LIRNEasia is a regional ICT policy and regulation think tank active across the Asia Pacific

ICT is making surge pricing possible, but caution is advised in avoiding outrage

The NYT piece suffers from peculiar worldview of American and European journalists who think all good innovations come from their part of the world (Singapore pioneered congestion pricing for road use in 1975), but let’s focus on the positive: the drawing out of lessons from Thaler and Springsteen about the need to address hardwired perceptions of fairness:

Technology is making “variable” or “dynamic” pricing — the same strategies that ensure a seat on an airplane, a hotel room or an Uber car are almost always available if you’re willing to pay the price — more plausible in areas with huge social consequences.

Dynamic pricing of electricity could help bring down pollution, reduce energy costs and make renewable energy more viable. Constantly adjusting prices for access to highways and congested downtowns could make traffic jams, with all the resulting wasted time and excess emissions, a thing of the past. Any sector where supplies tend to be fixed but demand fluctuates — the water supply, health care — would seem like prime candidates for variable pricing.

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