The effects of online disclosure about personalised pricing on consumers
Results from a lab experiment in Ireland and Chile
Online personalised pricing is a form of price discrimination that involves charging
different prices to different consumers, often based on a consumer’s personal data.
Policymakers are currently discussing ways to protect consumers from potential adverse
effects of personalised pricing. One option involves displaying disclosures on the
websites of retailers that use personalised pricing, in order for consumers to make
informed purchase decisions. This paper summarizes findings from a laboratory experiment
on the effects that online disclosures about personalised pricing have on consumers.
Results from the experiment suggest that online disclosures have only limited effects
on consumers’ ability to identify and comprehend online personalised pricing, and
cannot confirm a significant effect on participants’ purchasing behaviour. Results
from a questionnaire distributed to participants reveal that on average personalised
pricing is considered an unfair practice that should be prohibited.