4 ms·

San Francisco: Don't Fall for Industry Defense of Surveillance Pricing

167 points by hn_acker 3mo ago

JumpCrisscross 3mo ago
Bill: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB2564 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
xhkkffbf 3mo ago
I agree that surveillance pricing sounds terrible and discriminatory. But people are also happy with coupons, codes, introductory pricing, employee discounts and many of the other schemes that do more or less the same thing. One guy who worked for an athletic shoe company told me that they had a special code that their sponsored athletes could give to their friends. In the end, what's the difference?
- JumpCrisscross 3mo ago
  > what's the difference? For me, it's the surveillance infrastructure per se. My main curiosity around these bills is to what extent surveillance pricing–versus ad targeting–drives the economics of those systems. (My prior is not much.)
  - xhkkffbf 3mo ago
    You realize that there's plenty of surveillance in the infrastructure that sends coupon codes to some patrons and collates loyalty points, right?
    - JumpCrisscross 2mo ago
      > there's plenty of surveillance in the infrastructure that sends coupon codes to some patrons and collates loyalty points, right? Sure. I choose whether I participate in that when I use a coupon or sign up for a loyalty programme. Surveillance pricing is more universal.
- robrtsql 3mo ago
  Well, they're all discounts, for starters. Surveillance pricing defenders claim that surveillance pricing is better because it works both ways--it might offer a higher price to someone who is desperate, but someone who is likely not that motivated might get a sweet deal. I highly doubt that. A highly-advertised, transparent discount or sale is how you sell to someone who is not that motivated. Surveillance pricing is how you (secretly) extract as much money as possible from the desperate.
  - pc86 3mo ago
    > Well, they're all discounts, for starters. And they're subsidized by the revenue made by everyone else. A thousands of coupons start rolling in and meaningfully affecting revenue either the coupons go away or the MSRP increases. It's the exact same pig just slightly different lipstick.
    - ellen364 3mo ago
      It doesn't really seem the same. In coupon hunting, I might not want to spend time finding a coupon and decide to pay full price. That's my choice. In surveillance pricing, I wouldn't get that choice, I'd just get a custom-to-me price. I'd have no idea how the company decided to charge me more or less than they charged my friend. And no idea how to change the price I'm offered, so it would be terrible if the algorithm decided to charge me +15% for everything.
      - gruez 3mo ago
        >In surveillance pricing, I wouldn't get that choice, I'd just get a custom-to-me price. I'd have no idea how the company decided to charge me more or less than they charged my friend. And no idea how to change the price I'm offered, so it would be terrible if the algorithm decided to charge me +15% for everything. What's the difference between this and the company charging an absurdly high base price, then your discount is "customized" to you? That's basically how universities work with various scholarship and financial aid schemes working as discounts.
    - Eisenstein 3mo ago
- sgc 3mo ago
  Actually many people thoroughly detest forced "memberships" to pay the actual price of the item, digital coupons, forced use of apps, and all of the other utter nonsense. I hope surveillance pricing bills destroy all of them forever.
  - pc86 3mo ago
    Is the "actual price" what you're willing to pay for it, or the lowest possible price you could pay based on whatever combination of membership(s) and coupon(s) is available?
    - 8note 3mo ago
      to me the actual price is in the realms of a couple dollars higher than what the reseller paid for it, to account for paying employees and taxes and so on the price i end up paying is always some multiple of the real price
      - pc86 2mo ago
        Well that's just not based in reality. You might as well be saying "to me the actual price is $0 because we shouldn't have any money like Star Trek." You're certainly allowed to have that opinion, but there's no reason to take you seriously if you do.
- clarance 3mo ago
  My take on this isn't directly related to the surveillance side of it, but from what I can tell we used to have this model: Most stores and restaurant chains had normal prices, and sale/special prices. You could coupon like mad and save some serious money by going around to a bunch of different places, with them probably losing money on many of those transactions as long as you were disciplined and didn't buy non-couponed items, but it was a ton of work. (Another model was to have had fake, way-too-high [like, double what they should be] full prices, but 2/3 of those kinds of stores were always "on sale" at what should be the normal price anyway. A disgusting psychological trick and tacit lie that we probably should have found some way to effectively crack down on, but pretty easy to spot and it was no big deal to avoid the places that did this, especially since most of them sold crappy goods anyway. This model's still around, I'm just not really concerned with it here and mentioning it as an aside to acknowledge that it existed, and exists) Now we have this model: A very-few stores and restaurant chains still follow the old model, but most now have batshit crazy "normal" prices, require an app (so, spying) and shopping specials to get what should be the normal prices, and then sometimes you do still get an actual bargain. The net result is that if you just want reasonable fucking baseline prices and not to be gouged, you now have to spend more time and attention than before. I'm convinced this is a big part of why there's a perception that inflation is even worse than official measurements say it is. I can say it's a major contributing factor to it feeling like our financial situation is worse than it was six years ago, despite making quite a bit more money now. We were finally at a point where we didn't really need to pay attention to sales and such at most normal stores, just didn't matter enough to us to save an extra couple bucks and we could finally relax a little when shopping, like pay attention to which interchangeable thing was cheaper and maybe grab things if we saw a sale but we didn't need to structure our grocery lists around deals. Now? They've price-discriminated via attention and allowing-tracking (those damn apps) so much that we have to pay lots of attention and have their damn advertising prodding us all the time (the apps) again just to not get entirely screwed every time we go to a store. We feel poorer again. In short, I think a somewhat-obscure online rant-song about Taco Bell contains more insight about how normal people are experiencing the US economy since Covid, than most serious economic reporting does. Lyrics: https://genius.com/Jeff-heiny-deserving-taco-bell-rant-lyrics https://genius.com/Jeff-heiny-deserving-taco-bell-rant-lyric... Song, such as it is (warning: lo-fi screamo, more or less): https://www.youtube.com/watch?v=2g0coPaZWi4 https://www.youtube.com/watch?v=2g0coPaZWi4
- mindslight 3mo ago
  The difference is in degree, and with the point that coupons/discounts/dynamic pricing have gotten to I think we would be better off if those things started getting banned as well. The main point of all of these things is to confuse the market and make it less efficient (so that companies can extract value instead of creating more value). We've gotten to a breaking point, and we should reject all of it rather than justifying new abusive dynamics based on the less-harsh dynamics having been tolerable before companies became completely shameless.
delichon 3mo ago
This is what I think of when I think of personalized pricing: https://www.youtube.com/watch?v=rVlT3uHlNAg&t=111s https://www.youtube.com/watch?v=rVlT3uHlNAg&t=111s It's pretty much what I've done when selling at flea markets all of my life. I ask what I think the market will bear, per person and situation. I don't feel at all guilty for it. It doesn't surprise me at all that mass customization in the information age has brought us to it at scale, or that the force of law would be necessary to repress it. Some people seem to feel they have a right to the best price without negotiating or shopping. I don't feel that I'm owed or owe that privilege.
- b345 3mo ago
  It is because you're on the side benefitting from it. It doesn't benefit the consumer or the working class.
  - JumpCrisscross 3mo ago
    > It doesn't benefit the consumer or the working class It should absolutely benefit the blue-collar consumer. Whom it hurts is the moderately rich. (If it works as intended.)
    - lokar 3mo ago
      Like a rideshare app offering worse pay to drivers who they know are heavily in debt and near their payment deadline? Offering less pay to people who are desperate and have no other options?
      - pc86 3mo ago
        Your example is both bad and irrelevant. Two completely unrelated things can be true simultaneously.
        lokar 3mo ago
        I can’t quite understand your point. My example was a real reported behavior.
dynm 3mo ago
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?
- tekno45 3mo ago
  Take control of medicine away from private interests.
  - pc86 3mo ago
    OK maybe but that's a completely different thing unrelated to the point of the article or comment.
  - stronglikedan 3mo ago
    And give it to who, governments? The ones that can't even get universal healthcare right anywhere it's been implemented?
    - lux-lux-lux 3mo ago
      That’s…the exact opposite of what the data says?
benced 3mo ago
I suspect part of the reason this is playing well on this website is banning surveillance pricing is great for rich people. I don't have the time or inclination to coupon or aggressively cross-shop but I benefit a lot from the less well-off folks who do. The grocery store, without any ability to differentiate, has to assume that I might be one of those people and sell me a banana at the same price.
- davemp 2mo ago
  Great for rich people or just not your relative purchasing power being completely eroded. Why work for a 5% raise if it means all your expenses go up 5%?
  - benced 2mo ago
    The situation you're positing already basically exists with housing - who literally ask for proof of your income - and while housing goes up at unreasonable rates due to lack of construction, it clearly doesn't go up at the same rate (and _definitely_ not by the same raw amount) as income does.
calbear81 3mo ago
I generally agree with the statements here but the example of the baby thermometers seems to be a false equivalence since there is no variation of pricing of the products but instead it's a personalized search results page that takes into account what they think this person might want. It actually would seem silly that a newborn parent would NOT want a baby thermometer and it just so happens that baby thermometers tend to be pricier. I know the stance from the EFF is likely that everyone should see the same search results and only allow a direct ly expressed query to influence the sorting/ranking.
tavavex 3mo ago
To me it's insane how popular surveillance pricing is in discussions on HN. I think that so far it is the pinnacle of useless rent-seeking from the tech-finance alliance. Bit by bit eliminating the 'inefficiency' of people not giving companies the last few cents they have remaining. Evil. At first I was quick to assume that the proponents of these schemes work in adtech, data harvesting and processing companies, or are just extremely rich and poised to become the beneficiaries of all the surveillance. But so many people are bringing up things like regional pricing for poor countries, coupons or other types of discount that it makes me feel like they think this will benefit them. Are we really about to fall for the 'if you just let us track you, you will be rewarded!' scheme all over again? Did we forget when credit scores were promised to provide anything positive to the customers, but instead became exclusively a way to punish the worst offenders? You don't get anything from a good credit score anymore. Or what about letting your car insurance company track your movements under the promise of discounts which quickly turned into the promise of a lack of a punitive rate hike if you drive well? Giving you a good deal is not profitable. Whatever mind tricks you think you'll be able to play under a surveillance pricing regime will not work. They will always be three steps ahead of you.
- pc86 3mo ago
  Let's take your credit score example for a second. There's a similar argument elsewhere here but why do you think the 800+ credit score loan rate (let's say $500/mo for the sake of argument) is the base rate, and anyone paying more than $500/mo is getting screwed? Is it not equally likely that the default is the highest payment there is? Obviously reality is probably somewhere in the middle.
  - tavavex 3mo ago
    I think that because I've not seen anything that requires an 800+ credit score anywhere. I'm not saying it doesn't exist whatsoever, but by far the most common way to set credit score-based incentives that I see is that there's a really low bar, probably in the 600s or the low 700s, where you get the 'standard' rate or are allowed to apply for some service, etc. Having a better score doesn't improve the deal for you, all you need is to just clear the extremely low bar. You're either OK and get treated like everyone else, or you're not and you get penalized. That's what makes me think that this rate is the default, there's no rewards for getting a higher score anymore. And it makes sense from the lender perspective too - credit scores are ubiquitous now, you don't need to lose money by giving your customers sweet deals and rewards to get them into the credit scheme. Everyone must have a credit score now to exist in society, so why would they spend money on these loss-leaders?
bobbiechen 3mo ago
I had an interesting conversation with an coworker recently - If you give an agent a budget of $500 to buy a flight, and the airline knows this and bumps your price to $499 even though it will offer the same flight at $300 to someone else, is there harm done? I argued it feels unjust. He said it's totally fair, it's within budget so what's the problem? Naturally this trends towards a sort of principal-agent problem where the airline is incentivized to bribe your agent for up to $198 to max out your budget (which is a problem if you're not running your own agent). But for general personalized pricing, there is the same dynamic to posture that you have a limited budget so that companies offer you better prices (regardless of whether you really do or not). This is haggling culture at scale. I worry about a world trending towards this sort of thing and away from clearly universal prices and wrote about this at the beginning of the year: https://digitalseams.com/blog/the-behavioral-cost-of-personalized-pricing https://digitalseams.com/blog/the-behavioral-cost-of-persona...)
- TheCoelacanth 2mo ago
  The problem is that it completely eliminates the consumer surplus from the transaction and converts it to producer surplus. It basically erases all benefits of capitalism for the average person. If it becomes the norm to charge the maximum that someone is willing to pay in every consumer transaction, then business owners are almost forcing average people to try to end capitalism.
- therealpygon 2mo ago
  I’d ask that coworker, “so you would be okay with paying $10 per gallon of gas, while the Prius that barely uses gas next to you pays only $3 per gallon? You use more gas, which means it is in your budget to afford, right?” (Or pick another alternative that is applicable.) Inverting the argument almost always exposes cracks, because they will immediately switch to why it’s not the same.
- halJordan 2mo ago
  You've just described the golden age of piracy (itself a principal agent problem, and imo it'll be solved like piracy was). It's also a good example of the "If I break a butcher's windows and cause him to buy a new pane, haven't I done good?" And the answer is no. What you've described is a poor/inefficient allocation of money.
zzo38computer 3mo ago
Possibly, to add the anti-discrimination law, one of the other things that is protected against discrimination would be the computers (including kind of computers and lack of computers). Then, they cannot expect you to have a app to get a discount. Additionally, in situations where it would be reasonable, to publish the catalogs including prices and to allow them to be distributed. (My idea of a computer payment file, additionally requires that the catalog file have a proof of work field.)
4d4m 2mo ago
Wish everyone in this thread defending surveillance pricing would disclose their employers
m463 2mo ago
I don't understand why they have carveouts for loyalty programs. I know safeway for instance raises prices on just about everything, and to lower them you need to register for a loyalty program by providing personal information "voluntarily". we should have the ability to say "I decline loyalty program membership" with the same price. (for example maybe by giving 888-888-8888 as a phone number) this is basically the same thing as surveillance pricing, but you voluntarily tell them yourself.

167 points by hn_acker 3mo ago

Bill: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB2564 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

xhkkffbf 3mo ago

I agree that surveillance pricing sounds terrible and discriminatory. But people are also happy with coupons, codes, introductory pricing, employee discounts and many of the other schemes that do more or less the same thing. One guy who worked for an athletic shoe company told me that they had a special code that their sponsored athletes could give to their friends. In the end, what's the difference?

JumpCrisscross 3mo ago
> what's the difference? For me, it's the surveillance infrastructure per se. My main curiosity around these bills is to what extent surveillance pricing–versus ad targeting–drives the economics of those systems. (My prior is not much.)
- xhkkffbf 3mo ago
  You realize that there's plenty of surveillance in the infrastructure that sends coupon codes to some patrons and collates loyalty points, right?
  - JumpCrisscross 2mo ago
    > there's plenty of surveillance in the infrastructure that sends coupon codes to some patrons and collates loyalty points, right? Sure. I choose whether I participate in that when I use a coupon or sign up for a loyalty programme. Surveillance pricing is more universal.
robrtsql 3mo ago
Well, they're all discounts, for starters. Surveillance pricing defenders claim that surveillance pricing is better because it works both ways--it might offer a higher price to someone who is desperate, but someone who is likely not that motivated might get a sweet deal. I highly doubt that. A highly-advertised, transparent discount or sale is how you sell to someone who is not that motivated. Surveillance pricing is how you (secretly) extract as much money as possible from the desperate.
- pc86 3mo ago
  > Well, they're all discounts, for starters. And they're subsidized by the revenue made by everyone else. A thousands of coupons start rolling in and meaningfully affecting revenue either the coupons go away or the MSRP increases. It's the exact same pig just slightly different lipstick.
  - ellen364 3mo ago
    It doesn't really seem the same. In coupon hunting, I might not want to spend time finding a coupon and decide to pay full price. That's my choice. In surveillance pricing, I wouldn't get that choice, I'd just get a custom-to-me price. I'd have no idea how the company decided to charge me more or less than they charged my friend. And no idea how to change the price I'm offered, so it would be terrible if the algorithm decided to charge me +15% for everything.
    - gruez 3mo ago
      >In surveillance pricing, I wouldn't get that choice, I'd just get a custom-to-me price. I'd have no idea how the company decided to charge me more or less than they charged my friend. And no idea how to change the price I'm offered, so it would be terrible if the algorithm decided to charge me +15% for everything. What's the difference between this and the company charging an absurdly high base price, then your discount is "customized" to you? That's basically how universities work with various scholarship and financial aid schemes working as discounts.
  - Eisenstein 3mo ago
sgc 3mo ago
Actually many people thoroughly detest forced "memberships" to pay the actual price of the item, digital coupons, forced use of apps, and all of the other utter nonsense. I hope surveillance pricing bills destroy all of them forever.
- pc86 3mo ago
  Is the "actual price" what you're willing to pay for it, or the lowest possible price you could pay based on whatever combination of membership(s) and coupon(s) is available?
  - 8note 3mo ago
    to me the actual price is in the realms of a couple dollars higher than what the reseller paid for it, to account for paying employees and taxes and so on the price i end up paying is always some multiple of the real price
    - pc86 2mo ago
      Well that's just not based in reality. You might as well be saying "to me the actual price is $0 because we shouldn't have any money like Star Trek." You're certainly allowed to have that opinion, but there's no reason to take you seriously if you do.
clarance 3mo ago
My take on this isn't directly related to the surveillance side of it, but from what I can tell we used to have this model: Most stores and restaurant chains had normal prices, and sale/special prices. You could coupon like mad and save some serious money by going around to a bunch of different places, with them probably losing money on many of those transactions as long as you were disciplined and didn't buy non-couponed items, but it was a ton of work. (Another model was to have had fake, way-too-high [like, double what they should be] full prices, but 2/3 of those kinds of stores were always "on sale" at what should be the normal price anyway. A disgusting psychological trick and tacit lie that we probably should have found some way to effectively crack down on, but pretty easy to spot and it was no big deal to avoid the places that did this, especially since most of them sold crappy goods anyway. This model's still around, I'm just not really concerned with it here and mentioning it as an aside to acknowledge that it existed, and exists) Now we have this model: A very-few stores and restaurant chains still follow the old model, but most now have batshit crazy "normal" prices, require an app (so, spying) and shopping specials to get what should be the normal prices, and then sometimes you do still get an actual bargain. The net result is that if you just want reasonable fucking baseline prices and not to be gouged, you now have to spend more time and attention than before. I'm convinced this is a big part of why there's a perception that inflation is even worse than official measurements say it is. I can say it's a major contributing factor to it feeling like our financial situation is worse than it was six years ago, despite making quite a bit more money now. We were finally at a point where we didn't really need to pay attention to sales and such at most normal stores, just didn't matter enough to us to save an extra couple bucks and we could finally relax a little when shopping, like pay attention to which interchangeable thing was cheaper and maybe grab things if we saw a sale but we didn't need to structure our grocery lists around deals. Now? They've price-discriminated via attention and allowing-tracking (those damn apps) so much that we have to pay lots of attention and have their damn advertising prodding us all the time (the apps) again just to not get entirely screwed every time we go to a store. We feel poorer again. In short, I think a somewhat-obscure online rant-song about Taco Bell contains more insight about how normal people are experiencing the US economy since Covid, than most serious economic reporting does. Lyrics: https://genius.com/Jeff-heiny-deserving-taco-bell-rant-lyrics https://genius.com/Jeff-heiny-deserving-taco-bell-rant-lyric... Song, such as it is (warning: lo-fi screamo, more or less): https://www.youtube.com/watch?v=2g0coPaZWi4 https://www.youtube.com/watch?v=2g0coPaZWi4
mindslight 3mo ago
The difference is in degree, and with the point that coupons/discounts/dynamic pricing have gotten to I think we would be better off if those things started getting banned as well. The main point of all of these things is to confuse the market and make it less efficient (so that companies can extract value instead of creating more value). We've gotten to a breaking point, and we should reject all of it rather than justifying new abusive dynamics based on the less-harsh dynamics having been tolerable before companies became completely shameless.

delichon 3mo ago

This is what I think of when I think of personalized pricing: https://www.youtube.com/watch?v=rVlT3uHlNAg&t=111s https://www.youtube.com/watch?v=rVlT3uHlNAg&t=111s It's pretty much what I've done when selling at flea markets all of my life. I ask what I think the market will bear, per person and situation. I don't feel at all guilty for it. It doesn't surprise me at all that mass customization in the information age has brought us to it at scale, or that the force of law would be necessary to repress it. Some people seem to feel they have a right to the best price without negotiating or shopping. I don't feel that I'm owed or owe that privilege.

b345 3mo ago
It is because you're on the side benefitting from it. It doesn't benefit the consumer or the working class.
- JumpCrisscross 3mo ago
  > It doesn't benefit the consumer or the working class It should absolutely benefit the blue-collar consumer. Whom it hurts is the moderately rich. (If it works as intended.)
  - lokar 3mo ago
    Like a rideshare app offering worse pay to drivers who they know are heavily in debt and near their payment deadline? Offering less pay to people who are desperate and have no other options?
    - pc86 3mo ago
      Your example is both bad and irrelevant. Two completely unrelated things can be true simultaneously.
      - lokar 3mo ago
        I can’t quite understand your point. My example was a real reported behavior.

dynm 3mo ago

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?

tekno45 3mo ago
Take control of medicine away from private interests.
- pc86 3mo ago
  OK maybe but that's a completely different thing unrelated to the point of the article or comment.
- stronglikedan 3mo ago
  And give it to who, governments? The ones that can't even get universal healthcare right anywhere it's been implemented?
  - lux-lux-lux 3mo ago
    That’s…the exact opposite of what the data says?

benced 3mo ago

I suspect part of the reason this is playing well on this website is banning surveillance pricing is great for rich people. I don't have the time or inclination to coupon or aggressively cross-shop but I benefit a lot from the less well-off folks who do. The grocery store, without any ability to differentiate, has to assume that I might be one of those people and sell me a banana at the same price.

davemp 2mo ago
Great for rich people or just not your relative purchasing power being completely eroded. Why work for a 5% raise if it means all your expenses go up 5%?
- benced 2mo ago
  The situation you're positing already basically exists with housing - who literally ask for proof of your income - and while housing goes up at unreasonable rates due to lack of construction, it clearly doesn't go up at the same rate (and _definitely_ not by the same raw amount) as income does.

calbear81 3mo ago

I generally agree with the statements here but the example of the baby thermometers seems to be a false equivalence since there is no variation of pricing of the products but instead it's a personalized search results page that takes into account what they think this person might want. It actually would seem silly that a newborn parent would NOT want a baby thermometer and it just so happens that baby thermometers tend to be pricier. I know the stance from the EFF is likely that everyone should see the same search results and only allow a direct ly expressed query to influence the sorting/ranking.

tavavex 3mo ago

To me it's insane how popular surveillance pricing is in discussions on HN. I think that so far it is the pinnacle of useless rent-seeking from the tech-finance alliance. Bit by bit eliminating the 'inefficiency' of people not giving companies the last few cents they have remaining. Evil. At first I was quick to assume that the proponents of these schemes work in adtech, data harvesting and processing companies, or are just extremely rich and poised to become the beneficiaries of all the surveillance. But so many people are bringing up things like regional pricing for poor countries, coupons or other types of discount that it makes me feel like they think this will benefit them. Are we really about to fall for the 'if you just let us track you, you will be rewarded!' scheme all over again? Did we forget when credit scores were promised to provide anything positive to the customers, but instead became exclusively a way to punish the worst offenders? You don't get anything from a good credit score anymore. Or what about letting your car insurance company track your movements under the promise of discounts which quickly turned into the promise of a lack of a punitive rate hike if you drive well? Giving you a good deal is not profitable. Whatever mind tricks you think you'll be able to play under a surveillance pricing regime will not work. They will always be three steps ahead of you.

pc86 3mo ago
Let's take your credit score example for a second. There's a similar argument elsewhere here but why do you think the 800+ credit score loan rate (let's say $500/mo for the sake of argument) is the base rate, and anyone paying more than $500/mo is getting screwed? Is it not equally likely that the default is the highest payment there is? Obviously reality is probably somewhere in the middle.
- tavavex 3mo ago
  I think that because I've not seen anything that requires an 800+ credit score anywhere. I'm not saying it doesn't exist whatsoever, but by far the most common way to set credit score-based incentives that I see is that there's a really low bar, probably in the 600s or the low 700s, where you get the 'standard' rate or are allowed to apply for some service, etc. Having a better score doesn't improve the deal for you, all you need is to just clear the extremely low bar. You're either OK and get treated like everyone else, or you're not and you get penalized. That's what makes me think that this rate is the default, there's no rewards for getting a higher score anymore. And it makes sense from the lender perspective too - credit scores are ubiquitous now, you don't need to lose money by giving your customers sweet deals and rewards to get them into the credit scheme. Everyone must have a credit score now to exist in society, so why would they spend money on these loss-leaders?

bobbiechen 3mo ago

I had an interesting conversation with an coworker recently - If you give an agent a budget of $500 to buy a flight, and the airline knows this and bumps your price to $499 even though it will offer the same flight at $300 to someone else, is there harm done? I argued it feels unjust. He said it's totally fair, it's within budget so what's the problem? Naturally this trends towards a sort of principal-agent problem where the airline is incentivized to bribe your agent for up to $198 to max out your budget (which is a problem if you're not running your own agent). But for general personalized pricing, there is the same dynamic to posture that you have a limited budget so that companies offer you better prices (regardless of whether you really do or not). This is haggling culture at scale. I worry about a world trending towards this sort of thing and away from clearly universal prices and wrote about this at the beginning of the year: https://digitalseams.com/blog/the-behavioral-cost-of-personalized-pricing https://digitalseams.com/blog/the-behavioral-cost-of-persona...)

TheCoelacanth 2mo ago
The problem is that it completely eliminates the consumer surplus from the transaction and converts it to producer surplus. It basically erases all benefits of capitalism for the average person. If it becomes the norm to charge the maximum that someone is willing to pay in every consumer transaction, then business owners are almost forcing average people to try to end capitalism.
therealpygon 2mo ago
I’d ask that coworker, “so you would be okay with paying $10 per gallon of gas, while the Prius that barely uses gas next to you pays only $3 per gallon? You use more gas, which means it is in your budget to afford, right?” (Or pick another alternative that is applicable.) Inverting the argument almost always exposes cracks, because they will immediately switch to why it’s not the same.
halJordan 2mo ago
You've just described the golden age of piracy (itself a principal agent problem, and imo it'll be solved like piracy was). It's also a good example of the "If I break a butcher's windows and cause him to buy a new pane, haven't I done good?" And the answer is no. What you've described is a poor/inefficient allocation of money.

zzo38computer 3mo ago

Possibly, to add the anti-discrimination law, one of the other things that is protected against discrimination would be the computers (including kind of computers and lack of computers). Then, they cannot expect you to have a app to get a discount. Additionally, in situations where it would be reasonable, to publish the catalogs including prices and to allow them to be distributed. (My idea of a computer payment file, additionally requires that the catalog file have a proof of work field.)

4d4m 2mo ago

Wish everyone in this thread defending surveillance pricing would disclose their employers

m463 2mo ago

I don't understand why they have carveouts for loyalty programs. I know safeway for instance raises prices on just about everything, and to lower them you need to register for a loyalty program by providing personal information "voluntarily". we should have the ability to say "I decline loyalty program membership" with the same price. (for example maybe by giving 888-888-8888 as a phone number) this is basically the same thing as surveillance pricing, but you voluntarily tell them yourself.