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10 - Algorithmic Competition, Collusion, and Price Discrimination

from Part II - Business, Regulations, and Decision-Making with Algorithms

Published online by Cambridge University Press:  19 October 2020

Woodrow Barfield
Affiliation:
University of Washington
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Summary

Rapid, recent technological change has brought forward a new form of “algorithmic competition.” Firms can and do draw on supercharged connectivity, mass data collection, algorithmic processing, and automated pricing to engage in what can be called “robo-selling.” But algorithmic competition can also produce results that harm consumers. Notably, robo-selling may make anticompetitive collusion more likely, all things being equal. Additionally, the possibility of new forms of algorithmic price discrimination may also cause consumers to suffer. There are no easy solutions, particularly because algorithmic competition also promises significant benefits to consumers. As a result, this chapter sets forth some approaches to each of these issues, necessarily tentative, to address the changes that algorithmic competition is likely to bring.

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Publisher: Cambridge University Press
Print publication year: 2020

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