Title of the Essay, Author, and Date

Pricing, Fairness, and Digital Data by Terri Williams (April 15, 2013)

Title of the Reflection

R ight Pricing in Information System

First Impression

An essay about how we should be fair in pricing, and the digital data

Quote

In any event, it appears that the Internet- The Great Equalizer- may be the next battlefield in war for equality

Reflection Paper

Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan.    Fairness is the quality of making judgments that are free from discrimination. Judges, umpires, and teachers should all strive to practice fairness. Digital data, in information theory and information systems, are discrete, discontinuous representations of information or works, as contrasted with continuous, or analog signals which behave in a continuous manner, or represent information using a continuous function.   The Internet has been praised as being “The Great Equalizer,” for leveling the playing field by providing a platform for the free exchange of information, and for being a global marketplace without borders that provides consumers with unprecedented levels of choices. However, in the eyes of some retailers, it appears that all consumers are not created equal. According to a Wall Street Journal investigation which resulted in an article titled, “Websites Vary Prices, Deals Based on Users’ Information,” Staples, Home Depot, Lowe’s, Discover Financial Services and Rosetta Stone are some of the companies that vary their prices and product offers depending on consumer information. And in another Wall Street Journal article, online travel site Orbitz discovered that consumers who own Mac computers tend to spend almost 30 percent more per night on hotel rooms than consumers who own PCs. As a result, when a Mac user and a PC user visit Orbitz’s website, even if they type in the same search information, the Mac user will be shown travel options that are at least 11 percent higher. We can expect this trend to grow, based on the type of information provided by companies like Forrester Research, which recently released a report that showed iPhone users are more likely to research, compare and purchase products on their mobile devices.   Critics are concerned that companies will use consumer information to help them target their ideal customers. Businesses already have the ability to track a consumer’s location based on the IP address. And according to Daily Finance, businesses can also identify the type of device used by the consumer and also track purchases that customers make on their website.

5 Things That I've learned from the article:

1. The Internet has been praised as being “The Great Equalizer,” for leveling the playing field by providing a platform for the free exchange of information, and for being a global marketplace without borders that provides consumers with unprecedented levels of choices. However, in the eyes of some retailers, it appears that all consumers are not created equal.
2. Several major companies are compiling consumer information, including geographical and income data, to determine what price they will offer each potential customer.
3. Price discrepancies are not a new phenomenon. For example, some restaurants have a lunch menu and a dinner menu. The lunchtime prices are generally lower, although the customer usually gets the same amount of food during both time periods. Many movie theatres have matinee pricing, although they are showing the same films. Some automobile oil change centers offer discounts to women on certain days, while some restaurants allow kids to eat for free when their parents accompany them. And many retailers offer discounts to senior citizens and military veterans.
4. According to a Wall Street Journal investigation which resulted in an article titled, “Websites Vary Prices, Deals Based on Users’ Information,” Staples, Home Depot, Lowe’s, Discover Financial Services and Rosetta Stone are some of the companies that vary their prices and product offers depending on consumer information.
5. Companies can also purchase consumer information from data brokers like Acxiom Corporation, which collects such information as education level, marital status and political affiliation, in addition to other personal data such as age, race and sex.

5     Integrative Questions

1.  What are the reasons that in the eyes of some retailers, it appears that all consumers are not created equal.
2. Where makes online pricing different?
3. Why and what are the reasons online price discrimination qualify as an ethical issue?
4. What are the implications of this type of price discrimination?
5. Why and what explanations can it give  if  it is fair for online retailers to penalize consumers because they reside in the “wrong” area or have an undesirable zip code?