Comment by twodave
5 hours ago
This fundamentally doesn’t work unless there is collusion involved, which we already have laws against.
5 hours ago
This fundamentally doesn’t work unless there is collusion involved, which we already have laws against.
Let's say you're shopping for something that is about $80. You have Prime so you pull it up in Amazon and see you can get it for $78.74. You throw it into Google and see Target lists it for $76.18. You usually order from Amazon; are you going to order from Target this one time to save $2.56? What if it was $3.56? What if it was $5.00? What if it was $7.86? What if it was $20.14?
Or let's say you need a flight. You usually fly American so you check there first. You've had Gold there for the last few years, and you're close now. You could go look up other airline prices and maybe you do as a quick gut check. American costs more, but not a lot more. Exactly how much more is it worth to you to fly American and hit your status? What if you just got a raise? What if you just moved? Or what if you just got laid off?
What is the exact price delta that would get you to change a purchase habit? How does that change from purchase to purchase? How does it change depending on the other circumstances in your life?
As a concept: there are price differences that don't matter to people, and those vary, sometimes wildly. Meanwhile, to a large company, adding even 1 percentage point to their margin, on average, could mean tens to hundreds of millions of dollars of additional profit that year. It could mean managers hitting targets and getting bonuses paid out.
None of this is inherent to the functions of AI, though. Trying to regulate it from that angle will just cause battle lines to form in weird places for the sake of not being considered AI. Or else extension of regulation beyond AI, which sounds pretty dystopian to me but is sort of my overall point.
Why doesn’t it work? It’s not obvious to me that a company with straightforward pricing would necessarily outcompete the algorithmic price discrimination one. They’d get somewhat more business from comparison shoppers who the algorithm feels can pay a lot, but lose business from people who the algorithm feels can pay less, and make less profit on everyone else.
Because then it’s not distinguishable from price differences that already exist. Where are the damages? Who is being harmed? As a consumer you can always overpay for stuff. Amazon could start using its knowledge of spending habits TODAY to do this, without AI.