Episode 2 of Breaking the Black Box: When Algorithms Decide What You Pay

The phone you use,
[dramatic music]

the computer you own,

the zip code you live in.

These can all be factors
in the price you see

when you're searching for
items on the internet.

Welcome to the world
of mass customization.

For example,

you probably know that logging on

on different days and times

can give you different
prices for airline flights,

but you might not know

that Amazon can change
its prices for everything,

from dustpans to televisions
every 15 minutes,

even more often than airlines.

Researchers have tried
to study this phenomenon,

but the world of ever-changing
prices is a black box,

that is difficult to test.

Even so, here are some findings:

Orbitz was found to be
showing higher priced hotels

to Mac users than PC users.

Staples was found to sell most
everything on its website,

from staplers to duct tape,

at different prices in
different zip codes.

The zip codes being charged higher prices

were more likely to be low income.

Princeton Review charges different prices

for its online SAT tutoring
in different zip codes.

We found that Asians were
almost twice as likely,

to be offered a higher
price than non-Asians.

In the European union,

variable pricing is regulated.

In the United States,

it's legal to sell the same product

to different people for different prices.

That means, in the U.S.,

mass customization can
mean mass discrimination.

[music continues]