3 ms·

The same is happening in rent. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increa

The same is happening in rent. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... . it's not really a free market if you have a 3rd party company acting as the proxy for pricing collusion.

pwagland 3y ago
This was also mentioned in the article: > But are there other examples? Yes. One mind-blowing story from ProPublica that came out in 2022 was about landlord software sold by a firm called RealPage, which essentially told big landlords to raise rents by showing them “data RealPage gathers from clients, including private information on what nearby competitors charge.” There’s a quasi-consulting arrangement here too, as “RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.” > RealPage is now facing at least seven private antitrust class action suits, as lower output and higher prices are classic signs of monopoly power. What’s fascinating is that here again, an economist would look at these markets and see competition and multiple rivals renting out apartments, but they would miss that there’s a cartel, or rather a set of regional cartels coordinated by a software platform, operating to boost prices and margins.
bsenftner 3y ago
Zillow tells landlords they are "losing money" if their rent is less than similar apartments in the same area, while also telling the landlord they are "the market leader" when they have the highest rent in an area. I bet in a more fair world, that little mechanism would be illegal.
- sokoloff 3y ago
  You think price discovery in general would be illegal? Or just a conditional message about it? A gas station owner doesn’t (and IMO shouldn’t) have to block their eyes when they drive by competitors.
  - bsenftner 3y ago
    To use your analogy, the gas station owner would have to drive by every competitor in their city, as well as all the neighboring cities, as well visit every similar populated city in their country to get the same information. A service that tells sellers what they should charge is what I don't like. I seriously expect in many situations, these "price aggregators" are probably corporate subsidiaries of the market leaders.
    - sokoloff 3y ago
      They’d have to do that iff someone would consider buying gas 50 or 500 miles away as a reasonable substitute for buying gas from them. > A service that tells sellers what they should charge is what I don't like. Is it only the “tells sellers what they should charge” part that you specifically object to (the conditional messaging) or do you also object to the lesser “tells sellers what others are charging”?
      - bsenftner 3y ago
        > only the “tells sellers what they should charge” part that, and when they inform the seller they use emotionally loaded language implying "if they are not the market leader, they are leaving money on the table, like a fool." Yes, the service consumer has to be a little manipulable for such mechanisms to work, but they do, nearly all the time.
  - RandomLensman 3y ago
    So what do we do if price discovery zeros out consumer surplus because pricing based profit maximation by competitors creates synthetic oligopoly or monopoly pricing? Move to auctions everywhere? Something else? I have yet to see a good answer to that.
  - k12sosse 3y ago
    In Canada there is a grid, and the affluence of each grid impacts the price of gas sold in that grid. You can have swings of 20¢/L from one side of the tracks to the other - all sold by the same chain, fueled by the same trucks equidistant from the depot.
- shrimpx 3y ago
  Housing is a bad example because there’s not enough supply for competition to work, so prices can become arbitrary without rent control.
  - antifa 3y ago
    There are currently 28 vacant homes for every one person experiencing homelessness in the U.S. https://unitedwaynca.org/blog/vacant-homes-vs-homelessness-by-city/ https://unitedwaynca.org/blog/vacant-homes-vs-homelessness-b...
    - erik_seaberg 3y ago
      You don't need a house somewhere in the US, you need one in a job market where you can support yourself. Remote jobs are still rare, and long term I don't think they will pay well.

pwagland 3y ago

This was also mentioned in the article: > But are there other examples? Yes. One mind-blowing story from ProPublica that came out in 2022 was about landlord software sold by a firm called RealPage, which essentially told big landlords to raise rents by showing them “data RealPage gathers from clients, including private information on what nearby competitors charge.” There’s a quasi-consulting arrangement here too, as “RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.” > RealPage is now facing at least seven private antitrust class action suits, as lower output and higher prices are classic signs of monopoly power. What’s fascinating is that here again, an economist would look at these markets and see competition and multiple rivals renting out apartments, but they would miss that there’s a cartel, or rather a set of regional cartels coordinated by a software platform, operating to boost prices and margins.

bsenftner 3y ago

Zillow tells landlords they are "losing money" if their rent is less than similar apartments in the same area, while also telling the landlord they are "the market leader" when they have the highest rent in an area. I bet in a more fair world, that little mechanism would be illegal.

sokoloff 3y ago
You think price discovery in general would be illegal? Or just a conditional message about it? A gas station owner doesn’t (and IMO shouldn’t) have to block their eyes when they drive by competitors.
- bsenftner 3y ago
  To use your analogy, the gas station owner would have to drive by every competitor in their city, as well as all the neighboring cities, as well visit every similar populated city in their country to get the same information. A service that tells sellers what they should charge is what I don't like. I seriously expect in many situations, these "price aggregators" are probably corporate subsidiaries of the market leaders.
  - sokoloff 3y ago
    They’d have to do that iff someone would consider buying gas 50 or 500 miles away as a reasonable substitute for buying gas from them. > A service that tells sellers what they should charge is what I don't like. Is it only the “tells sellers what they should charge” part that you specifically object to (the conditional messaging) or do you also object to the lesser “tells sellers what others are charging”?
    - bsenftner 3y ago
      > only the “tells sellers what they should charge” part that, and when they inform the seller they use emotionally loaded language implying "if they are not the market leader, they are leaving money on the table, like a fool." Yes, the service consumer has to be a little manipulable for such mechanisms to work, but they do, nearly all the time.
- RandomLensman 3y ago
  So what do we do if price discovery zeros out consumer surplus because pricing based profit maximation by competitors creates synthetic oligopoly or monopoly pricing? Move to auctions everywhere? Something else? I have yet to see a good answer to that.
- k12sosse 3y ago
  In Canada there is a grid, and the affluence of each grid impacts the price of gas sold in that grid. You can have swings of 20¢/L from one side of the tracks to the other - all sold by the same chain, fueled by the same trucks equidistant from the depot.
shrimpx 3y ago
Housing is a bad example because there’s not enough supply for competition to work, so prices can become arbitrary without rent control.
- antifa 3y ago
  There are currently 28 vacant homes for every one person experiencing homelessness in the U.S. https://unitedwaynca.org/blog/vacant-homes-vs-homelessness-by-city/ https://unitedwaynca.org/blog/vacant-homes-vs-homelessness-b...
  - erik_seaberg 3y ago
    You don't need a house somewhere in the US, you need one in a job market where you can support yourself. Remote jobs are still rare, and long term I don't think they will pay well.