It would likely lead to people working harder to find better prices.
I moved into a nice house that was about to be foreclosed a couple of years back and after moving in, we had to get some of the same things done that we’d had at our previous home. The quotes were usually 2-3x higher for the exact same job.
This isn't all exploitative. I used to work trades and we regularly found the richer clients to be absolute PITA's about super minor details. They were the first ones to threaten not to pay unless we redid a big thing and also wouldn't offer to compensate for any phase of that.
This doesn't make any sense... what these algorithms are doing is trying to determine how price insensitive the person is... they are trying to find a price point where, for this individual, they aren't going to make the effort to find an alternative because it is not worth the extra savings.
If this leads people to work harder to find a better price, their software isn't working right... it should be charging that person less (just lower enough to not trigger this 'find a better price' desire)
How much time a person is willing to spend to save money is going to be very proportional to how much money that person has, and this makes total sense.
The effect that I’m assuming is that this will work until people realize it’s happening. At that point, the price sensitivity will increase as a matter of opposition to price gouging.
Price discrimination happens all the time currently, already, and has forever. Whether you know it is happening or not, everyone is still going to have a different price they are willing to pay; sure, maybe people will, as a whole, care more about not paying more in the future, but how much they care will still vary between people, and that will be priced in.
I moved into a nice house that was about to be foreclosed a couple of years back and after moving in, we had to get some of the same things done that we’d had at our previous home. The quotes were usually 2-3x higher for the exact same job.