In a souk, there are no price tags. The price of a carpet is up for negotiation. The merchant looks at your shoes, your watch, the way you speak, and forms an idea of what you can afford. You, for your part, pretend to be uninterested in the item. It is a game, with its own rules.
For most of human history, this is how almost everything was bought. The same price for everyone, displayed on a label, is a surprisingly recent invention.
The displayed price, a revolution
In seventeenth-century England, Quaker merchants stood out by refusing to haggle: out of a concern for honesty, they set a single price, the same for every customer. The idea remained marginal for a long time.
It was in the nineteenth century, with the department stores, that it took hold. The displayed price then changed everything. It made purchases faster, it allowed comparisons, and above all, it treated all customers the same way, whether rich or poor, skilled negotiators or shy.
In Paris, from 1852, Aristide Boucicaut transformed a shop on the Left Bank into one of the world's first department stores: Le Bon Marché. Among his innovations were fixed and clearly displayed prices, free entry with no obligation to buy, and the option to return an item. Émile Zola would draw on it for his novel Au Bonheur des Dames. What seems obvious to us today, knowing how much something costs before entering into negotiation, was in its time a small revolution.
The return of haggling, only worse
AI could undo this revolution. With personalised pricing, the seller can once again adjust the price to each customer, like the merchant in the souk.
But with one major difference. In the souk, the game was balanced: the merchant sized you up, and you sized him up too. You could walk away, come back, argue. With an algorithm, the seller knows almost everything about you, your history, your habits, sometimes your income, and you know nothing about him. You do not even see that a negotiation has taken place.
It is a haggle in which only one of the two players knows the rules.
What is a fair price?
The question is a very old one. Medieval philosophers, such as Thomas Aquinas, spoke of the "just price": a price that corresponds to the value of the thing, and not to the need of the person buying it. Taking advantage of a buyer's distress or ignorance to make them pay more was considered unjust.
Seen from this angle, the problem with personalised pricing is not that it is different. It is that it is calculated on what is known about you, in order to extract the maximum of what you are prepared to give.
The argument in favour
We should nevertheless be fair to differentiated pricing. Some forms are widely accepted, and even desirable: reduced rates for students, the unemployed or large families, social tariffs for electricity. Charging less to those who have less is also a form of justice.
The difference comes down to two words: transparency and intent. A student rate is displayed, known to all, and it works in favour of the person who has the least. A surveillance price is hidden, and it works in favour of the party with the most information.
What to take away
A displayed price was a promise made to everyone: here, you will be treated like anyone else.
AI makes it possible to break that promise discreetly, customer by customer. The question is not whether it is technically possible. It is whether we want to return to the souk, letting only one of the two sides see the cards.