The behavioral cost of personalized pricing

Summary

In Instacart’s response, they said that these pricing experiments were based purely on behavioral data - not on personal or demographic information. Or in other words, they aren’t looking at who you are, “just” what you’re doing. Andy Warhol once wrote about American culture: What's great about this country is America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you can know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good.From The Philosophy of Andy WarholYesterday, we all drank the same Cokes. But today, we scroll hyper-personalized social media feeds, tailored to our so-called revealed preferences. And tomorrow, maybe we’ll pay wildly-different prices for that same can of Coke (and not because you’re Liz Taylor, but because you spend like she does). It’s one more change that fragments our common experiences into isolated silos. Personal pricing leads to ritualized posturingEconomically, is this an issue? I don’t really know; if Lucille Bluth is willing to pay $10 for a banana, maybe we should let her - and the shop and platform can split the profits from whatever pricing scheme can make that happen. It’s the invisible hand at work. It still gives me the ick. It makes me feel like the business is trying to shrink my “consumer surplus” until I pay a perfect, maximized-for-me price. It makes me feel like an adversary, not a customer, and it makes me feel like I should be a worse person to get a better price. Is it just a cultural difference? As a kid visiting China, I once bought a Gameboy game from a nice lady at the electronics bazaar, a great deal at under $10, or so I thought. Later, I got scolded because I didn’t try to haggle: Remember, the first pric...