The hidden logic behind AI pricing and why it may be unfair
A plane ticket jumps in price after a second search. A streaming service offers one customer a deal that never appears for someone else. An online store quietly adjusts what you pay, not because the product changed. Instead, the system thinks it knows how much you are willing to spend. That quiet shift sits at the center of a growing legal and economic debate over algorithmic pricing. Companies now use algorithms, including AI-powered systems, to sort through detailed personal and behavioral data. They make pricing decisions at remarkable speed. The practice has sparked concern for two main reasons: whether algorithms can help firms collude, and whether they can charge different people different prices for the same product. The second issue, often called algorithmic price discrimination, has drawn less attention. Even so, it may create a different kind of consumer harm. Price discrimination itself is not new. Businesses have long charged different prices to different groups, often using visible categories like age or location. Student discounts and region-based pricing are familiar examples. In economic theory, this …
