That's the ideal dream scenario, but in reality the market isn't that efficient. Lots of markets gouge their customers and due to power imbalances the customers can't really do anything about it. The free market solution to this is just generally to let people suffer.
replyI don't see why consumers wouldn't just pick the stores that have better prices for them. Why would they know/care/need to know what the prices are doing for other people?
replyYou can't see you mean? Consumers pick things that are reasonably convenient, achievable and known to them. These things are all subject to exploitative tactics by grocery stores.
replyThere's also price-fixing, which famously occurred in Canada recently.
Not to mention cornering a market like Walmart would and removing consumer choice entirely.
> If any store used dynamic pricing to expand their margins, the others would just do the same and compete away those margins once again, with the marginal gain being handed back to consumers.
replyHow would you do it if pricing is dynamic and changes every day?
By the time competitor finds out about the price, you might have already reduced it, making it look like theirs is more expensive even after they applied discount.
Because the exact same is true in reverse
replyDynamic pricing based on personal data is not even a market, let alone a perfectly competitive one. Temporal dynamic pricing can mean almost anything, so might be ok (early bird lunch deal) or pure evil (bottled water now costs $100 because there is lead in the tap water).
replyYour evil case is not evil
replyThe point of pricing water to that level is that it would induce other people who have access to bottled water to bring it to that market, as is desirable
You assume that other people can simply bring bottled water to market & compete with discoverability and access to customers with established players?
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