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What's the Deal?


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#1 Stolen

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Posted 06 November 2014 - 10:22 PM

og-ac951_travel_g_20141023135647-%281%29
 
In a world of high speed news, global information, instant communication, data, algorithms, and cookies, we tend to stay on our own side of the screen and trust that things are handled appropriately. 
 
In this digital age, we also have instant shopping and when making purchases online, one would like to think that businesses conduct themselves with transparency and fairness, especially online business that take our money. Because how would we know if something was slightly off?
 
Recently a few observant online shoppers who lived only a few miles apart discovered they were being sold the same thing but at different prices by Staples. And that raised all kinds of questions.
 
Are shoppers somehow profiled or targeted? Why would the same item ordered at the same time cost different amounts? How is the price difference determined? What technical methods and data are being utilized to determine pricing? We all know algorithms are used to form marketing and advertising campaigns, but should consumers be made aware that they can expect to pay widely differing prices based on certain individual factors and their personal Internet habits?
 
The Computer Information Sciences Department at Northeastern University decided to conduct a study to answer these and other questions. Using the crowd-sourcing site Amazon Turk, they recruited 300 people to create hundreds of fake accounts to run product searches and gather data on 16 sites including 10 major e-retailers such as Wal-Mart, Expedia, Home Depot and other hotel/rental car companies to determine if they use personalized pricing and if so, what are the triggers?
 
So, there actually is something called ‘personalized pricing'. It sounds awfully benign, so we let's take a look at what it means, and more importantly, do you think it is okay?
 
Example: You book a hotel room online. You may not realize it, but with price steering and discrimination, you are likely to pay more if you happen to be viewing those hotel rooms from your Mac computer (and yes, they can tell). You will pay less if you logged in a member of the site, but if you happen to be booking that room from your Android phone, you are for sure going to pay more. At the same time, you will be offered many more options on the Android than if you are trying to compare hotels and book from your desktop PC. Why? Because companies are collecting a lot of data and using it to profile you and charge you more or less than your next door neighbor who is buying the same item at the same time. Personalized pricing is based on many things but all based on data that companies are collecting including your cookies, what browser you use, and even your geographic location.
  
One might argue that is a common practice in brick and mortar stores. However, consumers also have reasonable expectations about pricing and fairness and what they should find when they purchase anything online.
 
The expectation is based on the premise that businesses should operate with transparency and fairness. That means that when shopping online, consumers have the right to know and understand what is being offered in order to make decisions about where they shop and how they spend their money. Certainly when consumers know what the discounts are or how the prices are levied, they then have an equal opportunity to spend a dollar there or somewhere else.
 
What's the deal? Don't use big data against us and then charge us one way or another without disclosing to us what you are doing.
 
Further reading: 
 
 


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#2 wizardfromoz

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Posted 07 November 2014 - 05:29 AM

In a bricks and mortar sense, in my part of Australia (Queensland) we have had discrimination for 15 to 20 years that I am aware of.

 

Our two biggest retail supermarket chains are Woolworths and Coles,with inroads made by SupaIGA, Aldi and the like.

 

If you lived in the suburbs, you paid by what suburb you lived in. My wife and I lived in a suburb named Runcorn, while my late Mother lived in a suburb named Forest Lake, more exclusive and she would pay 50 per cent more for a piece of rib fillet steak, and on and on through a grocery list, both at Woolies or Coles.

 

With regard to online "specials" - I myself haven't flown for 18 years, but I used to book tickets occasionally for my late parents with Australian carriers such as Virgin, Jetstar and Qantas.

 

I soon became acquainted with the phrase "This special ONLY available online".

 

Given the privacy and profiling issues you raise, there is much "food for thought", and not just of the grocery variety.

 

Keep Smilin' :wink:

 

:wizardball:  Wizard

 

ya gotta love Linux



#3 Stolen

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Posted 07 November 2014 - 12:29 PM

Hi wizardfromoz! Good points and thank you! I agree and I don't have a problem knowing that if I shop in a more upscale neighborhood or at a boutique store or I forget my coupon, I can expect to pay more.

 

However, I may have a problem with companies changing my prices and my search results based on factors that I am not aware of and they have not disclosed. 

 

Quote:

‘Discriminatory pricing isn’t illegal. It happens all the time when consumers get loyalty cards, coupons, or promotion codes. But consumers have protested when it’s not transparent. How can you shop for the best deal if you don’t know the rules of the game?

 

The frustration comes in the 'knowing' and in the 'not knowing'.  We know big data is collected and used to personalize pricing. We do not know exactly what or how they are using it to personalize pricing. This means they take the choice OUT of your hands and someone else makes the decision on not only pricing but literally in search results. 

 

This practice leads to other concerns such as if companies can use computer algorithms, your data, your browsing habits to determine they can charge you more or steer you one way, then can the same practices be used against you in job hunting, hiring, applying for a loan or denial of a lease for a home?

 

Quote:

‘Some companies mentioned in the Northeastern University study said they didn’t intend to discriminate.  Expedia and Hotels.com were researching the impact of pricing on sales by showing different prices to different groups of shoppers, a practice known as A/B testing — essentially conducting market research in real time. Without such testing, Expedia and other vendors have argued, it would be harder for them to run their business.

 

This is the same argument OKCupid made recently when the online dating service told some users they were bad matches when, in fact, its algorithm suggested they were compatible. Without a large control group, how could the company know its matchmaking software worked? OKCupid faced a huge backlash from customers who said they didn’t want to be used as guinea pigs.’

 

The ultimate point is that in brick and mortar stores, you can see what the specials are or you have a coupon in your hand…You know what your options are because the business is transparent and you are informed.

 

The Northeastern study has shown that price discrimination and steering is becoming much more common and much more sophisticated. To my knowledge, there are no regulations for online price steering and discrimination whereas we do have laws to protect us against price gouging

 

And, when you are shopping online, it is impossible to know whether the prices you are being shown are being altered or if cheaper products are being hidden from your search results and consumers should know about these practices so they can encourage companies to become transparent about how they personalize prices AND search results for the consumer.

 

Quote:

'Rather than using opaque and creepy algorithms to secretly alter content, companies could stick to the kinds of real-world incentives that shoppers already know and love, like coupons and sales.'

 

All quotes from Christo Wilson at Northeastern University



#4 Queen-Evie

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Posted 07 November 2014 - 12:40 PM

I've gotten better deals than what a site online has listed simply by calling the hotel directly.

Expedia and other such sites can be used for comparison purposes. Narrow down your choices, call the hotel and see what they offer. I'm a member of AAA and most hotels offer a AAA discount and military discount. AARP members can ask about an AARP discount.

You might be able to get a better rate with airlines by calling them instead of using the online middleman.

#5 NickAu

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Posted 08 November 2014 - 02:29 AM

I wonder how much of a discount I would get for using Linux?


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#6 Allen

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Posted 08 November 2014 - 10:54 AM

I wonder how much of a discount I would get for using Linux?

$9001 :P


Hey everyone I'm Allen I am a young web developer/designer/programmer I also help people with computer issues including hardware problems, malware/viruses infections and software conflicts. I am a kind and easy to get along with person so if you need help feel free to ask.

#7 TriggerJinxed

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Posted 17 November 2014 - 03:21 PM

Just recently I heard a rumor that if you continually clear out your browser history and your cache while shopping for airline tickets, you tend to get a better deal. It was elsewhere though.


Edited by TriggerJinxed, 17 November 2014 - 03:23 PM.

I think computer viruses should count as life. I think it says something about human nature that the only form of life we have created so far is purely destructive. We've created life in our own image. ~Stephen Hawking

#8 rarson

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Posted 21 November 2014 - 10:16 AM

The problem is that people don't bother to take the time to actually compare prices. They tend to rely on a singular solution. The question is whether the difference in price is large enough to warrant spending the time on it.






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