Artificial Intelligence And Collusion
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Artificial Intelligence And Collusion
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Author : Steven Van Uytsel
language : en
Publisher:
Release Date : 2020
Artificial Intelligence And Collusion written by Steven Van Uytsel and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
The use of algorithms in pricing strategies has received special attention among competition law scholars. There is an increasing number of scholars who argue that the pricing algorithms, facilitated by increased access to data, could move in the direction of collusive price setting. Though this claim is being made, there are various responses. On the one hand, scholars point out that current artificial intelligence is not yet well-developed to trigger that result. On the other hand, scholars argue that algorithms may have other pricing results rather than collusion. Despite the uncertainty that collusive price could be the result of the use of pricing algorithms, a plethora of scholars are developing views on how to deal with collusive price setting caused by algorithms. The most obvious choice is to work with the legal instruments currently available. Beyond this choice, scholars also suggest constructing a new rule of reason. This rule would allow us to judge whether an algorithm could be used or not. Other scholars focus on developing a test environment. Still other scholars seek solutions outside competition law and elaborate on how privacy regulation or transparency reducing regulation could counteract a collusive outcome. Besides looking at law, there are also scholars arguing that technology will allow us to respond to the excesses of pricing algorithms. It is the purpose of this chapter to give a detailed overview of this debate on algorithms, price setting and competition law.
Artificial Intelligence Collusion
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Author : Ariel Ezrachi
language : en
Publisher:
Release Date : 2019
Artificial Intelligence Collusion written by Ariel Ezrachi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
The development of self-learning and independent computers has long captured our imagination. The HAL 9000 computer, in the 1968 film, 2001: A Space Odyssey, for example, assured, “I am putting myself to the fullest possible use, which is all I think that any conscious entity can ever hope to do.” Machine learning raises many challenging legal and ethical questions as to the relationship between man and machine, humans' control -- or lack of it -- over machines, and accountability for machine activities. While these issues have long captivated our interest, few would envision the day when these developments (and the legal and ethical challenges raised by them) would become an antitrust issue. Sophisticated computers are central to the competitiveness of present and future markets. With the accelerating development of AI, they are set to change the competitive landscape and the nature of competitive restraints. As pricing mechanisms shift to computer pricing algorithms, so too will the types of collusion. We are shifting from the world where executives expressly collude in smoke-filled hotel rooms to a world where pricing algorithms continually monitor and adjust to each other's prices and market data. Our paper addresses these developments and considers the application of competition law to an advanced 'computerised trade environment.' After discussing the way in which computerised technology is changing the competitive landscape, we explore four scenarios where AI can foster anticompetitive collusion and the legal and ethical challenges each scenario raises.
Algorithms Machine Learning And Collusion
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Author : Ulrich Schwalbe
language : en
Publisher:
Release Date : 2018
Algorithms Machine Learning And Collusion written by Ulrich Schwalbe and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This paper discusses the question whether self-learning price-setting algorithms are able to coordinate their pricing behaviour to achieve a collusive outcome that maximizes the joint profits of the firms using these algorithms. While the legal literature generally assumes that algorithmic collusion is indeed possible and in fact very easy, the computer science literature on cooperation between algorithms as well as the economics literature on collusion in experimental oligopolies indicate that a coordinated and in particular tacitly collusive behaviour is in general rather difficult to achieve. Many studies have shown that some form of communication is of vital importance for collusion if there are more than two firms in a market. Communication between algorithms is also a topic in artificial intelligence research and some recent contributions indicate that algorithms may learn to communicate, albeit in a rather limited way. This leads to the conclusion that algorithmic collusion is currently much more difficult to achieve than often assumed in the legal literature and is therefore currently not a particularly important competitive concern. In addition, there are also several legal problems associated with algorithmic collusion, for example, questions of liability, of auditing and monitoring algorithms as well as enforcement. The limited resources of competition authorities should rather be devoted to more pressing problems as, for example, the abuse of dominant positions by large online-platforms.
Artificial Intelligence Algorithmic Pricing And Collusion
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Author : Emilio Calvano
language : en
Publisher:
Release Date : 2018
Artificial Intelligence Algorithmic Pricing And Collusion written by Emilio Calvano and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Artificial intelligence categories.
Pricing algorithms are increasingly replacing human decision making in real marketplaces. To inform the competition policy debate on possible consequences, we run experiments with pricing algorithms powered by Artificial Intelligence in controlled environments (computer simulations). In particular, we study the interaction among a number of Q-learning algorithms in the context of a workhorse oligopoly model of price competition with Logit demand and constant marginal costs. We show that the algorithms consistently learn to charge supra-competitive prices, without communicating with each other. The high prices are sustained by classical collusive strategies with a finite punishment phase followed by a gradual return to cooperation. This finding is robust to asymmetries in cost or demand and to changes in the number of players.
Consumer Search Collusion And Artificial Intelligence
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Author : Mike P. Vo
language : en
Publisher:
Release Date : 2022
Consumer Search Collusion And Artificial Intelligence written by Mike P. Vo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.
We use both economic theory and experiments with Artificial Intelligence (AI) pricing agents to study the roles of consumer search friction on collusion and implications on market prices and consumer welfare. By developing an oligopoly model in which consumers sequentially search for the best product with advertised prices, we find that collusion is easier to sustain with lower search costs. On the other hand, increasing search costs can reduce the collusive price. However, the price reduction is insufficient to increase the consumer surplus if the collusion sustains. Our experiments show that simple reinforcement learning algorithms (Q-learning) manage to adopt a trigger-price strategy to keep prices above the competitive level in a frictional market.
Algorithms Collusion And Competition Law
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Author : Steven Van Uytsel
language : en
Publisher: Edward Elgar Publishing
Release Date : 2023-01-20
Algorithms Collusion And Competition Law written by Steven Van Uytsel and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-01-20 with Law categories.
What is algorithmic collusion? This evaluative book provides an insight into tackling this important question for competition law, with contrasting critical perspectives, including theoretical, empirical, and doctrinal – the latter frequently from a comparative perspective. Bringing together scholarly discussion on algorithmic collusion, the book questions whether competition law is adeptly equipped to deal with its various facets.
Pricing Via Artificial Intelligence
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Author : Weipeng Zhang
language : en
Publisher:
Release Date : 2023
Pricing Via Artificial Intelligence written by Weipeng Zhang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.
Classic artificial intelligence (Q-learning) algorithms have been capable of consistently learning supra-competitive pricing strategies in infinitely repeated Nash-Bertrand pricing games without human communication. Such algorithms have been able to converge due to the temporal correlation of consecutive states and actions in the learning process, which restores stationarity in an otherwise highly non-stationary setting. It is difficult for more realistic AI algorithms to converge, as the necessary training processes breaks the aforementioned temporal correlation, rendering the algorithms ineffective in learning reward-punishment strategies that result in collusive market outcomes. We adapt several widely used neural network architectures to the framework of model-free reinforcement learning and experimentally explore how the structure of AI algorithms affects market outcomes in a workhorse oligopolistic model of repeated price competition. While it is possible to train advance AI algorithms to always best respond in environments where the rival exercises a fixed strategy, it is unlikely that such algorithms can learn to coordinate in setting supra-competitive prices due to the non-stationarity of multi-agent learning processes, suggesting that algorithmic collusion may not be an immediate concern for antitrust authorities.
Understanding Ai Collusion And Compliance
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Author : Justin Johnson
language : en
Publisher:
Release Date : 2020
Understanding Ai Collusion And Compliance written by Justin Johnson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
Antitrust compliance scholarship, particularly with a focus on collusion, has been an area of study for some time. Changes in technology and the rise of artificial intelligence (AI) and machine-learning create new possibilities both for anti-competitive behavior and to aid in detection of such algorithmic collusion. To some extent, AI collusion takes traditional ideas of collusion and simply provides a technological overlay to them. However, in some instances, the mechanisms of both collusion and detection can be transformed using AI. This handbook chapter discusses existing theoretical and empirical work, and identifies research gaps as well as avenues for new scholarship on how firms or competition authorities might invest in AI compliance to improve detection of wrong doing. We suggest where AI collusion is possible and offer new twists to where prior work has not identified possible collusion. Specifically, we identify the importance of AI to address the “trust” issue in collusion. We also identify that AI collusion is possible across non-price dimensions, such as manipulated product reviews and ratings, and discuss potential screens involving co-movements of prices and ratings. We further emphasize that AI may encourage entry, which may limit collusive prospects. Finally, we discuss how AI can be used to help with compliance both at the firm level and by competition authorities.
Multidisciplinary Perspectives On Artificial Intelligence And The Law
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Author : Henrique Sousa Antunes
language : en
Publisher: Springer Nature
Release Date : 2023-12-26
Multidisciplinary Perspectives On Artificial Intelligence And The Law written by Henrique Sousa Antunes and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-12-26 with Law categories.
This open access book presents an interdisciplinary, multi-authored, edited collection of chapters on Artificial Intelligence (‘AI’) and the Law. AI technology has come to play a central role in the modern data economy. Through a combination of increased computing power, the growing availability of data and the advancement of algorithms, AI has now become an umbrella term for some of the most transformational technological breakthroughs of this age. The importance of AI stems from both the opportunities that it offers and the challenges that it entails. While AI applications hold the promise of economic growth and efficiency gains, they also create significant risks and uncertainty. The potential and perils of AI have thus come to dominate modern discussions of technology and ethics – and although AI was initially allowed to largely develop without guidelines or rules, few would deny that the law is set to play a fundamental role in shaping the future of AI.As the debate over AI is far from over, the need for rigorous analysis has never been greater. This book thus brings together contributors from different fields and backgrounds to explore how the law might provide answers to some of the most pressing questions raised by AI. An outcome of the Católica Research Centre for the Future of Law and its interdisciplinary working group on Law and Artificial Intelligence, it includes contributions by leading scholars in the fields of technology, ethics and the law.
Algorithmic Collusion Its Implications For Competition Law And Policy
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Author : Kenji Lee
language : en
Publisher:
Release Date : 2019
Algorithmic Collusion Its Implications For Competition Law And Policy written by Kenji Lee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
Algorithms are increasingly employed by businesses as an integral part of their business models given the availability of big data and breakthroughs in artificial intelligence technology and application. While the competition landscape has shifted to a digital environment, questions have been raised as to whether the traditional competition policy tools, formulated in the analogue era, may nevertheless remain relevant in addressing algorithmic anti-competitive practices. In particular, the unilateral use of algorithms and algorithmic tacit collusion raises enforcement challenges for the competition authorities because of the inability of existing ex-post measures to adequately address these algorithmic anti-competitive conducts. This paper discusses these issues through a critical analysis of the relevant law, economics and computer science literatures.