Re:The Welfare Effects of Dynamic Pricing: Evidence from Air...
by JoshTriplett on Friday March 25, 2022 @03:42PM
(#30806321)
> My take is that consumers understand and are willing to put up with dynamic pricing for airplane seats because the algorithm is presumably understood.
I think consumers put up with dynamic pricing for airline seats because they don't have another option available, and because it's a long-standing practice that didn't change in an era where that change would have generated blowback.
> But what happens when airlines quietly change algos...to raise prices because of my browsing habits, IP, or CC used?
Orbitz showed higher prices to Mac users because they figured (probably correctly) that Mac use was correlated with willingness to pay more. They stopped that practice when it became widely known, but it wouldn't surprise me at all if others do the same and don't get caught.
I think consumers put up with dynamic pricing for airline seats because they don't have another option available, and because it's a long-standing practice that didn't change in an era where that change would have generated blowback.
> But what happens when airlines quietly change algos...to raise prices because of my browsing habits, IP, or CC used?
This has already happened: https://business.time.com/2012/06/26/orbitz-shows-higher-pri...
Orbitz showed higher prices to Mac users because they figured (probably correctly) that Mac use was correlated with willingness to pay more. They stopped that practice when it became widely known, but it wouldn't surprise me at all if others do the same and don't get caught.