Adversarial competition and collusion in algorithmic markets | Nature Machine Intelligence
Algorithms are now playing a central role in digital marketplaces, setting prices and automatically responding in real time to competitors’ behaviour. The deployment of automated pricing algorithms is scrutinized by economists and regulatory agencies, concerned about its impact on prices and competition. Existing research has so far been limited to cases where all firms use the same algorithm, suggesting that anti-competitive behaviour might spontaneously arise in that setting. Here we introduce and study a general anti-competitive mechanism, adversarial collusion, where one firm manipul...
Source: nature.com