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

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

#61

Post by JumpCrisscross »

lokar wrote: post #12
JumpCrisscross wrote: post #8

Earlier quoted context omitted.

> 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.)

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?

> Like a rideshare app offering worse pay to drivers who they know are heavily in debt and near their payment deadline?

No. Labour is a famously idiosyncratic market.

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

#62

Post by arjie »

robrtsql wrote: post #6
xhkkffbf wrote: post #3

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?

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…

Is it just a matter of the 'turbo' button then? Surveillance pricing could be reframed to be entirely discount based. A banana shall be $10k/unit and then it is discounted either $9999 or $9998 depending on who you are? It seems fairly equivalent. I don't like it either because I don't want the vendor to extract almost all the surplus from the relationship but I suppose I could get that by just settling for fewer things and only buying where the price does not capture surplus.

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

#63

Post by bluefirebrand »

gruez wrote: post #51
bryanlarsen wrote: post #47

Earlier quoted context omitted.

That's called "the consumer price surplus". It's one of the major reasons that market economies are better for everyone than command economies. And it's the antithesis of price discrimination. You're right about monopolies -- price discrimination is a symptom of monopolistic pricing powers. It's not that price discrimination should be illegal, it's that successful price discrimination is a strong symbol of monopoly,…

>That's called "the consumer price surplus". It's one of the major reasons that market economies are better for everyone than command economies. And it's the antithesis of price discrimination. I'm not denying this exists, just pointing out your Reductio ad absurdum is absurd and fails rhetorically. If your point is that without surveillance pricing legislation, people selling us essentials will milk us for the last…

> If your point is that without surveillance pricing legislation, people selling us essentials will milk us for the last dime we have, that simply isn't happening today

https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada

They don't even need surveillance pricing, they already try to do it. This wasn't some 1920's scheme, this was very recent.

It seems to me that the level of surveillance we're talking about, with dynamic pricing, would make it both easier for them to gouge and harder for price fixing to detect. Win win for slimy capitalists.

Edit: so maybe you're right that given the opportunity, no one is trying to milk you for literally every dime you have. Still, we should probably not allow businesses to milk the average person for every dime they can get away with, either. That's still bad for society.

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

#64

Post by tavavex »

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.

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

#65

Post by Schiendelman »

pc86 wrote: post #16
dynm wrote: post #11

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. The…

> 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? This seems entirely reasonable - they're obviously a point where tax rates are too low and revenue isn't being brought in, but also a point where tax rates are too high, incentivizing tax shelters or outright crime, and revenue starts decreasing again. The price…

It's not necessarily obvious that tax rates can be too low. If you're a government and you issue the currency, you can get much of the same outcome as taxation by printing the money you need to spend. What you don't get by doing that is natural redistribution the way graduated marginal rates give you. You have to spend to redistribute.

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

#66

Post by Schiendelman »

everdrive wrote: post #37
dynm wrote: post #11

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. The…

I think very few people are thinking about the harder economic arguments here. We know that if companies are drawing prices, they'll do it in the way that most hurts the consumer and most benefits the company. Or more realistically, in the way that the company _perceives_ it benefits them the most. I'm not necessarily opposed to the ideas you're talking about, I just have zero faith that anything positive will be sto…

In the real world, the best examples of price discrimination I'm aware of are lowering published prices for those who can't afford as much. Wwre you thinking of another example?

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

#67

Post by AngryData »

arjie wrote: post #62
robrtsql wrote: post #6

Earlier quoted context omitted.

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…

Is it just a matter of the 'turbo' button then? Surveillance pricing could be reframed to be entirely discount based. A banana shall be $10k/unit and then it is discounted either $9999 or $9998 depending on who you are? It seems fairly equivalent. I don't like it either because I don't want the vendor to extract almost all the surplus from the relationship but I suppose I could get that by just settling for fewer thi…

As long as the company must clearly show the base original price I would be more amenable to it.

But personally I think goods should have one singular price for everybody. They can set their out the door price however they want, but anybody else should also be able to buy it at that price at the same time.

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

#68

Post by pc86 »

tavavex wrote: post #64

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 a…

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.

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

#69

Post by bobbiechen »

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-persona...)

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

#70

Post by tavavex »

pc86 wrote: post #68
tavavex wrote: post #64

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 a…

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.

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?

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