The Perils of Automatic Pricing

In response to our post about the Amazon.com price difference for Caucasian and African-American dollhouses comes this interesting e-mail from a reader named Stephen Fidele:

Back in the day, I used to work at CD-Now, which was the largest retailer of music on the internet right around 1999-2002.  For some strange reason, I was placed in charge of “pricing.” Say our normal price for a CD was $17.99 … but if that CD hit the “Top 100” we reduced the price to $13.99. Now imagine that we have a CD by a rap artist that has some pretty strong lyrics in it. We also have a “toned down” version, so that parents can protect their children. Invariably, the hardcore version would hit the Top 100 and the price would automatically fall, and I would receive boatloads of complaints from parents asking why the “toned down” version cost more … just one of the problems when you automate a system. We had a similar problem when Joey Ramone (of the Ramones) died.  All of their old stuff went back to the Top 100, and the system automatically lowered the price … I fixed that in a hurry! Anyhow, I am not sure if the “powers that be” at Amazon are aware of even the possibility of this situation.  Again, it’s more of a systems problem than anything else.

And, from the comments on that same dollhouse post, another (more) interesting point, from a reader named Brian:

This is mild compared to the price differences of private adoption for white and black babies in the U.S. My wife and I are thinking of adopting and shockingly found in Texas, the cost for a white infant was $35,000 and the cost of a black infant was $17,000 – these are published numbers on private adoption websites. $20 difference on a dollhouse is not much in comparison.