can’t easily export that data. That, to me, shows a fundamental flaw in so much of the economics literature, in that it tries to model a unitary consumer switching. People are in very different circumstances if, for example, they used Google for five years intensively, or if they have cultivated a, say, diverse array of search engines that they use. Wildly overstating how much Google cares about any individual user and how much data is actually available to advertisers or internally available within Google. For the user if you switch from Google to Bing the change is relatively minor. A lot of people out there probably 'switch' to Bing accidentally when Windows upgrades or they accidentally set their browser to a different default - and may barely notice the difference. This article is nearly stream of consciousness buzzword gibberish that has no relationship whatsoever to the topic ostensibly being discussed. It's a fun word game for some people to gargle out buzzwords and demonstrate how hip they are to technology.
towersofzeyron 9y ago
the obvious elephant in the room is: who's gonna fix markets that are not what we believe? Do you have any solutions, beyond pointing out examples of what's wrong? How do you see crypto-currencies like Bitcoin, Ethereum and others playing a role?
- problems 9y ago
  If you look at the post they're just talking about price discrimination tactics employed by big data companies. Crypto-currencies have nothing to do with this and no role to play. Deal and comparison sites are the solution here basically, and they're readily employed by people who actually use the market and don't just blindly buy from 1 seller. tldr: If you want a good deal, go looking for one, if you don't, you get screwed.
WalterBright 9y ago
It's always been true that prices and service offered to you in person are influenced by your dress, manner, the car you drove in by, the words you use, etc.
SFJulie 9y ago
This already happened circa 1780. In Europa merchants were taking advantage of the numerous measure of length, weight, volume to make customers unable to be comparing. There was 117 measure of length used. So as a result, Louis XVI who was influenced by the early liberal set on course the project of the international system. The idea was a market is more competitive if states regulate the obigation for merchant to make measure comparable. Hence came the meters, kg, liters and the decimal system. It was adopted by the republican after the king was overthrown because they were also willing for a fairer competition... It has always stroked me as weird that USA never saw the inherent liberalist advantage of simple measurement system.
- Gibbon1 9y ago
  > It has always stroked me as weird that USA never saw the inherent liberalist advantage of simple measurement system. I read a claim somewhere that the pox of different measurement systems wasn't as much of an issue in Britain and it's American colonies so they stuck with archaic but consistent units a lot longer.
pinkhasov 9y ago
Incredible; not one mention of how this 'facade of competition' lowers costs of living and caps inflation, keeping rates low, making markets go higher and prices cheaper by making our lives easier.

That's what worries me about things like Alexa and Siri, they turn just about every market into winner take most. Siri I'd like a pizza. "no problem I have a Domino's pizza delivered with your favorite toppings." I was in the mood for pizza hut. "No problem...wait domino's is having an alexa preferred partner special...would you like $4 off?"

iamacynic 9y ago
and of course, this is to amazon's benefit. the more concentrated their buying power, the more leverage they have over the vendor, the more profits they can squeeze from the entire supply chain, because shit rolls downhill. most vendors of course will dive head-first into this arrangement with their eyes wide open, because most of them don't think long-term, they want that revenue now cost-be-damned, and quite frankly they're just not as good as the executives running amazon. see: walmart from 10 years ago. wonder how many of those nice folks made the move from arkansas to seattle recently...
- losteric 9y ago
  Inevitably to the detriment of most worker's wages, and regions that are outside of Amazon's logistical hot paths.
- digi_owl 9y ago
  I find it interesting that Dell decided to take the company off the stock market so they could focus on the long term. You get all these perverse incentives towards the short term via the board and the CEOs they pick (never mind the whole stock option bonuses etc the CEOs are offered).
- gizmo686 9y ago
  Amazon benefits from being the winner in its winner-take-all market. It also benefits from having competition in the upstream markets. For example, if Dominos were the only pizza provider, they would be able to offer whatever terms they wanted. Amazon only leverage would be mutually assured destruction [0] of not offering any pizza. If there is a diverse markets of pizza providers, Amazon can dictate the terms and drop any provider who does not play ball. In fact, many companies make a point of having multiple upstream providers to limit the leverage any one provider has over them. [0] Not quite an existential threat to either, but painful for both.
splintercell 9y ago
> That's what worries me about things like Alexa and Siri, they turn just about every market into winner take most. What you're really seeing is not that there is a winner takes all, rather every product is being turned into such a unique experience that there can only be one. Lets go back to 19th century. You received grain which could have been produced by any farmer. Yes there was different quality of grains and you judged every grain you bought based on it's individual quality, but at the end of the day, there were thousands of farmers providing you with grain. In 20th century when 'branding' arrived, then although there were different kinds of products, at the end of the day once you chose Pepsi, you stuck with it, if you chose Wonder bread, then that's mostly what you ate. In many ways, Pepsi had a monopoly in providing Pepsi cola drink and Wonder bread had a monopoly in providing Wonder bread. In 21st century, the experience would even more extremely brandized. We have seen this with Apple computers. When you buy a Macbook, you automatically buy the different hardware devices Apple chose for you, and many people are completely ok with (in fact love) this echosystem. If you don't like it, then you go ahead and buy yourself an Android phone and a PC.
- canoebuilder 9y ago
  (in fact love) this echosystem That's a nifty little portmanteau of echo-chamber and ecosystem, though I do recognize it could have just been an innocent misspelling.
smacktoward 9y ago
Just wait until it's built into your self-driving car and you can't drive anywhere else but McDonald's during the dinner hour.
- theseatoms 9y ago
  Solution: Don't buy cars that do that.
  - mikejmoffitt 9y ago
    The future of self-driving cars is not going to be one based around ownership.
    - problems 9y ago
      If the future of self-driving cars involves trapping them to reverse engineer them, I for one am really excited for that future.
      - clock_tower 9y ago
        Better yet, it involves trapping them in summoning circles. (https://creators.vice.com/en_us/article/meet-the-artist-using-ritual-magic-to-trap-self-driving-cars https://creators.vice.com/en_us/article/meet-the-artist-usin...)
      - paulddraper 9y ago
        The fastest ones are hardest to catch.
        problems 9y ago
        Sounds like the plot for a new shitty Fast and the Furious movie. For the record I also look forward to that.
  - electricEmu 9y ago
problems 9y ago
Do people shop this way? I haven't bought anything blindly like that in years, I've had too many experiences going "oh shit, I just got ripped off" to do that. Particularly on Amazon, where many people are selling re-branded stuff from Chinese vendors which can be obtained much cheaper on AliExpress or eBay.
- creepydata 9y ago
  Yes, Amazon [Prime] customers shop that way.
  - dsacco 9y ago
    What? How? You choose the specific product you want from a specific seller or reseller on Amazon.
    - sharemywin 9y ago
      Win the Buy Box To give customers the best possible shopping experience, Sellers must meet performance-based requirements to be eligible to compete for Buy Box placement. All Buy Box eligible offers are then further evaluated to determine the Buy Box winning offer. One "New" and one "Used" condition offer, as applicable, will receive Buy Box placement. https://www.amazon.com/gp/help/customer/display.html/ref=hp_rel_topic?ie=UTF8&nodeId=201687810 https://www.amazon.com/gp/help/customer/display.html/ref=hp_... --- No reason to think Alexa will work differently
      - Toast_ 9y ago
        The buy box is based off of performance records and shipping nexus availability, not business partnerships.

sharemywin 9y ago

Wonder why there isn't something like ebates with a paid plan. Finds best price with affiliate money as a rebate.

mortenjorck 9y ago

“If you want, run an experiment this evening. Instead of using your MacBook, use a PC, you will get a cheaper price. Leave your house, go to a different house, book the same holiday or buy the same product, you will get a cheaper price." Um... no? The Mac/PC pricing thing was one travel site, and to my knowledge, this practice is limited to travel booking sites. Amazon prices may often be algorithmically adjusted, but not per-user. There is an entire industry of price trackers and deal blogs that would not exist if online retail used travel-booking-style real-time price discrimination adjustment.

zeteo 9y ago
> The Mac/PC pricing thing was one travel site, and to my knowledge, this practice is limited to travel booking sites. Amazon prices may often be algorithmically adjusted, but not per-user. Yeah why worry about it if it's only happening on travel booking sites? I mean, these practices would never be taken up by big companies with lots of data to really tailor prices per-user.
- cavanasm 9y ago
  There's too much same product price comparison available for online retail to do such things without being noticed. It's not that they couldn't do it and have some level of results, it's that people would quickly become aware of it.
  - deleted 9y ago
    [deleted]
  - problems 9y ago
    Exactly, noticing things like this is just too easy - Friends and I frequently discuss it when comparing prices, usually it turns out to be that one of us found a product from a vendor via the search and one found it via a sale page. You'll get caught all the time if you're doing this.
- DINKDINK 9y ago
  The Mac/PC pricing phenomenon is being misrepresented. The price of a specific hotel was completely independent of the OS you booked from. What was dependent on what OS you booked at was the price percentile of the market that was shown to you as a default. If you were a PC customer and thought "Hmm why are all these low rent places being shown to me" and filtered to the 'high rent' places you'd be able to see the same market as a Mac customer who thought "Hmm why are all these high rent places being shown to me" and filtered to the 'low rent' places. Is there a anti-trust issue? no-> there isn't an issue with competition, the author is just angry someone isn't giving a good or service to them for free.

mcrad 9y ago

Makes you wonder, is Ethics even a required course in a typical software engineering curriculum?

deleted 9y ago
[deleted]
navait 9y ago
ABET requires an ethics course.
draw_down 9y ago
*business curriculum
IIIIIIIIIIII 9y ago
It doesn't matter how many ethics courses are offered and taken. The only thing I ever retweeted on my otherwise completely empty and unused Twitter account so that I could copy and paste it when needed: "For evil to triumph, all that is required is for good men to respond rationally to incentives." You learn all your basic ethics during early childhood, not in university courses. Most of the rest is the quote above. University classes talk to and train parts of the brain whose involvement in the ethics of your decisions is minimal.
- podviaznikov 9y ago
  > "For evil to triumph, all that is required is for good men to respond rationally to incentives." This is a great insight. Where does it come from? Your thought or someone else?
- gizmo686 9y ago
  >You learn all your basic ethics during early childhood. The ethical questions a software engineer (or almost any professional) faces are not "basic". More specifically, the "basic" ethics we learn as children relate to direct interpersonal relations and small group dynamics (including excessive deference to authority, which "good" ethics must unlearn). These lessons to not prepare us to deal with questions that involve millions of people whom we know very little about.

_rpd 9y ago

> “Today almost all the prices that you see online are actually designed for you. Dynamic pricing is the art of squeezing every dollar out of your pocket.” Is "almost all" actually true? I know that dynamic pricing capability is being built, and I have detected a few cases of it myself, but right now the actual prevalence seems really low.

j-c-hewitt 9y ago
False. When most people talk about dynamic pricing or repricing, it's about competing with other sellers or other retailers. Retailer A may reprice according to what the going price is at Retailer B to try to avoid losing the business. This goes on quite a lot, but it's not on a per user basis because that would make no sense. People already self segregate into pricing groups: some people buy from high end retailers and other people buy from discount retailers, often for identical manufactured products. If it's showing different prices to different users it's usually something specifically B2B where you need to have a relationship with some kind of vendor to even see the prices. The public nature of most consumer prices makes it so that this kind of scheme is not all that tenable. Sure you could show different ads to people who use different devices but most of the time the different prices are the ones you pay to the advertising provider -- the consumers generally pay the same. When people try to geographically discriminate for digital products you often wind up with a big retail arbitrage trade that appears out of nowhere -- see the market in digital PC game keys purchased in one area with lower prices and sold in another area with higher prices. >He continued: “The second problem here is that even if I were to switch, we have to understand that the consequences of the switch could quite easily be service degradation. I have, in a way, created a partnership with Google over 10 years of searches. They have literally tens of thousands of emails from me, thousands of points of search data. If I were to suddenly switch to Yahoo or to Bing, that is a massive loss for me because Yahoo and Bing don’t have that data. I can’t easily export that data. That, to me, shows a fundamental flaw in so much of the economics literature, in that it tries to model a unitary consumer switching. People are in very different circumstances if, for example, they used Google for five years intensively, or if they have cultivated a, say, diverse array of search engines that they use. Wildly overstating how much Google cares about any individual user and how much data is actually available to advertisers or internally available within Google. For the user if you switch from Google to Bing the change is relatively minor. A lot of people out there probably 'switch' to Bing accidentally when Windows upgrades or they accidentally set their browser to a different default - and may barely notice the difference. This article is nearly stream of consciousness buzzword gibberish that has no relationship whatsoever to the topic ostensibly being discussed. It's a fun word game for some people to gargle out buzzwords and demonstrate how hip they are to technology.

towersofzeyron 9y ago

the obvious elephant in the room is: who's gonna fix markets that are not what we believe? Do you have any solutions, beyond pointing out examples of what's wrong? How do you see crypto-currencies like Bitcoin, Ethereum and others playing a role?

problems 9y ago
If you look at the post they're just talking about price discrimination tactics employed by big data companies. Crypto-currencies have nothing to do with this and no role to play. Deal and comparison sites are the solution here basically, and they're readily employed by people who actually use the market and don't just blindly buy from 1 seller. tldr: If you want a good deal, go looking for one, if you don't, you get screwed.

WalterBright 9y ago

It's always been true that prices and service offered to you in person are influenced by your dress, manner, the car you drove in by, the words you use, etc.

SFJulie 9y ago

This already happened circa 1780. In Europa merchants were taking advantage of the numerous measure of length, weight, volume to make customers unable to be comparing. There was 117 measure of length used. So as a result, Louis XVI who was influenced by the early liberal set on course the project of the international system. The idea was a market is more competitive if states regulate the obigation for merchant to make measure comparable. Hence came the meters, kg, liters and the decimal system. It was adopted by the republican after the king was overthrown because they were also willing for a fairer competition... It has always stroked me as weird that USA never saw the inherent liberalist advantage of simple measurement system.

Gibbon1 9y ago
> It has always stroked me as weird that USA never saw the inherent liberalist advantage of simple measurement system. I read a claim somewhere that the pox of different measurement systems wasn't as much of an issue in Britain and it's American colonies so they stuck with archaic but consistent units a lot longer.

pinkhasov 9y ago

Incredible; not one mention of how this 'facade of competition' lowers costs of living and caps inflation, keeping rates low, making markets go higher and prices cheaper by making our lives easier.