I find it interesting that surveillance pricing- using personal data to charge different prices to different people for the same good - is controversial if grocery stores do it, but acceptable when universities do it.
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Everyone buys groceries. Higher education is not a necessity.
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And higher education doesn’t charge more than their list price.
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Sure. But the application of surveillance pricing in higher ed benefits the people who need it most, in theory. Lower income families. Would that not also be good for groceries?
Right. They discount.
Would you be okay if a grocery store listed a price for an apple of $5.00 then applied different discount rates based on income, race, gender etc.
One is list price. The other is net price.
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That kind of happens already, but it’s higher prices for poorer people. Have you ever checked out grocery store prices in poor areas?
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The chain store - Safeway Fred Meyer, QFC (Kroger) - were doing a lot of ads and signs in stores saying that the law wouldn’t allow them to have any discounts, which of course isn’t true.
Since I live outside the city, the law doesn’t affect me, but I still don’t shop at either Safeway or FM because I can’t stand the stores and what they sell. I’m able to drive the 4-ish miles to a very locally-owned store with quality products and that has the prices clearly shown on the shelves.
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This was the bugaboo that the law was supposed to address but it remained to be proven. The goal of surveillance pricing is to infer the highest price that a customer is willing to pay, based on consumers’ personal data. It was clear that different people were paying different prices for specific items. If anything it charged more for people who could afford it and were willing to pay (sound familiar?). The unintended consequence, I suspect, will be higher prices and less discounting.
If you are comparing “surveillance pricing” at grocery stores to financial aid at universities, they are very different concepts. You can find the specific text of the bill at SEATTLE CITY COUNCIL - Record No: CB 121267 . It restricts “algorithmic based price discrimination”, which it defines as listed below:
“Algorithmic-based price discrimination” means the practice of setting, altering, or manipulating the price of goods offered to a consumer or a segment of consumers, based in whole or in part on monitoring, tracking, or automated analysis of the consumer’s behavior, location, demographic characteristics, biometric data, or other personal information, including personal information acquired from a third party or personal information that is collected, gathered, purchased, or collected by a covered retailer using electronic surveillance technology.
Universities are not using tracking algorithms to monitor spending behavior for different families and choosing to display the price that leads to the most profit for that particular student. Instead of basing pricing on hidden “monitoring, tracking, or automated analysis of the consumer’s behavior”, students have the option to apply for financial aid, and if eligible for FA, they receive a grant/loan/work study that makes the college more affordable. Along the same lines, the bill would not restrict programs that make groceries more affordable for lower income families, if applied in a uniform way based on income, rather than with hidden tracking software and AI algorithms.
I do regularly see things that would qualify as “algorithmic-based price discrimination” when buying groceries. I have 2 accounts with both my nearest supermarket, and with Instacart. At both I sometimes do see different effective prices between the 2 accounts, presumably based on algorithm coming to different conclusions about effective price points. It’s normal for me to choose whichever of the 2 accounts gives the largest discount for a particular shopping trip, based on what I am purchasing on that trip.
However, this is a drop in the bucket compared to the degree of variation in pricing on other types of products besides groceries such as hotels, Ubers, streaming subscriptions, etc.
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Are those two accounts on two different phones? I would think the system should realize if multiple accounts are linked to the same app and device.
Call what universities do “surveillance discounting” then. What is the NPC but an algorithm? The difference is you provide the info. The effect is the same. The net price people pay, the effective price set by the school, varies based on ability and willingness to pay. From the press release “The price shouldn’t be different based on who you are.”
At Instacart it’s 2 accounts with the same name and phone number, but different emails. Instacart doesn’t seem concerned about having 2 accounts. I even contacted support mentioning the 2 accounts earlier because I wanted more information about why the service fees had increased on one account, but not the other. At the same grocery store, I’d pay one service fee with the first account and a larger service fee with the 2nd account. The support rep insisted that the service fee is determined by the grocery store and Instacart has no control of it, which I very much doubt. Searching online I learned that many others reported similar. For example, a husband and wife with different accounts might have very different service fees for the same order at the same grocer.
My local supermarket instead defines accounts by phone number, so I have one account under my cell # and one account under my old landline that is no longer active. Again they both have the same name and are obviously the same person. The SW once sent a message saying that they thought the accounts were linked and asked if I wanted to combine them to accumulate rewards points faster. I declined the offer and instead chose to keep them separate.
The "surveillance " discussed in the bill is based on algorithimic monitoring or tracking of particular individual’s behavior or data. For example, based on past shopping history, the algorithm determines that a particular shopper isn’t going to go to the store unless they give a discount on a particular product that customer buys each week, so the algorithm gives a discount on that item for that shopper, but does not give a discount to other shoppers.
This is not equivalent to filling out a financial aid form and giving a FA grant to all students who meet the FA eligibility criteria. There is no hidden “surveillance” with algorithimic monitoring of shopping behavior and adjusting prices according to that algorithm. The university financial aid system would not violate the bill. A violation might instead include something like the university purchases tracking information from a 3rd party that includes websites visited and purchases. The university plugs that 3rd party tracking in to an algorithm that estimates the maximum amount the particular student is willing to pay and adjusts prices accordingly, maximizing their revenue. Some students get a discount and others don’t based on the 3rd party tracking and algorithm output.
I hate different prices for different people based upon any algorithms. Give me the price for a product and I will decide if I want to pay that price for it or not, including groceries. I make my own choice of which grocery store to shop at, knowing that at different locations and brands of grocery stores, the prices are different.
The reason inner city prices, where the poorest people live, are highest for groceries is simple economics - rent is higher, smaller store selling lower volume, etc.
I also hate prices that vary based upon when you buy (like airline tickets and hotel rooms).
I think none of this is applicable to tuition rates based upon family income. It makes sense to subsidize higher ed for lower income families with financial aid. Making a college degree affordable for everybody. There is a long history of this, including the government subsidizing education for returning vets.
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Yes, through financial aid / loans/ GI bill.. Not through University variable pricing schemes that say people from X, making Y, pay Z. This effectively creates tiered pricing.
People pay different prices based on who they are, not based on the inherit value of the good.
Are you saying groceries, concert tickets, hotel room - bad idea. But college - good idea. Why?
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NO I am agreeing with you to have the old fashioned methods like financial aid make college affordable - not to have variable pricing based upon income level. However, financial aid does indirectly translate to tiered pricing. By giving people making $X a certain financial aid reduction in tuition, you are discounting based upon income.
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Our grocery store has a senior discount on Wednesday mornings. I always feel guilty when they give it to me.
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I love using senior discounts, since we became old enough to get them, we use them everywhere - museums, transit, rental on our storage unit, theaters, etc. I don’t feel bad about using it, just like I encouraged my daughter to use student discounts when she was in school.
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