This is just dynamic pricing with extra steps. Airlines have done this for decades but at least they're transparent about it. The difference here is that readers don't know the person next to them is paying a different price for the same article. Once you start using behavioral data to set prices, the incentive flips from "make content worth paying for" to "figure out who's desperate enough to pay more." Not a great look for a newspaper that positions itself as a public service.
I thought that prices changed for everyone, but they changed over time. Book a flight 6 months before? You get a good price. Book a flight day-of? Hope you've got money in the bank!
(I'm not the OP but I'm guessing this is what they're talking about?)
That's still person-invariant though. This gives the impression that they could potentially be tailoring prices based on what they feel each individual person will pay.
Plenty of digital services have the ability to do this, but don't. Honestly, I think the primary reason is that it's extremely offensive; it feels like saying "we're charging you more, for no reason, other than that we think you'll pay it".
Oh absolutely. Price discrimination is hated by all customers.
The trick airlines use is to make the price discrimination transparent in a way that a customer feels is "acceptable" - time variance, seat variance and addons etc. It adds the same level of price discrimination, but because it's not directed _at the person_, the customer begrudgingly accept it.
The best example of dynamic pricing I know of is college tuition; if you have infinite money you just pay the price, otherwise you get "student aid" (after taking out as many loans as you can bear) which effectively means you are paying a reduced price compared to the full-ride student.
I understand your point, but there are only X number of seats in an airplane, airline seats are physical products. Why should the same be applicable to a digital product? I mean, it is their property so they are free to charge whatever they want (just like the users are free to leave) but it feels way more intrusive to track users' reading habits and tailor pricing to each user than saying "only 2 seats are left but 5 people are interested, so we're jacking up the price"
It absolutely is a different and more insidious type of dynamic pricing.
First, you can use the airline's strategy to your advantage by planning early. It doesn't feel as unfair because everyone gets the same terms and the system is transparent and equal
WaPos daynamic pricing is simply maximizing value capture, without any way of a consumer benefitting. It's 100% lose-lose for the consumer. You always pay the maximum you are willing to pay. No discounts!
I was just answering OPs question about how airlines were transparent about their system and decided to answer it factually.
while it might feel like a discount, buying airline tickets upfront is not a "true" discount in the traditional sense, because the money is prepaid, and is worth it to the airline to receive guaranteed income from a seat early. A true discount is one where the margins of the product is shrunk to reduce the price.
Do these models try to factor the target’s knowledge of what things cost, or maybe even their knowledge of dynamic pricing or discounting practices? That seems like it would not necessarily inversely correlate with wealth.
To use an extreme example, you’d have wanted your model to have offered Warren Buffet the base price, or even a deal.
I'm sure it's planned. To miss out on the Warren Buffet sale is to miss out on additional revenue on zero COGS, and it's against the goal of individualized pricing to squeeze out all consumer surplus.
Good read! Yes—-digital reputation as something to have to manage. And that is only possible once you know what kind of price variance is possible; not everyone will.
Another situation where bad actors benefit. From the article:
> What really interests Cian, who has published research[1] exploring how audiences tend to have less trust in media outlets that are transparent about their AI use, is the fact that the Post disclosed its use of algorithmic pricing at all. “If you ask people [whether they] want transparency on what’s behind your pricing strategy, people say ‘yes,'” he says. “But what we found in my research is a paradox, in the sense that people think that they want to know, but once they know, the reaction is worse than not knowing.”
It shouldn't be surprising that a company who might be using a scummy pricing strategy gets less blow-back than one who comes right out and brazenly says they are using a scummy pricing strategy. When the action is bad, admitting to it and continuing to do it shows contempt.
It's as though you caught a thief rifling through your pockets and they just looked you in the eye and said, "You caught me. I'm not stopping. What are you going to do about it chump?"
> But what we found in my research is a paradox, in the sense that people think that they want to know, but once they know, the reaction is worse than not knowing.
"People said they wanted to know if companies were putting feces into chocolate, but once they know, they stop buying that 'chocolate'. The reaction is worse than not knowing! What a paradox! The revealed preference is that consumers want companies to secretly include feces. I am a professor."
If it was they would say so as that would not be seen as nefarious.
Part of me likes the idea of the price being set by how much you read, but the increasing amount of clickbait would probably make such a scheme not a good thing. I used to look at Google's news feed on my phone at times--lots of stuff that was clearly ads pretending to be articles but mostly you could pick out the interesting stuff. Now, though, very often the "interesting" stuff turns out to be AI garbage that doesn't actually say what it says it says.
This is just dynamic pricing with extra steps. Airlines have done this for decades but at least they're transparent about it. The difference here is that readers don't know the person next to them is paying a different price for the same article. Once you start using behavioral data to set prices, the incentive flips from "make content worth paying for" to "figure out who's desperate enough to pay more." Not a great look for a newspaper that positions itself as a public service.
How are airlines transparent about it?
I thought that prices changed for everyone, but they changed over time. Book a flight 6 months before? You get a good price. Book a flight day-of? Hope you've got money in the bank!
(I'm not the OP but I'm guessing this is what they're talking about?)
That's still person-invariant though. This gives the impression that they could potentially be tailoring prices based on what they feel each individual person will pay.
Plenty of digital services have the ability to do this, but don't. Honestly, I think the primary reason is that it's extremely offensive; it feels like saying "we're charging you more, for no reason, other than that we think you'll pay it".
Oh absolutely. Price discrimination is hated by all customers.
The trick airlines use is to make the price discrimination transparent in a way that a customer feels is "acceptable" - time variance, seat variance and addons etc. It adds the same level of price discrimination, but because it's not directed _at the person_, the customer begrudgingly accept it.
The best example of dynamic pricing I know of is college tuition; if you have infinite money you just pay the price, otherwise you get "student aid" (after taking out as many loans as you can bear) which effectively means you are paying a reduced price compared to the full-ride student.
Have you ever noticed that the tickets for a nearly empty flight is a lot cheaper than a nearly full one? Thats dynamic pricing.
The price changes according dynamically according to demand.
I understand your point, but there are only X number of seats in an airplane, airline seats are physical products. Why should the same be applicable to a digital product? I mean, it is their property so they are free to charge whatever they want (just like the users are free to leave) but it feels way more intrusive to track users' reading habits and tailor pricing to each user than saying "only 2 seats are left but 5 people are interested, so we're jacking up the price"
It absolutely is a different and more insidious type of dynamic pricing.
First, you can use the airline's strategy to your advantage by planning early. It doesn't feel as unfair because everyone gets the same terms and the system is transparent and equal
WaPos daynamic pricing is simply maximizing value capture, without any way of a consumer benefitting. It's 100% lose-lose for the consumer. You always pay the maximum you are willing to pay. No discounts!
I was just answering OPs question about how airlines were transparent about their system and decided to answer it factually.
while it might feel like a discount, buying airline tickets upfront is not a "true" discount in the traditional sense, because the money is prepaid, and is worth it to the airline to receive guaranteed income from a seat early. A true discount is one where the margins of the product is shrunk to reduce the price.
Do these models try to factor the target’s knowledge of what things cost, or maybe even their knowledge of dynamic pricing or discounting practices? That seems like it would not necessarily inversely correlate with wealth.
To use an extreme example, you’d have wanted your model to have offered Warren Buffet the base price, or even a deal.
I'm sure it's planned. To miss out on the Warren Buffet sale is to miss out on additional revenue on zero COGS, and it's against the goal of individualized pricing to squeeze out all consumer surplus.
I recently wrote about the harms here and it made the front page at the time: https://digitalseams.com/blog/the-behavioral-cost-of-persona...
Good read! Yes—-digital reputation as something to have to manage. And that is only possible once you know what kind of price variance is possible; not everyone will.
You’re in my RSS reader now.
Well this should be banned. Or at least watpo should be required to be transparent about this whenever you subscribe
Another situation where bad actors benefit. From the article:
> What really interests Cian, who has published research[1] exploring how audiences tend to have less trust in media outlets that are transparent about their AI use, is the fact that the Post disclosed its use of algorithmic pricing at all. “If you ask people [whether they] want transparency on what’s behind your pricing strategy, people say ‘yes,'” he says. “But what we found in my research is a paradox, in the sense that people think that they want to know, but once they know, the reaction is worse than not knowing.”
> [1] https://ideas.darden.virginia.edu/AI-disclosure-dilemma
It shouldn't be surprising that a company who might be using a scummy pricing strategy gets less blow-back than one who comes right out and brazenly says they are using a scummy pricing strategy. When the action is bad, admitting to it and continuing to do it shows contempt.
It's as though you caught a thief rifling through your pockets and they just looked you in the eye and said, "You caught me. I'm not stopping. What are you going to do about it chump?"
> But what we found in my research is a paradox, in the sense that people think that they want to know, but once they know, the reaction is worse than not knowing.
"People said they wanted to know if companies were putting feces into chocolate, but once they know, they stop buying that 'chocolate'. The reaction is worse than not knowing! What a paradox! The revealed preference is that consumers want companies to secretly include feces. I am a professor."
> “This price was set by an algorithm using your personal data.”
How's that "I have nothing to hide" working out?
See also: https://en.wikipedia.org/wiki/Surveillance_pricing
> Surveillance pricing is a form of dynamic pricing where a consumer's personal data and behavior is used to determine their willingness to pay
Light on details. Could be as simple as user who reads a couple articles a month gets a lower rate than someone who reads daily.
If it was they would say so as that would not be seen as nefarious.
Part of me likes the idea of the price being set by how much you read, but the increasing amount of clickbait would probably make such a scheme not a good thing. I used to look at Google's news feed on my phone at times--lots of stuff that was clearly ads pretending to be articles but mostly you could pick out the interesting stuff. Now, though, very often the "interesting" stuff turns out to be AI garbage that doesn't actually say what it says it says.
Correlates with WaPos massive decline in quality, just another rag