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What nobody knows is what happens when everyone goes full ham with manipulations.

All these techniques, from gamification to behavioral mining, were developed in isolation - when only one actor maximized their profits.

Their results apply when most other actors don't pursue the same goals.

Once everyone starts to do it, I predict none will work and will be counterproductive on a larger scale.

A bit of a tragedy of commons.

This is why time matters. Society has generational amnesia. New generations will think of this as normal, and will even call you weird for thinking it could ever work differently. There will be an equilibrium, but it will be much farther than you consider reasonable.
For example I think there is only so many gatcha games one can play in a lifetime.

When the gatcha concept is new, everyone is on board and seems like a golden goose, but who will do it again and again?

a generational amnesia is still 20 years ...

Seems like a bit of a prisoner's dilemma from the perspective of the companies

If they don't do it but their competitors do, they will lose

But if all of them do it they will all lose in the end

You can see this dilemma on YouTube. Videos with highly exaggerated facial expressions, arrows, and sensationalized titles full of exclamation marks tend to attract far more clicks (and therefore more revenue) than those with honest titles and straightforward thumbnails. This trend has forced even high-quality content creators to adopt these tactics to remain financially viable. Despite the misleading titles and thumbnails, their actual content often maintains the same high standards once the video begins.
I sometimes wonder if patrons get access to new videos without the spoiler/click bait thumbnail and the intro that shows the finished product.

It’s like, “today you won’t guess what I’ll be building” yes, I can, you just showed me twice.

I see clickbait thumbnail, I press do not recommend channel. It is the only way.
That's advertising in a nutshell. Except we all lose, because of all the resources and people-hours burned on efforts that just cancel each other out.
And a nash equilibrium will be found, exactly as free markets should behave.
"a nash equilibrium" also known as "the bottom, reached after a race there"

It's not really what I would call a good outcome

And what about the underserved consumers keeping this whole equilibrium afloat?
Why would they stop working when everyone does it?

The methods described might be new, but the underlying principle is simple and fundamental - charge customers based on their willingness-to-pay. If customers are willing to pay $10 for your product, as opposed to $20, almost all businesses would take that into account when setting their prices.

In a low-tech world, you can only price stuff using one-size-fits-all. So you would price stuff based on something like median-willingness-to-pay. This puts your product out-of-reach for half its potential customers, while giving a big discount to the other half. The techniques described in the article are designed to "fix" the above - sell the product to as many people as possible, and give everyone a more even discount compared to their willingness-to-pay.

There is no reason for this strategy to stop working just because other companies are also doing it. In fact, it will only snowball once this practice becomes more commonly accepted.

In a macro sense, fine-grain-price-differentiation is undoubtedly in the best interests of all corporations. Whether they are in the best interests of consumers is more debatable. I'm guessing the answer is no. In theory, the best possible outcome is perfect price differentiation, coupled with increased corporate tax rates (or capital gains tax rates) that are used to lower income tax rates. I doubt this will happen anytime soon.

It stops working as more people understand the tricks.

Trust works only when most actors are trustworthy.

Once you know the prices are jacked up just for "you", and once you know you are being "played," you behave differently and resist.

That is the point I am making, true value + gamification = price, but the gamification part is the quickest to do away with.

> Once you know the prices are jacked up just for "you", and once you know you are being "played," you behave differently and resist.

This isn't true. If you find out that only Tesla is customizing their car-price for you personally, you may decide to boycott Tesla. But what are you going to do if every single car company does the same thing? Boycott all cars and take the bus? Hence my point that price-personalization works even better when more companies do it, not less.

Yes, but that just changes your price sensitivity (potentially all the way to 0 if you refuse). There might be some ringing or chaotic dynamics in the price discovery dynamic system but a sufficiently advanced algorithm could take that into account. Still dystopian depending on your perspective.
> Why would they stop working when everyone does it?

If everyone does it, it's a de facto cartel.

Cartels generally end when one of the members breaks ranks and starts selling the product for less than the agreed-upon cartel price and vacuuming up all the customers. The result is often a price war.

Everyone does it because across most industries key commodities have been allowed to create little cartels and monopolies.
Feels like there's also a practice for a couple of years where companies raise prices in line with inflation, but keep annual employee COLA raises pinned to their typical 2-3% historical rate.
This is just normal economics when (real) value of labour goes down. Hardly a new practise.
What private companies have COLA raises? Corporate raises have been 0%.
It's pretty common from my experience, for Fortune 500 type companies to do an annual raise of 2-3% for employees that is not tied to a promotion. They may not call it a "COLA" raise, but that's what it is. Though, yes, I'm sure some have frozen that in recent years.

Edit: Okay here's an example:

https://www.imercer.com/articleinsights/2024-first-quarter-u...

Note that they talk about it being a "merit raise", but that's sort of double talk. It's the budget for raises that aren't tied to a promotion. So the pool amount is 3.5%-ish, and you get some leeway to personalize it a bit..some people get 0%, some 2%, some 5%, etc. But it's just a COLA in disguise where most people get just under the pool percentage. Meaning most people get 2.5-3% or so.

Mercer gets their data from roughly 500 companies of varying sizes.

And, yes, I'm sure there are some places that don't give any sort of annual COLA type raises at all.

> It's pretty common from my experience, for Fortune 500 type companies to do an annual raise of 2-3% for employees that is not tied to a promotion

That's not what I've heard but then again n=1. No inflation correction because [insert snarky comment about c-suite compensation].

When a company says "cost of living" they mean their own, not their employees. So-called COLA adjustments are for Cost of Hiring, or Cost of Employee Retention. The distinction is that it is calculated based on minimizing unwanted attrition due to wage competition elsewhere, and has nothing to do with how much rent or milk prices may have increased.
Everywhere I worked in my life (perm employment) I was getting at least the inflation. If performance (personal + corp) was well, I was getting an extra 3%-5% and bonus. (in the EU)
> Corporate raises have been 0%.

And data to back this up? Does not match my personal experience at all.

Amazon did that this year and last year. But they're probably an exception not a rule.
Can't wait for them to adapt my mcnuggets price based on my credit score.
And a face scan to evaluate how good-looking you are.
Facebook/Instagram/Tinder already do that.
The platform, or the users?
On Tinder you get invited to pay $500/mo for some "super secret exclusive" version. I got prompted by the app with a free month - it is wall to wall high end escorts.

At some point you gotta accept that this is dystopia.

What, really, is the difference between country-specific pricing and ethnicity-specific pricing?

(yeah, this line of thinking isn't going to go anywhere good)

I’m curious, what are the arguments against making price discrimination illegal?

It seems like something the public will push for if companies overplay their hands and start doing this too aggressively.

> I’m curious, what are the arguments against making price discrimination illegal?

Markets work better the more customer knows about a product and the company that provides it.

Markets work worse when the company knows more about the customer and the product than the customer that buys it.

It's basically extension of market for lemons.

It's been pretty common in the travel industry for quite a long time. There's pushback every now and then, but generally the "free market" isn't doing much in that regard.
Price discrimination ensures that poorer people get stuff cheaper. Price discrimination is why poor people can afford flying today.
The principle of freedom.

The principle that poor people are the majority and prefer to pay less for things.

The principle that it's better for consumers and producers to engage in trade than to force a business to be unviable.

Isn’t this a priori a good thing to know? Is the universe where we can’t accurately determine these numbers a better place to live?
No, I don't think so. It probably hurts the overall economy to squeeze every last bit of juice out of the consumer base like this, leaving them with no money to spend in other ways.
The maximum the business can charge is not just constrained by what the customer can afford, but also by the costs of alternatives that the customer could use (including the option of not doing it at all).

It's often the case that overall prices fall. For example, by keeping prices similar to what airline tickets used to cost for business customers, airlines can reduce the price to others and increase the number of flights, increase efficiency, and provide a better level of service.

Isn't this also just basic economics in action?

Companies have always tried to maximize their revenue. It might be faster now but the process is no different than your local supermarket messing with the price of toilet paper every few weeks.

It is.

The innovation in that cheap capital has rolled up industries. It’s easy to keep meat prices high when 3 companies control 80% of volume. In past times, you have dozens or hundreds of suppliers who controlled little regional niche markets.

I thought so.

If I were to develop a retail product, when it came time to put a price on the package, you can be sure that I would collect data to see how much people were willing to pay for the product. That’s hardly “stop-the-presses!” headline news.

I know this article is about price discrimination or market segmentation, but those topics aren’t secrets either ( https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-... ).

Not sure about the universe, but sounds like a terrible thing for a consumer.
Oh no, a range of options.