Price Personalization in the Age of AI: Complicating the Defense

Given the rapid rise of AI and its capacity to help firms customize consumer prices, price personalization has become a hot topic at the intersection of business ethics and technology studies. This article challenges the argument that price personalization would increase social welfare, addressing the claim that firms should charge more to people with greater willingness-to-pay (WTP), and less to people with lower WTP, because this will boost social welfare. I develop two reasons for doubt. First, preferences that influence WTP often do not conduce to consumers’ well-being. So, adjusting prices to preference-based WTP will not necessarily enhance social welfare. Second, firms’ long-term strategic agendas will often disfavor increased price personalization. If “ought implies can,” firms can morally be expected to do only what they reasonably can in competitive conditions.