AI-driven price discrimination: strategic applications, ethical challenges, and regulatory implications
DOI:
https://doi.org/10.46299/j.isjmef.20250405.04Keywords:
AI pricing, price discrimination, algorithmic fairness, transparency, GDPR, consumer trustAbstract
Artificial intelligence (AI) has transformed the way firms implement price discrimination by enabling real-time, data-driven pricing strategies. This paper explores how AI empowers businesses to personalize prices based on consumer behavior, demand elasticity, and algorithmic segmentation. Drawing on case studies from sectors such as e-commerce, ridesharing, and retail, the study illustrates how AI enhances operational efficiency, boosts revenue, and improves customer targeting. At the same time, it highlights critical ethical and regulatory concerns, including transparency, fairness, privacy, and consumer trust. The paper emphasizes the importance of explainable AI (XAI), responsible data governance, and legal compliance frameworks, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). By integrating strategic and ethical perspectives, this study contributes to the growing discourse on sustainable AI use in digital markets and outlines areas for future research in algorithmic fairness and accountability.References
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