Algorithms play an increasingly important role in economic situations. Often these situations are strategic, where the artificial intelligence may or may not be cooperative. We study the determinants and forms of algorithmic cooperation in the infinitely repeated prisoner's dilemma. We run a...

We study the propensity of independent algorithms to collude in repeated Cournot duopoly games. Specifically, we investigate the predictive power of different oligopoly and bargaining solutions regarding the effect of asymmetry between firms. We find that both consumers and firms can benefit...

As self-learning pricing algorithms become popular, there are growing concerns among academics and regulators that algorithms could learn to collude tacitly on non-competitive prices and thereby harm competition. I study popular reinforcement learning algorithms and show that they develop...

Algorithms play an increasingly important role in economic situations. These situations are often strategic, where the artificial intelligence may or may not be cooperative. We study the deter-minants and forms of algorithmic cooperation in the infinitely repeated prisoner’s dilemma. We run a...

This paper investigates the collusive and competitive effects of algorithmic price recommendations on market outcomes. These recommendations are often non-binding and common in many markets, especially on online platforms. We develop a theoretical framework and derive two algorithms that...

The market for video games is booming, with in-game purchases accounting for a substantial share of developers' revenues. Policymakers and the general public alike are concerned that so-called loot boxes - lotteries that offer random rewards to be used in-game - induce consumers to overspend on...

While many companies use algorithms to optimize their pricing, additional human oversight and price interventions are widespread. Human intervention can correct algorithmic flaws and introduce private information into the pricing process, but it may also be based on less sophisticated pricing...

We study the propensity of independent algorithms to collude in repeated Cournot duopoly games. Specifically, we investigate the predictive power of different oligopoly and bargaining solutions regarding the effect of asymmetry between firms. We find that both consumers and firms can benefit...

Policymakers have been discussing various potential measures to cushion the impact of skyrocketing gas prices and prevent supply shortages. On 10 October 2022 an expert commission in Germany proposed a plan to keep natural gas affordable while also preventing shortages. The main element of the...

This policy brief is concerned with the efficient allocation of subsidies for eco-friendly products. Examples include subsidies for cargo or e-bikes, electric cars, and energy efficient building retrofits. Inefficiencies arise when subsidies are allocated to consumers who would have bought...