AI Summary
5 min readThe Hidden War Over What You Pay
When Lindsay Owens and her team recruited 400 secret shoppers to fire up the Instacart app at the exact same time, from four different locations, buying the same 23 items from the same grocery store for pickup, they found something striking: 75% of the items were priced differently for different shoppers. The gap reached as high as 23% — meaning one person could pay 23% more for a dozen Lucerne eggs than someone else standing in the same virtual checkout line. Owens estimates that for a family of four, these differences could add up to $1,200 a year.
That study, which landed on the cover of the New York Post, is one of several experiments Owens has run to document what she calls the end of a fair price. Her new book Gouged traces how pricing has shifted from a simple sticker on a shelf to a highly engineered science — one where companies hire physicists, buy AI firms, and run constant experiments to figure out exactly how much each of us will pay.
How Pricing Became a Science
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What you'll learn
- 1 (02:42) **Introduction: Muse and AI Shopping Agents** - Joe shares his experience with Meta’s Muse AI agent, which saved him money by reading a long email.
- 2 (04:41) **The Seller Side: AI-Powered Pricing Arms Race** - Sellers also use AI for pricing, creating a potential arms race between buyer and seller agents.
- 3 (05:50) **Guest Introduction: Lindsay Owens and Her Book "Gouged"** - Lindsay Owens, author of "Gouged: The End of a Fair Price," joins to discuss algorithmic and dynamic pricing.
- 4 (06:04) **Defining Pricing Terms: Algorithmic, Dynamic, Personalized** - Owens explains the shift from simple cost-plus pricing to highly engineered, data-driven pricing.
- 5 (07:29) **Devil’s Advocate: Could Personalized Pricing Help the Poor?** - Joe asks if algorithms could give better deals to less affluent consumers.
- 6 (09:37) **Instacart Study: Secret Shoppers Reveal Price Differences** - Owens recruited 400 secret shoppers to buy the same 23 items from the same store at the same time on Instacart.
- 7 (11:48) **History of Fixed Prices: From Quakers to Wanamaker** - For thousands of years, haggling was the norm; Quakers introduced fixed prices for moral reasons.
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Show Notes
It's obvious that things are getting more expensive, and there are plenty of reasons behind the surge in prices — whether it's wars or inflation or companies padding their profit margins. But with the release of AI agents like Meta's Muse, tech companies are promising consumers that agents will start saving them tons of money by finding the best deals. According to today's guest, Lindsay Owens, the history of price gouging does not bode well for claims that things might get cheaper because of new technology, and research conducted by her think tank Groundwork Collaborative shows that a number of consumer facing agents end up serving customers more expensive items after learning more about their financial situation. Her new book Gouged: The End of a Fair Price — and What That Means for Your Wallet gets into the history of how companies got away with charging more for their goods, through means like data collection and surveillance. Today we talk to Owens about how AI agents are already changing the idea of a fair price, all the pre-AI ways that companies price gouged, and her new book.
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