Commentary – Big Data, always prowling

Jeff Burgar
Most people heading for a fill of gasoline head to their usual pump station. We are all resigned to the inevitable fact we are going to be hosed without mercy.

Pump prices in Edmonton last week were 90.9 cents per litre. Grande Prairie, Falher, Peace River, High Prairie and Slave Lake were all ridiculously higher, in no order, from 105.9 to 112.9. Guess what, my friends? It’s the same everywhere.

According to a report in The Economist magazine, an island off the coast of Massachusetts, Martha’s Vineyard, a while back brought a price fixing lawsuit against four of the island’s gas stations. Prices on the island were always much higher than nearby Cape Cod.

The suit failed.

The judge said he could find no evidence of price fixing, where the gas companies met to agree on what high prices for maximum profit they would all charge.

But he did admit the station operators did look up and down the street, call head office, and adjust their prices above, lower, or the same as what somebody else was doing. In other words, this “tacit collusion” allowed them to adjust their prices to what they figured the market would bear.

Again, maximum profit. You don’t like it? Buy some shares in the companies.

The Economist article talks about how consumers could fight back. Perhaps a Smartphone app that would track prices and direct buyers to the cheapest pump. Call it GasBuddy Deluxe.

But that idea backfired in three different situations. What actually happened was prices went up as the petroleum companies used the same app to match prices. It was faster and easier than driving down the road to see what the competition was doing.

More counter ideas are mentioned in the article. Some seem to be great ideas for an episode or two of the TV comedy, Big Bang Theory. Nerds Sheldon and Leonard design an app that checks out the prices of pizza and Thai food joints. It matches up best deals with how long they have to drive, delivery charges, preferred vendor, and any other variables.

Wow, what an idea! The app is put into action, and supper is ordered. As they are munching down on their not so well-liked dinner from their not so favourite restaurant, but bought because it was cheapest, Penny shows up with a truckload of the food they love best. And it was a quarter the price Sheldon and Leonard paid! How come?

The food joints had their own app. Among other things, it was programmed to know when buyers like Sheldon and Leonard were likely shopping and knew what would close a deal with them. Then it adjusted prices on the fly to take the most money possible from them.

The war is coming!

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