Price Theory

One of the hallmarks of a successful businessperson is knowing what to charge a customer and the mirror attribute of knowing what to pay for a product or service. Being able to judge how badly a customer wants or needs a product can go a long way in offering a price that they will agree to pay. I distinguish  a businessperson from a salesman because the latter might not always have the authority to offer large discounts. But, of course, good salespeople are glib talkers as well as good people-readers. I remember when I joined a new company about eight years ago and my editor asked the head of sales to guess my age. The editor was expecting him to be surprised by  how  young I was but the sales head guessed my  age accurately. When it was our turn to  be surprised, the sales head simply said that being in sales, it was his job to read people correctly.

With the advent of technologies, individual people-readers might become less sought after. The busloads of personal data that technology companies are hoovering up can be used to create detailed profiles of customers to predict what a particular customer may want at a particular instant in time and giving them option  of  purchasing it instantly. I have written a paper that touches on this point. But, the biggest use of personal data, I believe, will be to set prices. We may soon reach a stage when individual prices are personally tailored (within bounds, of  course, else there would be a public uproar). The biggest difference between shopping online and shopping in a physical store is that in the latter every customer sees the same price tag. In an online store, that is not the case. Maybe in the future we will reach a stage where every price is individually tailored depending on the customers' ability and willingness to pay. Of course, this would  be hugely controversial. Rich people are quite savvy when it comes to these things and would not take to being soaked kindly.  

One way of getting around potential allegations of discriminatory pricing is framing every price as a discount on the marked price. So, some people could be offered a greater discount, some a lesser discount.