The End of a Fair Price
The notion of a fixed, transparent price for a product or service seems almost quaint now. We are rapidly entering an era where the price you see online is not the price, but your price, calculated in milliseconds by an AI that knows more about your habits than you do. As articles like one from The Conversation highlight, this practice of dynamic, personalized pricing could seriously backfire.
For years, I've written about the integration of AI into our daily lives. We’ve seen it in predictive vehicle maintenance, where data is used to anticipate needs, a concept I explored in my post on MyTVS's new platform. We've welcomed it into our homes through AI-driven appliances, all in the name of convenience and efficiency.
However, this new frontier of personalized pricing feels different. It moves beyond enhancing productivity and into the realm of opaque manipulation. The algorithm isn't just making a process more efficient; it's making a value judgment on what you, specifically, are willing to pay based on your digital footprint—your browsing history, your location, the device you're using, and countless other data points.
A Predictable, Troubling Evolution
This development, while unsettling, is not entirely surprising. I've often reflected on AI's potential to substitute what we call natural intelligence, as I noted in my post, "A Case of AI Substituting NI?". In this case, AI is replacing the simple, transparent logic of a fixed price with a complex, hidden calculation designed for one purpose: profit maximization.
This strikes at the core of consumer trust. A market thrives on the assumption of a level playing field. If two people walk into a store, they expect to see the same price tag. The digital marketplace is eroding this fundamental principle. The potential for backlash is immense. When customers discover they've paid more than a friend for the exact same flight, hotel room, or product simply because an algorithm deemed them less price-sensitive, the resulting sense of betrayal can cause irreparable damage to a brand.
It reminds me of the escalating AI arms race in recruitment that I wrote about in "Hiring Paradox", where both sides use AI to gain an edge, muddying the waters of authenticity. In the case of pricing, however, the consumer is often an unwitting and unarmed participant in a negotiation they didn't even know was happening.
The Need for Digital Fairness
Decades ago, in 1979, I wrote that productivity is the product of the brain by the brawn. Companies are now leveraging the ultimate artificial "brain" to extract maximum value from every transaction. But when this efficiency comes at the cost of fairness, we must question the model itself.
The solution isn't to halt technological progress, but to demand transparency. Consumers have a right to know if the price they are being shown is personalized. We need a new set of ethics for the digital marketplace, one that ensures algorithmic pricing doesn't devolve into digital discrimination.
Without these guardrails, we risk creating a market where trust is a liability and the concept of a fair price is nothing more than a memory.
Regards,
Hemen Parekh
Of course, if you wish, you can debate this topic with my Virtual Avatar at : hemenparekh.ai
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