Big data allows corporations to analyze a huge range of consumer behavior to spot patterns that allow them to market more efficiently to individual groups. For example, companies have often used different advertising tactics when targeting different demographic groups. In the past, these tactics had to be designed individually, based on theories of consumer behavior. But now, powerful algorithms can spot a far greater number of opportunities to increase sales based purely off of consumer biases. 

University of Minnesota - Twin Cities

- Consumer mediation
- Mass production of bias
- Disclosure ratcheting
- Means-based ad targeting and interface design

Digital Factors Accelerating Market Manipulation

Calo, Ryan, Digital Market Manipulation (August 15, 2013). 82 George Washington Law Review 995 (2014), University of Washington School of Law Research Paper No. 2013-27, Available at SSRN: https://ssrn.com/abstract=2309703 or http://dx.doi.org/10.2139/ssrn.2309703

Digital Market Manipulation

In the past, consumers generally transacted with businesses face-to-face. However, consumers today almost always purchase products or services through a device, whether that be a kiosk, a laptop, or a smartphone. These devices enable corporations to store data on individual consumers' behavior and use that data to determine how best to get them to increase their consumption. Moreover, they can use the same devices to design every aspect of a consumer's experience. And because technology has become so ingrained into our day-to-day lives, corporations no longer need to wait for a consumer to enter a store to market to them. 

Consumer Mediation

Mass Production of Bias

Consumers today face an overwhelming amount of information when buying products or services, which can make it extremely difficult for them to make rational decisions. Companies can use consumers' biases to manipulate them into giving up personal information more easily. For example, consumers are more likely to choose not to opt out of data collection than they are to choose to opt in. Corporations can use data to determine groups of consumers that are susceptible to certain biases, and use that information to design highly effective marketing tactics. Additionally, since this information on consumer biases is so valuable, corporations can sell it to the highest bidder. 

Disclosure Ratcheting

Digital advertising today focuses heavily on what type of pitch will be most relevant to a particular consumer. Companies can use data to determine what motivates a consumer and change their advertisements accordingly. This is especially effective on the Internet, where websites can determine which ad a consumer will see based on the information they have to predict what will be most effective. 

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