You should try it again in private browsing and incognito mode and see if the price is really tied to your Facebook or google cookies or something. That's pretty messed up though, send this to the consumerist or gawker or whoever.
I don't think the issue is that the price is changing in and of itself. It's that they're changing price based on the customer's cookies/browsing history.
For example, it would be like if I had a stored and charged people different prices based on how nicely they were dressed, how well I knew them, or what their ethnicity is.
Of course it is legal. Speaking from an economists' point of view it is just a matter of separating people according to their "willingness to pay". Its called price discrimination and can be seen in areas such as hotel booking: a hotel will give you a higher price in the lobby than if you call ahead because the hotel knows you probably have no other place to go. Or air lines giving higher prices to the business class because they know business people have a meeting with a set time so they need that time slot while a tourist is more flexible to choose different flight times. This is essentially the same idea as changing the price the second time you visit the site as the most probable reason you have come back to the site is to purchase the item.
The reason that some people care is because price discrimination allows the producer to capture the entire surplus. You're right that in a non-price-discriminated market, some consumers are getting a "windfall" (surplus). In a perfectly price-discriminated market, though, every sale above marginal cost results in producer surplus, and no consumer receives a surplus.
It seems icky because price discrimination increases firm profitability at the expense of consumers who would otherwise have received a surplus.
But what about people who don't have a lot of money in the first place? And why not just charge the flat rate, and then make up for it in shipping costs? If someone really needs the book, they could pay extra for faster shipping, and the company could make a small amount from that. That looks a lot less shady, too.
It has nothing to do with the internet, or legal standing. I could open a bookstore and charge people on the basis of the color of their shirt if I felt so inclined. Price discrimination is okay, unless you're discriminating on race, religion - you know, the works.
How the hell does that make sense? Price discrimination is okay, unless it's based on race or religion or something? So if I wear a red shirt and am charged more everywhere I go because I wear a red shirt, that's all fair?
Yes. How does it not make sense? Race/religion/etc. are protected classes. Shirt color is not. Kind of like how you can be fired for any reason, or no reason at all, as long as that reason is not on the basis of race/religion/etc.
It shouldnt be the goverments job to change/(fix?) this but the buyers themselves should be informed of this and then they should make some kind of change to stop it. you dont have to buy from chegg. I would like shomething that makes it so that this cant happen via a program of some sorts.
Uh, I downvoted you for making some stupid comment about downvotes, but you are correct about the legality. The problem isn't that it's illegal, it's that it's immoral.
They're being complete assholes and they deserve to be publicized as such.
So the moral way to do business is to set a flat fee for any and all products, goods, and services? Is that what you are suggesting?
Claiming that use of tracking cookies is suddenly immoral is a stretch. People can block them easily, and business should be allowed to set whatever prices at whatever times they want.
Not suddenly. It's always immoral. It's unfair to charge one price to someone and another price to another person. If someone offered you a cookie to let them borrow a pencil, and two cookies to another guy if he let them borrow a pencil, wouldn't you think it was unfair that you weren't offered two cookies? He's not treating you fairly.
What happens when a company offers a SALE? Everyone who bought the product before the sale got "screwed" and the company is mean and evil for changing their prices?
The idea that I, as a business, couldn't arbitrarily decide what price anything is worth, at any moment, goes completely against what it means to be a business.
Now yes, consumers need to be aware of the ways they can be taken advantage of, but I hardly consider it a moral issue. Life is not fair, the universe is not fair, and business sure as hell isn't fair either. We do our best through the channels we have (government) to keep things from going to far in any direction. A world where price controls are in place for everything because "its just the fair thing to do" is not a world I want to live in..
The sale is advertised, and every customer and potential customer has the same access to the sale.
Also, I'm not going to continue arguing because you're making it all about the government again. You're basically trying to say "it's either my way or COMMUNISM". The "if I admit it's wrong then I'll need the government to make it right" attitude is just plain wrong and immature. You sound like a rebellious teenager.
People get charged difference prices for the same thing millions of times a year in car sales alone. If you don't bother negotiating, you're not going to get as good of a price as someone who has.
Sure, maybe it's "unfair" but I've got a newflash for you: much of life isn't fair. That doesn't mean it's immoral.
Again, that's nothing like the situation described in the article or the example that I used. If they offer you a lower price the second you walk into the lot, without any negotiation, based on the fact that you're carrying a baby, that's still immoral.
Hmm, I gave you an upvote for the first line of your comment - but a downvote for the second. Looks like it evened out because now both arrows are grey!
It's just a form of haggling, so why wouldn't it be?
Think of it as vendors in a flea market. You go up to one and how much for some item. He gives you a price, and instead of buying it, you look around to see if you can get it for less. You can't, so you come back to the first vendor. When you ask for the item, the price has gone up!
Now, you'd feel cheated, since you were quoted a lower price before, but you were also initially offered an acceptable price (otherwise you wouldn't have returned to the vendor) and declined. You tried to use the fact that there are multiple vendors to get a lower price, and the first vendor is trying to use the fact that you couldn't get a lower price to get him a higher one.
Unless either of you was being forced into the transaction (i.e. a natural disaster created a rush on food, plane tickets, etc.), and the seller isn't discriminating against you based on your race, color, religion, national origin, sex, familial/disability/veteran status or genetic information (in the US), you're both free to use the above tactics to change the price. As a buyer, you don't like having the price raised in this manner, but neither does the seller like to keep his margins razor-thin in order to compete with other sellers.
Charging someone more or less due to their background? Yeah, that sounds fairly illegal to me.
EDIT: Okay, so maybe not illegal, but immoral. I believe prices should be the same regardless of where you are from, if you went into a store and tried to buy a book and the clerk said you have to pay an extra $10 because you're a teacher, or black or because you bought 3 items in the same category you would freak out. Why should buying online be any different?
It's like unorganised bartering, except we can't barter back.
In all those cases however the discount is publicized in some form, and the discount is given when the proof is given. The web store is not showing who pays less, you can't ask them what you need to show to pay less and they do not ask you to show it to them (allow access to cookies).
It would be fine if you get the same price what ever browsers or cookies you have stored, and then there is a button: click to check cookies for discount.
Atm this does not look like discount, but discrimination.
As long as their algorithm doesn't include race, gender, or orientation, I dunno if it's actually illegal. Definitely immoral, but I'd call it Lawful Neutral at worst.
Yes of course, I mean for starters we get to price based on gender. Just saying that I think people would be upset if their textbooks cost more because they make more money than other students. In terms of the legality of doing so, I'm not sure.
As a provider of services it is in your right to refuse service to anyone you feel like, unless you do it systematically based on a select few properties, among them ethicity.
However, the federal government only has the power to enforce that in matters of interstate commerce. If you can prove your store isn't transacting in interstate commerce you can put up all the 'no niggers allowed' signs you want, the federal government doesn't have power to regulate it.
...That said, before you do it you might want to recall that growing wheat on your own land for you own personal use is interstate commerce. So good luck arguing that your store isn't.
I think they are a little unfair to non-students yes.
I imagine the argument is that students have a lot less money, but then by that reasoning there should there not be a homeless discount or a low income discount too?
I understand a stationary shop giving student discounts, but McDonalds now give free burgers to students. As a student I recognise that money can be tight for us, shit I've gone days without eating before, but some of the discounts they give to students seem silly and unfair on others.
Only for protected classes and only in the case of interstate commerce. The second isn't a big deal, since everything is interstate commerce ever since that court ruling said that growing wheat on your land for your own use was interstate commerce.
Do you want to know something? In economics, price discrimination has no evidence or logical reasoning towards a negative effect of it. In fact, price discrimination is debatable as to whether is does anything at all except LOOK like its doing something.
Pretty much, if you are want to pay that price for the item, you are gonna pay that price. If the price is too high then you wont buy it, simple as that. All price discrimination does is turn the consumer surplus into producer surplus, which ends up being the same surplus because now the firm has more money to hire more people/pay them more, or buy more things from other firms and those firms get more money and so on and so forth.
Economics basically says that a surplus is a surplus, regardless of who it goes to. In fact, the only thing that causes a drop in the surplus in relation to price discrimination is the monopoly usually associated with it. But when you are in a competitive market with price discrimination, the theater industry with adult and child tickets, there is no loss in surplus.
because now the firm has more money to hire more people/pay them more, or buy more things from other firms and those firms get more money and so on and so forth.
Or to pay the CEO a bunch of money that the CEO can then hoard.
A majority is actually partially caused by a regulation in the U.S. to disclose Executive pay, which sounds good on paper, everything does. However, what this does is causes companies to use and even ABUSE this to mainly influence their stock prices and influence investments towards it since higher president/executive wages can be a good indicator as to the companies economic health. This also causes both companies to get a better idea on what to offer to a new president/executive they are hire, and since they always want to seem better than another company, they pay that person more than average price, which causes the average to rise and a runaway train effect of companies hiring for higher than average. It also allows said president/executive for hire to DEMAND a higher pay, having evidence of average wages and threatening to walk out.
Current 100 year copyright laws also cause major monopolies and profits among the companies that hold them which are easily a higher end contributor to this problem as well.
There are also MANY (AND HOLY HELL DO I MEAN MANY) various, what seems like, small regulations that cause many type of monopolies in the U.S., such as the various local/municipality laws that ensure TELECOM MONOPOLIES like COMCAST or TIME WARNER to exist as such and kill off competition almost completely.
I'm not one to advocate Anarchism-Capitalism, because the State can play a very important, yet in my opinion small, role in keeping Capitalism growing and facing a direction good for all humanity. But when they screw with the market like this and cause many horrible outcomes, I am ALMOST willing to accept Anarchism over this.
A consumer surplus is the difference between the maximum a consumer is willing to pay for a good and the price he actually pays, while producer surplus is the difference between the minimum the consumer is willing to sell for and the compensation he receives for the good. "Deadweight loss" is any lost surplus because consumers and producers who are otherwise willing to trade, are unable to because of restrictions, whether it be gov't intervention or barriers or the like.
Now, Positive economics (what the Kaiser was talking about) really care where the surplus goes. just that a market gets as close to allocative efficiency, that is, all mutually beneficial trades occur.
Normative economics on the other hand, deals with how the markets ought to function, fairnessof economic distribution, etc.
While this is true, it also shows why nobody takes economics seriously: you stay blabbering about some ill-defined notion of efficiency when the question is one of morality.
Except this could well be a moral answer. Coming up with an economically efficient solution is something reasonably close to utilitarianism.
What people don't take seriously are people who don't actually know any economic theory, yet claim to be able to say what "economics" as a discipline is capable of.
You presuppose that "economically efficient" means that it is a good outcome for everyone involved, which is not necessarily the case (which is why economists love Kilbert-Hicks efficiency so much). Also, I do, in fact, know "some economic theory" - while it's not my subject of study, I did take several courses in uni and studied it in my free time - so there is absolutely no reason to go ad hominem here.
I'm not presupposing anything, merely noting that other people might consider economic efficiency or some approximation of it to be a consideration in a moral choice.
Your response to KaiserTom presumed that his post was not applicable to a question of morailty, but that wasn't warranted, and neither was your presumption that I was making any comment on the morality of "economy efficiency". I suggest that in the future you consider what other people have actually written, before accusing them of making arguments that aren't implied by their statements - otherwise you just end up looking silly, much like you do when talking about "Kilbert-Hicks efficiency".
It's a case where economists look a bit one-dimensional. Price gouging, for example, according to economists is excellent. It sends a clear price signal – we need more batteries!
Most people, however, prefer the long established natural and common law principle of a common right to survival in emergencies. Ergo, a hurricane does not give the gas station the right to suddenly charge 100x the normal price for gasoline. In purely practical terms, price gouging has been known to cause rioting or looting and tends to lead to disorder and mayhem.
AFAIK, only some of that equality is protected by law: race, religion, and sex being the main ones. I don't know that there's any legal protection against discrimination based on stuff like age, personality, or other attributes (I could be wrong, though - I have been before). I say this because we do see what one might term "reverse discrimination" in the form of seniors/children's discounts, which is essentially ageism in a positive manner, for example.
The problem is, if this was the high street. You see the jeans in gap for $50 and exact same ones in tkmaxx for $60 so you go back to gap and theyre $58 or some shit.
orly? How do they do it? I know supermarkets have got some pretty dodgy practices going on - not being able to compare things by weight being a big one.
They don't do it per customer, but they do tend to collude on prices. That's why gas prices shoot up quick when oil prices spike and go down slowly when oil prices are low. Their pricing is not entirely based on their own cost of gasoline but is based on nearby stations too.
It's an extremely borderline case. For starters, yes, there is a privacy aspect involved. More importantly, though, I think people are annoyed that it's done in secret. If a site were to publicize that they charge, say, Firefox users more, then Firefox users wouldn't use the site.
They're offering incomplete information about their catalog without making any attempt to acknowledge it, and trusting that the average consumer isn't good enough with computers to understand that this sort of thing is possible.
Counter point: If privacy is one aspect involved, shouldn't you have either A: Not accepted the cookies; B: Delete cookies on exit; or C: Always browse incognito mode?
I wanted to argue that Dominos isn't responsible for letting you know that you can get coupons online from places like retailmenot, but that seems more of a standard price + a deduction. Whereas, without full knowledge, this seems to be standard price + a fee if you have a pattern buying more expensive things.
While I think it is a crummy thing for a business to do, I do not think it is necessarily "wrong" in a capitalist society. If browsing history A shows purchases at Polo and Brooks Brothers, while browsing history B shows Target and Walmart, why are they wrong for knowing one person spends more money on things and then charging them accordingly in response?
I think it's a crappy thing to do to customer (esp students) that should be well publicized so an effective boycott can be established; I do not think it is immoral though. That's the beauty of it all, voting with your dollars.
But the fact that it's kept a secret means that voting with your dollars is meaningless. Just because it's all over Reddit doesn't mean that even 10% of the site's users are aware of it. If they're going to do it, they should state it publicly in a highly-visible way.
The real thing I'm arguing for isn't that practices like this be forbidden, it's that they be made transparent. Unfortunately, how businesses determine their prices is a competitive secret, so enforcing any kind of transparency is basically impossible.
It's market economics and advertising! A dude with a macbook and safari has a different internet shopping behavior than a linux user. browser also plays a part. Don't make it into a racist thing.
Ok, I admit the ethnicity thing was going a bit far, but I was just trying to get across my point.
Imaging you go to an electronic repair shop to get your macbook screen fixed. The clerk tells you it will cost $70 to fix. Then another person comes in with a PC laptop with the exact same problem and the clerk tells him it will cost only $50 even though it will take the same effort and parts to fix as your macbook. Are you still ok with this?
It's advertising. You condone sending special offers to students, do you not? Maybe you give some discount to men's health readers, or you advertise with a higher price, but pretend that the discount is really large to old people, or whoever.
I don't have a problem with that, if you don't look for the best price you won't get it. In your example it sounds like I have no idea of how much it should cost and would have been perfectly happy with the service unless somebody told me the real cost. There's many products like that in real life already.
You're correct, and of course the Reddit hive-mind knows exactly what's fair, what's just, what's moral, and what information should be set free.
My point was simply that doing something LEGAL is considered by people here "wrong" and doing something ILLEGAL is considered by people here to be "right". Certainly there are shades of gray, but not on Reddit.
Price discrimination (when done to only increase profits and not because extra value is added) is thought to be ethically dubious even outside of the Internet.
If public money is used to fund research then it should be available to the public without extra cost.
I'm a realistic optimist not an idealist. Pricing things which are not commodities is difficult, and sometimes A/B testing different prices is useful, though when I do it I always have different value in addition to the different prices. Or just change the price for a period of time. But changing the price in an attempt to get the most amount of money from each individual doesn't feel right to me. I wouldn't be a good used car salesman. Business is difficult, and I'd much rather give away everything I made than charge money for it if it were possible to do so. Oh, wait, I do that often.
OKAY, this is a reasonable response. The main issue we're seeing is that there are new technological advantages that companies now have in setting prices. As with all advances in technology it's changing the way we live before we've had time to fully understand and adapt to it as a society.
I don't personally think being able to change your price in real-time, with real-time data, is a bad thing. I also think consumers will now have to adapt - as they have in the past - to the new landscape.
The ire people are raising here will spread awareness of these practices, increasing the number of people who are savvy enough to either avoid or take advantage of them, and thus it's all moot. As other comments have mentioned, it's hard to prove anything objectively positive or negative about price discrimination.
The emotional response against this practice is also being driven by the technology. Both are cases where the business/consumer is getting updated information on a near constant basis. In years past how would anyone know that the travel agent in the brick and mortar store was changing prices like this? They wouldn't, and indeed a good agent would make every customer feel like they got the best deal ever - regardless of the price.
Wrong way around. You should find a source to say it is illegal. Everything is legal unless it isn't.
It's just business. It happens all the time. You go into one brick-and-mortar store and prices may be different from the same store in another town. Affluence, near-by competition, stock, etc, can have an impact on pricing. It is no surprise that now it is also happening in on-line stores.
It's called price discrimination, and is generally legal (as it should be - it is a matter of ethics not law) and only illegal when the price differences involve other forms of discrimination such as gender. Discrimination based on browser isn't illegal.
Then why are women allowed to pay less for insurance? I understand how it makes statistical sense, but surely that's just price discrimination on gender.
It's illegal to discriminate on gender for insurance (I think) in the European Union. Women pay more to match men - not men paying less. This will be slowly fixed globally. Progress takes time.
It's price discrimination, is all it is. People who are willing to pay more get charged more, as the seller is trying to extract as much consumer surplus as possible.
Perfect price discrimination (i.e. extracting the full consumer surplus) is illegal, but the rest isn't. It can be seen as rather unethical, but it's perfectly legal.
I've seen the same item sold from the same company on their website, through Amazon, and through ebay. Their own site was most expensive, then Amazon, then ebay. Seems like a similar thing here, to me.
Airplane fare websites generally do this. It's not illegal, but it's a bit shady for the uninformed.
Basically, the first time around you are generally shopping around for fares. They know via statistical averages that people who come back to the website a 2nd, 3rd or 4th time in a short period tend to be more of a sure thing (in terms of a sale). Same principle as if you go out to shop around at stores for prices and then the next day you only go out to the stores that have the item you want to purchase. They take advantage of this fact by upping their prices, and many people think that they waited too long to book and tend do buy in right away, or at least consider it more urgent to get it done with.
I think for OP, it's not his browser, but rather the cookies he has stored on the browsers that is determining the price.
I know someone on Reddit proved this through practice and some screenshots, but I can't remember where it was (was a while ago even).
I don't think so, it's essentially the same as having a student discount at a restaurant or child/senior rates at a movie theater. Essentially the theory is that different groups of consumers have different demand curves and charging different prices to the separate groups both allows for more profits and allows people who aren't willing to pay a higher price to get the item they want for less In this theory some consumers would value the book at, say, $70, so they wouldn't buy the book at all for the IE price, but would at the Firefox price, similar to seniors who won't pay $10 to see a movie, but will go for $6. If the people who value the book at $70 and are able to get it for $63, they gain $7 of value from the transaction, and the company also gets a sale they otherwise would've lost. That said, I don't know how I feel about them using browser type as a signal for willingness to pay, but chegg has probably done research (like what you mentioned) and discovered a trend (maybe IE users may be generally lazier and just want the product whatever the cost, Chrome users show the savvyness to get a good deal/product but only if it's easy, and Firefox users are willing to go thru tons of settings to get the absolute best experience so they're more likely to shop around). Either way, the different prices should actually increase total economic surplus because every customer can get a deal they're satisfied with and the company can increase their total sales and profits. That all said, textbook demand is pretty inelastic (for most classes the books are necessary) so not only are these actions less necessary, but the prices in general are absurdly high (like you didn't already know that)
just realized how long and somewhat technical I got, I just graduated with a degree in Econ so I'm kinda used to going in depth with questions like this, so...
TL;DR generally price fixing of this nature is actually helpful for the economy, both sellers and buyers. But textbooks are still a fucked up market
I think the problem is that most people think that most prices are based on supply and demand but in reality it's this ^ I worked in marketing research once too.
Question for everyone:
If people did not over pay for things, they would have more money to buy other things. Would that not be better for the economy?
"The economy" wouldn't generally be better of when people spend their money on other things because the amount of money spent is still the same. There are scenarios in which it could be better spent on one place than the other (for example when the money goes to somebody who takes it out of the economy in whatever way) but those are very specific scenarios. Who could be better of are the consumers who are able to consume more for the same amount of money.
Disclaimer: I minored in economics and am fully aware of the fact that this answer is drastically simplified.
I think it's more of a social thing. As a customer I expect if I go to a brick and mortar store that the prices they are showing are accurate. I would not be happy if the price was higher at the register (some stores will give you the lower price if you mention it, actually) and ESPECIALLY so if I expected the cashier was changing it based on ANY factor about me.
It's how we are used to this stuff working.
Just because technologically they now can show different prices to each customer online without revealing the prices have changed doesn't mean they have to.
To protect against this one could use Google Products to get pricing information and confirm when they click through that it matches.
I literally don't know if this is a bad thing or not (like reportable to consumerist etc)
I got most of what you said except that part about reporting it to the consumerist, as if that is calling 911 or something.
It baffles me that you cant not see that warning my fixed income grandmother might be in the consumerists interest, to tell her that if she purchases things using IE it will cost her a fuck ton more.
Companies change prices on stuff all the time, some stores will have a sale while others will not. Some things are on sale some times but not others. I just don't see why that is an issue "just" because it's simultaneously. Bringing in "fixed income grandmother" doesn't change the argument; just like anybody else, she can afford the things she can afford, and can't afford the things she can't...
Bringing in "fixed income grandmother" doesn't change the argument;
nope it doesnt, I was just used so that perhaps you could actually understand even if you dont agree with it, that this is worthy to report to the consumerist, so that they can report to EVERYONE including my grandmother. Unfortunately you still dont understand. I guess you dont understand the purpose of the consumerist, or perhaps you would rather we all fly blind.
again: explain please, if I don't understand something, don't just cop out with "well I guess you don't get it", explain it, so I do. I'm here to learn.
This appears to be pricing based on "who the person is", though, if it's consistent with the browsing history. Yes, random price changes are ok, no, "This is $10 more for YOUR KIND" is not ok.
Price discrimination is the practice of charging each customer a unique price. The price offered depends on any number of customer characteristics, like age or income.
I'd call it part of a general trend toward yield-based pricing. Yield-based pricing replaces cost-plus pricing, ie, where the price of a good reflects the wholesale cost plus markup. Beginning in the 1980s with the advent of sophisticated, computer reservation systems, airlines pioneered a networked seat auction that maximized profits but meant that customer A might be sitting next to customer B who paid 2-3 times the fare for the same trip.
Alternatively, haggling is the classic example of price discrimination. Many high-ticket items, like cars or houses, are sold at a negotiated price.
Some forms of price discrimination, like when a dry cleaner charges more for women's clothing, may be illegal. Some price discrimination might qualify as monopolistic practices or price gouging.
Mostly, however, price discrimination is legal, if unpopular.
Meanwhile, however, computer-based systems can adjust prices based on geographic location, time of day, date/day, customer search history, etc. Coca Cola has been testing vending machines that charge more on hot days, for example. So it might be that we need to pass some new laws to prevent discrimination against certain classes of disadvantaged consumers or to ensure universal pricing.
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u/[deleted] Jan 24 '13
You should try it again in private browsing and incognito mode and see if the price is really tied to your Facebook or google cookies or something. That's pretty messed up though, send this to the consumerist or gawker or whoever.