Surge pricing and the limits of what consumers accept
Dynamic pricing appears on 51 recent papers and price discrimination on 28, mostly in operations research and economics; 29 of 91 such papers touch consumer welfare, but price fairness appears on 3. Retailers and venues have faced backlash over surge prices, and some have retreated. Where is the line that consumers will not accept, and what does it cost firms to cross it?
What prompted this
Since October 2025, 91 papers carry a dynamic-pricing, surge-pricing, personalized-pricing, price-discrimination or algorithmic-pricing keyword (36 in operations research journals, 34 in economics, 14 in finance, 5 in management): "dynamic pricing" on 51, "price discrimination" on 28, "personalized pricing" on 6, "surge pricing" on 4. Twenty-nine of them carry a consumer, welfare, fairness or trust keyword, but "price fairness" appears on only 3.
Questions
- After a visible pricing backlash (concert tickets, fast food surge pricing, ride-hailing in emergencies), do sales and brand sentiment fall for long, and do rivals gain?
- Which forms of variation do consumers accept (time of day, demand) and which do they reject (personal data, emergencies)?
- Do laws against price gouging and personalized pricing change what firms do, or only what they call it?
Data that could help
Price and sales data from firms that introduced dynamic pricing, social media sentiment around backlash episodes, and survey experiments on acceptance.
Next step
Measure sales and search interest for a retailer before and after a publicized surge-pricing episode, and compare with a competitor.