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This was, in some ways, a curious stampede. For decades, academic economists had generally been as indifferent to corporations as corporations were to them. (Indeed, most of their models barely acknowledged the existence of corporations at all.)
In the past, retailers have used demographic data to try to deduce walk-away price. In 2000, some people thought Amazon was doing this when customers noticed they were being charged different prices for the same DVDs. Amazon denied it. This was the result of a random price test, CEO Jeff Bezos explained in a news release. “We’ve never tested and we never will test prices based on customer demographics.”
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They have ample means to do so: the immense data trail you leave behind whenever you place something in your online shopping cart or swipe your rewards card at a store register, top economists and data scientists capable of turning this information into useful price strategies, and what one tech economist calls “the ability to experiment on a scale that’s unparalleled in the history of economics.” In mid-March, Amazon alone had 59 listings for economists on its job site, and a website dedicated to recruiting them.
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Before buying from a new company, evaluating the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
It’s not that consumers hadn’t benefited from the lower prices available online. They had. But some of the deals weren’t nearly as good as they seemed to be. And for some people, glee began to give way to a vague suspicion that maybe they clothing shopping online cheap getting ripped off. In 2007, a California man named Marc Ecenbarger thought he had scored when he found a patio set—list price $999—selling on Overstock.com for $449.99. He bought two, unpacked them, then discovered—courtesy of a price tag left on the packaging—that Walmart’s normal price for the set was $247. His fury was profound. He complained to Overstock, which offered to refund him the cost of the furniture.
“As a general matter,” she went on, “I find it so difficult to determine the actual price of the product that when I’m shopping for my kids, my new technique is to make all my decisions at the cashier. I pick up lots of clothes. I completely ignore all pricing until I get to the register. And then if something is too much, I say, ‘I don’t want it.’ ”
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