Posted On: Tuesday - October 20th 2026 7:00AM MST
In Topics: Internets Websites Curmudgeonry Economics Big-Biz Stupidity
Continued from yesterday's Part 1.
Yesterday I wrote that Amazon's quest to have more of my info before I can shop till I drop might be about upholding their reputation against payment scammers. However, that doesn't explain that one can no longer even read more reviews (than those few "top" ones shown first) without having signed in.
It came to me like a flash a few days ago. This is about real-time pricing, isn't it? Perhaps I'm not using the appropriate "industry" term, but I refer to the recently gained ability of sellers to adjust prices nearly instantaneously based on demand.
Demand can depend on conditions such as, for the famous Coke* machine example, outside air temperature. As the machine's thermocouple detects temperatures farther above a comfortable 75 F, the software raises the displayed and required prices per some schedule determined by expert marketing folk who used experimental data from the Sports Physiology department at Cornell (why Cornell?). That grant money is gonna pay off. At 95F, as you the customer get out from under that POS car with rusted exhaust hangers, you'll scrounge for that $6.45 that this coke machine asks for at the moment. Ker-ching!
Does that mean when it's 15F outside, the machine should start spitting out frozen over coke bottles for free? Only fair, you know... but this will probably only happen once Coca~Cola IT has gone completely Indian.
I don't know if Amazon is the only one, and I haven't personally experienced it, but I've read of this practice being used in web sales. It's all software anyway - no hardware involved - so why not use some demand change factors to adjust prices? I've been told by a friend that he saw a great deal on something, but the next time he looked at it, maybe just hours later, it was higher in price. That could be just bad timing, but it wasn't. (One can get a friend to try it and see some curious discrepancies, but I'm getting ahead of myself.)
Yeah, but how do you determine demand from customers who you don't know and aren't anywhere nearby?
To practice real-time or near-real-time pricing, you use all the data you can collect on HOW the customer is doing his shopping. How interested in this product is he? Did he put this pack of chainsaw chains into the virtual shopping buggy already and leave it for some time? Did he click on lots of different chains from various manufacturers, spending 15 minutes on it? Did he click on many reviews pages ... wait... he CAN'T right now until he ... ohhhh.
There are the "cookie" files on the client side, i.e. info stored on the users computer/device. There is also lots of info stored on amazon's servers. With memory as cheap as it is, the sky's the limit. It's important for the software to connect up page views and such from the same customer. For the cookies, if a customer changes devices, that info is lost. On the amazon side, a customer can be kept track of by, you got it, his account. Info on customers like me, shopping and buying as a "guest", rather than after logging in with a username/email, cannot be connected this way from day to day or even minute to minute.
How can we best get the most money out of each customer, not just via allegedly good deals and "free" shipping, but by raising prices for items based on algorithmically determined demand? Ker-ching! Except, this doesn't work for guests. Amazon's old guests could check prices later on a different device, not to mention just delete the appropriate cookie, and all that effort by the marketing and IT geniuses can't be applied.
Bezos - memo to staff: No MOAR guests.
Peak Stupidity Moderator - memo to self: Shop elsewhere if possible.
PS: Is this real-time pricing idea an economic Libertarian's dream? Shouldn't we (Libertarians) be all FOR this idea? I don't actually know. I think it would make for a good post and some good discussion another time.
* Fine. Don't sue us, Coca~Cola, as we mean "coke" generically. Peak Stupidity understands that your specific flagship product is the real thing, and everything goes better with it, and you all would like nothing better than to just teach the world to sing. WE! GET! THAT! Also, WE! OWN! NOTHING! [Thx - PS Legal Dept.]
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