“Markets Today Are Not What We Believe” – The Façade of Competition
promarket.org
promarket.org
“If you want, run an experiment this evening. Instead of
using your MacBook, use a PC, you will get a cheaper price.
Leave your house, go to a different house, book the same
holiday or buy the same product, you will get a cheaper price."
Yeah why worry about it if it's only happening on travel booking sites? I mean, these practices would never be taken up by big companies with lots of data to really tailor prices per-user.
You'll get caught all the time if you're doing this.
Is there a anti-trust issue? no-> there isn't an issue with competition, the author is just angry someone isn't giving a good or service to them for free.
That's correct, although some online retailers show different prices depending on whether you visit them directly or via a price comparison site.
Time of Day, Time of Week, Year etc. Previous Shopping IP address/Geographical Location User Agent String (includes most info regarding device type, brand, model, browser etc) and more...
However, pricing from a travel agent (such as a different non official website) might be different, but that's because travel agents want to make money as the middlemen. However, you should always be able to find the lowest price publicly available (i.e. not privately negotiated) on the actual hotel's website.
http://hiltonworldwide3.hilton.com/en/best-price-guarantee/o...
http://www.marriott.com/online-hotel-booking.mi
https://www.ihg.com/hotels/us/en/customer-care/best-price-gu...
https://www.choicehotels.com/deals/best-rate
Why would a hotel want to pay 15% commission to Expedia or Priceline? Compare prices on kayak.com with roomkey.com and you will see that all the chain hotels are lower on roomkey.com (which is the website owned by the hotel brands themselves, hence no commission, and lower rewards member pricing).
Well, they don't want to per se, but since you are in the hotel business then you know that a hotel room, like an airline seat, is effectively a perishable good. An unoccupied room is a revenue opportunity that is lost forever, and worse it is a source of costs not associated with occupation (interest, heating, fixed wages, etc). Like an airline, a hotel operator is strongly motivated to maintain as close to full occupancy as possible. As long as average room revenue is above occupied room overhead, the business is ahead financially. I suspect that, like airlines, hotels cover their overhead with "economy class" guests, and make their profit from "first class" guests who are not price sensitive. Hotels have a dilemma because they want full occupancy without conditioning consumers to expect discounted rates. Their solution has been to be to officially advertise "list price" while discounting as necessary through 3rd parties.
However, I'll remember to check roomkey.com from now on, thanks!
Is "almost all" actually true? I know that dynamic pricing capability is being built, and I have detected a few cases of it myself, but right now the actual prevalence seems really low.
People already self segregate into pricing groups: some people buy from high end retailers and other people buy from discount retailers, often for identical manufactured products.
If it's showing different prices to different users it's usually something specifically B2B where you need to have a relationship with some kind of vendor to even see the prices. The public nature of most consumer prices makes it so that this kind of scheme is not all that tenable.
Sure you could show different ads to people who use different devices but most of the time the different prices are the ones you pay to the advertising provider -- the consumers generally pay the same.
When people try to geographically discriminate for digital products you often wind up with a big retail arbitrage trade that appears out of nowhere -- see the market in digital PC game keys purchased in one area with lower prices and sold in another area with higher prices.
>He continued: “The second problem here is that even if I were to switch, we have to understand that the consequences of the switch could quite easily be service degradation. I have, in a way, created a partnership with Google over 10 years of searches. They have literally tens of thousands of emails from me, thousands of points of search data. If I were to suddenly switch to Yahoo or to Bing, that is a massive loss for me because Yahoo and Bing don’t have that data. I can’t easily export that data. That, to me, shows a fundamental flaw in so much of the economics literature, in that it tries to model a unitary consumer switching. People are in very different circumstances if, for example, they used Google for five years intensively, or if they have cultivated a, say, diverse array of search engines that they use.
Wildly overstating how much Google cares about any individual user and how much data is actually available to advertisers or internally available within Google.
For the user if you switch from Google to Bing the change is relatively minor. A lot of people out there probably 'switch' to Bing accidentally when Windows upgrades or they accidentally set their browser to a different default - and may barely notice the difference.
This article is nearly stream of consciousness buzzword gibberish that has no relationship whatsoever to the topic ostensibly being discussed. It's a fun word game for some people to gargle out buzzwords and demonstrate how hip they are to technology.
Unless I have misunderstood, you are suggesting that fixed pricing provides higher expected returns than tailored pricing, which I think is incorrect.
Imagine people's private value for a particular good is uniformly distributed between 0 and 1.
In the scheme you propose the expected per-customer return for a fixed price x is x * (1-x), because everyone the x fraction of people whose private value falls below x will not pay at all, returning 0, and the return for all the (1-x) fraction of people whose private value is above x is just x, because the price is fixed.
In a tailored pricing scheme, still requiring a minimum price of x, the expected per-customer return is 0.5 * (1+x) * (1-x), because again the x fraction of people whose private value is below x will not pay at all, returning 0, but for the (1-x) fraction whose private value is above x you expect to receive their average private value, or 0.5 * (1+x) (obviously assuming you could determine this perfectly).
The maximum return under these two schemes is using the tailored pricing scheme with x set as 0, meaning that tailored pricing for all customers provides the highest expected return. You can see a plot of the two curves here [0]. This is a simple model, and perhaps someone more skilled in mathematics can provide a more general answer, but it does show that tailored pricing _can_ be beneficial (suggesting firms would probably try to do it if they found it to make sense, and were able).
I would also note that the following quote seems like it is probably not correct as well, given that a web server has full control over what it returns to each individual, as well as the means for obtaining fairly reliable distinguishing information. The prevalence of these behaviours is difficult to assess because it is somewhat difficult to perform comparisons between individual responses at scale.
> The public nature of most consumer prices makes it so that this kind of scheme is not all that tenable
[0] http://www.wolframalpha.com/input/?i=plot+0.5(1%2Bx)(1-x),+x...
"no problem I have a Domino's pizza delivered with your favorite toppings."
I was in the mood for pizza hut.
"No problem...wait domino's is having an alexa preferred partner special...would you like $4 off?"
most vendors of course will dive head-first into this arrangement with their eyes wide open, because most of them don't think long-term, they want that revenue now cost-be-damned, and quite frankly they're just not as good as the executives running amazon.
see: walmart from 10 years ago. wonder how many of those nice folks made the move from arkansas to seattle recently...
You get all these perverse incentives towards the short term via the board and the CEOs they pick (never mind the whole stock option bonuses etc the CEOs are offered).
For example, if Dominos were the only pizza provider, they would be able to offer whatever terms they wanted. Amazon only leverage would be mutually assured destruction [0] of not offering any pizza. If there is a diverse markets of pizza providers, Amazon can dictate the terms and drop any provider who does not play ball.
In fact, many companies make a point of having multiple upstream providers to limit the leverage any one provider has over them.
[0] Not quite an existential threat to either, but painful for both.
What you're really seeing is not that there is a winner takes all, rather every product is being turned into such a unique experience that there can only be one.
Lets go back to 19th century. You received grain which could have been produced by any farmer. Yes there was different quality of grains and you judged every grain you bought based on it's individual quality, but at the end of the day, there were thousands of farmers providing you with grain.
In 20th century when 'branding' arrived, then although there were different kinds of products, at the end of the day once you chose Pepsi, you stuck with it, if you chose Wonder bread, then that's mostly what you ate. In many ways, Pepsi had a monopoly in providing Pepsi cola drink and Wonder bread had a monopoly in providing Wonder bread.
In 21st century, the experience would even more extremely brandized. We have seen this with Apple computers. When you buy a Macbook, you automatically buy the different hardware devices Apple chose for you, and many people are completely ok with (in fact love) this echosystem. If you don't like it, then you go ahead and buy yourself an Android phone and a PC.
That's a nifty little portmanteau of echo-chamber and ecosystem, though I do recognize it could have just been an innocent misspelling.
(https://creators.vice.com/en_us/article/meet-the-artist-usin...)
The alternative to self-driving cars that behave badly is not necessarily other self-driving cars, but simply non-self-driving cars.
self-driving cars will quickly prove to be thousands of times safer than human-driven cars. given a few decades for public opinion to align with the facts we'll see human-driven cars heavily regulated as the extreme hazards that they are.
> I can't see either happening if self-driving cars have major limiting factors like that.
the 'limiting factors' are introduced as optional 'luxury features' several years after self-driving cars have established domination of the market, and over the years are integrated downward into more accessible models.
(Which McDonald's or Burger King isn't a whole lot better than McDonald's, but I think you are overstating the ability marketers will have to wedge people)
Particularly on Amazon, where many people are selling re-branded stuff from Chinese vendors which can be obtained much cheaper on AliExpress or eBay.
To give customers the best possible shopping experience, Sellers must meet performance-based requirements to be eligible to compete for Buy Box placement.
All Buy Box eligible offers are then further evaluated to determine the Buy Box winning offer. One "New" and one "Used" condition offer, as applicable, will receive Buy Box placement.
https://www.amazon.com/gp/help/customer/display.html/ref=hp_...
--- No reason to think Alexa will work differently
The only thing I ever retweeted on my otherwise completely empty and unused Twitter account so that I could copy and paste it when needed:
"For evil to triumph, all that is required is for good men to respond rationally to incentives."
You learn all your basic ethics during early childhood, not in university courses. Most of the rest is the quote above. University classes talk to and train parts of the brain whose involvement in the ethics of your decisions is minimal.
The ethical questions a software engineer (or almost any professional) faces are not "basic". More specifically, the "basic" ethics we learn as children relate to direct interpersonal relations and small group dynamics (including excessive deference to authority, which "good" ethics must unlearn).
These lessons to not prepare us to deal with questions that involve millions of people whom we know very little about.
The challenge is to have the right reactions when you are sitting in a comfortable office and the moral dilemmas inherent in your work are entirely hidden by metrics, and all your bosses ask you to do is to drive the graph up and to the right.
And that is where I refer back to my comment: Pretty much nobody will become the whistleblower or the guy who prevents their company (or their country) from landing that billion dollar arms sale or from raising drug prices to levels unaffordable to many sick people even if they are perfectly well aware of how bad it is. There is one Snowden outlier for a million other people. "If I don't do it somebody else will" is just one of numerous rationalizations (and it even is actually correct).
Statistically speaking the impact of ethics education vs. incentives is like 1 : 1 billion or worse.
This has an impact on your quote because the urgency with which one pursues these rational incentives is going to depend on that person's estimate of their need (i.e. how much they perceive themselves to be lacking, in a very broad sense which includes needs of kin, emotional needs, etc.).
Words to live by if you've never encountered a problem you can't solve with A*...
I've never taken an ethics course myself, but we discussed ethical problems extensively when I was in high school and I've read numerous books on the subject. It's taken me until middle age to be able to easily recognize and debunk unethical rhetorical strategies and philosophical positions, and I'm sure than in 10 and 20 years I'll bemoan my present lack of sophistication.
The question is, why do you invent stuff I didn't say? Is this show you get your highs? People like you are one of the major annoyances of online discussion.
I didn't say anything about my childhood. Stop making stuff up, troll.
If you want to create change in the world, you need rational thinking, not wishful thinking.
Most of the troubles we have with Healthcare in the US is due to very poor incentive structures. I'll never understand why people were surprised when investors realized they could buy niche lifesaving drugs and raise their prices by 6,000% since insurance providers would pay for them regardless.
Obviously they would do that. The system was never designed to reduce the incentive to not do that (ie. making it illegal). The problem isn't "unethical" people. Trusting people to act ethically without any disincentives (ie. Jail/fines/social stigma/etc) is like trusting your toddler to run safely around a busy intersection.
The question is, why do you invent stuff I didn't say? Is this show you get your highs? People like you are one of the major annoyances of online discussion.
The course was surprisingly contentious. A lot of students saw it as a waste of time or just an easy GPA booster. It did have some weird content, like a Meyers-Briggs day, but overall I thought it was worthwhile.
My ABET accredited ethics course in college took the attitude that ethics (for some definition of ethics) can't be taught in a semester at college so we'll just inform you about consequences of different choices engineers have made in different situations.
And clearly that is not happening.
If that bothers you, talk to a union rep, because few businesses in existence would rather do the right thing if doing the wrong thing makes an extra buck. If the money flows in, those maintenance costs will keep you employed; if it doesn't, those costs won't need to be paid.
You don't refuse to deploy, you don't leak, and you don't shame. If you feel as you you ethically must do any of those, quit first. (Don't mention your intentions to HR at your exit interview.)
What if you don't question that the change will make money for the business, but have ethical concerns about it (either because of its effect on users, competition, third parties, etc). How do you decide if you have ethical concerns?
What if you are writing firmware for brakes that is going to get deployed to thousands of cars?
>If that bothers you, talk to a union rep
What union?
Even if there was a union, this entirely avoids the central question: what behavior is ethically concerning?
>If you feel as you you ethically must do any of those, quit first.
This answer entirely avoids the ethical question of '(when) should you do any of those things'. All it says is "quit first" (a position which solidifies your moral high-ground, but which I do not agree with from a purely ethical standpoint).
Exactly. Software professionals don't have a (powerful) union or trade association, so our ethical concerns are not significant from a business standpoint. The company hired you to do what the company wants, not what you think is best. You have no leverage to enforce your views.
Making an ethical stand can get you fired or blacklisted from future promotions. Or it might get you recognized and rewarded by the company. It all depends on the company leadership. Do you believe your company leadership has the same respect for ethics as you?
Have you ever considered that the ideological opposition to collective action and glorification of individual liberty that obtains in hacker culture is in fact a form of social engineering expressly designed to disempower you and prevent you from threatening the social structures that rule your life? While public companies are nominally semi-democratic and allow open access to participate in their commercial rewards, in practice almost all large firms are dictatorships and operate on the same pragmatic principles as dictatorships.
It's baffling to me that so many people who conceive of themselves as free individualists are in such a rush to put themselves as the disposal of autocratic rules. Meanwhile the open-source movement systematically cuts itself off at the knees by displaying an irrational antipathy to any sort of private profit, thus ensuring a steady supply of free voluntary labor which is economically unsustainable for anyone who isn't willing to live as an ascetic.
This also seems to assume there is an inherent wrongness in discriminating what price is offered, which many wouldn't find unethical (especially if the discrimination isn't based on protected classes).
I feel that the 'definitely' comes from a personal system of ethics that is by no means shared with others. A system that, at least to other systems, might be unethical to enforce on others.
I don't see how a single course in an engineering degree can even begin to fix this. I aced my ethics course but consider it a waste of time, not because ethics is a waste of time, but because what the course presented was so light as to be useless. Imagine giving a one semester intro to programming with javascript to MDs; that's what it felt like.
Anyhow, I agree that other people may judge the situation differently than me. (I'm sure that for a given ethical conclusion, there's always some ethical system that disagrees, so if you're after certainty, you've picked the wrong topic.) You asked; I answered. If you don't like the answer, just fill out the refund form.
Intro courses aren't meant to fix anything. They're meant to wake people up to the topic and prepare them to dig further, either in other classes or on their own. If you're arguing that more should be mandatory, I could get behind that. If, on the other hand, you're arguing that no education is better than some education, I'm not persuaded.
In Europa merchants were taking advantage of the numerous measure of length, weight, volume to make customers unable to be comparing.
There was 117 measure of length used.
So as a result, Louis XVI who was influenced by the early liberal set on course the project of the international system. The idea was a market is more competitive if states regulate the obigation for merchant to make measure comparable.
Hence came the meters, kg, liters and the decimal system.
It was adopted by the republican after the king was overthrown because they were also willing for a fairer competition...
It has always stroked me as weird that USA never saw the inherent liberalist advantage of simple measurement system.
I read a claim somewhere that the pox of different measurement systems wasn't as much of an issue in Britain and it's American colonies so they stuck with archaic but consistent units a lot longer.
Deal and comparison sites are the solution here basically, and they're readily employed by people who actually use the market and don't just blindly buy from 1 seller.
tldr: If you want a good deal, go looking for one, if you don't, you get screwed.