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It's not so much that they're "Fixing" prices, but that so many companies/businesses are all using the same algorithm. Man, if only they knew how many industrie

It's not so much that they're "Fixing" prices, but that so many companies/businesses are all using the same algorithm. Man, if only they knew how many industries do this exact same thing. Services like this exist for just about every market, from housing price estimation, to salaries, to magic the gathering cards. What they're effectively saying is that "Services that estimate rent prices should be illegal." OK. Good luck with that.

Retric 3y ago
Normally this is self correcting. In most markets when a single participant defects from a cartel they can flood the market. When 70% or housing is under control of a single pice of software the other 30% can’t flood the market.
- jcrben 3y ago
  It's also affected by the fundamental barriers to entry in offering a competing product - homes don't get built quickly and people can't move that easily.
treffer 3y ago
It's not that. It's basically the old question: can algorithms format cartels? I am strongly on the side of: yes, they can. In a time where most offerings are public you just need to make sure you stay slightly above the p50 and prices will go up. Similarly on the buying side of e.g. Ads most algorithms and platforms have a "bidding war avoidance". Stop bidding more even of it would make you money, in order to keep the proce low. In all those cases you try to sync and rise /lower the price (as seller/buyer). It's not about just estimating a price. It is doing that on a large scale with an algorithmic outcome of upwards price fixation.
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burkaman 3y ago
It's not just landlords using the same algorithm, they're using the same company that tells them all to set the same artificially high price. In other words, RealPage isn't saying "average rent around here is $2000 so that's what you should charge", it's saying "I just told every other building in this city to charge $2000, so you should too". If there were 50 of these companies all competing in a particular city it wouldn't be a problem, but when most apartments are priced by just one or two companies, it is.

Retric 3y ago

Normally this is self correcting. In most markets when a single participant defects from a cartel they can flood the market. When 70% or housing is under control of a single pice of software the other 30% can’t flood the market.

jcrben 3y ago
It's also affected by the fundamental barriers to entry in offering a competing product - homes don't get built quickly and people can't move that easily.

treffer 3y ago

It's not that. It's basically the old question: can algorithms format cartels? I am strongly on the side of: yes, they can. In a time where most offerings are public you just need to make sure you stay slightly above the p50 and prices will go up. Similarly on the buying side of e.g. Ads most algorithms and platforms have a "bidding war avoidance". Stop bidding more even of it would make you money, in order to keep the proce low. In all those cases you try to sync and rise /lower the price (as seller/buyer). It's not about just estimating a price. It is doing that on a large scale with an algorithmic outcome of upwards price fixation.

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burkaman 3y ago

It's not just landlords using the same algorithm, they're using the same company that tells them all to set the same artificially high price. In other words, RealPage isn't saying "average rent around here is $2000 so that's what you should charge", it's saying "I just told every other building in this city to charge $2000, so you should too". If there were 50 of these companies all competing in a particular city it wouldn't be a problem, but when most apartments are priced by just one or two companies, it is.