Dynamic pricing or price gouging.

Useful video below from the FT about dynamic pricing. Some notes from the video below:

• Dynamic pricing (surge pricing), is increasingly used by airlines, retail, theme parks, and restaurants, where prices adjust in real time based on demand.

• Online retailers like Amazon leverage algorithms and AI to change prices millions of times daily, boosting competitiveness and revenue, with studies showing airlines, for example, can increase revenues by up to 4%.

• High street stores have faced challenges in implementing dynamic pricing due to physical price tags, but electronic labels are changing this; Walmart and Kroger have begun rolling out the technology across hundreds of stores.

• Though dynamic pricing can enhance supermarket margins, its use for essentials like groceries raises concerns, with recent investigations into potential price gouging risks.

• Non-essential sectors are also under scrutiny, as seen with UK regulators probing concert ticket price surges.

• Regulators worry algorithms could lead to implicit collusion, pushing prices higher industry-wide.

• While dynamic pricing aims to match supply and demand more efficiently, companies may face challenges in assuring consumers and regulators that it’s not simply a profit-maximizing tactic.