Personalized Pricing: Discriminating Persons and Domesticating Markets

This paper addresses the social implications and possibilities of ‘personalized pricing’. By this, we refer to the use of information, usually gathered online, to charge customers different prices for the same goods or services according to their willingness or ability to pay, and in a way that is often hidden from view (Nesta 2014; see also OFT 2013: 6). How, we want to ask, are prices currently involved in the making up of persons (Hacking 1985), and how might the ability to ‘personalize’ pricing reconfigure the ability of markets to discriminate?

Our starting point is that personalization is never ‘just’ personal; it always involves generalization and frames of reference beyond the individual. In effect, personalization produces ‘types’ of persons and, in so doing, domesticates market relations in highly distinctive ways. Situating personalization in relation to debates about the historically shifting configuration of personal and impersonal relations in economic exchange (e.g. Strathern 2004, Zelizer 2005), we discuss a variety of contemporary personalization practices, including loyalty cards, ‘live’ pricing, discounts, and customer ratings. We also consider what is at stake in potential future developments in price personalization, and why these are an object of concern for governments and business alike.

In each case our concern is with how prices vary according to ‘personal’ qualities that are themselves understood and assembled in multiple, diverse and sometimes contradictory ways. Thus while some developments in personalized pricing draw on understandings of the personal and the relational that are quite familiar, others imply definitions of the personal that are novel, and likely to be contested. Indeed, surveys suggest that consumers dislike price discrimination, even in situations where they benefit from it (OFT 2013). Thus the realm of personalized pricing, and potential price discrimination, is deeply shaped by moral and relational concerns, as well as by economic and political interests. Drawing these strands together, we understand price personalization practices in relation to what Fourcade and Healey (2013) describe as ‘classification situations that shape life-chances’.