When I was twelve years old, there was nothing I enjoyed more than going to the Shuk Machane Yehuda. The massive indoor/outdoor market in Jerusalem was an assault of sights, sounds, and smells coming from the garbled masses of people and product. People tumbled from stall to stall, some with clear purpose and direction, some with none at all. While buying rugelach at one stall, the neighboring stall owner would try to entice you to buy some pants along with your pastry. The absence of any semblance of sense and sensibility spoke to me, a kid from Cleveland, OH who had just moved halfway across the globe to a totally new culture.
I would often leave school, where I was the target of hazing because of my Americaness, and hop on the 39 Bus to the Shuk (sorry Ima and Abba if you’re reading this!). There I could visit with the various vendors I got to know, there I could buy a bag of rugelach for 3 shekels (this was in 1991), and perhaps a pair of pants too. I could wind my way through the quiet alleyways between the open and close shuk and go schmooze with Pinny, the old Bucharian Jew who secretly sold fireworks to kids. But what I liked more than anything else was the haggling.
Prices in the shuk are fluid. Prices in the shuk are a battlezone. Prices in the shuk are where all the fun is. The art of haggling was intoxicating to me. I had my strategies and always looked to push the limits. Start with an absurdly low price, it makes him look unreasonable if he’s not willing to meet you in the middle. Halfway through the haggle pull out cash and make sure he can smell it! Loss aversion makes it much harder for a merchant to let go of a sale when the money is right in front of them. Walk away slowly, giving the person time to call you back in. If he doesn’t, make sure to pass by ten minutes later without looking at him, giving him one last opportunity to make the sale, even at a lower margin than he normally takes… Ah! The joys of haggling!
In 1994, I moved back to the US, and the haggling fun mostly ended. Americans have been following posted prices since they were introduced in the 1860’s by retail pioneers Rowland H. Macy and John Wanamaker (the father of the price tag). Sure, you could choose which store to go to based on their price point, or what sale they had going on, but once you got there, you either bought or didn’t.
If the GAP was selling a pair of khakis for $29.99, you couldn’t tell the sales clerk, “C’mon man, you know this is a crazy price, give it to me for $8.99!” He wouldn’t counter with, “$8.99? You’re trying to steal food from my kid’s mouths! $25 and I’m not going any lower!” You couldn’t pull out a $20 and hold it out, “Here, you know I’m never going to pay a penny more than $20, take my $20 and we both walk away happy!” It just doesn’t work that way.
With the advent of the internet, that all changed. You might not be able to bargain with various retailers, but you could price things out at multiple websites, and usually find better prices. Power seemed to be shifting back to the consumer. Big box retailers were struggling to maintain sales when people could come into their store, find the products they wanted and then find it for 20% cheaper on their phones at some e-store that had almost no overhead. We saw a wave of bankruptcies. Border’s, Filene’s, Radio Shack, JC Penney, Kids R Us, Thom McAn, Circuit City, CompUSA, Sleepy’s, Marshall Field’s, K-Mart, and Hudson’s are just some of the companies driven out of business by consumer’s new abilities to haggle, not necessarily in store, but by using the internet to find better prices.
It looked like a Golden Age for the American consumer. We finally figured out how to beat the fixed prices of American retail. The American consumer could feel the joy of getting a great deal without having to clip coupons.
Then Big Data entered the scene and power seems to be slipping away from the consumer to the retailer again. Instead of consumers finding the lowest prices, retailers are using complex algorithms to find the highest prices they can extract from the consumer. Dynamic pricing is the new King of Retail, where prices are fluid again, but usually not in our favor. There are soda machines that raise the prices as the temperature rises. Massive online retail giants like Amazon are able to change prices multiple times each day based on what they learned about our spending habits. Last year, around Thanksgiving, the price of a one ounce jar of Pumpkin Pie Spice on Amazon vacillated between $3.36 and $4.69 throughout the day. Amazon, using millions of historical data points, knew that people who shop in the morning and people who shop at night are willing to pay different prices.
I experienced this dynamic pricing myself around Purim time. My children had spent days debating what they wanted to dress up for Purim, and seemed to settle for an Emoji theme. We found a few different Emoji costumes on Amazon for $16.99 which was perfectly reasonable, but we left them in our shopping cart until everyone in the family was ready to confirm that this is what they wanted. The next time we came to the shopping cart, the price had changed to $24.99, and then again a few days later it went down to $21.99. We probably should have snagged them at that time, because when we finally were ready to pull the trigger, they had gone up to $25.99. It was like someone was tracking what we were ready to pay, and pushing it to the limits. That is because someone was tracking us, or more realistically, something was, the Big Data mining computers at Amazon!
When looking for earphones, Amazon decides which options to show you, and depending on your past spending habits shows you the ones it wants you to buy. Affluent customers will be offered earphones costing four times the amount more frugal shoppers will be shown! Shoppers in the Boston Metro area, when shopping for computers, were shown far cheaper prices than people in rural Massachusetts, because the computer knows that the shoppers in the Metro area can stop in the big box stores and price compare, whereas people in rural areas don’t have that option.
One of the earliest adopters of dynamic pricing was Uber. When a lot of people are looking for Ubers, such as after a basketball game when 20,000 people are spilling out of a stadium, Uber uses Surge Pricing and ups the cost of a ride by anywhere from 1.5x to 5x! But Uber let’s you know that you are part of a dynamic pricing scheme and you can opt in or out. However, finding out that our good friends at Amazon.com and so many other websites are doing the same thing without telling us, leaves us feeling a bit betrayed.
Pricing is once again fluid, pricing is once again a battleground. Only this time, we consumers are not battling with some guy in the shuk who wants us to pay 80 shekels for a backgammon set, we are battling with massive supercomputers that have compiled millions of data points on backgammon buyers, our personal shopping history, and the cost of backgammon sets on other websites. We used to use the web’s wealth of data to comparison shop for the lowest price we could get, now the e-tailers are using the web’s wealth of data to comparison shop us to find the highest price they can charge us! The price we see now might not be the price we see in two hours, the products we are offered today might not be the same we are offered tomorrow.
While it may feel like consumers are losing the battle, fear not. The consumer always finds a way. I’m confident that websites will soon spring up, mining the data to uncover what web e-tailers are doing to us, and showing us how we can beat them. Commerce is a battleground that has been here since time immemorial, and each side takes turns getting more sophisticated in having it our way.
We are living in an age of dynamic commerce like the world has never seen before. The haggling changes, but the game remains the same. Happy Hunting!
As I read about how dynamic pricing changes the prices of products by the hour, I thought about how this relates to us as human beings, and I realized that dynamic pricing is not new at all to human relationships. The amount of reward we get for being good people changes every day hundreds of times.
If my son spills his cereal and milk all over the floor at 8:20 AM, when I’m refreshed from a great night of sleep, and I don’t lose my cool, and calmly just mop it up, I may get 100 “Good Guy Credits.” But what if he spills his spaghetti and meatballs all over the floor at 6:20 PM, after I just got home from an exhausting day at the office, where I just lost one of my best clients? If I stay calm in that situation, which is surely much harder for me, do I only get 100 Good Guy Credits? Of course not, I may get double points or triple points for that!
The Mishna in Ethics of Our Fathers says (5:23), “Ben Hai Hai says, ‘According to the pain is the reward.’” Holding back from saying something nasty about a friend of yours may only get you 12 Good Guy Credits, who wants to say something nasty about a friend? But what about holding back from saying something nasty about the guy who just made fun of you in public the day before? That’s gonna earn you hundreds of Good Guy Credits, it’s that much harder!
Spending time going to visit your great aunt who has been in the hospital for the last month when you were anyway bored out of your mind and can’t even find joy in Candy Crush anymore, is a good thing. But going to visit the same great aunt when you’re in finals week in college and feel incredibly stressed, that’s a great thing. Many more Good Guy Credits will be earned.
This moral dynamic pricing is very encouraging for us. When we find ourselves faced with a particularly hard moral challenge, we just need to remind ourselves that Surge Pricing is in effect, if we just find the strength to overcome this test, we will be getting 3x or 5x or even 20x the normal reward. Keeping this in the foreground of our mind, changes the moral equation, it gives us the chance to be a much better consumer of moral good, the rewards are just too good to let go! Happy Hunting!
Parsha Dvar Torah
The portion of Tazria includes a detailed discussion of an affliction known as Tzara’at, one of the most misunderstood concepts in the Torah. Because Tzara’at afflicts the skin, it is commonly mistranslated as leprosy. Nachmonides explains, however, that Tzara’at was not a physical malady, but a spiritual ailment that manifested itself physically on the person’s body. This affliction was the result of committing one of several transgressions, the most common of which was lashon hara, or gossip, and slander.
The Torah goes into great detail when discussing the various forms of Tzara’at that may exhibit themselves on a person’s body. Should a person discover a suspicious-looking patch of skin, a Kohen must be brought in to examine the affected area. There are several stipulations that must be fulfilled in order for the Kohen to declare the person spiritually impure and afflicted with Tzara’at, and there are times when the individual must be quarantined and then reexamined. However, one situation is absolutely clear-cut: If the Kohen looks and sees that the person’s entire body is covered with what appears to be Tzara’at, the law is that the Kohen must declare the person pure.
At first glance, this seems completely counter-intuitive. If a small patch of Tzara’at renders a person impure, certainly this should apply when the person’s entire body is covered. On closer consideration, it becomes clear that the Torah is teaching a fundamental lesson about the Kohen’s relationship to those in need of spiritual guidance. If the Kohen sees someone as totally blemished, without even a single redeeming speck, he must not be seeing the person properly, and therefore is not in a position to declare him “afflicted,” or, even more significantly, to help him. Only when the Kohen sees some healthy skin, i.e., some good in the person, may he then declare him “impure.” In such a case, the declaration is the beginning of the individual’s journey back to spiritual health, rather than a permanent judgment about his status.
A great Chassidic Rabbi used to lead his congregation each Yom Kippur for the Kol Nidre prayers. One year, everyone stood quietly waiting, but the Rabbi wasn’t moving from his place. He seemed entirely lost in thought, and no one dared to disturb him. Finally after a protracted wait, he finally began in his usual manner. His followers were intrigued. After Yom Kippur, a few of them approached the Rabbi to ask him what caused the long delay. The Rabbi explained:
“I try to never lead the Kol Nidre prayer until I can find one area in which each person is better than I am. Only with the recognition that we are all flawed, and that some of us are greater in some areas, and some in others, can I approach G-d with my prayers. This year, just before I was about to begin, someone walked in who behaved so rudely that I simply could not find any redeeming qualities in him. After thinking about it for a while, however, I realized that he was in fact greater than I in one respect: If I was as rude as he is, I would never come for Yom Kippur services! Once I came to this realization, I was able to begin the prayers!”
In one way or another, each of us serves as a mentor or guide to someone else at some point in our lives. It may be to our children, a younger co-worker, a study partner, or friend. Sometimes we come up against a situation in which the other person appears beyond hope. However, this week’s portion demonstrates that the status of being beyond hope is more of a problem with the mentor than the person in need of guidance. If our view of someone else is so tainted that we cannot find any redeeming qualities, it is a sign that we are not viewing his situation – or our relationship with that person – properly. Finding the good in a person is the seed from which all of our efforts on their behalf can bear fruit.
This weeks parsha, Tazria, begins with laws of impurity associated with childbirth. The idea is that life alone in not an end, rather life’s purpose is that we elevate ourselves, To this end, when a child is brought into this world the mother goes through a process of impurity which then leads to purity. This mimics the type of life she wants her child to lead – one of growing, and elevating themselves from their basic state to a higher state.
After that, the Torah launches into the laws of tzara’at (see above) for the rest of the Parsha. It talks about the different forms of tzara’at, the way the Kohen makes his diagnoses, and what the metzora does after being diagnosed. One major part of his “medicine” is the law requiring him to sit in isolation for a week. This is supposed to help him realize how he made others feel when he spoke negatively about them, and caused rifts, dissension, and isolation.
The last section of the parsha deals with tzara’at that appears on clothing. (No, that reddish or greenish blotch on that suit is not the latest styling from Versace, it is actually a spiritual disease manifesting itself on clothing!) Our Sages explains that because of G-d’s great compassion, one does not immediately get tzara’at upon his body. Rather, he first gets it on his house, as is described in our second Parsha, Metzora. Hopefully, he learns his lesson and stops gossiping and slandering, however, if he doesn’t, it starts to afflict his clothing (a little bit too close for comfort). If the person continues to ignore these blatant cues telling him to shape up, he then gets the full force affliction on his body, for which the atonement process is the longest.
Quote of the Week: He that would have fruit must climb the tree. ~ Thomas Fuller
Random Fact of the Week: Our sense of smell is 10,000 times stronger than our sense of taste!
Funny Line of the Week: Why do people always say, “No offense,” right before they offend you?
Have a Supercalifragilisticexpialidocious Shabbos,
R’ Leiby Burnham