Collusion By Algorithm
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Collusion By Algorithm
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Author : Jeanine Miklós-Thal
language : en
Publisher:
Release Date : 2018
Collusion By Algorithm written by Jeanine Miklós-Thal 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.
We build a game-theoretic model to examine how better demand forecasting due to algorithms, machine learning and artificial intelligence affects the sustainability of collusion in an industry. We find that while better forecasting allows colluding firms to better tailor prices to demand conditions, it also increases each firm's temptation to deviate to a lower price in time periods of high predicted demand. Overall, our research suggests that, despite concerns expressed by policymakers, better forecasting and algorithms can lead to lower prices and higher consumer surplus.
Collusion By Algorithm
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Author : Simon Martin
language : en
Publisher:
Release Date : 2022
Collusion By Algorithm written by Simon Martin 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 analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question. Moreover, our analysis reveals a dual role of improving forecasting ability when actions are not observable. Deviations become more tempting, reducing profits, but also uncertainty concerning deviations is increasingly eliminated. This results in a u-shaped relationship between profits and prediction ability. When prediction ability is perfect, the "observable actions" case emerges.
Algorithmic Collusion In A Price Oligopoly
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Author : Thomas Loots
language : en
Publisher:
Release Date : 2024
Algorithmic Collusion In A Price Oligopoly written by Thomas Loots and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024 with categories.
"This thesis demonstrates algorithmic collusion in a price oligopoly with multinomial logit demand. Of main interest is the scenario where competing firms independently adopt copies of the same price algorithm. One of the key takeaways is that in this scenario, major challenges to achieving and sustaining supra-competitive outcomes can be overcome by the firms. We show this by constructing competitive price algorithms that have collusive capabilities when at least one of the opponents uses a copy of the same algorithm. Importantly, the firms do not have to activate the algorithm at the same time, do not need to use the same input parameters, and do not need to know that they are using the same algorithm. Moreover, the proposed algorithms do not engage in illicit forms of communication or signaling, and therefore exemplify tacit (lawful) algorithmic collusion . This thesis thus contributes to the ongoing debate on the extent to which collusion by algorithms is possible within the confines of existing antitrust law and jurisprudence, and further contributes to the fields of axiomatic bargaining, dynamic pricing, and demand learning in the presence of competitors."--
Artificial Collusion
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Author : Arnoud V. den Boer
language : en
Publisher:
Release Date : 2022
Artificial Collusion written by Arnoud V. den Boer 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 examine recent claims that a particular Q-learning algorithm used by competitors 'autonomously' and systematically learns to collude, resulting in supracompetitive prices and extra profits for the firms sustained by collusive equilibria. A detailed analysis of the inner workings of this algorithm reveals that there is no immediate reason for alarm. We set out what is needed to demonstrate the existence of a colluding price algorithm that does form a threat to competition.
Collusion Among Autonomous Pricing Algorithms Utilizing Function Approximation Methods
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Author : Malte Jeschonneck
language : en
Publisher:
Release Date : 2021
Collusion Among Autonomous Pricing Algorithms Utilizing Function Approximation Methods written by Malte Jeschonneck and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
The increased prevalence of pricing algorithms incited an ongoing debate about new forms of collusion. The concern is that intelligent algorithms may be able to forge collusive schemes without being explicitly instructed to do so. I attempt to examine the ability of reinforcement learning algorithms to maintain collusive prices in a simulated oligopoly of price competition. To my knowledge, this study is the first to use a reinforcement learning system with linear function approximation and eligibility traces in an economic environment. I show that the deployed agents sustain supra-competitive prices, but tend to be exploitable by deviating agents in the short-term. The price level upon convergence crucially hinges on the utilized method to estimate the qualities of actions. These findings are robust to variations of parameters that control the learning process and the environment.
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.
Collusion
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Author : Martial Dubonnet
language : fr
Publisher:
Release Date : 2017
Collusion written by Martial Dubonnet and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
Algorithmic Pricing Collusion The Limits Of Antitrust Enforcement
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Author : Sumit Bhadauria
language : en
Publisher:
Release Date : 2020
Algorithmic Pricing Collusion The Limits Of Antitrust Enforcement written by Sumit Bhadauria 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 combination of big data, large storage capacity and computational power has strengthened the emergence of algorithms in making myriads of business decision. It allows business to gain a competitive advantage by making automatic and optimize decision making. In particular, the use of pricing algorithms allows business to match the demand and supply equilibrium by monitoring & setting dynamic pricing. It benefits consumer alike to see and act on fast changing prices. However, on the downside, the widespread use of algorithm in an industry has the effect of altering the structural characteristic of market such as price transparency, high speed trading which increases the likelihood of collusion. The ability of pricing algorithm to solve the cartel incentive problem by quickly detecting and punishing the deviant further strengthen the enforcement of price fixing agreement. In addition, the use of more advance forms of algorithm such as self-learning algorithm allows business to achieve a tacitly collusive outcome in limited market characteristic even without communication between humans. This raises the fundamental challenge for anti-cartel enforcement as the current law in most jurisdictions is ill-equipped to deal with algorithmic facilitated tacit collusion. The legality of tacit collusion is questionable primarily because the pricing algorithm has the ability to alter the market characteristics where the tacitly collusive outcome is difficult to achieve; thus widening the scope of the so-called 'oligopoly problem'. This paper studies the usages of pricing algorithms by business in online markets. In particular, the paper identify the conditions under which the algorithm prices causes the harm to consumers. It seeks to analyze how algorithms might facilitate or even causes the collusive outcome without human interventions. Further, it looks at the legal challenges faced by the competition authorities around the globe to deal with the algorithmic let collusion and examine the various approaches suggested to counter act it.
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.
Algorithms Pricing
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Author : Céline Geissmann
language : en
Publisher:
Release Date : 2018
Algorithms Pricing written by Céline Geissmann 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.