Proven Stupidity = Higher Prices

Posted 2012-06-26 09:43
by Karl Denninger
in Consumer

Orbitz Worldwide Inc. OWW 0.00%has found that people who use Apple Inc.'s AAPL -0.04%Mac computers spend as much as 30% more a night on hotels, so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see.
The Orbitz effort, which is in its early stages, demonstrates how tracking people's online activities can use even seemingly innocuous information—in this case, the fact that customers are visiting Orbitz.com from a Mac—to start predicting their tastes and spending habits.

There's another way to look at this, of course. If you were dumb enough to pay twice as much for a computer with zero serviceability, especially when all portable computers include a battery that has a known service life but you can't replace it, and you willingly and intentionally subjected yourself to this, you're also likely to overpay for something as simple as a place to sleep.

Marketing is all about figuring out human behavior and capitalizing on it. The more you can capitalize on people's acts (good or bad) without them figuring out that you're basically milking them for their last dollar, the more you make.

Hotels are one of the places where price inflation has gotten especially-ridiculous over the last decade or so. Being a service business it's also one of the places where supply and demand can have a dramatic impact on price, since it takes quite a while to bring new supply online.

It would make sense that this is one of the places where marketers have figured out that people who will pay more for one thing might pay more for another.

Go Orbitz!

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