A believable conspiracy theory: Airlines and online travel agencies surreptitiously use computer “cookies” they’ve implanted on your Web browser to track your activity on their sites and then raise prices when it appears that you’re interested in a fare. That’s the rumor, at least. … For years … the industry … has vehemently denied any tampering with prices. …
My bet would be that the biggest 'bite' of private price discrimination for the rich would be in higher education, where customers have to fork over their tax returns or equivalent information and the sums of money (and discounts/"financial aid") are very large.
Amazon uses this tactic on an ongoing basis to find their price ceiling. Try putting books/electronics/clothes/etc into your shopping cart, and come back to it a week or two later and you'll find that the prices have fluctuated. (FYI: Amazon does let you know that the prices have changed.)
A room full of computers may all use a common NAT box or proxy, so they may share one IP address. Before doing the experiment, it would be best to make sure this is not the case, just in case the web site is using IP address.
SSL also maintains a session, even without cookies. I just did a test on delta.com, which tried to create an SSL connection to estara.com.
But on delta.com, I got to the final price without giving out any personal information, not even a zip code. They could geolocate my source IP address and get a vague idea of where I am, but if they want to price discriminate, they need some kind of proxy for my wealth or income. I don't see that they have much to go on.
All, I'm not saying price discrimination is inefficient or morally bad. But it is something that offends most people, and elites do seem to conspire to hide the fact that it is ubiquitous.
If I wanted to implement this price raising strategy in a way your tests would not detect, I could use server side processing to track behavior from IP addresses. At the cost of a little inaccuracy from people sharing IP addresses, no cookies are needed.
That said, yes, it would be good to investigate if the sites in question use the easily detectable strategies. And you could test for my strategy as well, provided you use multiple computers with different IP addresses, a much less convenient test.
I don't care that it is not illegal. As a consumer, I do not want to be treated in this way, and I am happy to be aware of it, so I know I should pay special attention to price increases as I go through the purchasing process, so that I can try such remedies as clearing browser cookies, and finding more competitive offerings.
If they're using cookies to do that, it's easy enough to find out.
Delete them (during the process, in fact, for testing). Or use a browser with cookies turned off.
Look at the page and local script source, look at access to the cookies.
It's not like they're secret magic nobody can investigate or watch...
I guess the Post couldn't bother to ask a computer security professional to actually check (or even check themselves, to at least get a baseline), preferring to state it as "rumor" and offering only anecdotes...
(I mean, "It may be impossible to prove conclusively that travel companies use cookies to raise their fares, or to bait us with low fares."?
Impossible? Trivial, since cookie access is "open" and we can see when it's done. Rather than relying on ancedotes, they should have actually tried it, deleting and testing multiple times, to show a clear pattern or its absence.)
Commercial prices on anything... are variable and generally negotiable from customer to customer --- been that way for thousands of years.
What exactly is the horrible ethical 'problem' here ?
Perhaps ticket prices are more easily manipulated by airlines online-- but there are also more discount options for alert buyers thru 3rd Party ticket consolidators/resellers and fare information websites.
And the "watchdog" government itself has no ethical problem demanding vastly different fees for the same services to different citizens (e.g., progressive income taxes & property taxes).
May not be illegal, but I see cynical business practices so often that my perception is that virtually *all* companies are engaging in them.
It's always been bad, but I think there's been creep in that direction and I would like to see a movement for targeted boycotting to attempt to change that trend.
I might expand a bit on why this is not illegal price discrimination.The Robinson-Patman act forbids price discrimination between "two competing" customers typically also engaged in the resale of the product. The discrimination must adversely affect competition--that is, the discriminated customer must lose business as a result of the discrimination to the other customer. Consumer end users do not lose business. Sorry.
Most customers are not competitors either, they are end user customers, and not resellers.
I am an antitrust lawyer and also teach antitrust law.
This is not an antitrust conspiracy. There is no agreement between airlines.
This is simply a vendor/customer matter. The only issue is one of consent or deception. Consent--did I consent to the use of personally identifiable information. Yeah, probably, just as you do when you go face to face with a salesperson. How about data from a different site being sold to the airline so it can raise the price...probably something in the website's fine print there as well.
Second, this is not really price discrimination either, unless you want to define price discrimination in a non-antitrust sense--selling to someone based on their maximum willingness to pay.
By the way, airlines do do this, but also, with dynamic pricing, prices do change due to supply and demand as well. Other websites do dynamic pricing as well, but, if you and everyone gets to know of it, there may be adverse reputational effects.
Oh, you might also want to work this information game in your favor. Go to a website, put the product in the shopping basket BUT do not finish the transaction or put the product back. A lot of times, if you wait, the vendor will send you a coupon for buying the item, or inform you it is on sale.
My bet would be that the biggest 'bite' of private price discrimination for the rich would be in higher education, where customers have to fork over their tax returns or equivalent information and the sums of money (and discounts/"financial aid") are very large.
Amazon uses this tactic on an ongoing basis to find their price ceiling. Try putting books/electronics/clothes/etc into your shopping cart, and come back to it a week or two later and you'll find that the prices have fluctuated. (FYI: Amazon does let you know that the prices have changed.)
And you could test for my strategy as well, provided you use multiple computers with different IP addresses, a much less convenient test.
You can use proxies to access from different IPs. It's useful to check for geographic discrimination too.
A room full of computers may all use a common NAT box or proxy, so they may share one IP address. Before doing the experiment, it would be best to make sure this is not the case, just in case the web site is using IP address.
SSL also maintains a session, even without cookies. I just did a test on delta.com, which tried to create an SSL connection to estara.com.
But on delta.com, I got to the final price without giving out any personal information, not even a zip code. They could geolocate my source IP address and get a vague idea of where I am, but if they want to price discriminate, they need some kind of proxy for my wealth or income. I don't see that they have much to go on.
I wonder how much price discrimination based on wealth acts as a disincentive to work hard and get rich.
All, I'm not saying price discrimination is inefficient or morally bad. But it is something that offends most people, and elites do seem to conspire to hide the fact that it is ubiquitous.
Price discrimination under imperfect competition may be socially beneficial.
Go to websites anonymously. I am not saying that I like this either, but it is not illegal. Think of it as a small town: everyone knows your name.
If I wanted to implement this price raising strategy in a way your tests would not detect, I could use server side processing to track behavior from IP addresses. At the cost of a little inaccuracy from people sharing IP addresses, no cookies are needed.
That said, yes, it would be good to investigate if the sites in question use the easily detectable strategies. And you could test for my strategy as well, provided you use multiple computers with different IP addresses, a much less convenient test.
I don't care that it is not illegal. As a consumer, I do not want to be treated in this way, and I am happy to be aware of it, so I know I should pay special attention to price increases as I go through the purchasing process, so that I can try such remedies as clearing browser cookies, and finding more competitive offerings.
If they're using cookies to do that, it's easy enough to find out.
Delete them (during the process, in fact, for testing). Or use a browser with cookies turned off.
Look at the page and local script source, look at access to the cookies.
It's not like they're secret magic nobody can investigate or watch...
I guess the Post couldn't bother to ask a computer security professional to actually check (or even check themselves, to at least get a baseline), preferring to state it as "rumor" and offering only anecdotes...
(I mean, "It may be impossible to prove conclusively that travel companies use cookies to raise their fares, or to bait us with low fares."?
Impossible? Trivial, since cookie access is "open" and we can see when it's done. Rather than relying on ancedotes, they should have actually tried it, deleting and testing multiple times, to show a clear pattern or its absence.)
Commercial prices on anything... are variable and generally negotiable from customer to customer --- been that way for thousands of years.
What exactly is the horrible ethical 'problem' here ?
Perhaps ticket prices are more easily manipulated by airlines online-- but there are also more discount options for alert buyers thru 3rd Party ticket consolidators/resellers and fare information websites.
And the "watchdog" government itself has no ethical problem demanding vastly different fees for the same services to different citizens (e.g., progressive income taxes & property taxes).
This paper looks apropos, coming after Amazon got some bad PR for trying this circa 2000: http://www.vjolt.net/vol6/i...
Many great posts from Robin lately!!!
May not be illegal, but I see cynical business practices so often that my perception is that virtually *all* companies are engaging in them.
It's always been bad, but I think there's been creep in that direction and I would like to see a movement for targeted boycotting to attempt to change that trend.
I might expand a bit on why this is not illegal price discrimination.The Robinson-Patman act forbids price discrimination between "two competing" customers typically also engaged in the resale of the product. The discrimination must adversely affect competition--that is, the discriminated customer must lose business as a result of the discrimination to the other customer. Consumer end users do not lose business. Sorry.
Most customers are not competitors either, they are end user customers, and not resellers.
I am an antitrust lawyer and also teach antitrust law.
This is not an antitrust conspiracy. There is no agreement between airlines.
This is simply a vendor/customer matter. The only issue is one of consent or deception. Consent--did I consent to the use of personally identifiable information. Yeah, probably, just as you do when you go face to face with a salesperson. How about data from a different site being sold to the airline so it can raise the price...probably something in the website's fine print there as well.
Second, this is not really price discrimination either, unless you want to define price discrimination in a non-antitrust sense--selling to someone based on their maximum willingness to pay.
By the way, airlines do do this, but also, with dynamic pricing, prices do change due to supply and demand as well. Other websites do dynamic pricing as well, but, if you and everyone gets to know of it, there may be adverse reputational effects.
Oh, you might also want to work this information game in your favor. Go to a website, put the product in the shopping basket BUT do not finish the transaction or put the product back. A lot of times, if you wait, the vendor will send you a coupon for buying the item, or inform you it is on sale.