Related papers: Multimarket Contact, Merger, and Airline Collusion
Algorithmic pricing is increasingly shaping market competition, raising concerns about its potential to compromise competitive dynamics. While prior work has shown that reinforcement learning (RL)-based pricing algorithms can lead to tacit…
Algorithmic price collusion facilitated by artificial intelligence (AI) algorithms raises significant concerns. We examine how AI agents using Q-learning engage in tacit collusion in two-sided markets. Our experiments reveal that AI-driven…
Ancillaries have become a major source of revenue and profitability in the travel industry. Yet, conventional pricing strategies are based on business rules that are poorly optimized and do not respond to changing market conditions. This…
This study investigates the implications of algorithmic pricing in digital marketplaces, focusing on Airbnb's pricing dynamics. With the advent of Airbnb's new pricing tool, this research explores how digital tools influence hosts' pricing…
Firms' algorithm development practices are often homogeneous. Whether firms train algorithms on similar data, aim at similar benchmarks, or rely on similar pre-trained models, the result is correlated predictions. We model the impact of…
Codeshare agreements are contracts that allow two or more airlines to share seats on the same flight. These agreements, which are widespread in commercial aviation as a response to highly competitive environments, have enabled the expansion…
Artificial intelligence algorithms are increasingly used by firms to set prices. Previous research shows that they can exhibit collusive behaviour, but how quickly they can do so has so far remained an open question. I show that a modern…
When online sellers use AI learning algorithms to automatically compete on e-commerce platforms, there is concern that they will learn to coordinate on higher than competitive prices. However, this concern was primarily raised in…
In the US airline industry, independent regional airlines fly passengers on behalf of several national airlines across different markets, giving rise to $\textit{common subcontracting}$. On the one hand, we find that subcontracting is…
I examine how upstream mergers affect negotiated prices when suppliers bargain with a monopoly intermediary selling products to final consumers. Conventional wisdom holds that such transactions lower negotiated prices when the products are…
AI agents are increasingly deployed in ecosystems where they repeatedly interact not only with each other but also with humans. In this work, we study these human-AI ecosystems from a theoretical perspective, focusing on the classical…
Recent work shows that pricing with symmetric LLM agents leads to algorithmic collusion. We show that collusion is fragile under the heterogeneity typical of real deployments. In a stylized repeated-pricing model, heterogeneity in patience…
Demand forecasting is extremely important in revenue management. After all, it is one of the inputs to an optimisation method which aim is to maximize revenue. Most, if not all, forecasting methods use historical data to forecast the…
We study the problem of pricing under a Multinomial Logit model where we incorporate network effects over the consumer's decisions. We analyse both cases, when sellers compete or collaborate. In particular, we pay special attention to the…
Algorithmic pricing raises a question of interpretation as well as intervention: when autonomous deep-learning pricing systems sustain supracompetitive prices, what strategic pattern have they learned, and how might market institutions…
The price clustering phenomenon manifesting itself as an increased occurrence of specific prices is widely observed and well-documented for various financial instruments and markets. In the literature, however, it is rarely incorporated…
This paper develops an econometric model of flight delays to investigate the influence of competition and dominance on the incentives of carriers to maintain on-time performance. We consider both the route and the airport levels to inspect…
Modern online platforms such as marketplaces, ride-hailing services, and food-delivery systems serve a dual role: they are both markets where participants interact and transact, and operators that design and govern how these markets…
In this letter, the merging-vs-bouncing response of obliquely-oriented colliding jets under elevated and reduced gaseous environment pressures was experimentally examined. Experiments with water and n-tetradecane confirmed that the…
Correctly estimating how demand respond to prices is fundamental for airlines willing to optimize their pricing policy. Under some conditions, these policies, while aiming at maximizing short term revenue, can present too little price…