The Perils of Behavior-Based Personalization

“Behavior-based personalization” has gained popularity in recent years, whereby businesses offer personalized products based on consumers' purchase histories. This paper highlights two perils of behavior-based personalization in competitive markets. First, although purchase histories reveal consumer preferences, competitive exploitation of such information damages differentiation, similar to the classic finding that behavior-based price discrimination intensifies price competition. With endogenous product design, there is yet a second peril. It emerges when forward-looking firms try to avoid the first peril by suppressing the information value of purchase histories. Ideally, if a market leader serves all consumers on day 1, purchase histories contain no information about consumer preferences. However, knowing that their rivals are willing to accommodate a market leader, firms are more likely to offer a mainstream design at day 1, which jeopardizes differentiation. Based on this understanding, I investigate how the perils of behavior-based personalization change under alternative market conditions, such as firms' better knowledge about their own customers, consumer loyalty and inertia, consumer self-selection, and the need for classic designs

Algorithms, Automation, and News

This special issue examines the growing importance of algorithms and automation in the gathering, composition, and distribution of news. It connects a long line of research on journalism and computation with scholarly and professional terrain yet to be explored. Taken as a whole, these articles share some of the noble ambitions of the pioneering publications on ‘reporting algorithms’, such as a desire to see computing help journalists in their watchdog role by holding power to account. However, they also go further, firstly by addressing the fuller range of technologies that computational journalism now consists of: from chatbots and recommender systems, to artificial intelligence and atomised journalism. Secondly, they advance the literature by demonstrating the increased variety of uses for these technologies, including engaging underserved audiences, selling subscriptions, and recombining and re-using content. Thirdly, they problematize computational journalism by, for example, pointing out some of the challenges inherent in applying AI to investigative journalism and in trying to preserve public service values. Fourthly, they offer suggestions for future research and practice, including by presenting a framework for developing democratic news recommenders and another that may help us think about computational journalism in a more integrated, structured manner

Big Data Analytics, Insurtech and Consumer Contracts: A European Appraisal

The article investigates, from the European perspective, to what extent the enhanced availability of granular data to insurance companies and the growing sophistication of insurers’ processing capabilities through big data analytics (BDA) are fostering the increasing personalization of insurance products and services for consumers. To this purpose, the article first explores the very notion of ‘automated personalization’ in insurance, and then delves into the institutional, epistemic, economic and legal factors that, in Europe, work as a constraint, at least in the short-term, to paradigmatic shifts in insurance consumers contracts. The analysis will hopefully demonstrate that automated personalization in consumer insurance contracts, in Europe, is for the time being more a myth than a reality. What does exist, by contrast, is a no less problematic trend towards mass customization and robotization of consumer insurance contracts, which fully deserves lawyers’ attention

More than "just shopping:" personalization, privacy and the (ab)use of data

Working draft of the Personalization/Customization GroupEmerging technologies often produce unexpected consequences that existing institutions and policies are unable to deal with effectively. Because predicting the consequences of technological change is difficult, responses to emerging technologies tend to be reactive (if not passive), rather than proactive. Improved understanding of the potential consequences of a particular technology would enable policymakers and analysts to implement appropriate measures more quickly and perhaps even act prospectively. This paper proposes a general approach that can be used to identify potential sources of disruption from emerging technologies in order to enable proactive policy actions to limit the negative consequences of these disruptions. New technologies are often characterized through the use of metaphors and/or comparisons to existing technologies. While such comparisons provide an easy way to generate understanding of a new technology they often also neglect important aspects of that technology. As a result, the use of metaphors and comparisons creates a disconnect between what the metaphor suggests is happening and what is actually taking place. The incompleteness of the metaphors leads to a disparity in the appreciation of the benefits, opportunities, and pitfalls of a new technology. This disparity allows certain aspects of the technology to be ignored and/or exploited, with potentially disruptive social consequences. An analysis of the mismatch between metaphorical characterizations and the actual attributes of a new technology can help identify otherwise overlooked issues and determine if existing institutions and policies can adequately respond. This paper uses a study of personalization technologies by online retailers to demonstrate the potential for disruption caused by failures of metaphor to adequately describe new technologies. Online retailing technologies have equipped firms with tools that allow them to move closer to the ``mass market of one" --- satisfying the demands of a mass market through individually-targeted sales strategies (i.e., personalization). While the metaphors of ``shopping" and ``catalog" have been used to describe online retail ``stores," these metaphors fail to capture several key aspects of online retail technologies such as aggregation, replication, persistence, and analysis of the personal data easily collected by such businesses. As a result, the institutions that exist to protect consumers when dealing with traditional, physical stores may no longer be sufficient. Furthermore, the pervasiveness of the metaphor undermines the ability of consumers to understand or debate the negative consequences of personalization, especially in the areas of privacy and identity.National Science Foundatio

Socio-digital experiences

The experiences emerging from interacting with digital technology need to be understood, designed and engineered. This is quintessential for ensuring that related systems and services have a purpose and value for their users, helping them achieve their aspirations and desires. Rooted in this human-experience centered perspective, we explore ambient intelligence technologies, where computation and communication are embedded in our physical and social environment, adapting to users and their context. The overarching motivation is to create novel socio-digital experiences that address societal needs, like staying connected with dear ones, children’s outdoor play, achieving desirable behavior change, supporting independent living, and rehabilitation. Looking to the future, two grand challenges concern us. First is to design technologies that people can shape to meet idiosyncratic and dynamically emerging requirements, known as meta-design. Second is endowing ambient intelligence technologies with aspects of social intelligence

A Political Sociology of Populism and Leadership

In the face of change in the social bases of advanced European democracies, politics has delayed the articulation of new cleavages characterising a society that can no longer be attributed to the perimeter of belonging and the social classes of the 20th century. The crisis is therefore not an expression of criticism against democracy as a political regime per sé, but rather corresponds to a crisis in the legitimacy of traditional political players. The democratic deficit feeding populism is not weakened by the claimed desire to broaden the participatory dimension of politics, insomuch as it derives from the loss of collective references in a society divided in new winners and new losers of globalization and in the midst of a crisis of the concept of equality. These aspects shall be analysed further as part of the interpretation of populism as a phenomenon comprising an appeal to the people and an opposition to the élite. The purpose of this paper is to address the issue of the politicization of anti-establishment sentiment, where populism is considered not so much as an ideology but as a political strategy of politicization of the rift between society and politics, where political leaders and parties are the key players in shaping the disaffection of the people toward the traditional mass politics