I think the whole pricing thing is dystopian but I also think it would most likely end up being defeated by consumer price monitoring apps, possibly run for you by a little shopping AI assistant, and maybe even businesses whose strategy involves deciding 'we don't screw people like that.'
At which point the AI pricing apps will charge highly customized prices capturing the vast majority of the surplus they salvaged for consumers.
The neoliberals are just dead wrong on this; this is an extraordinarily obvious case for regulation to preserve the functioning of markets.
Price discrimination on the basis of the identity of the buyer is *poison* and must be destroyed everywhere it already exists and prevented from taking a single step forward in expanding.
"At which point the AI apps will charge highly customized prices capturing the vast majority of the surplus they salvaged for consumers"
This is the PBM business model -- started as a way to do better price comparison shopping for health plans, and then moved ever closer towards "capturing the vast majority of the surplus they salvaged".
Good analogy. It also worries me even more because the PBM have already crossed the line into “deliberately making markets more opaque so they can generate more surplus for themselves,” and all the same incentives would apply to an AI shopping assistant’s developer.
Yea very good comparison and I think you and David are both right about the inherent inefficiency of prices being battled out in such a way. Probably a situation where the theoretical rationality of a market leads to bad outcomes for everyone.
Theoretical rationality is not the per se issue in re the market concept here but rather than unexamined potential for market equilibriums that may not be consumer optimal. Perfectly rational equilibrium outcomes possible sans necessity being consumer optimal. (speaking as a proper economist)
I haven't personally any views here as there are so many unknowns and factors pushing in different directions, I would be reluctatant to jump to any a priori conclusion (although for that same reason jumping to regulations which are comparatively easier to code into law than to later unwind if they end up having perverse outcomes [see rent controls, Jones Act etc]
Fair enough, I'm no economist, just a law talkin guy. That said my law talkin' has been in house healthcare and Allan's point about the PBMs resonates. Now part of that is that they're part of a larger, much messier ecosystem than retail groceries but it's a good example of something that was supposed to be a patient-supporting counter thrust to opaque (and downright shady) practices on the payer side. Instead they've evolved into just another massive rent seeker with no apparent value to the consumer.
While I think the arms race of AI seems to favor the producer, there seems to be a clear under current where the ability for us to use personalized tools will be cheap. I don't think the setup of the producers having an AI fighting an expensive AI that consumers are paying to fight it will pass. We already see free AI models that rival paid versions. Consumers should have access to free shopping assistants.
What would the regulations look like? I'm having a hard-time getting my head around how the government could regulate the price of cheerios without also causing big problems.
Ban the use of personal data for personalized pricing except for specific defined categories. You could still charge e.g. higher prices in a richer neighborhood like we do now.
Nik got it. Ban personalized pricing. Retailers must, at a given time and location, display and charge a single price to all via all sales channels. Online sales channels must display and charge a single price, period.
Price discrimination via time and most of the other currently extant methods serve actual purposes and enhance utility. We already limit them in various ways, no need for much change.
I think it would just look like MA liquor law. You must sell any product you sell to all comers at the same price for at least one full day. (Yes, you can't have happy hour discounts on alcohol in MA.) It seems like posted coupons could be incorporated pretty easily (those aren't allowed for alcohol.)
yes - this seems very much like something that at current level of knowledge it is nigh impossible to develop at this time a regulation that would not have near certain chances of really perverse and destructive outcomes.
But that ignores competition between AI pricing apps! If you have five big apps and any firm can launch another with moderate capex, the pricing apps will compete on price.
Yo dawg, I heard you like AI pricing apps that prevent you from getting ripped off, so I made an AI pricing app that prevents you from getting ripped off by the AI pricing apps so you can not get ripped off while you don't get ripped off.
I feel like we already went through this when we transitioned from markets where you have to haggle to stores with set prices where we can all save time and mental energy.
Of course it could end up like clothing, where everything seems to always be on sale or it could require a coupon to get a reasonable price. But I imagine a lot people will generally be willing to pay a bit more overall for consistent prices they don't need to think about and businesses will adapt to serve that customer.
Yeah, I don't buy that this is going to be a dystopia. Amazon already does dynamic pricing, and it doesn't sell $50 Cheerios and most current forms of dynamic pricing (coupons, sales, buy 1 get 1), bring prices down.
If my Stop & Shop starts trying to sell $50 Cherios, I'm not just going to walk across the street for my Cheerios; I'm going to walk across my street for everything, and I think that's going to keep them from trying.
Matt’s whole take here was kind of underbaked — “private entities will extract more from richer people in a ubiquitous surveillance dystopia with astronomical transaction costs and this is good because it will narrow the gap between the rich and the poor” is exactly the sort of handwavey bullshit that he would scoff at in other contexts. Inter alia whence the incentive to earn more if it just gets immediately extorted away by the time you want to consume stuff?
Individual price discrimination is illegal under our current antitrust arrangement. With all the information we have firms are moving closer and closer to this.
In a world with minimal consumer surplus, many consumers will feel much antipathy towards products and brands.
Amazon recently got an injunction against an AI powered app consumers used to monitor prices for set products on the store.
It’s only illegal where anticompetitive (and consumer sales by non-dominant retailers would probably almost never be considered anticompetitive), not illegal per se.
It might drive more people to Costco/BJs/Sams wholesale type places as well which seems like it would be bad for the people who don’t have the extra cash for the membership fee and for the diversity of stores and selection.
Not related to dynamic pricing, but: my daughter asked me to bring home a box of Cheerios yesterday and I felt like I was going to retire in poverty.
On that subject: FedNow tells me the price index for a bushel of oats is about the same as it was in 2011, but the price of a box of Cheerios has doubled. I know some of this is labor etc. but (according to Google) generic "toasted oat" cereals are only up 30%, while Cheerios brand is up 90%. So on the subject of whether dynamic prices will be efficient or extractive, I'm going to lean towards "extractive".
You can definitely buy store brand generic-Os and they are a lot cheaper. Same with corn flakes which are more my thing.
IMO the texture is slightly different, but not a lot different. I wish I could say I prefer the cheaper version but it does appear to be missing "something" although the difference is small enough that it might just be placebo effect or familiarity.
Just a few days ago I was asking the ChatGPT about the high price of cereal, and the biggest surprise was that the cardboard packaging is one of the biggest cost inputs. So if you can find cereal in a bag it might be a lot cheaper. But at my local grocery store the only cerreals that come in a bag was super surgery shite I would never eat.
Also on the topic - plain raw oats are much cheaper, more filling and probably healthier than any brand of cereal. For a long time now I've ben sprinkling a layer of raw, plain oats on my breakfast cereal (and sometimes on a few other things). If you don't overdue it it mostly just makes whatever you're eating feel more filling and substantial which might make you less hungry later. YMMV!
There's still the effort of setting up and using such an assistant. And there would be some cost in running it, adding an expense of either paying for that in a subscription, or with the ad and/or (ironically) data collection model.
"The one thing that does temper my populist outrage is the recognition that the whole point here is that custom pricing algorithms are going to try to screw me personally because I’m pretty affluent."
Yeah, I don't think that's how these things tend to work. Affluent people don't get screwed on car loans and consumer credit even though they could totally afford a 10% interest rate, who even knows the difference?
Supermarkets may give wealthy people competitive prices because they want them shopping there and buying high end food in their stores, and they're willing to not maximize their earnings on low margin food that would just piss them off.
It's intriguing that Matt sees the consumer surplus to customized pricing in terms of how much money is spent, whereas others might see consumer surplus instead in terms of how much time and effort is spent. That view would invert who would benefit as consumers from what Matt states. Then, the question would be whose view of consumer surplus we want to prioritize.
Amazon is a clear winner of the view that most people believe that consumer surplus that people want to save on is time and effort. The sacrifice of any real pricing discrimination is so over the top I avoid it as much as possible.
In a world full of AI and online shopping tools, time and effort spent should inevitably decline towards zero. The only reason they wouldn't do that is if the corporate world uses AI to ensure they remain high.
This is already possible and proven. AVs can already move inches apart with no issue. If we have downtown cooridors with nothing but AVs on the road it would be almost trivial to remove all stoplights, create easements for hopping on/off, and then shuttling around with just a few centrally managed protocols that new AVs must interact with.
That's my point though. Downtown cores should be AV only. It would be trivial to implement. Your own car can be brought to you as you leave the city center. Theres 0 downside at all. Who likes driving 5 mph through city centers that cause all sorts of safety issues for everyone involved. Who likes finding that one narrow street parallel parking spot. Inbound traffic can stop at the edge of the city and you can get personally shuttled to where you are going. It would actually be far, far faster for commuters.
In the precise areas where congestion is the worst, AVs will do much less to resolve it absent huge levels of IoT integration that either cannot happen at all or will take a huge amount of time to assemble and train AVs to function within.
This is also trivially solved by more lane separation. Without street parking in urban cores there's a lot more room to play with. Crosswalk signals being connected to AVs stops them when people want to cross, otherwise there are fully separated barriers.
Also if has already been proven that AVs react to people/kids running into the street far faster and safer than people do. Moot point.
It will not take long to do fleet training, that, again, has already been done in a thousand different use cases. The tech is already there across every part of the stack.
I agree with you in general, but you're talking about a downtown where there are no traffic lights because the AVs are programmed to drive within inches of each other and seamlessly allow each other to pass. That only works if there's no outside interference from pedestrians.
How about merging on and off freeways? A lot of inherent congestion on them comes when there are too many vehicles all trying to weave within the same space.
I don't think AV-only should include freeways. I thought you meant how would human drivers navigate this with AV-only downtown cores. I think they should park at the city edge at large park&rides and hop onto fleets of AVs from there.
That seems like an added step of inconvenience that people might not like, especially if they're having to move a significant amount of goods between vehicles. And it strikes me as of now that even coordinated AVs aren't going to fix problems of freeway congestion, which would mean that there needs to still be considerable room for non-motorist forms of transportation.
No need for hyperbole here. The average car gets about 4% utilization (an hour a day). If AVs can bump that up to 20% it will be a huge win. I hope utilization doesn't go above 70% because I, for one, plan on being asleep at 4 AM.
Also, ride share is typically about 50% deadheading.
I don't really get the problem with the Streetsblog/GGWash article Matt links to. It reports study findings that autonomous cars would increase driving and suggests that regulatory responses to that (like congestion pricing) are appropriate. That seems like the same conclusion you would reach from a standard externalities analysis; unless I'm missing something, it doesn't support a ban or something like an autonomous vehicles cap and it explicitly notes the potential safety benefits.
I'm not sure it's a "problem", but GGW clearly views reducing vehicle miles travelled as a bigger priority than traffic safety.
The article's conclusion illustrates this well:
> America could end up embracing a mode that addresses many of our traffic violence troubles, but fails to uproot the deeper rot of car dependency that has hollowed out our society.
"car dependency has hollowed out our society". I'm not sure what that means unless the vision is of everyone living in dense urban highrises within walking distance of trains. Not for me, I need a plot of land.
I want to live in the same kind of city as urbanists, but I hate the aggressive inclination to ignore contrary preferences and exaggerate externalities.
I'm all for proportional representation, but it is structurally unworkable at the federal level without major constitutional change, and since that would need to include abolishing the Senate, that is extremely daunting. It needs to be a bottom up movement where municipalities demonstrate its worth first, then hopefully filtering up to the state level, where unlike the federal level they can deviate much more than things like the sole exception of Nebraska's unicameral legislature. That's going to take a long time to do. So in the here and now we're going to have to find a way to improve what we have.
This is actually not true, and it's worth unpacking the reason why it's not true, because it involves unpacking the distinction between two separate sins of the current Senate-- malapportionment and winner-take-all.
So one of the major problems with the Senate is that it gives small states a level of power that large states lack. The people there, very directly, get more representation than those in big states-- sometimes comically more, like the average voter in Wyoming has almost three times as much representation as the average voter in California. This is an intractable problem because the entrenched language in the Senate precludes depriving a state of "equal representation" without its consent. The only real way to tweak this is by deliberately making all states about the same size, which isn't going to happen for other practical reasons. And short of a revolution destroying the Constitution outright, we're stuck with it.
But the other problem with the Senate is that consistently getting 51 percent of the vote gets you 100 percent of the representation. That makes the otherwise academic question of whether the majority of states are "blue" or "red" massively consequential. Nonproportionality IS a solvable problem, and it's a solved problem even within the context of a malapportioned Senate. Australia's Senate, like ours, is constitutionally malapportioned such that every state has equal representation-- Tasmania, with 580,000 people, gets the same representation as New South Wales, with 8.5 million people. However, the way that equal representation gets manifested is through electing six senators per cycle per state, not one, and the way the six senators are distributed uses single transferable vote, which is basically a form of proportional representation (I will spare everyone the math on that, but if you look it up on Wikipedia you'll get all the gory details). As a result there's always at least one Labor senator and one Liberal or National senator (the two biggest parties) in every Senate election regardless of whether you're talking about super-libbed-out South Australia or right-wing Queensland. Six seats per cycle is also enough to allow for a decent number of senators from outside of the two major parties, enough to where it's basically impossible for there to ever be a majority for the government in that chamber. That means some level of minor-party buy-in is needed for most laws to pass.
It would not take a revolution overthrowing the Constitution to move to Australia's system of equal proportional representation for each state. I think the Australian Senate is quite badly designed, and the malapportionment is a big reason for that, but it's a whole lot better than ours in that third-party voices are really important in getting laws through it.
I had an unanswered question a few weeks ago about the value in calling for a constitutional convention. It's obviously far-fetched and I've always felt there'd be a "be careful what you wish for" element to it, but considering where we are now and Trump showing us the risk of a strongman hijacking the GOP, I'd at least like to see more ideas along the lines of yours. We're at the point where we need structural reform.
No, it's still only for one person from one party for each seat. If the person/party you want doesn't get that seat, then you have no representation in that chamber.
The dirty little secret of left wing urbanists is that a lot of them are authoritarians who want to use the government to force people to stop living lives they disapprove of. Things like pedestrian safety are just the hook for those beliefs.
While I like self-driving cars, I am well aware that there are a lot of people who would love to use them to physically control where people can and cannot go by programming what routes the cars can follow and what locations they can go to. This is why I don't want to completely ban driving.
The types of urban areas urbanists are concerned about are a tiny part of the overall country. People who want to drive a lot could just live in the suburbs? No visa is required, you can still commute to the same job, and it’s most likely a lot cheaper.
No, a lot of them think they shouldn't exist, or define "the externalities" dishonestly so high that they can try to force people out of them, because obviously auto-centered suburbanites shouldn't exist and should be forced to live more "virtuous" lives.
Another way we see the effort dynamic play out in pricing is with credit cards. All consumers are getting their prices raised via passing the cost of merchant fees onto them, and the only way to recoup that cost is to go through the effort of playing the points game with credit cards. That has never struck me as a positive arrangement. I hope that more merchants move to offer discounts for using less expensive forms of transactions, so that the credit card churners get the cost directly placed on them instead of getting a cross subsidy from non-credit card users.
Come on. All forms of payment have costs. If you accept cash, you have to manage it with large trucks and armed guards and deal with the risk of theft. If you accept checks, there's NSFs and straight up fraud (which we as a society pay to put people in jail for).
Merchants accept credit cards because they want the customers who have the cards and so they don't have to provide their own financing directly. They don't have to accept cards - many businesses don't accept cash or checks.
....
As a customer, the variety of cards may be kind of overwhelming because it's a highly competitive market (particularly for affluent customers) and they're trying to tempt you with a bundle that appeals to you specifically... but you don't really have to worry about it if you don't want to. Just get a good cash back card (eg. Fidelity Rewards Visa Signature - 2% cash back on everything) and never worry about it again.
An equilibrium where there is fierce competition to compete down the cost of the transaction and share to saving with the customer with broad consumer protection (Regulation E) seems better than a lot of the alternatives... Though I get that small merchants in particular complain since they get terrible rates (they're bad risks for the processors) and they often aren't really thinking through the risks and costs of other methods (eg. If you ask me to pay with an e-transfer, I start getting worried your trying to scam me since I have many fewer consumer protections and may simply walk away).
I highly doubt raising the salience of race would be good for the YIMBY movement.
"Hey person with latent NIMBY tendencies, do you want to vote to change your neighborhood so poorer people of color can move in?" Doesn't seem like the best strategy imo.
Yeah, however racist you assume homeowners are, in practice they are probably a lot more racist than that. Nextdoor comments are not a statistically sound measure of homeowner racism but they are definitely strong anecdotal evidence of it.
So I have absolutely no doubt that submerging the racial implications of zoning reform is the tactically correct choice. It's depressing and disturbing that that's so, but from the crooked timber of humanity etc etc.
Agreed. But academically there is a large racial justice issue which is that minorities were largely legally excluded from buying when housing prices were much cheaper so didn’t benefit from the appreciation and have to pay higher prices now. It’s one of the main ways in which past discrimination demonstrably causes part of the wealth gap today. It’s smart not to emphasize this in political messaging but that doesn’t mean it isn’t true or that people don’t sincerely believe it.
Yeah I think it's unambiguously true that pro-YIMBY policies would be very good for racial justice (and personally I'd argue that they'd be much better for racial justice than the current criminal justice push).
But as Zagarna said below, the median voter is what you find on Nextdoor.
Considering that Kroger mails me coupons on all the time specifically for the items I buy most often, I don't think ultra-specific, individualized price hikes from supermarkets is something we will have to be concerned about.
Yes, my wife had a bit of a freakout recently when she looked at the Kroger coupons and realized that every single one of them was for a product that we routinely buy.
>does not show any substantial effect of the war or a shift in the opinion landscape that would make you think Democrats have an easy path anywhere outside of Maine and North Carolina.<
Is Maine now an "easy path" for Democrats? In theory it's winnable—Maine's on the blue side of purple, and a lot of Mainers are angry at Trump. But Susan Collins might be the single strongest electoral performer her party possesses. And she doesn't even have do as well as she did in 2020 to prevail this cycle.
I don't understand the last sentence. If we're in a blue-wave environment, which 2020 was not despite a lot of polls suggesting we were, then what Collins did in 2020 is not going to cut it.
The main problem with personalised pricing,is the same as with haggling,it might lead to better pricing but it would take a lot of effort and mental energy. I really don't want to have to create a plan for optimising grocery prices. It would make buying things stressful and with lots of regret for mistakes, I would pay a lot of money not to have that stress.
>The big ones are: allow more doctors and engineers to immigrate, don’t cut Social Security, raise the minimum wage to $15 an hour, expand Medicaid, and raise the income tax rate on people earning more than $400,000 per year to 45 percent.
Why is mandatory parental leave and vacation time never mentioned in these? Every poll I've looked at says it's incredibly popular and I find it weird we went through a democratic trifecta and they chose to spend their time on low impact low priority issues like renewable energy instead of something pretty close to universal.
One issue is that for upper middle income and above corporations will already include these as benefits, so this is mostly a working class issue. And the democratic party is no longer the working class party, so maybe they stopped caring?
I think there's a worry about the fact that small businesses would have the hardest time complying with it, so there would have to be minimum size small business carveouts, but that would leave a bunch of the working class in a position where they couldn't benefit anyway. There's also the worry that businesses would just start cutting back on positions for the working class.
The decline of Austria-Hungary at least worked out for most of it eventually; they’re mostly just in the EU now. The real tragedy of WWI-era nationalism was the Ottoman Empire, which went from arguably the most cosmopolitan part of the world in its heyday with non-Muslims the majority even in its capital in 1900 to committing genocides once it got nationalist brainworms and the wars over its carcass still going on.
I think the lesson here is that multiculturalism is not enough—you also need developmentalism. If the Ottomans had kept up in technology and didn’t suffer genocides at the hands of the new Balkan states they probably wouldn’t have committed their own. And had they not lost WWI none of the bad stuff in the Middle East today would be happening.
I'm glad that Matt explicitly stated what the purpose of the Academy Awards are, and that is a statement of acclaim from one's professional peers in the film industry, since that is who constitutes the Academy. If anyone thinks acclaim should come from a different set of voters, we can have different awards from them, and make our judgment as to which ones are more worthy.
Regarding abusive pricing for groceries and other necessities, one likely market response is the emergence of more retail brands that avoid such practices to optimize trust in Lazy Guys. An exemplar of this is the HEB chain in Texas, which elevates consumer trust above essentially all other values. It is assisted in this because it is privately held by a family (egads, billionaires) who are not hostage to quarterly results, but nevertheless illuminates a path forward. HEB dominates its markets in Texas, *and* it resists the urge to do sneaky things, which results in almost unbelievable brand loyalty. People really do talk about "my HEB," the store they go to. Never seen anything like it.
I think the whole pricing thing is dystopian but I also think it would most likely end up being defeated by consumer price monitoring apps, possibly run for you by a little shopping AI assistant, and maybe even businesses whose strategy involves deciding 'we don't screw people like that.'
At which point the AI pricing apps will charge highly customized prices capturing the vast majority of the surplus they salvaged for consumers.
The neoliberals are just dead wrong on this; this is an extraordinarily obvious case for regulation to preserve the functioning of markets.
Price discrimination on the basis of the identity of the buyer is *poison* and must be destroyed everywhere it already exists and prevented from taking a single step forward in expanding.
"At which point the AI apps will charge highly customized prices capturing the vast majority of the surplus they salvaged for consumers"
This is the PBM business model -- started as a way to do better price comparison shopping for health plans, and then moved ever closer towards "capturing the vast majority of the surplus they salvaged".
Good analogy. It also worries me even more because the PBM have already crossed the line into “deliberately making markets more opaque so they can generate more surplus for themselves,” and all the same incentives would apply to an AI shopping assistant’s developer.
Yea very good comparison and I think you and David are both right about the inherent inefficiency of prices being battled out in such a way. Probably a situation where the theoretical rationality of a market leads to bad outcomes for everyone.
Theoretical rationality is not the per se issue in re the market concept here but rather than unexamined potential for market equilibriums that may not be consumer optimal. Perfectly rational equilibrium outcomes possible sans necessity being consumer optimal. (speaking as a proper economist)
I haven't personally any views here as there are so many unknowns and factors pushing in different directions, I would be reluctatant to jump to any a priori conclusion (although for that same reason jumping to regulations which are comparatively easier to code into law than to later unwind if they end up having perverse outcomes [see rent controls, Jones Act etc]
Fair enough, I'm no economist, just a law talkin guy. That said my law talkin' has been in house healthcare and Allan's point about the PBMs resonates. Now part of that is that they're part of a larger, much messier ecosystem than retail groceries but it's a good example of something that was supposed to be a patient-supporting counter thrust to opaque (and downright shady) practices on the payer side. Instead they've evolved into just another massive rent seeker with no apparent value to the consumer.
While I think the arms race of AI seems to favor the producer, there seems to be a clear under current where the ability for us to use personalized tools will be cheap. I don't think the setup of the producers having an AI fighting an expensive AI that consumers are paying to fight it will pass. We already see free AI models that rival paid versions. Consumers should have access to free shopping assistants.
What would the regulations look like? I'm having a hard-time getting my head around how the government could regulate the price of cheerios without also causing big problems.
Ban the use of personal data for personalized pricing except for specific defined categories. You could still charge e.g. higher prices in a richer neighborhood like we do now.
impossible to effect, who is going to determine
A. What is personalised pricing
B. that a price is in fact "personalised"
C. Prove both of A & B in legal terms
Never mind the selectin of categories, etc.
This is the perfect recipe for a solution with by historical precedent near-certain perverse outcomes and manipulation.
It’s a restriction on data use like what already exists in GDPR and similar laws and has shown to be enforceable, not on pricing per se.
Nik got it. Ban personalized pricing. Retailers must, at a given time and location, display and charge a single price to all via all sales channels. Online sales channels must display and charge a single price, period.
Price discrimination via time and most of the other currently extant methods serve actual purposes and enhance utility. We already limit them in various ways, no need for much change.
I think it would just look like MA liquor law. You must sell any product you sell to all comers at the same price for at least one full day. (Yes, you can't have happy hour discounts on alcohol in MA.) It seems like posted coupons could be incorporated pretty easily (those aren't allowed for alcohol.)
yes - this seems very much like something that at current level of knowledge it is nigh impossible to develop at this time a regulation that would not have near certain chances of really perverse and destructive outcomes.
But that ignores competition between AI pricing apps! If you have five big apps and any firm can launch another with moderate capex, the pricing apps will compete on price.
Yo dawg, I heard you like AI pricing apps that prevent you from getting ripped off, so I made an AI pricing app that prevents you from getting ripped off by the AI pricing apps so you can not get ripped off while you don't get ripped off.
My agents monitor your agents while placing side bets on kalshi on the top price paid for bananas on October 7th, 2029
It's called "Banana for Scale"
I feel like we already went through this when we transitioned from markets where you have to haggle to stores with set prices where we can all save time and mental energy.
Of course it could end up like clothing, where everything seems to always be on sale or it could require a coupon to get a reasonable price. But I imagine a lot people will generally be willing to pay a bit more overall for consistent prices they don't need to think about and businesses will adapt to serve that customer.
Yeah, I don't buy that this is going to be a dystopia. Amazon already does dynamic pricing, and it doesn't sell $50 Cheerios and most current forms of dynamic pricing (coupons, sales, buy 1 get 1), bring prices down.
If my Stop & Shop starts trying to sell $50 Cherios, I'm not just going to walk across the street for my Cheerios; I'm going to walk across my street for everything, and I think that's going to keep them from trying.
Dynamic pricing is a whole different story from identity-based pricing.
Matt’s whole take here was kind of underbaked — “private entities will extract more from richer people in a ubiquitous surveillance dystopia with astronomical transaction costs and this is good because it will narrow the gap between the rich and the poor” is exactly the sort of handwavey bullshit that he would scoff at in other contexts. Inter alia whence the incentive to earn more if it just gets immediately extorted away by the time you want to consume stuff?
Individual price discrimination is illegal under our current antitrust arrangement. With all the information we have firms are moving closer and closer to this.
In a world with minimal consumer surplus, many consumers will feel much antipathy towards products and brands.
Amazon recently got an injunction against an AI powered app consumers used to monitor prices for set products on the store.
It’s only illegal where anticompetitive (and consumer sales by non-dominant retailers would probably almost never be considered anticompetitive), not illegal per se.
It might drive more people to Costco/BJs/Sams wholesale type places as well which seems like it would be bad for the people who don’t have the extra cash for the membership fee and for the diversity of stores and selection.
I agree, but I really want to avoid an AI arms race every time I go to the grocery store.
I wonder if it would lead to the return of haggling and bargaining? That would make the checkout line a total nightmare.
Obligatory Monty Python reference:
https://www.youtube.com/watch?v=-2iZjxSGca8
Not related to dynamic pricing, but: my daughter asked me to bring home a box of Cheerios yesterday and I felt like I was going to retire in poverty.
On that subject: FedNow tells me the price index for a bushel of oats is about the same as it was in 2011, but the price of a box of Cheerios has doubled. I know some of this is labor etc. but (according to Google) generic "toasted oat" cereals are only up 30%, while Cheerios brand is up 90%. So on the subject of whether dynamic prices will be efficient or extractive, I'm going to lean towards "extractive".
You can definitely buy store brand generic-Os and they are a lot cheaper. Same with corn flakes which are more my thing.
IMO the texture is slightly different, but not a lot different. I wish I could say I prefer the cheaper version but it does appear to be missing "something" although the difference is small enough that it might just be placebo effect or familiarity.
Just a few days ago I was asking the ChatGPT about the high price of cereal, and the biggest surprise was that the cardboard packaging is one of the biggest cost inputs. So if you can find cereal in a bag it might be a lot cheaper. But at my local grocery store the only cerreals that come in a bag was super surgery shite I would never eat.
Also on the topic - plain raw oats are much cheaper, more filling and probably healthier than any brand of cereal. For a long time now I've ben sprinkling a layer of raw, plain oats on my breakfast cereal (and sometimes on a few other things). If you don't overdue it it mostly just makes whatever you're eating feel more filling and substantial which might make you less hungry later. YMMV!
Hey that honey bee has a lifestyle to maintain too!
There's still the effort of setting up and using such an assistant. And there would be some cost in running it, adding an expense of either paying for that in a subscription, or with the ad and/or (ironically) data collection model.
AI giveth and AI taketh
"The one thing that does temper my populist outrage is the recognition that the whole point here is that custom pricing algorithms are going to try to screw me personally because I’m pretty affluent."
Yeah, I don't think that's how these things tend to work. Affluent people don't get screwed on car loans and consumer credit even though they could totally afford a 10% interest rate, who even knows the difference?
Supermarkets may give wealthy people competitive prices because they want them shopping there and buying high end food in their stores, and they're willing to not maximize their earnings on low margin food that would just piss them off.
It's intriguing that Matt sees the consumer surplus to customized pricing in terms of how much money is spent, whereas others might see consumer surplus instead in terms of how much time and effort is spent. That view would invert who would benefit as consumers from what Matt states. Then, the question would be whose view of consumer surplus we want to prioritize.
Amazon is a clear winner of the view that most people believe that consumer surplus that people want to save on is time and effort. The sacrifice of any real pricing discrimination is so over the top I avoid it as much as possible.
Bargain hunting is an inferior good
In a world full of AI and online shopping tools, time and effort spent should inevitably decline towards zero. The only reason they wouldn't do that is if the corporate world uses AI to ensure they remain high.
Pros of self driving cars:
-less traffic accidents+fatalities
-less erradic drivers
-safe option for shuttling kids around
-risk free elderly driving
-New mobility for the disabled
-ability to coordinate across vehicles, removing needs for even stop lights in AV-only areas
-95%+ utilization aka less on-street parking
-all EVs
-reduces overall insurance cost
Cons:
-someone elses idea other than transit activists
“ability to coordinate across vehicles, removing needs for even stop lights in AV-only areas”
Lolz at anyone who thinks the level of IoT penetration for this is coming.
It literally might not be achievable at all.
This is already possible and proven. AVs can already move inches apart with no issue. If we have downtown cooridors with nothing but AVs on the road it would be almost trivial to remove all stoplights, create easements for hopping on/off, and then shuttling around with just a few centrally managed protocols that new AVs must interact with.
The IoT-light model of reducing headways is dependent on assuming nothing outside the control of the AVs exists.
There is no panacea for traffic inbound.
That's my point though. Downtown cores should be AV only. It would be trivial to implement. Your own car can be brought to you as you leave the city center. Theres 0 downside at all. Who likes driving 5 mph through city centers that cause all sorts of safety issues for everyone involved. Who likes finding that one narrow street parallel parking spot. Inbound traffic can stop at the edge of the city and you can get personally shuttled to where you are going. It would actually be far, far faster for commuters.
I said and meant “nothing.”
That means pedestrians, cyclists, kids playing.
In the precise areas where congestion is the worst, AVs will do much less to resolve it absent huge levels of IoT integration that either cannot happen at all or will take a huge amount of time to assemble and train AVs to function within.
This is also trivially solved by more lane separation. Without street parking in urban cores there's a lot more room to play with. Crosswalk signals being connected to AVs stops them when people want to cross, otherwise there are fully separated barriers.
Also if has already been proven that AVs react to people/kids running into the street far faster and safer than people do. Moot point.
It will not take long to do fleet training, that, again, has already been done in a thousand different use cases. The tech is already there across every part of the stack.
This is the kind of talk that makes urbanists anti-AV. This does not sound very compatible with pedestrians!
AVs are already far safer for pedestrians. It would be an enormous boon to pedestrians.
I agree with you in general, but you're talking about a downtown where there are no traffic lights because the AVs are programmed to drive within inches of each other and seamlessly allow each other to pass. That only works if there's no outside interference from pedestrians.
No it doesn't. Just install crosswalk buttons. That's literally all it takes.
How about merging on and off freeways? A lot of inherent congestion on them comes when there are too many vehicles all trying to weave within the same space.
Park&rides
I don't think AV-only should include freeways. I thought you meant how would human drivers navigate this with AV-only downtown cores. I think they should park at the city edge at large park&rides and hop onto fleets of AVs from there.
That seems like an added step of inconvenience that people might not like, especially if they're having to move a significant amount of goods between vehicles. And it strikes me as of now that even coordinated AVs aren't going to fix problems of freeway congestion, which would mean that there needs to still be considerable room for non-motorist forms of transportation.
What do you mean by this?
> 95% utilization
No need for hyperbole here. The average car gets about 4% utilization (an hour a day). If AVs can bump that up to 20% it will be a huge win. I hope utilization doesn't go above 70% because I, for one, plan on being asleep at 4 AM.
Also, ride share is typically about 50% deadheading.
Note: Michael B Jordan is playing only one brother in your leadoff image. The actor on the right is Miles Caton as Sammie.
Oh, thank God, I thought I was going crazy when I saw that caption!
I don't really get the problem with the Streetsblog/GGWash article Matt links to. It reports study findings that autonomous cars would increase driving and suggests that regulatory responses to that (like congestion pricing) are appropriate. That seems like the same conclusion you would reach from a standard externalities analysis; unless I'm missing something, it doesn't support a ban or something like an autonomous vehicles cap and it explicitly notes the potential safety benefits.
I'm not sure it's a "problem", but GGW clearly views reducing vehicle miles travelled as a bigger priority than traffic safety.
The article's conclusion illustrates this well:
> America could end up embracing a mode that addresses many of our traffic violence troubles, but fails to uproot the deeper rot of car dependency that has hollowed out our society.
"car dependency has hollowed out our society". I'm not sure what that means unless the vision is of everyone living in dense urban highrises within walking distance of trains. Not for me, I need a plot of land.
My plan is not trains for all. My plan is trains for all *who want it*.
I want to live in the same kind of city as urbanists, but I hate the aggressive inclination to ignore contrary preferences and exaggerate externalities.
The problem is that car-dependence leads to nobody fucking.
That was not my experience in high school.
born in?
If you look at places in the world that are American urbanist dreams, they have much worse marriage/fertility rates than car obsessed America.
I'm all for proportional representation, but it is structurally unworkable at the federal level without major constitutional change, and since that would need to include abolishing the Senate, that is extremely daunting. It needs to be a bottom up movement where municipalities demonstrate its worth first, then hopefully filtering up to the state level, where unlike the federal level they can deviate much more than things like the sole exception of Nebraska's unicameral legislature. That's going to take a long time to do. So in the here and now we're going to have to find a way to improve what we have.
This is actually not true, and it's worth unpacking the reason why it's not true, because it involves unpacking the distinction between two separate sins of the current Senate-- malapportionment and winner-take-all.
So one of the major problems with the Senate is that it gives small states a level of power that large states lack. The people there, very directly, get more representation than those in big states-- sometimes comically more, like the average voter in Wyoming has almost three times as much representation as the average voter in California. This is an intractable problem because the entrenched language in the Senate precludes depriving a state of "equal representation" without its consent. The only real way to tweak this is by deliberately making all states about the same size, which isn't going to happen for other practical reasons. And short of a revolution destroying the Constitution outright, we're stuck with it.
But the other problem with the Senate is that consistently getting 51 percent of the vote gets you 100 percent of the representation. That makes the otherwise academic question of whether the majority of states are "blue" or "red" massively consequential. Nonproportionality IS a solvable problem, and it's a solved problem even within the context of a malapportioned Senate. Australia's Senate, like ours, is constitutionally malapportioned such that every state has equal representation-- Tasmania, with 580,000 people, gets the same representation as New South Wales, with 8.5 million people. However, the way that equal representation gets manifested is through electing six senators per cycle per state, not one, and the way the six senators are distributed uses single transferable vote, which is basically a form of proportional representation (I will spare everyone the math on that, but if you look it up on Wikipedia you'll get all the gory details). As a result there's always at least one Labor senator and one Liberal or National senator (the two biggest parties) in every Senate election regardless of whether you're talking about super-libbed-out South Australia or right-wing Queensland. Six seats per cycle is also enough to allow for a decent number of senators from outside of the two major parties, enough to where it's basically impossible for there to ever be a majority for the government in that chamber. That means some level of minor-party buy-in is needed for most laws to pass.
It would not take a revolution overthrowing the Constitution to move to Australia's system of equal proportional representation for each state. I think the Australian Senate is quite badly designed, and the malapportionment is a big reason for that, but it's a whole lot better than ours in that third-party voices are really important in getting laws through it.
I had an unanswered question a few weeks ago about the value in calling for a constitutional convention. It's obviously far-fetched and I've always felt there'd be a "be careful what you wish for" element to it, but considering where we are now and Trump showing us the risk of a strongman hijacking the GOP, I'd at least like to see more ideas along the lines of yours. We're at the point where we need structural reform.
You're right about the Senate, but I think you can do House PR by statute.
The Senate could be more proportional with ranked choice voting or run-off style elections.
No, it's still only for one person from one party for each seat. If the person/party you want doesn't get that seat, then you have no representation in that chamber.
The dirty little secret of left wing urbanists is that a lot of them are authoritarians who want to use the government to force people to stop living lives they disapprove of. Things like pedestrian safety are just the hook for those beliefs.
nobody thinks the laws they like breaking should be enforced
True enough, but a lot of people fantasize about using the power of the state and its guns and violence to eradicate the lifestyles they don't like.
While I like self-driving cars, I am well aware that there are a lot of people who would love to use them to physically control where people can and cannot go by programming what routes the cars can follow and what locations they can go to. This is why I don't want to completely ban driving.
What they really believe in is bike supremacy.
The types of urban areas urbanists are concerned about are a tiny part of the overall country. People who want to drive a lot could just live in the suburbs? No visa is required, you can still commute to the same job, and it’s most likely a lot cheaper.
Urbanists think automobile suburbs should not exist.
Urbanists think automobile-suburb dwellers should have to pay the costs of their own externalities.
No, a lot of them think they shouldn't exist, or define "the externalities" dishonestly so high that they can try to force people out of them, because obviously auto-centered suburbanites shouldn't exist and should be forced to live more "virtuous" lives.
Another way we see the effort dynamic play out in pricing is with credit cards. All consumers are getting their prices raised via passing the cost of merchant fees onto them, and the only way to recoup that cost is to go through the effort of playing the points game with credit cards. That has never struck me as a positive arrangement. I hope that more merchants move to offer discounts for using less expensive forms of transactions, so that the credit card churners get the cost directly placed on them instead of getting a cross subsidy from non-credit card users.
Come on. All forms of payment have costs. If you accept cash, you have to manage it with large trucks and armed guards and deal with the risk of theft. If you accept checks, there's NSFs and straight up fraud (which we as a society pay to put people in jail for).
Merchants accept credit cards because they want the customers who have the cards and so they don't have to provide their own financing directly. They don't have to accept cards - many businesses don't accept cash or checks.
....
As a customer, the variety of cards may be kind of overwhelming because it's a highly competitive market (particularly for affluent customers) and they're trying to tempt you with a bundle that appeals to you specifically... but you don't really have to worry about it if you don't want to. Just get a good cash back card (eg. Fidelity Rewards Visa Signature - 2% cash back on everything) and never worry about it again.
An equilibrium where there is fierce competition to compete down the cost of the transaction and share to saving with the customer with broad consumer protection (Regulation E) seems better than a lot of the alternatives... Though I get that small merchants in particular complain since they get terrible rates (they're bad risks for the processors) and they often aren't really thinking through the risks and costs of other methods (eg. If you ask me to pay with an e-transfer, I start getting worried your trying to scam me since I have many fewer consumer protections and may simply walk away).
I highly doubt raising the salience of race would be good for the YIMBY movement.
"Hey person with latent NIMBY tendencies, do you want to vote to change your neighborhood so poorer people of color can move in?" Doesn't seem like the best strategy imo.
Yeah, however racist you assume homeowners are, in practice they are probably a lot more racist than that. Nextdoor comments are not a statistically sound measure of homeowner racism but they are definitely strong anecdotal evidence of it.
So I have absolutely no doubt that submerging the racial implications of zoning reform is the tactically correct choice. It's depressing and disturbing that that's so, but from the crooked timber of humanity etc etc.
Agreed. But academically there is a large racial justice issue which is that minorities were largely legally excluded from buying when housing prices were much cheaper so didn’t benefit from the appreciation and have to pay higher prices now. It’s one of the main ways in which past discrimination demonstrably causes part of the wealth gap today. It’s smart not to emphasize this in political messaging but that doesn’t mean it isn’t true or that people don’t sincerely believe it.
Yeah I think it's unambiguously true that pro-YIMBY policies would be very good for racial justice (and personally I'd argue that they'd be much better for racial justice than the current criminal justice push).
But as Zagarna said below, the median voter is what you find on Nextdoor.
Considering that Kroger mails me coupons on all the time specifically for the items I buy most often, I don't think ultra-specific, individualized price hikes from supermarkets is something we will have to be concerned about.
Yes, my wife had a bit of a freakout recently when she looked at the Kroger coupons and realized that every single one of them was for a product that we routinely buy.
I had a friend who used to work at Dunn Humby before Kroger bought them out. He used to work with that data.
>does not show any substantial effect of the war or a shift in the opinion landscape that would make you think Democrats have an easy path anywhere outside of Maine and North Carolina.<
Is Maine now an "easy path" for Democrats? In theory it's winnable—Maine's on the blue side of purple, and a lot of Mainers are angry at Trump. But Susan Collins might be the single strongest electoral performer her party possesses. And she doesn't even have do as well as she did in 2020 to prevail this cycle.
I don't understand the last sentence. If we're in a blue-wave environment, which 2020 was not despite a lot of polls suggesting we were, then what Collins did in 2020 is not going to cut it.
Collins won by 8.5 points in 2020 and the generic Democrat was up by 5.1 as of Wednesday.
https://en.wikipedia.org/wiki/2020_United_States_Senate_election_in_Maine
https://www.natesilver.net/p/generic-ballot-average-2026-nate-silver-bulletin-congress-polls
The main problem with personalised pricing,is the same as with haggling,it might lead to better pricing but it would take a lot of effort and mental energy. I really don't want to have to create a plan for optimising grocery prices. It would make buying things stressful and with lots of regret for mistakes, I would pay a lot of money not to have that stress.
>The big ones are: allow more doctors and engineers to immigrate, don’t cut Social Security, raise the minimum wage to $15 an hour, expand Medicaid, and raise the income tax rate on people earning more than $400,000 per year to 45 percent.
Why is mandatory parental leave and vacation time never mentioned in these? Every poll I've looked at says it's incredibly popular and I find it weird we went through a democratic trifecta and they chose to spend their time on low impact low priority issues like renewable energy instead of something pretty close to universal.
One issue is that for upper middle income and above corporations will already include these as benefits, so this is mostly a working class issue. And the democratic party is no longer the working class party, so maybe they stopped caring?
I think there's a worry about the fact that small businesses would have the hardest time complying with it, so there would have to be minimum size small business carveouts, but that would leave a bunch of the working class in a position where they couldn't benefit anyway. There's also the worry that businesses would just start cutting back on positions for the working class.
The decline of Austria-Hungary at least worked out for most of it eventually; they’re mostly just in the EU now. The real tragedy of WWI-era nationalism was the Ottoman Empire, which went from arguably the most cosmopolitan part of the world in its heyday with non-Muslims the majority even in its capital in 1900 to committing genocides once it got nationalist brainworms and the wars over its carcass still going on.
I think the lesson here is that multiculturalism is not enough—you also need developmentalism. If the Ottomans had kept up in technology and didn’t suffer genocides at the hands of the new Balkan states they probably wouldn’t have committed their own. And had they not lost WWI none of the bad stuff in the Middle East today would be happening.
I'm glad that Matt explicitly stated what the purpose of the Academy Awards are, and that is a statement of acclaim from one's professional peers in the film industry, since that is who constitutes the Academy. If anyone thinks acclaim should come from a different set of voters, we can have different awards from them, and make our judgment as to which ones are more worthy.
Regarding abusive pricing for groceries and other necessities, one likely market response is the emergence of more retail brands that avoid such practices to optimize trust in Lazy Guys. An exemplar of this is the HEB chain in Texas, which elevates consumer trust above essentially all other values. It is assisted in this because it is privately held by a family (egads, billionaires) who are not hostage to quarterly results, but nevertheless illuminates a path forward. HEB dominates its markets in Texas, *and* it resists the urge to do sneaky things, which results in almost unbelievable brand loyalty. People really do talk about "my HEB," the store they go to. Never seen anything like it.