Related papers: Markets are competitive if and only if P != NP
We consider a simple model of rational agents competing in a single product market described by simple linear demand curve. Contrary to accepted economic theory, the agents' production levels synchronise in the absence of conscious…
I prove that if markets are weak-form efficient, meaning current prices fully reflect all information available in past prices, then P = NP, meaning every computational problem whose solution can be verified in polynomial time can also be…
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…
Consider sellers in a competitive market that use algorithms to adapt their prices from data that they collect. In such a context it is plausible that algorithms could arrive at prices that are higher than the competitive prices and this…
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…
Efficient computability is an important property of solution concepts in matching markets. We consider the computational complexity of finding and verifying various solution concepts in trading networks-multi-sided matching markets with…
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…
We develop a tractable model for studying strategic interactions between learning algorithms. We uncover a mechanism responsible for the emergence of algorithmic collusion. We observe that algorithms periodically coordinate on actions that…
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…
It has been assumed that arbitrage profits are not possible in efficient markets, because future prices are not predictable. Here we show that predictability alone is not a sufficient measure of market efficiency. We instead propose to…
Algorithmic agents are used in a variety of competitive decision-making settings, including pricing contexts that range from online retail to residential home rental. We study the emergence of algorithmic collusion when competing agents…
The rise of autonomous pricing systems has sparked growing concern over algorithmic collusion in markets from retail to housing. This paper examines controlled information quality as an ex ante policy lever: by reducing the fidelity of data…
The origin of economic crises is a key problem for economics. We present a model of long-run competitive markets to show that the multiplicity of behaviors in an economic system, over a long time scale, emerge as statistical regularities…
There is growing concern about tacit collusion using algorithmic pricing, and regulators need tools to help detect the possibility of such collusion. This paper studies how to design a hypothesis testing framework in order to decide whether…
We examine the dynamics of informational efficiency in a market with asymmetrically informed, boundedly rational traders who adaptively learn optimal strategies using simple multiarmed bandit (MAB) algorithms. The strategies available to…
There has been substantial recent concern that pricing algorithms might learn to ``collude.'' Supra-competitive prices can emerge as a Nash equilibrium of repeated pricing games, in which sellers play strategies which threaten to punish…
This paper examines how data inputs shape competition among artificial intelligences (AIs) in pricing games. The dataset assigns labels to consumers and divides them into different markets, thereby inducing multimarket contact among AIs. We…
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 collusion is an emerging concept in current artificial intelligence age. Whether algorithmic collusion is a creditable threat remains as an argument. In this paper, we propose an algorithm which can extort its human rival to…
Two issues of algorithmic collusion are addressed in this paper. First, we show that in a general class of symmetric games, including Prisoner's Dilemma, Bertrand competition, and any (nonlinear) mixture of first and second price auction,…