Tag Archives: privacy

Personalization and Price Discrimination

Price Discrimination

Price Discrimination

Since my courses in CMU, I always ask myself if first-degree price discrimination is feasible in e-commerce, and if it is, then how. Anybody knows that the main problem with price discrimination is customers exchange information to each other. And when people know that they are charged differently, they get annoyed.

 

 

 
 

I just encountered this 2 valuable articles in economist.com (Online firms are getting better at calculating how much they can sting you for. Here’s how to pay less) and (How deep are your pockets?). They are explaining to me many good insights, how and what products these firms can charge people differently.

  • Getting your information from cookie, as normal
  • Getting your computer type, if you are an Apple user, you are more likely to pay for higher prices
  • These software can even track your mouse movement

It also explains to me which websites can charge people differently based on no logic. Flight, hotel, secondhand cars and other similar products and services can do this job easily. They already displayed the price sales differently every single day or hour without any complains from the user. With the usage of smartphone, I think this trend will continue when firms have more information and idea about how bad you want their products.

It would be annoyed for any users if they happen to know that they are charged differently just because they are using a Macbook Pro or just because they like the product more than everybody else. I still recommend you to not use this price discrimination strategy intensively but rather to focus on better customer experience. They would help you to do viral marketing and gain more transactions for your company.