Game Theory Explains How Algorithms Can Drive Up Prices
SMRTR summary
Pricing algorithms used by online sellers can drive up prices even without intentional collusion, creating a regulatory challenge for authorities who traditionally target explicit price-fixing agreements. Researchers discovered that when certain "learning" algorithms compete against simple "nonresponsive" strategies, they reach an equilibrium with high prices that benefits both sellers without any communication or threats between them.
SMRTR provides this summary for quick context. The original article belongs to Wired.
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