Can the Use of Pricing Algorithms Lead to Collusive Outcomes? Insights and Practical Approaches from the Economic Literature.

  • Published In: Antitrust Magazine, 2024, v. 39, n. 1. P. 18 1 of 3

  • Database: Academic Search Ultimate 2 of 3

  • Authored By: XIE, CLAIRE; MONAHOVA, GABRIELLA; FOREMAN, KATE 3 of 3

Abstract

The article explores the potential for pricing algorithms, particularly those based on AI technology, to lead to collusive outcomes in the market. It discusses how algorithms can autonomously learn to sustain prices above competitive levels without explicit human instruction to collude. The research highlights that while pricing algorithms can theoretically achieve supracompetitive prices, it does not definitively conclude that all algorithms lead to elevated prices, necessitating a case-by-case analysis. The study also emphasizes the importance of considering factors specific to pricing algorithms, such as the frequency of price updates, in assessing the likelihood of achieving supracompetitive prices. [Extracted from the article]

Additional Information

  • Source:Antitrust Magazine. 2024/09, Vol. 39, Issue 1, p18
  • Document Type:Article
  • Subject Area:Business and Management
  • Publication Date:2024
  • ISSN:0162-7996
  • Accession Number:182309039
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