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Maryland to ban A.I.-driven price increases in grocery stores

nytimes.com

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Re: Maryland to ban A.I.-driven price increases in grocery stores

#31

Post by AussieWog93 »

kdheiwns wrote: post #20
Uehreka wrote: post #17

Earlier quoted context omitted.

That then leads to a cat and mouse chase, and in the end the big corporations will win by forcing you to tie your real identity to your shopping identity, which won’t turn off enough consumers to meaningfully impact the bottom line.

The problem isn't really turning them off as much as it is people having no choice. There aren't too many supermarket chains. If one chain does this, rather than other chains undercutting them on price, they're going to do the same to maximize their profits. Most people only have one or two stores near their home. Some maybe have three. That doesn't leave a lot of options. And if you or your family is hungry, you won…

>And if you or your family is hungry, you won't drive around for hours, burning gas, until you find a shop that saves you a few bucks.

Sure, but if you felt you didn't get a good deal you're not going to go back.

Like I personally don't know every single price at every single shop before I go, but I do know for example that Henry's Mercato or the Big Watermelon will have some kind of cheap bulk fruit, Aldi has cheaper staples, Springvale has the best fish etc. etc.

There are plenty of other places I checked out once or twice and then wrote off as a bad deal.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#32

Post by testing22321 »

njovin wrote: post #25
MithrilTuxedo wrote: post #23

Isn't the Free Market already a form of AI that does exactly that? How can you ban tools for measuring the value of things?

The ban is specifically on adjusting prices _per-consumer_ based on data known/collected/stolen/assumed about the consumer.

Which is wild, because things like car dealerships, airline tickets and many more do it already.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#33

Post by chis »

amazingamazing wrote: post #9

Why grocery stores only? It’s also unclear how this will change anything - don’t the grocery stores in richer areas already charge more? I’ve noticed Whole Foods prices are not the same across all stores even in the same state.

Price targeting can help the poor in some cases and hurt them in others. For essentials where the need to purchase is high and the provider has a semi-monopoly, dynamic pricing leaves everyone worse off. For instance, think of groceries where there is only one store nearby or medicines with only one producer.

On the other hand, for something like a Netflix subscription, price discrimination DOES tend to help the poor users out. Netflix is 10x cheaper in third world countries for the exact same product. If they were forced to charge the same price everywhere, they would just charge everyone the US price and foreign users would be left out.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#34

Post by danielmarkbruce »

testing22321 wrote: post #32
njovin wrote: post #25

Earlier quoted context omitted.

The ban is specifically on adjusting prices _per-consumer_ based on data known/collected/stolen/assumed about the consumer.

Which is wild, because things like car dealerships, airline tickets and many more do it already.

Not to mention seniors discounts, active military, and all kinds of things.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#35

Post by WalterBright »

pdonis wrote: post #28
WalterBright wrote: post #22

Earlier quoted context omitted.

The inevitable result of government setting prices is some combination of: 1. shortages 2. gluts 3. black markets It doesn't matter what your or my opinion on it is, any more than having an opinion on F=ma. The Law of Supply and Demand is always in play. There are thousands of years of history on this.

This isn't government setting prices. It's just government outlawing a certain form of price discrimination. It's forbidding sellers from transferring consumer surplus to themselves by charging a higher price to customers that would be willing to pay a higher price for the same item. But the item is still available to buyers that wouldn't want to pay the higher price--at the lower price. The grocery stores aren't goi…

> This isn't government setting prices. It's just government outlawing a certain form of price discrimination.

I.e. the government is regulating prices, yet another attempt going on for 4,000 years of trying and failing to repeal the Law of Supply and Demand.

> The grocery stores aren't going to raise the overall price to compensate for losing the ability to price discriminate: that would result in less profit for them.

Allow me to explain how prices are set:

Consider an appliance store. They want to sell refrigerators. What do they do? They have 3 refrigerator lines - the stripper, the midline, and the lux. The purpose of the stripper is that is what they advertise, to bring customers into the store. The purpose of the midrange is to upsell those who come for the stripper, as they think the extra features are worth it. The lux is sold to the wealthy customers who just want to buy the best. (Not having a lux is means the retailer is throwing easy money away.)

The moneymaker is the midrange.

You'll see the same thing in the grocery store. The store advertises the price of milk, which is likely at below cost (called a "loss leader"). People come to buy the milk, which is always on the back wall of the store. The customer has to pass by all kinds of things to get to the milk, and they'll buy it. The most overpriced stuff will be next to the checkout line.

Cheeses come in cheap, midrange, and lux, too.

There's been an extensive amount of research on exactly how to set up the store to maximize profits, which is necessary as grocery stores have razor thin margins.

BTW, the article is paywalled. I have no idea how a grocery store is going to adjust prices at checkout, as the prices are marked.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#36

Post by WalterBright »

pdonis wrote: post #26
CuriouslyC wrote: post #8

Earlier quoted context omitted.

Supply curves are literally predicated on one price for a market.

If by this you mean that standard supply-demand economics can't model price discrimination, which is what's going on here, that's not correct. See, for example, Chapter 10 of David Friedman's Price Theory , where he models price discrimination using supply and demand curves just fine. In terms of this kind of analysis, price discrimination is a way for sellers to try to transfer as much as possible of what would othe…

And the buyer tries to pay as little as possible. Negotiating is a skill well worth learning (lots of books on it).

Re: Maryland to ban A.I.-driven price increases in grocery stores

#37

Post by asdfasgasdgasdg »

xethos wrote: post #29
geuis wrote: post #15

Doesn't this then open a market for "vpn style" apps that make everyone look broke? Get the lowest prices (ie market/baseline) on every interaction from food delivery to airplane tickets?

You've actually got that backwards - being wealthy makes your time and effort worth more (to you) than the half-hour you'd spend price-comparing every item in the cart for each price difference (each between $0.03 and $2.00), while being poor makes price comparisons much more worth it Being more financially stable means you pay higher prices, in this scenario

Right, which would imply that a VPN that makes you look broke would help get you better prices.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#38

Post by NiloCK »

clintonb wrote: post #13
amazingamazing wrote: post #9

Why grocery stores only? It’s also unclear how this will change anything - don’t the grocery stores in richer areas already charge more? I’ve noticed Whole Foods prices are not the same across all stores even in the same state.

You're thinking of pricing zones—shoppers in Zone A pay a different price than those in Zone B. This makes sense, for example, if shipping costs are higher in Zone B. The bill in question is about per-shopper pricing (e.g, you and I pay different prices in the same store). This is something Lyft and Uber do, but it's not really possible in retail.

This is possible in retail, or will soon be.

Canada's major grocery chain has migrated entirely to LCD price tagging that can receive OTA updates. There are now no paper price labels in the store.

The same chains have extensive camera coverage on the entrance / exits of the store.

So pricing can be an optimization function as fine grained as persons currently in the store.

Cameras on the aisles as well can enforce that individual tags update while nobody is within 15 feet, etc.

It's hard to even talk or think about without without sounding (and becoming!) conspiratorial. Add a little data from our trusted partners and they can jack specific prices according to urgency - eg, floral bouquets when you're en route to a dance recital.

Re: Maryland to ban A.I.-driven price increases in grocery stores

#40

Post by bdangubic »

thunderstruck wrote: post #39

I'd like to see fair pricing for airlines tickets too.

use a VPN, like Bulgaria is usually good. everything is on sale if you are Bulgarian (most of the time).

you may have to text back Yes your credit card company when you get a fraud alert text - that’s about the only inconvenience. just bought US-EU return ticket for June - 22% lower than lowest price I’ve seen “from US” in the last month

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