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(the temp sensitive Coke machine is reacting to
supply and demand (higher temps, more demand, higher prices)
You're right; these machines would not individually price
discriminate. Perhaps the next generation of machines will have cameras
and algorithms to estimate how thirsty each consumer is :) (The cameras in
these machines will also count how many other soft drink machines are
in the area.)
but it does seem a bit strange they don't focus
more on keeping customers with a solid record of purchasing. (i spend about $100
a month at Amazon).
Maybe you should stop using Amazon for while and see if they send you any
"loyalty" incentives in response.
Seiji
__________________________________________________ Seiji
Steimetz
Office: SST 311 Graduate
Student
(949) 824-1390 Dept. of Economics University of California, Irvine 3151
Social Science
Plaza
[EMAIL PROTECTED]Irvine, CA
92612
http://zotnet.net/~steimetz
"We dance round in a ring and suppose,
But the Secret sits in the
middle and knows." - Robert
Frost
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----- Original Message -----
Sent: Friday, September 15, 2000 5:19
AM
Subject: RE: "Dynamic Pricing"
this
is an interesting move from Amazon, if true. The difference with the
temperature sensitive Coke machine is that the price rises for everyone for
external reasons. with the Amazon move described here, the discriminatory
pricing is based on individual characteristics and is therefore actually
discriminatory. (the temp sensitive Coke machine is reacting to supply and
demand (higher temps, more demand, higher prices) while the point-of-purchase
price differences do not.
something that has always intrigued me about Amazon (being a regular
client) is how they offer almost nothing for loyalty or regular use. i guess i
was expecting something in the way of discounting or gift certificates or
something. maybe i just don't spend enough there, but it does seem a bit
strange they don't focus more on keeping customers with a solid record of
purchasing. (i spend about $100 a month at Amazon).
etb
It looks like (3rd degree) price discrimination is becoming more
sophisticated. Check out the following article:
According to the article, Amazon.com uses various gauges of your "price
sensitivity" (read: own-price elasticity of demand), such as which browser
you're using, to determine what price to charge you for DVD's. It also
discusses Coca-Cola's investigation into vending machines that can
automatically adjust prices according to outside temperature.
I think most economists will think this is pretty cool. However,
I doubt that the public response to such practices will be favorable.
This leads me to wonder about one legal ramification. From what I
understand, price discrimination is de jure illegal (but not de facto
illegal) if it interferes with competition. Will price discriminating
Coke machines impede or promote competition?
Seiji
___________________________________________________
Seiji
Steimetz
Office: Social Science Tower 305
Compulsory Union Fee Paying
Graduate Student
"Every time a calf is born, the per capita GDP of a nation
rises.
Every time a human baby is born, the per capita GDP
falls."
-- Julian
Simon
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