Delve: Could New Algorithms Ensure Everyone Pays Fair Prices Online?

Dynamic pricing algorithms set the prices we pay online—and few rules govern how they work. Even if an algorithm doesn’t ostensibly consider race at all, research shows that it can be biased and discriminatory on the basis of race, as well as gender, economic level, and other personal information openly gathered from consumers. Desautels Professor Sentao Miao developed an approach to dynamic pricing that builds in fairness constraints to protect consumers, proposing algorithms that keep prices fair across groups and over time.

“Some variation [in pricing] is quite normal, but it is possible to limit this, which can help to prevent price gouging,” says Miao. “This is especially important in situations like the COVID-19 pandemic, when many prices suddenly doubled for the exact same product.”

For more insights, read the research paper: Dynamic Pricing with Fairness Constraints, co-authored with Desautels Professor Maxime Cohen.

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Founded in 2019, Delve is the official thought leadership publication of McGill University’s Desautels Faculty of Management. Under the direction of Professor Saku Mantere, inaugural Editor-in-Chief, Delve features the latest in management thinking that stretches perspectives, sparks new ideas, and brings clarity to decision-makers at all levels and across sectors.