How Companies Cheated Price Fixing Laws... With Math

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My Other Channel: @HowHistoryWorks

Edited By: Svibe Multimedia Studio

Music Courtesy of: Epidemic Sound

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#business #inflation #finance

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Algorithms are everywhere.

Every app, every website, EVERY business you interact with has a program working away in the background to show you what you want to see, get you to make decisions you didn’t have to, and make you spend as much as you’re absolutely willing to on stuff you didn’t know you needed…

A month ago Wendy’s CEO Kirk Tanner announced that the fast food franchise would be introducing dynamic pricing. A system where how much you pay for a Baconator would depend on an algorithm that balanced customer demand with store capacity.

According to the companies announcement they were planning to invest twenty MILLION dollars [$20,000,000] into this technology before it was rightfully ridiculed across the internet.

This was a win for the little guy that just wanted to clog their arteries at a predictable price point, but Wendy’s only mistake was announcing their plans. Dynamic pricing is already here, and it’s making inflation and essential feature.

So it’s time to learn How Money Works to find out how mathematical models mandated inflation.

[bmxzpqz]

If I had a nickel for everytime a tech company promised that their groundbreaking revolutionary algorithm was going to make everybody's lives better only for it to turn out to do the exact opposite, I'd have enough money to cause inflation myself.

[lostbutfreesoul]

For a beautiful moment in time we created a lot of value for shareholders.

[WMDistraction]

“WE didn’t price fix. We just made a TOOL to price fix for US.”

FTC: “And that makes this different how?”

[tonysilke]

The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

[dande]

"Algorithms aren't bad. They're just a tool that can be used for good or evil."
Guess how corporations are using them?

[HobbieJ]

Does anyone else just get constantly depressed by learning how awful modern society is?

[slashine]

this is dystopian, in probably the worst way possible.

[gordonmills]

I bought my house in 1999, long before real estate algorithms were a thing. Then in the wake of the 2008 financial crash - which was driven by real estate - corporate landlords bought up all houses around me and rented them out.

If I hadn't bought and held my house, there is no way I could afford to live in my own neighborhood now.

[laughingman]

If Skynet was real, it wouldn't try to kill anyone. It would just hold us all down and force us to watch ads

[kekero]

It’s amazing how much corporations get away with by just saying “if we can’t be evil then how are we supposed to grow?”

[philosophysics]

so we're min-maxing ourselves out of existence. wonderful. love it here! just so great. so fucking great.

[Meitti]

So instead of tech bringing more overall efficiency to the markets, it was rather used to obfuscate illegal practices, because lawmakers are too old to understand computers and are thus slow to react.

[curiousponderings]

I can't wait till I'm priced out on everything. I'll truly own nothing and just be dead.

[danielhale]

Oh boy, can't wait until we skip all the stuff in the middle and just let the algorithm decide directly who lives and who dies

edit: the replies have me thinking people don't understand *this is sarcasm*

[peteypobbs]

Im a physician. We have literally had to see twice as many patients in the past 2 years to make the same amount of money as we did 3 years ago and before. And patients are paying more as well. Guess who is making the difference? you guessed it- United, aetna, blue cross, etc.

[TheSuperhomosapien]

You can manage the algorithms through legislation. For example, if Wendy's is going to implement dynamic pricing to increase the cost of food during peak hours, then create a law stating that they also have to increase the salary of their employees during those peak periods, since the company is now essentially tracking the times when their employees are working harder.

[MG-shlk]

As a Gen Z Canadian who has seen price fixing, oligopolies, and lack of housing impoverish majority of ppl in the span of a couple years, it really drains your spirits. I feel like no degree of financial planning, or realistic income increase will save me from this hellscape. I do not blame doom spenders one bit and if we are priced out of a home, family, and stability, what else should we do with our meager savings?

[JokerFace]

As a seller on Amazon, I can say they are squeezing to put 3rd party sellers out of business

[RavenMyBoat]

We let ourselves get taken in by the economies of scale of big business, and seemed to forget the long term value of antitrust and fair competition laws.

[Droidman]

Healthcare is such BS. I was in an ambulance one time for getting hit by a car, I asked to be taken somewhere nearby that was better and in network and they refused! And I'm paying the ambulance bill!