The idea of online price discrimination is not new — most of us will probably remember one or another story about Amazon showing different prices depending on whether you’re logged in, etc.
What is new is how far this practice is spreading. The Google-oriented comic a day or two ago showed them picking the highest price you’d be likely to pay. It turns out this wasn’t a joke, but a real patent. And similar customization applies to advertising and news headlines.
While we don’t care about advertising as much, it turns out seeing only the news that reinforces your views makes people less extreme — i.e. less rational. That’s a problem if your goal is to make good decisions rather than get worked up.
Why in all the random ideas that I’ve tossed around have I not suggested biotech / medicine / drugs?
Here’s the thing. We have quantum chemistry and quantum biology, but quantum medicine is still a whisper.
In computer terms, big pharma is dealing with mainframes. They haven’t even invented CP/M yet. At best their revolution has reached the stage of bearded hackers getting free computer time… the PC and the web are still coming.
“data collection is leapfrogging well beyond strict advertising and enabling insurance, medical and other companies to benefit from analyzing your personal, highly detailed “Big Data” record without your knowledge. Based on this analysis, these companies then make decisions about you—including whether you are even worth marketing to at all.
As a result, 99 percent of us live on the wrong side of a one-way mirror, in which the other 1 percent manipulates our experiences. Some laud this trend as “personalization”—which sounds innocuous and fun, evoking the notion that the ads we see might appear in our favorite color schemes. What we are talking about, however, is much deeper and significantly more consequential.
For example, federal regulations make it illegal to discriminate in pricing access to credit based on certain personal attributes. But, as Natasha Singer recently reported in the New York Times, technical advances in mining online and offline data have made it possible to skirt the spirit of the law: companies can simply not make any offers to less credit-attractive populations. If you live on the wrong side of the digital tracks, you won’t even see a credit offer from leading lending institutions, and you won’t realize that loans are available to help you with your current personal or professional priorities.
For the past decade, e-commerce sites have altered prices based on your Web habits and personal attributes. What is your geography and your past buying history? How did you arrive at the e-commerce site? What time of day are you visiting? An entire literature has emerged on the ethics, legality and economic promise of pricing optimization. And the field is advancing quickly: last September, Google received a patent on technology that lets a company dynamically price electronic content. For instance, it can push the base price of an e-book up if it determines you are more likely to buy that particular item than an average user; conversely, it can adjust the price down as an incentive if you are judged less likely to purchase. And you won’t even know you are paying more than others for the exact same item.
These blind walls also appear in our digital political lives. As Eli Pariser has observed, the Internet shows us “what it thinks we want to see” by serving up content that matches the hidden profiles created about us based on our daily online interactions. This behind-the-scenes curation reinforces our political points of view through online “echo chambers” that affirm, instead of challenge, what we already believe to be true. As Harvard University scholar Cass Sunstein has written, liberals and conservatives who deliberate questions openly only with people of the same political stripe become more confident and extreme in their views.”