Big Data and Discriminatory Pricing

White House: “In response to the big data and privacy report’s finding that these technologies and tools can enable new forms of discrimination, the White House Council of Economic Advisers conducted a study examining whether and how companies may use big data technologies to offer different prices to different consumers — a practice known as “discriminatory pricing.” The CEA found that many companies already use big data for targeted marketing, and others are experimenting in a limited way with personalized pricing, but this practice is not yet widespread. While the economic literature contends that discriminatory pricing will often, though not always, be welfare-enhancing for businesses and consumers, the CEA concludes that policymakers should be vigilant against the potential for discriminatory outcomes, particularly in cases where prices are not transparent and could give rise to fraud or scams….To read the Council of Economic Advisers report on discriminatory pricing, click here.

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