Algorithmic Pricing and Competition: The Small-Town Gas Station Example
Twice recently I've tried to purchase something from Amazon that I had purchased just a few months before. In both cases the price of the item in second purchase had been jacked up over 25%, one was over 33%. So,... I just didn't buy one and I bought the other from amazon's competitor, walmart.com, for the price of the original amazon purchase.
The amazon algorithm knows I didn't buy either at the higher price but it doesn't know i'm a price shopping dick and that amazon lost a sale to a competitor.
I'll check every price now. How does that get input into amazon's algorithm?
Twice recently I've tried to purchase something from Amazon that I had purchased just a few months before. In both cases the price of the item in second purchase had been jacked up over 25%, one was over 33%. So,... I just didn't buy one and I bought the other from amazon's competitor, walmart.com, for the price of the original amazon purchase.
The amazon algorithm knows I didn't buy either at the higher price but it doesn't know i'm a price shopping dick and that amazon lost a sale to a competitor.
I'll check every price now. How does that get input into amazon's algorithm?
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