Personalized pricing has spread across many industries. Here’s how consumers can avoid it
Summary
Delta Air Lines is using artificial intelligence (AI) to offer personalized prices for customers, causing concerns among some people. Personalized pricing is when each customer gets a different price based on their willingness to pay, and it's becoming common in many industries. The approach aims to increase profits but raises questions about fairness and transparency.Key Facts
- Delta Air Lines plans to use AI for personalized pricing.
- Personalized pricing means offering different prices to different customers for the same product.
- This pricing method is spreading across various industries beyond airlines, including finance and online gaming.
- Personalized pricing can increase profits by charging more to those willing to pay higher prices.
- Historically, custom pricing was common and involved direct negotiation between buyers and sellers.
- Set prices, where everyone pays the same, became popular after being introduced in department stores in 1876.
- AI helps companies set different prices by analyzing large amounts of data about customers’ spending habits.
- Concerns exist that AI-driven pricing could exploit customers who do not fully understand the pricing strategies.
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