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The Price Is Wrong

In March, Charles Fishman explored the new era of pricing. One sidebar touched on Coca-Cola’s short-lived 1999 experiment with temperature-based pricing. When it’s hot, Coke’s would cost more. Cool? Cost less.

According to an Associated Press wire story today, price discrimination is back — and showing increasing potential online.

While the Web gives consumers the ability to find the best price for products and services they’re interested in, Andrew Odlyzko of the University of Minnesota’s Digital Technology Center warns that the deep consumer data collected by many sites and services could lead to wide-ranging — and perhaps unfair — pricing.

Based on users’ demographic and psychographic data, as well as past activity on a certain site, a product could be offered for different prices to different people. People who pay $1,200 for an airplane seat might feel ripped off if someone else paid $200.

Is price discrimination unfair? In the customer’s best interest?

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