The Effect of Outsourcing Pricing Algorithms on Market Competition

Published Online:https://doi.org/10.1287/mnsc.2021.4241

References

  • Asker J, Fershtman C, Pakes A (2021) Artificial intelligence and pricing: The impact of algorithm design. Working paper, University of California–Los Angeles, Los Angeles, CA.Google Scholar
  • Assad S, Clark R, Ershov D, Xu L (2020) Algorithmic pricing and competition: Empirical evidence from the German Retail Gasoline Market. Working paper, Queen’s University, Kingston, Ontario, Canada.Google Scholar
  • Brown ZY, MacKay A (2022) Competition in pricing algorithms. Amer. Econom. J. Microeconomics. Forthcoming.Google Scholar
  • Calvano E, Calzolari G, Denicolò V, Pastorello S (2020b) Artificial intelligence, algorithmic pricing and collusion. Amer. Econom. Rev. 110:3267–3297.CrossrefGoogle Scholar
  • Calvano E, Calzolari G, Denicolò V, Harrington JE Jr, Pastorello S(2020a) Protecting consumers from collusive prices due to AI. Science 370:1040–1042.CrossrefGoogle Scholar
  • Chen L, Mislove A, Wilson C (2016) An empirical analysis of algorithmic pricing on Amazon Marketplace. Proc. 25th Internat. Conf. World Wide Web, April 2016 (Association for Computing Machinery, New York), 1339–1349.Google Scholar
  • Cooper WL, Homen-de-Mello T, Kleywegt AJ (2015) Learning and pricing with models that do not explicitly incorporate competition. Oper. Res. 63:86–103.LinkGoogle Scholar
  • Corts KS (1998) Third-degree price discrimination in oligopoly: All-out competition and strategic commitment. RAND J. Econom. 29:306–323.CrossrefGoogle Scholar
  • Cowan S (2016) Welfare-increasing third-degree price discrimination. RAND J. Econom. 47:326–340.CrossrefGoogle Scholar
  • den Boer AV (2015) Dynamic pricing and learning: Historical origins, current research, and new directions. Surveys in Oper. Res. and Management Sci. 20:1–18.Google Scholar
  • Deng A (2018) What do we know about algorithmic tacit collusion? Antitrust 33:88–95.Google Scholar
  • Dogan I, Güner AR (2015) A reinforcement learning approach to competitive ordering and pricing problem. Expert Systems 32: 39–47.Google Scholar
  • Ezrachi A, Stucke ME (2017) Artificial intelligence and collusion: When computers inhibit competition. Univ. Ill. Law Rev. 2017:1775–1810.Google Scholar
  • Fudenberg D, Miguel Villas Boas J (2012) Price discrimination in the digital economy. Peitz M, Waldfogel J, eds. Oxford Handbook of the Digital Economy (Oxford University Press, Oxford and New York), 254–272.CrossrefGoogle Scholar
  • Fudenberg D, Villas-Boas MJ (2007) Behavior-based price discrimination and customer recognition. Hendershott TJ, ed. Economics and Information Systems (Emerald, Elsevier, Bingley, UK), 377–436.Google Scholar
  • Gal MS (2019) Algorithms as facilitating practices. Berkeley Technol. Law J. 34:67–118.Google Scholar
  • German Monopolies Commission, XXII (2018) Biennial Report, Chapter on Algorithms and Collusion (German Monopolies Commission).Google Scholar
  • Hansen K, Misra K, Pai M (2021) Algorithmic collusion: Supra-competitive prices via independent algorithms. Marketing Sci. 40:1–12.LinkGoogle Scholar
  • Harrington JE Jr (2017) The Theory of Collusion and Competition Policy (The MIT Press, Cambridge, MA).Google Scholar
  • Harrington JE Jr (2018) Developing competition law for collusion by autonomous artificial agents. J. Compet. Law Econom. 14:331–363.CrossrefGoogle Scholar
  • Harrington JE Jr (2020) Third party pricing algorithms and the intensity of competition. Working paper, The Wharton School, University of Pennsylvania, Philadelphia.Google Scholar
  • Hilsen HOØ (2016) Simulating dynamic pricing algorithm performance in heterogeneous markets. Thesis, Norwegian University of Science and Technology.Google Scholar
  • Johnson PA (2017) Should we be concerned that data and algorithms will soften competition? CPI Antitrust Chronicle 2:10–15.Google Scholar
  • Klein T (2021) Autonomous algorithmic collusion: Q-learning under sequential pricing. RAND J. Econom. 52:538–558.CrossrefGoogle Scholar
  • Leisten M (2021) Algorithmic competition, with humans. Working paper, Federal Trade Commission, Washington, D.C.Google Scholar
  • Mehra SK (2016) Antitrust and the Robo-Seller: Competition in the time of algorithms. Minn. Law Rev. 100:1323–1375.Google Scholar
  • Miklós-Thal J, Tucker C (2019) Collusion by algorithm: Does better demand prediction facilitate coordination between sellers? Management Sci. 4:1552–1561.LinkGoogle Scholar
  • O’Connor J, Wilson NE (2022) Reduced demand uncertainty and the sustainability of collusion: How AI could affect collusion. Inform. Econom. Policy 54. Forthcoming.Google Scholar
  • OECD (Organisation for Economic Co-operation and Development) (2017) Algorithms and collusion—Background note by the secretariat. DAF/COMP(2017)4, Paris, France.Google Scholar
  • Oxera (2017) When algorithms set prices: Winners and losers. Discussion paper, Oxera Consulting LLP, Oxford, UK.Google Scholar
  • Özalp Ö, Phillips R, eds. (2012) The Oxford Handbook of Pricing Management (Oxford University Press, Oxford).Google Scholar
  • Salcedo B (2015) Pricing algorithms and tacit collusion. Working paper, Western University, London, Ontario, Canada.Google Scholar
  • Schwalbe U (2019) Algorithms, machine learning, and collusion. J. Compet. Law Econom. 14:568–607.CrossrefGoogle Scholar
  • Stole L (2007) Price discrimination and competition. Armstrong M, Porter RH, eds. Handbook of Industrial Organization, vol. 3 (Elsevier, Amsterdam), 2221–2299.Google Scholar
  • Tesauro G, Kephart JO (2002) Pricing in agent economics using multi-agent Q-learning. Autonomous Agents and Multi-Agent Systems 5:289–304.Google Scholar
  • U.S. Department of Justice (2015) Office of Public Affairs, April 6, 2015. Former e-commerce executive charged with price fixing in the Antitrust Division’s first online marketplace prosecution.Google Scholar
  • United Kingdom Competition & Markets Authority (2018) Pricing algorithms: Economic working paper on the use of algorithms to facilitate collusion and personalised pricing. Working paper.Google Scholar
  • Varian HR (1989) Price discrimination. Schmalensee R, Willig RD, eds. Handbook of Industrial Organization, vol. 1 (Elsevier, Amsterdam), 597–654.CrossrefGoogle Scholar
  • Waldman M, Johnson J, eds. (2007) Pricing Tactics, Strategies, and Outcomes (Edward Elgar, Cheltenham).Google Scholar
  • Waltman L, Kaymak U (2008) Q-learning agents in a Cournot oligopoly model. J. Econom. Dynam. Control 32:3275–3293.Google Scholar
  • Xie M, Chen J (2004) Studies on horizontal competition among homogeneous retailers through agent-based simulations. J. Systems Sci. Systems Engrg. 13:490–505.Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.