Delta Air Lines has announced plans to expand its use of artificial intelligence to create individualized pricing for customers, a trend seen in various industries such as finance and gaming. Customized pricing benefits businesses by allowing them to charge consumers based on their willingness and ability to pay. However, the increasing use of AI in pricing has sparked concern over issues of transparency and potential exploitation of vulnerable customers, particularly those who may not have the financial literacy to understand such pricing models. Historically, customized pricing involved direct negotiation between buyers and sellers, with each transaction reflecting the individuals' bargaining skills.
Customized pricing allows businesses to boost profits by adjusting prices for individual customers based on their spending ability and willingness to pay. This model is already implemented across many industries, including finance and online gaming.
The concern with AI pricing models is their lack of transparency, which raises ethical questions. Customized pricing can unfairly disadvantage financially unsophisticated individuals, potentially exacerbating economic inequality.
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