Perfectly Discriminated: How Dynamic Pricing Works

Welcome back to the Expanding Economics podcast! In this episode, Noelle and Zoya pull back the curtain on dynamic pricing—the invisible force changing the cost of everything from your Uber Eats order to your next concert ticket. While traditional models suggest that shifting prices simply balance supply and demand, the rise of Personalized Dynamic Pricing (PDP) tells a much more intrusive story.

The episode explores the shift from surge pricing to surveillance pricing, where AI models crunch your location, browsing history, and even your battery level to predict your maximum willingness to pay. They break down the microeconomic theory of 1st-degree price discrimination and contrast it with the harsh reality of informational inequality and predatory privacy underclasses.

By analyzing the DOJ's recent algorithmic price-fixing lawsuit against RealPage, they shed light on how these systems can exacerbate inequality and erode market trust. Tune in for a deep dive into whether allocative efficiency is worth the cost of our privacy, or if we need to start treating data breaches with the same urgency as environmental pollution.

Find out more at https://the-expanding-economics-podcast.pinecast.co