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Ask HN: What's the difference between price gouging and surge pricing?

3 pointsby CoreSetalmost 10 years ago
The growing availability and ease of wide-spread data collection seems to be making businesses more &quot;personalized&quot; - pegging advertising, pricing, and other commercial strategies to successfully identifying subgroups who are more or less likely to participate in the deal at hand.<p>Uber of course has &quot;surge pricing&quot; which they contend is to better incentivize the availability of drivers during peak times, yet airlines are now being investigated for raising prices when a disaster shut down all local rail.<p>I find that abhorrent, but isn&#x27;t it just good capitalism? Isn&#x27;t extracting as much value from someone as you can - willing or unwilling, regardless of how desperate, poor, disadvantaged, or mentally feeble they may be - the entire system?<p>I can also envision a world, sadly, where environmental variables about your present condition, health, race and socioeconomic position will be used to extract the maximum amount you can be made to pay (i.e. if you&#x27;re a wearable&#x2F;body-language algorithm says your hungry, food prices go up. If you eat unhealthily, your health insurance premiums increase. Credit scores, criminal proceedings, etc are all affected by statistical projections extrapolated from your personal history). This already goes on of course to some extent, but will only grow in scale.<p>Is there any discussion about this on the theoretical level - the impact of a growing information asymmetry on business transactions? Is there a &quot;Theory of X&quot; that argues for some market-correcting force, or is this the new way of the world?

2 comments

mkempealmost 10 years ago
If one calls it &quot;gouging&quot; one is implicitly against free markets and the function of pricing as an objective, social signal.<p>Footnote: some major figures in history railed against capitalism and &quot;price gouging&quot;. They are known for acting on their beliefs, providing &quot;market-correcting force&quot;. Naming these figures, and estimating the number of people they murdered, is left as an exercise.
crazypyroalmost 10 years ago
At the risk of coming off as crude, the only difference between those two concepts are the marketing copy and public perception, in my opinion.
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