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Orbitz shows costlier hotel options to Mac users

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Re: Orbitz shows costlier hotel options to Mac users

#131

Post by pavel_lishin »

gjm11 wrote: post #99
starship wrote: post #95

Earlier quoted context omitted.

Regardless, it never ceases to amaze me how controversial pricing discrimination is. Especially since most people have taken Econ 101: pricing discrimination eliminates dead-weight loss, which should be a good thing right? Nope, instant controversy.

> most people have taken Econ 101 Er. Um. No, most people have not taken Econ 101. Most graduates have not taken Econ 101. Most graduates in quantitative disciplines have not taken Econ 101. Most people with economics degrees have taken Econ 101. A modest number of other people have. Some more have learned the basic concepts by means other than taking Econ 101. These are probably not the people complaining about pric…

I took Econ 101 - but the only reason I did so was because it was one of the only two classes available in high school that offered college credit.

If it didn't give me three hours of credit, I probably would have ended up with Texas History, or something similar.

Re: Orbitz shows costlier hotel options to Mac users

#132

Post by chc »

mikeash wrote: post #126
chc wrote: post #122

Earlier quoted context omitted.

Really? You believe that people fall for Nigerian scams and click on shady ads on the Web, but not that framing a price increase as a discount (a tactic practically every grocery store in the world uses) would make many people feel better about it? I think you're drastically exaggerating the average person's resistance to marketing.

A very small proportion of the general population falls for Nigerian scams, so I don't think that's a good example.

I still don't think it's reasonable to say that "I have a hard time believing anyone would fall for a Nigerian scam." Enough people do it to make it hugely profitable for the scammers.

And falling for a Nigerian scam requires a much higher level of gullibility and a higher level of buy-in from the victim than merely letting somebody else set your expectations with careful phrasing.

My point isn't that everyone would fall for it, but if there are enough people who fall for more blatant scams that you can build a hugely profitable business off them, there's certainly a considerable number who would fall for this.

Re: Orbitz shows costlier hotel options to Mac users

#133

Post by RyanMcGreal »

chc wrote: post #122
RyanMcGreal wrote: post #109

Earlier quoted context omitted.

> If instead they had promoted their machines as automatically discounting their normal price of $3 down to $2 on cold, non-sunny days, then no one would mind. I have a hard time believing anyone would fall for that spin.

Really? You believe that people fall for Nigerian scams and click on shady ads on the Web, but not that framing a price increase as a discount (a tactic practically every grocery store in the world uses) would make many people feel better about it? I think you're drastically exaggerating the average person's resistance to marketing.

What percentage of people fall for Nigerian scams? One per hundred thousand? One per million? One per ten million?

A marketing campaign with that rate of success would be an abysmal failure.

Re: Orbitz shows costlier hotel options to Mac users

#134

Post by Spooky23 »

starship wrote: post #95
suprgeek wrote: post #90

It is important to read the article carefully: WRONG - Mac users see higher prices for same hotels than Windows users RIGHT - Mac users are sometimes also shown hotels that are costlier than their windows users "...so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see."

Regardless, it never ceases to amaze me how controversial pricing discrimination is. Especially since most people have taken Econ 101: pricing discrimination eliminates dead-weight loss, which should be a good thing right? Nope, instant controversy.

People don't like being ripped off.

Price discrimination is revenue optimization for the vendor, it's not eliminating some efficiency -- it's steering me to part with more of my economic resources.

I expect the kind of behavior from a salesperson with whom I am negotiating -- that's a customary way to do business in that model.

In the United States, we learn about fixed-cost in the grocery store -- an apple cost $1 whether I have $0.50 or $5,000 in my wallet. When I'm buying a product or service on what appears to be a fixed-cost basis, I perceive your "pricing discrimination" as taking advantage of me.

Re: Orbitz shows costlier hotel options to Mac users

#135

Post by rmc »

lmm wrote: post #114
pooriaazimi wrote: post #104

Earlier quoted context omitted.

Well, the code to look at JS features must be written in JS itself (adding features to an array, sending them over JSON, redirecting to a new page, etc.). I'll pull out my Dev Console and fuck with it (set a breakpoint and change that part of the code), and make them think I'm using lynx instead of Safari. So, I don't think you can ever really know what browser your users use.

Sure. And even if you could, you couldn't really know whether they like cheap hotels based on it. The question is whether you can get a signal that's statistically well correlated enough to be useful.

Actually in this case you could infer they like cheap hotels (or don't like expensive ones). If someone is willing to go to a lot of effort to hide who they are, to hunt for bargains, or check they are getting a good price, they are probably very price sensitive, and would like the cheapest hotel you have, they've shown they are willing to waste their own time to get cheaper prices.

Re: Orbitz shows costlier hotel options to Mac users

#136

Post by chc »

RyanMcGreal wrote: post #133
chc wrote: post #122

Earlier quoted context omitted.

Really? You believe that people fall for Nigerian scams and click on shady ads on the Web, but not that framing a price increase as a discount (a tactic practically every grocery store in the world uses) would make many people feel better about it? I think you're drastically exaggerating the average person's resistance to marketing.

What percentage of people fall for Nigerian scams? One per hundred thousand? One per million? One per ten million? A marketing campaign with that rate of success would be an abysmal failure.

See my earlier reply to mikeash: http://news.ycombinator.com/item?id=4162587

In short, enough people respond to a Nigerian scam to make it one of the country's biggest industries. And that requires constant, active participation in the face of a blatant scam that gets less plausible at every step. Passively allowing your perception to be shaped by how an idea is presented is many orders of magnitude easier.

Re: Orbitz shows costlier hotel options to Mac users

#137

Post by lmm »

rmc wrote: post #135
lmm wrote: post #114

Earlier quoted context omitted.

Sure. And even if you could, you couldn't really know whether they like cheap hotels based on it. The question is whether you can get a signal that's statistically well correlated enough to be useful.

Actually in this case you could infer they like cheap hotels (or don't like expensive ones). If someone is willing to go to a lot of effort to hide who they are, to hunt for bargains, or check they are getting a good price, they are probably very price sensitive, and would like the cheapest hotel you have, they've shown they are willing to waste their own time to get cheaper prices.

Not reliably. There are plenty of affluent privacy nuts who care a lot about making sure they're not tracked but aren't particularly price-sensitive.

Re: Orbitz shows costlier hotel options to Mac users

#138

Post by czr80 »

AnIrishDuck wrote: post #129
czr80 wrote: post #111

Earlier quoted context omitted.

Actually, it does both - capturing consumer surplus for buyers who pay more than the average and eliminating deadweight loss for buyers who pay less than the average. [Technical note: By "average" I really mean the optimal price if the producer is only allowed to set a single price point. But let's not quibble.]

"buyers who pay less than the average" (which I'm assuming means buyers whose reservation price is below the market equilibrium) do not qualify as a deadweight loss. Deadweight loss refers specifically to: a) buyers who cannot buy something which causes an economic benefit (they gain more than it costs to produce). Examples: shortages, monopoly pricing. b) buyers who buy something that does not cause a net economic b…

Okay, let's take the monopoly example from wikipedia. Firm prices at monopoly price (60 cents), deadweight loss because all transactions for buyers with marginal benefit between 10 and 60 cents do not occur. Assume some identifiable group of people exists with marginal benefit deadweight loss is smaller. Therefore, price discrimination can reduce deadweight losses.

Re: Orbitz shows costlier hotel options to Mac users

#139

Post by doh »

"I don't understand the Orbitz debacle.

First, they're not charging Mac users more than Windows users for the same hotels / services. All users, regardless of OS, have access to the same set of options at the same prices. This is ad targeting, not price manipulation; they're (essentially) showing Mac users different advertisements -- for higher-priced options. You're free to not click on the ad; if Orbitz chose wrong, they're losing money (by wasting ad space on their page)."

Rest here: https://www.facebook.com/tudorb/posts/10100307597913113

Re: Orbitz shows costlier hotel options to Mac users

#140

Post by AnIrishDuck »

czr80 wrote: post #138
AnIrishDuck wrote: post #129

Earlier quoted context omitted.

"buyers who pay less than the average" (which I'm assuming means buyers whose reservation price is below the market equilibrium) do not qualify as a deadweight loss. Deadweight loss refers specifically to: a) buyers who cannot buy something which causes an economic benefit (they gain more than it costs to produce). Examples: shortages, monopoly pricing. b) buyers who buy something that does not cause a net economic b…

Okay, let's take the monopoly example from wikipedia. Firm prices at monopoly price (60 cents), deadweight loss because all transactions for buyers with marginal benefit between 10 and 60 cents do not occur. Assume some identifiable group of people exists with marginal benefit deadweight loss is smaller. Therefore, price discrimination can reduce deadweight losses.

Close, but your example is missing a crucial piece. Specifically, the marginal cost of producing the product.

Let's say the MC is 20 cents at the scale produced (Q1). The second group (students) get a MB of let's say 30 cents. They will not buy at a price of 60 cents, therefore there is a deadweight loss (MC < MB to students, but they do not have the good). If the monopolist can expand their output to Q1 + Q2 (where Q2 is the student sales) while keeping their MC under 30 cents, they can reduce the DWL.

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