Why do online prices change so often?
Show answer & explanation
Answer: Algorithms adjust based on demand
Algorithms adjust based on demand ✓ — Correct! Companies use software that monitors demand, competitor prices, inventory, time of day, and browsing patterns. Prices adjust automatically in real-time to maximize profit. Airlines and hotels pioneered this 'dynamic pricing'—now many online retailers do it too.
Website errors cause random changes — Wrong. While pricing errors do occasionally occur, frequent price changes are intentional, not mistakes. Companies invest heavily in pricing software specifically to enable these changes. Price mistakes are usually caught quickly because they can cost companies significant money if exploited.
All customers see same prices — Wrong. While base prices are usually consistent, some companies practice 'price discrimination,' showing different prices to different customers based on browsing history, location, device type, or likelihood to purchase. This controversial practice varies by company and is regulated differently across regions.