Related papers: By Fair Means or Foul: Quantifying Collusion in a …
Nowadays, a significant share of the business-to-consumer sector is based on online platforms like Amazon and Alibaba and uses AI for pricing strategies. This has sparked debate on whether pricing algorithms may tacitly collude to set…
Nowadays, a significant share of the Business-to-Consumer sector is based on online platforms like Amazon and Alibaba and uses Artificial Intelligence for pricing strategies. This has sparked debate on whether pricing algorithms may tacitly…
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…
The rise of algorithmic pricing in online retail platforms has attracted significant interest in how autonomous software agents interact under competition. This article explores the potential emergence of algorithmic collusion -…
Pricing decisions are increasingly made by AI. Thanks to their ability to train with live market data while making decisions on the fly, deep reinforcement learning algorithms are especially effective in taking such pricing decisions. In…
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…
Pricing algorithms have demonstrated the capability to learn tacit collusion that is largely unaddressed by current regulations. Their increasing use in markets, including oligopolistic industries with a history of collusion, calls for…
Collusion in market pricing is a concept associated with human actions to raise market prices through artificially limited supply. Recently, the idea of algorithmic collusion was put forward, where the human action in the pricing process is…
With dynamic pricing on the rise, firms are using sophisticated algorithms for price determination. These algorithms are often non-interpretable and there has been a recent interest in their seemingly emergent ability to tacitly collude…
We conduct experiments with algorithmic pricing agents based on Large Language Models (LLMs). In oligopoly settings, LLM-based pricing agents quickly and autonomously reach supracompetitive prices and profits. Variation in seemingly…
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…
Algorithmic pricing on online e-commerce platforms raises the concern of tacit collusion, where reinforcement learning algorithms learn to set collusive prices in a decentralized manner and through nothing more than profit feedback. This…
We develop a model of algorithmic pricing that shuts down every channel for explicit or implicit collusion while still generating collusive outcomes. We analyze the dynamics of a duopoly market where both firms use pricing algorithms…
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…
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…
Autonomous pricing algorithms are increasingly influencing competition in digital markets; however, their behavior under realistic demand conditions remains largely unexamined. This paper offers a thorough analysis of four pricing…
This paper explores the application of a reinforcement learning (RL) framework using the Q-Learning algorithm to enhance dynamic pricing strategies in the retail sector. Unlike traditional pricing methods, which often rely on static demand…
We study how delegating pricing to large language models (LLMs) can facilitate collusion in a duopoly when both sellers rely on the same pre-trained model. The LLM is characterized by (i) a propensity parameter capturing its internal bias…
The prospect of collusive agreements being stabilized via the use of pricing algorithms is widely discussed by antitrust experts and economists. However, the literature is often lacking the perspective of computer scientists, and seems to…
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…