Price tags

The innovations that made modern consumerism possible are long forgotten. The idea of fixed retail pricing is so embedded in our consciousness that it is shocking to learn that John Wanamaker invented the idea less than 150 years ago.

Before Wanamaker invented the price tag, most buying was done by haggling. A devout Christian, he believed that if everyone was equal before God, then everyone should be equal before price.

Without fixed pricing, it is hard to imagine how department stores and mail-order catalogs and supermarkets and warehouse stores could ever operate. Price tags allowed merchants to remove salespeople from the equation, leaving the customer to do the job of selecting and comparing and evaluating and order-filling.

One early criticism of the telephone was that the network would quickly grow to the point where everyone in the country would have to be employed as a telephone operator. Instead, the phone company automated the operators out of existence entirely.

Back in the 70s the widespread use of personal computers was hard to imagine because computers were things that required much technically sophisticated love and care. Just as every Jaguar was said to require its own mechanic, every computer required its own sysop, and the result was that computers were very large and shared among many people. But soon enough manufacturers figured out how to shove the burden of maintenance onto the consumer (in large part by making the job easier), and now personal computers are ubiquitous.

It may be that fixed pricing was merely a stopgap solution, and now that sophisticated automation is available we will return to prices that are tailored to the customer and the moment. Amazon does this (without broadcasting the fact), presenting different customers with different prices for the same product. People are often outraged when they learn of it, but does it really matter? And might it actually be a better arrangement?

Here’s an article about how live theater producers in Los Angeles are openly using dynamic pricing to sell tickets, and people are for the most part accepting it.

How much does it cost to see a live performance in Los Angeles? Increasingly, the answer is "it depends."

Under Center Theater Group’s new dynamic pricing, the best seats were priced at $120 when it was first announced that the Ahmanson Theatre’s staging of the dark comedy "God of Carnage" would feature the original Broadway cast. But those who waited wound up paying as much as $200 for the same seat locations as Jeff Daniels, Marcia Gay Harden, James Gandolfini and Hope Davis reprised their roles.

But dynamic pricing works both ways. For "God of Carnage," orchestra seats under an overhang turned out to be relatively unpopular, and early birds who’d scored them for $120 may have found themselves sitting next to latecomers who paid $49 each.

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