Everyware_ The Dawning Age of Ubiquitous Computing - Adam Greenfield [33]
Famously, though, there's many a slip 'twixt cup and lip. For one thing, both values are constantly changing—maybe as often as several times a day. The first fluctuates with the commodities market, transportation costs, and changes in wage laws; the second responds to moves made by competitors as well as factors that are far harder to quantify, like your mood or the degree of your craving for caffeine. Nor does any present pricing model account for things like the variation in rent between different retail locations.
There's simply no practical way to capture all of this variability, and so all these factors get averaged out in the formulation of pricing structures. However expertly devised, they're always something akin to a stab in the dark.
But remember the event heap? Remember how it allowed a value entered here to affect a process unfolding over there? A world with ubiquitous inputs and event-heap-style coordinating mechanisms writ large turns this assumption upside down. Imagine how much more fluid and volatile the price of a tall decaf latte would be if it resulted from an algorithm actually pegged to something like a real-time synopsis of all of the factors impingent upon it—not only those involved in its production, but also whatever other quantifiable considerations influenced your decision to buy it.
Objections that consumers wouldn't stand still for such price volatility are easily countered by arguing that such things matter much less when the customer does not attend to the precise amount of a transaction. This widely happens to be the case already when the point-of-purchase scenario involves credit and debit cards, and it will surely happen more often as the mechanism of payment increasingly dissolves in behavior.
Say the price was a function of the actual cost of the Jet-A fuel that flew this lot of beans in from Kona, the momentary salary of the driver who delivered it...and a thousand other elements. Maybe it reflects a loyalty bonus for having bought your morning jolt from the same store on 708 of the last 731 days, or the weather, or even the mass psychology of your particular market at this particular moment. (Derived—who knows?—from the titration of breakdown products of Prozac and Xanax in the municipal sewage stream.)
This is economics under the condition of ambient informatics. As it happens, many of these quantities are already easily recoverable, even without positing sensors in the sewers and RFID tags on every bag and pallet.
They exist, right now, as numeric values in a spreadsheet or a database somewhere. All that is necessary to begin deriving higher-order information from them is for some real-time coordinating mechanism to allow heterogeneous databases, owned by different entities and maintained in different places, to talk to each other over a network. This way of determining price gets asymptotically close to one of the golden assumptions of classical economics, the frictionlessness of information about a commodity. Consumers could be sure of getting something very close to the best price consistent with the seller's reasonable expectation of profit. In this sense, everyware would appear to be late capitalism's Holy Grail.
And where sharing such information was once anathema to business, this is no longer necessarily true. Google and yahoo! already offer open application programming interfaces (APIs) to valuable properties like Google Maps and the Flickr photo-sharing service, and the practice is spreading; business has grown comfortable sharing even information traditionally held much closer to the vest, like current inventory levels, with partners up and down the supply chain. When mutual benefit has once been scented, connection often follows.
Beyond this point, the abyss of ridiculously granular relational micropayment schemes opens up. Accenture Technology Labs has demo'd a payper-use chair, for example, which monitors use, charges according to a schedule of prices that fluctuates