For generations, the price tag has been one of the most powerful consumer protections in American life. It’s small, unassuming, and rarely questioned by anyone, yet it represents a simple contract between shoppers and businesses: everyone pays the same price for the same product. This contract is now facing extinction, as companies are slowly replacing static prices with an algorithm-driven system that is designed to extract the maximum possible profit at our expense.
Price transparency was not always the norm. In the 19th century, shopping involved haggling and negotiating. Store clerks would adjust prices based on who the customer appeared to be, how busy the store was, or how quickly the sale was needed. Thus, it was common for two people to walk out of the same store, with the same item, having paid two entirely different prices. During this time, the Quakers in the US began to believe that charging people different prices was immoral, so they added small stickers on goods in their stores to counter haggling. In turn, the concept of the price tag was born.
In the 1930s, Stan Avery created the Kum-Kleen Adhesives. While the name changed over time, the promise of these adhesives stayed the same. Every person, no matter their economic status, race, or gender, would pay the same price for the same good. These tags made shopping a fair game for everyone. Competing stores would lower their prices to attract more business, and the real winners here were the consumers.
Now, the game is being rigged against us. With artificial intelligence on the rise, corporations are turning shopping into a battle of wits. Dynamic pricing sounds innocuous, almost like a fancy term for fluctuating prices. In reality, it means the price you pay for a product or service can change depending on who you are, when you purchase, and how much a company thinks they can make off of you. The price tag is dying.
Dynamic pricing isn’t a concept anymore; it’s already widespread and growing. Think of Uber, for example. Uber has admitted to using dynamic pricing, including “surge pricing” to raise fares when demand spikes, such as during rush hour or bad weather. This means that riders are being charged many times the normal rates.
One of the strongest predictors of whether or not you are going to be sensitive to surge—in other words, whether or not you are going to kind of say, oh, I’ll give it a 10 to 15 minutes to see if surge goes away—is how much battery you have left on your cell phone.”
– Uber’s head of economic research, Keith Chen said.
Companies are using algorithms to instantly change prices based on the demand for an item or service, forcing costs to skyrocket.
Price change is not necessarily bad, though. It helps companies to understand the supply and demand of items. However, companies are utilizing A.I. in a way that now takes advantage of consumers, making shoppers the laughing stock of capitalism.
James Robinson and Binyamin Appelbaum, with The New York Times, discuss three ways in which companies are using technology to win. There is the illegal way, the legal way, and the ‘most definitely should be illegal’ way.
“Now, back in the price tag days, collusion took a lot of effort. The bosses had to sit around a table with their competitors and smoke a cigarette, and agree to raise prices without getting caught. But today, with pricing algorithms, collusion is just a few clicks away. When a bunch of individual companies sign up for the same algorithm, they can effectively collude without ever talking to each other,” Robinson and Appelbaum said.
A good example is centered around the company RealPage, an AI-enabled software that uses data analytics to assist landlords with marketing, leasing, and accounting. In 2022, RealPage was accused of scheming with landlords to keep rent prices high.
“Landlords subscribing to the service would input data about their apartments, including location, square footage, and amenities. The algorithm would tell them how much to charge for rent. But the algorithm wasn’t designed to determine the market price. It was designed to maximize landlord profits. So it did all the things that would have been done in a back-door deal with an ease that old-fashioned colluders could only dream of,” Robinson and Appelbaum said.
The system encouraged landlords to set rents higher than market prices and, when demand declined, recommended keeping units vacant instead of lowering rents. The company claimed its algorithm increased revenue from 3% to 7%. This scheme affected more than 3 million apartments nationwide and ultimately led to Americans paying billions of dollars more in rent. Luckily, this model is likely illegal, which led to the Justice Department suing RealPages and settling in 2025.
There is a legal way to approach dynamic pricing, though. While companies cannot share the same algorithm, they can still use their own. When companies use different algorithms, prices still go up. These algorithms monitor competitor pricing, driving costs down to match any price cuts. If competitors stop trying to compete with each other, they can keep their prices high, and the companies win. But who loses? We do.
“Digital price tags that allow retailers to update their prices instantly are already in use. And even small stores can play the big data game,” states Robisnon and Appelbaum.
When many firms rely on similar pricing software, prices rise together without any direct communication. This blurs the line between legal behavior and anti-competitive conduct, making enforcement more difficult while still harming consumers.
Perhaps the most troubling aspect of dynamic pricing is the ‘most definitely should be illegal’ way, which focuses on personalization. Companies trick you into handing your information to them through ‘reward programs,’ gaining access to how much you make, how you make decisions, what emotionally triggers you, and when you’re willing to buy.
T.V. station Khon 2 writer, Coralie Matayoshi states that “We go to a website, click on information, and leave digital exhaust behind us, like cookies. Data brokers do business with all kinds of different websites that collect all of this information about us, including geolocation-related information. They also mine data from public sources like public records to build, essentially, a dossier on individuals. Then they apply analytics to infer from the information that they’ve compiled what we might be interested in, and that information is eventually sold.”
Unfortunately, this kind of pricing undermines the idea of fairness in markets. For decades, posted prices created a basic guarantee that everyone paid the same amount for the same item. Dynamic pricing has replaced that transparency with opacity. Consumers now have no way of knowing whether the price they are seeing is really the best possible price, and they have no way of knowing if someone else is paying less for the exact same thing.
Dynamic pricing isn’t just changing our prices; it’s changing the rules. What used to be a simple exchange has now become a constant process of negotiating that you don’t even know you’re in. Only now you’re not negotiating with a person. You’re up against an algorithm that watches you, learns you, and never stops trying to figure out just how much you’re willing to pay.