Algorithmic Pricing

tags
Competition Digisprudence

Using computers to set prices.

Competition concerns arise where ostensible competitors use the same pricing algorithm.

To my mind, somewhat undermines the idea of pricing altogether. If an algorithm can comprehend enough to put a price on something, you're strictly losing information by collapsing that comprehension into a single number - you know more than the market does! That is, the Prices Contain Information justification for free markets kind of falls apart: if the market is no longer setting prices, then what is the market for?

cf Algorithmic Discrimination

Discussion

Algorithmic Pricing Ban Advances in California Legislature
FTC inquiry upcoming (July 2024)