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We examine recent claims that a particular Q-learning algorithm used by competitors 'autonomously' and systematically … detailed analysis of the inner workings of this algorithm reveals that there is no immediate reason for alarm. We set out what … is needed to demonstrate the existence of a colluding price algorithm that does form a threat to competition. …
Persistent link: https://www.econbiz.de/10013375353
well-established self-learning algorithm) learns to profitably coordinate on either a fixed price or on asymmetric price …
Persistent link: https://www.econbiz.de/10011869980
We let "Algorithmic Market-Makers" (AMMs), using Q-learning algorithms, choose prices for a risky asset when their clients are privately informed about the asset payoff. We find that AMMs learn to cope with adverse selection and to update their prices after observing trades, as predicted by...
Persistent link: https://www.econbiz.de/10014236498
Artificial Intelligence (AI) automates human decisions. Algorithmic pricing, a form of AI, sets prices by a computer. It is now common currency in ride-hailing, travel, drugs, gasoline, online goods---And great price variability characterizes all those settings. However, little is known about...
Persistent link: https://www.econbiz.de/10014344646
Persistent link: https://www.econbiz.de/10011806180
algorithm. Resulting price zone configurations are compared to both exogenously given, expert-based price zone configurations … from the Entso-E bidding zone study and endogenously assessed configurations from a hierarchical cluster algorithm. Results … show that the genetic algorithm achieves best results in terms of system costs. Moreover, the comparison with solutions …
Persistent link: https://www.econbiz.de/10012038968
Persistent link: https://www.econbiz.de/10012286354
Increasingly, retailers have access to better pricing technology, especially in online markets. Firms employ automated pricing algorithms that allow for high-frequency price changes. What are the implications for price competition? We develop a model of price competition where firms can differ...
Persistent link: https://www.econbiz.de/10012175360
Increasingly, retailers have access to better pricing technology, especially in online markets. Using hourly data from five major online retailers, we show that retailers set prices at regular intervals that differ across firms. In addition, faster firms appear to use automated pricing rules...
Persistent link: https://www.econbiz.de/10012533409
pricing. We simulate a self-learning algorithm setting personalized prices based on additional information about consumer … show that the algorithm learns to charge different, revenue-maximizing prices and simultaneously increase fairness in terms …
Persistent link: https://www.econbiz.de/10012546921