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> Different companies using the same AI for pricing support purposes could easily tip into illegal practices if there is a feedback loop from company to model.

> Different companies using the same AI for pricing support purposes could easily tip into illegal practices if there is a feedback loop from company to model. While there are anti-competitive concerns with this kind of system, one of the points I was trying to make is that a problem requires more than there be simply a 'feedback loop'. Even in a market with 'perfect' competition, there can be feedback loops: e.g., an individual farmer might price their grain by checking the current market price which is tracked by a third party, and that third party determines the 'current market price' by querying the prices set by all farmers. The reason this isn't necessarily anti-competitive and can be compatible with 'perfect' competition is due to the other characteristics of the market (all participants are price takers, etc), not due to a lack of coordination between producing firms and market analytics firms.

wjnc 4y ago
I agree. I was thinking about granularity / specificity but wasn't able to form a coherent train of thought. I'll give it a try. In my part of the world rents are often very naively indexed, say with CPI or CPI+. That is currently an issue, but usually pretty well functioning. Any individual has no influence on the CPI. So the CPI has a feedback loop, but no characteristic of influence. In an AI world that characteristic of influence is indeed not clear at first. I can only expect this to be a pretty dark AI considering the 'Great Succes' it is for the owners. I expect it to vacuum data from brokers in order to calculate a "willingness to pay" combined with a "propensity to pay" to calculate individual and portfolio optimal increases. How is this (/ could this be) collusion? Because the rent increase on property X1, owner Y1 (that is private information, at least I presume for the US rental contracts are 1-on-1 and not public information) is input for all the distributions over properties X and owners Y. I think your point that other market characteristics have a large impact on collusion (yes / no / degree) is subtle as well.

wjnc 4y ago

I agree. I was thinking about granularity / specificity but wasn't able to form a coherent train of thought. I'll give it a try. In my part of the world rents are often very naively indexed, say with CPI or CPI+. That is currently an issue, but usually pretty well functioning. Any individual has no influence on the CPI. So the CPI has a feedback loop, but no characteristic of influence. In an AI world that characteristic of influence is indeed not clear at first. I can only expect this to be a pretty dark AI considering the 'Great Succes' it is for the owners. I expect it to vacuum data from brokers in order to calculate a "willingness to pay" combined with a "propensity to pay" to calculate individual and portfolio optimal increases. How is this (/ could this be) collusion? Because the rent increase on property X1, owner Y1 (that is private information, at least I presume for the US rental contracts are 1-on-1 and not public information) is input for all the distributions over properties X and owners Y. I think your point that other market characteristics have a large impact on collusion (yes / no / degree) is subtle as well.