Internet Users are able to view advertisements of various sorts of content that mostly matches their interest. This is mainly attributable to complex algorithms which assess the past practice and profile of the user to determine what might seem relevant. While it may sound beneficial for the user, it carries disadvantages alongside. A group of researchers from Northeastern University reveal that when the e-commerce websites alter prices, buyers often end up paying excessive amounts for items of interest.
The loophole in transparency here is huge. This team of five researchers aims to address it with a detailed study. For this purpose, they assessed a total of 16 renowned e-commerce websites in order to measure price determination and price steering. Price determination explains how the price of a product is set for each kind of user. The latter is the way in which the search results are organized for each user. Six of the sites related to car rental and hotels whereas 10 pertained to general retailers.
The researchers discovered various cases of personalization on five travel sites and four general retailers. Travel sites, in general, recorded more inconsistencies in prices compared to the rest. Prices would even vary by hundreds of dollars. They learned that Orbitz and Cheaptickets would establish their price determination upon offering lesser prices to ‘members’ of the hotels. On the other hand, Travelocity and Home Depot personalize their search results for those using mobile devices.
Most interesting of all, Priceline would personalize its search results judging by the history of clicks by a user. It works like this: any user who is used to purchasing high cost hotel rooms gets different search results compared to those who only stay around for window shopping or purchase cheap hotel rooms. Researchers don’t consider this price steering, though. This is mainly attributable to the fact that these varying orders do not necessarily correlate to the prices of each.
The 16 websites showed neither price steering not price discrimination despite the significantly varying prices in a few cases. The researchers picked companies based on their ranking as top sites. Interestingly, eBay and Amazon didn’t form part of the list given that they are online marketplaces. Even more interestingly, Apple was excluded from the list since the company mainly vests in its sole products.