Washingtonian: “Some subscribers recently received a heads-up that they’re on the hook for a new rate “set by an algorithm using your personal data.” We asked a UVA expert what that might mean. If recent events have not compelled you to cancel your Washington Post subscription, then you might have been in for sticker shock at the dawn of your latest billing cycle. Many readers have been notified via email that their subscription rates are set to increase. Nestled at the bottom of these emails, you’ll find an asterisk and the following: “This price was set by an algorithm using your personal data.” The Post‘s use of algorithmic pricing is not surprising, given the newspaper’s recent fixation on artificial intelligence—consider its AI-powered search engine and robot-led podcast. When we asked the Post for comment on its algorithmic pricing mechanisms, a spokesperson directed us to a blog post from the publication’s engineering team. The article explains how an AI-driven “smart metering model” determines the number of free articles both anonymous users (who are not registered on the Post‘s website) and registered users (who have free online accounts but no paid subscription) can access before a paywall pops up. But it doesn’t touch specifically on how the Post uses subscriber information to determine pricing. For some insight on how companies might mine reader data in order to maximize profit, we reached out to Luca Cian, a professor at the University of Virginia’s Darden School of Business. Though Cian does not have firsthand knowledge of how the Post‘s algorithmic pricing model works, he says that many such models rely on user demographics and location to determine how much they might be willing to pay for a product. Companies have long been using geographic information to dictate pricing. In 2015, ProPublica reporters discovered that the Princeton Review was charging more for the same SAT tutoring package in areas with higher Asian populations. “They call it the ‘tiger mom tax’ because they thought, ‘OK, that population most probably will really be focused on things like SAT product packages,’” Cian says. But the advent of real-time AI models has enabled companies to engage with individual user data more intricately. Instacart recently killed an algorithmic pricing model that allowed grocery stores to charge certain shoppers as much as $2.56 more for the same item. Post owner Jeff Bezos’ Amazon came under fire last year when the retailer’s dynamic pricing mechanism reportedly charged local school districts vastly different prices for the same supplies, sometimes even on the same day…”