Why Algorithmic Pricing Rather Benefits Consumers

Document Type

Article

Publication Title

RealClear Markets

Publication Date

6-20-2024

Abstract

(Excerpt)

The age of artificial intelligence, long predicted by futurists and science fiction writers, is finally here. Consumers and producers now have access to AI technology such as ChatGPT that radically transforms their abilities and makes them more efficient at managing a wide range of tasks. AI can now help us drive our cars, shop for groceries, buy and sell products and services online, manage our homes and our offices, plan our travels, prepare our homework, do our jobs, and even care for the sick and the elderly. AI's efficiency saves us resources, makes us better at what we do, and helps us to accomplish new things that without AI we could never do before. Real estate property management software is one area, like so many others, where AI-based technological innovation is making a positive difference. Property managers now have access to technologies (such as RealPage's YieldStar and other AI-based revenue management systems) that can assist them to manage their properties more efficiently. Rather than have to expend substantial resources researching and analyzing how to manage the pricing and marketing of their properties, the timing of leases, and the ratio of occupations to vacancies, real estate management firms can now receive assistance with all of that from non-binding, advisory software applying AI-technology algorithms to public, industry, and user-provided data for a fraction of the cost that lessors would need to expend to operate without such data-driven software. Best of all, this technology can benefit not only landlords (by enhancing their profitability), but also their tenants (through lower costs and more accurate, market-reflective pricing that better matches them with desired amenities).

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