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IT is happening in rents. A lot of rental properties have started using a tool to determine what the 'market can bear'. And have started raising rent. Their i

IT is happening in rents. A lot of rental properties have started using a tool to determine what the 'market can bear'. And have started raising rent. Their is no collusion. But they are all using the same technology, which is telling them to raise rent. Since they are all raising rent, everyone is trapped and must pay, thus the 'market' can bear the price, since the software can tell everyone else is increasing rent, then it must be possible. Kind of self fulfilling prophecy.

Enginerrrd 3y ago
I don't think that would work. The Uber/Lyft thing works because there is such a thing as a pseudo-monopoly pricing strategy that is optimal. This doesn't work in markets with a large number of actors. Now... MAYBE it could work if you have a very large fraction of rentals consolidated under a small number of listing services?
- FrustratedMonky 3y ago
  I'm not sure the percentage of the market owned that is needed to influence the total market. I'm sure different markets have different thresholds. I think you are thinking that all renters are 'actors', so there is to many individual choices, thus this can't happen. But, here the actors are the rental property owners. That is a much smaller number. IF you only have a few property owners, and they all use software telling them to increase prices, then the total market goes up, and individual renters do not have any options to go anywhere else, so must pay. It really is the same problem as with collusion, or price setting, it is just here, what is happening is 'the colluders' all happened to be using the same software. They aren't coordinating, they are coincidentally all being pushed in same direction by a single software company. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... >" RealPage became the nation’s dominant provider of such rent-setting software after federal regulators approved a controversial merger in 2017, a ProPublica investigation found, greatly expanding the company’s influence over apartment prices. The move helped the Texas-based company push the client base for its array of real estate tech services past 31,700 customers. The impact is stark in some markets. In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage."

Enginerrrd 3y ago

I don't think that would work. The Uber/Lyft thing works because there is such a thing as a pseudo-monopoly pricing strategy that is optimal. This doesn't work in markets with a large number of actors. Now... MAYBE it could work if you have a very large fraction of rentals consolidated under a small number of listing services?

FrustratedMonky 3y ago
I'm not sure the percentage of the market owned that is needed to influence the total market. I'm sure different markets have different thresholds. I think you are thinking that all renters are 'actors', so there is to many individual choices, thus this can't happen. But, here the actors are the rental property owners. That is a much smaller number. IF you only have a few property owners, and they all use software telling them to increase prices, then the total market goes up, and individual renters do not have any options to go anywhere else, so must pay. It really is the same problem as with collusion, or price setting, it is just here, what is happening is 'the colluders' all happened to be using the same software. They aren't coordinating, they are coincidentally all being pushed in same direction by a single software company. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... >" RealPage became the nation’s dominant provider of such rent-setting software after federal regulators approved a controversial merger in 2017, a ProPublica investigation found, greatly expanding the company’s influence over apartment prices. The move helped the Texas-based company push the client base for its array of real estate tech services past 31,700 customers. The impact is stark in some markets. In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage."