Ubiquitous Computing, Customer Tracking, and Price Discrimination

The availability and cost-efficiency of modern information and communication technology have made “interactive marketing” and individual customer addressability not only possible but economical. In 1991, Blattberg and Deighton Blattberg and Deighton [1991] defined the new frontiers for marketing opened by interactive computer technologies as the “age of addressability.” Today, ubiquitous computer systems make it possible for consumers and providers of services and goods to engage in repeated, seamless interactions regardless of their respective physical locations. Ubiquitous computing refers to methods of enhancing computer use by making networks of sensors and computers available and embedded in the physical environment Weiser [1993]. The technologies on which ubiquitous computing applications are based span automatic identification (Auto-ID), such as Radio Frequency Identification (RFID); (wireless) communication systems, such as Global Standard for Mobile Communication (GSM); positioning services, such as Global Positioning System (GPS); and sensor networks. Together, these technologies are making new or improved business models, services, and products possible, and attention in the academic literature is naturally growing towards the business opportunities of ubiquitous computing. The volume of ubiquitous commerce, in particular (“any transaction with a monetary value that is conducted using ubiquitous computing technology” Roussos [2004]) is expected to increase significantly in the coming years as e-commerce and wireless technologies continue to expand (the m-commerce or mobile commerce market alone is expected to be worth over $50bn by 2009 Carr [2004]). Ubiquitous commerce involves transactions as diverse as mobile phone based purchases, “intelligent” ∗Email contact: [email protected].