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Narrated by James Marriott
The recent breathless panic about the spread of “dynamic pricing” has been pretty puzzling for economists. Widely used by airlines, hotels and the likes of Uber, algorithms that adjust prices in real time to demand and supply conditions are broadly accepted to have granted consumers more choices and businesses more flexibility in those industries.
Now, with dynamic pricing spreading into entertainment and hospitality, certain consumer rights groups are demanding that the Competition & Markets Authority step in, talking as if customers are evidently being ripped off. I’m mystified: the available data and experience show that consumers have little to fear and much to gain from the proliferation of this practice.
It’s true that the rollout of dynamic pricing to new sectors is ruffling some feathers.