This is just dynamic pricing with extra steps. Airlines have done this for decades but at least they're transparent about it. The difference here is that readers don't know the person next to them is paying a different price for the same article. Once you start using behavioral data to set prices, the incentive flips from "make content worth paying for" to "figure out who's desperate enough to pay more." Not a great look for a newspaper that positions itself as a public service.
I thought that prices changed for everyone, but they changed over time. Book a flight 6 months before? You get a good price. Book a flight day-of? Hope you've got money in the bank!
(I'm not the OP but I'm guessing this is what they're talking about?)
That's still person-invariant though. This gives the impression that they could potentially be tailoring prices based on what they feel each individual person will pay.
Plenty of digital services have the ability to do this, but don't. Honestly, I think the primary reason is that it's extremely offensive; it feels like saying "we're charging you more, for no reason, other than that we think you'll pay it".
Oh absolutely. Price discrimination is hated by all customers.
The trick airlines use is to make the price discrimination transparent in a way that a customer feels is "acceptable" - time variance, seat variance and addons etc. It adds the same level of price discrimination, but because it's not directed _at the person_, the customer begrudgingly accept it.
The best example of dynamic pricing I know of is college tuition; if you have infinite money you just pay the price, otherwise you get "student aid" (after taking out as many loans as you can bear) which effectively means you are paying a reduced price compared to the full-ride student.
I understand your point, but there are only X number of seats in an airplane, airline seats are physical products. Why should the same be applicable to a digital product? I mean, it is their property so they are free to charge whatever they want (just like the users are free to leave) but it feels way more intrusive to track users' reading habits and tailor pricing to each user than saying "only 2 seats are left but 5 people are interested, so we're jacking up the price"
It absolutely is a different and more insidious type of dynamic pricing.
First, you can use the airline's strategy to your advantage by planning early. It doesn't feel as unfair because everyone gets the same terms and the system is transparent and equal
WaPos daynamic pricing is simply maximizing value capture, without any way of a consumer benefitting. It's 100% lose-lose for the consumer. You always pay the maximum you are willing to pay. No discounts!
I was just answering OPs question about how airlines were transparent about their system and decided to answer it factually.
while it might feel like a discount, buying airline tickets upfront is not a "true" discount in the traditional sense, because the money is prepaid, and is worth it to the airline to receive guaranteed income from a seat early. A true discount is one where the margins of the product is shrunk to reduce the price.
Do these models try to factor the target’s knowledge of what things cost, or maybe even their knowledge of dynamic pricing or discounting practices? That seems like it would not necessarily inversely correlate with wealth.
To use an extreme example, you’d have wanted your model to have offered Warren Buffet the base price, or even a deal.
I'm sure it's planned. To miss out on the Warren Buffet sale is to miss out on additional revenue on zero COGS, and it's against the goal of individualized pricing to squeeze out all consumer surplus.
22 comments
(I'm not the OP but I'm guessing this is what they're talking about?)
Plenty of digital services have the ability to do this, but don't. Honestly, I think the primary reason is that it's extremely offensive; it feels like saying "we're charging you more, for no reason, other than that we think you'll pay it".
The trick airlines use is to make the price discrimination transparent in a way that a customer feels is "acceptable" - time variance, seat variance and addons etc. It adds the same level of price discrimination, but because it's not directed _at the person_, the customer begrudgingly accept it.
The price changes according dynamically according to demand.
First, you can use the airline's strategy to your advantage by planning early. It doesn't feel as unfair because everyone gets the same terms and the system is transparent and equal
WaPos daynamic pricing is simply maximizing value capture, without any way of a consumer benefitting. It's 100% lose-lose for the consumer. You always pay the maximum you are willing to pay. No discounts!
I was just answering OPs question about how airlines were transparent about their system and decided to answer it factually.
To use an extreme example, you’d have wanted your model to have offered Warren Buffet the base price, or even a deal.
I recently wrote about the harms here and it made the front page at the time: https://digitalseams.com/blog/the-behavioral-cost-of-persona...
> “This price was set by an algorithm using your personal data.”
How's that "I have nothing to hide" working out?