Tracking, Filtering, Pricing

There are two developing incidents, which have caught my eye.

Incident One. Microsoft decided to release its new browser, Internet Explorer 10 with ‘Do Not Track’ option by advertisers as auto enabled. When such an option is enabled advertisers cannot use consumer’s browsing history to serve ads leading to consumers clicking less on ads because they may not be relevant to them. Microsoft’s proposal died a quick death to vociferous protests from online ad companies and industry groups.

Incident Two. Orbitz, a renowned travel site recently revealed that for the same hotels it charges Mac users more than they would for PC users. Their data revealed that Mac users on an average might spend $20-$30 more on a room and are more likely to book a four star or a five star. While Mac users have often been subjected to the Apple Tax, this PR misstep from Orbitz has revealed more than it should.

If one looks from a pure micro-economic standpoint, price differentiation provides a high societal welfare but here however one’s online behaviour is being tracked to an extent, which may not be in one’s favour. The litany of companies to track our behaviour looks more as an opportunity to lead us to act in manners we unknowingly do.

The whole mechanism on some occasions reeks of a lack of transparency that many consumers may find instinctively uncanny. Also there is a strong imbalance between the perceived benefits for the provider and the consumer. It is amply clear why this may appeal to large corporations but it may be of a little use to the consumer at the other end, sometimes. At the same time there are many examples of information asymmetry – lack of complete information at one end to arrive at a decision, that benefit the consumer too like offering personalized recommendations in an ecommerce site based on previous transactions or discounting off-peak inventory like offering discounts on the lesser known books of a popular author. The lesson one derives from this is – online behavioural tracking when done openly perhaps provide a benefit to both consumers as well as the large firms.

The prowess of technology is growing with every day and while the dystopian world depicted in the futuristic Minority Report may still be a few years away, it is important for us as a informed consumer to be in control of things around us. We consume content off the web for free. And in return we pay with our privacy in some instances.

So imagine your new personal assistant on the smartphone, Iris answering your question on a driving route:
“Hi, this is Iris – your personal assistant here. I see in your Calendar that you have an appointment with the doctor today, here is the suggested driving route to the hospital and by the way here’s some useful information about pancreatic cancer.”

Creepy, isn’t it?

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Ever heard of the internet filter bubble?