5 ms·

ate you sure it is that? after all, we all independently use the Kelley Blue book value of a car before we sell. I think there has to be some intentional and p

by jkic47 3y ago

ate you sure it is that? after all, we all independently use the Kelley Blue book value of a car before we sell. I think there has to be some intentional and provable link that you and I agreed (colluded) to use a particular value and set a floor below which we wouldn't sell.

dkjaudyeqooe 3y ago
> ate you sure it is that? after all, we all independently use the Kelley Blue book value of a car before we sell. That book doesn't price individual cars, only types and the price of the actual car is open to interpretation and usually negotiation.
- slrainka 3y ago
  The key distinction lies in how YieldStar approaches setting rental prices compared to other systems. YieldStar not only recommends rental prices by analyzing the entire inventory it oversees but also incorporates a strategy that effectively eliminates the possibility of rent negotiation with potential tenants. This approach mirrors the dynamics of the prisoner’s dilemma, a situation in game theory where individuals may not cooperate, even if it’s in their best interest to do so. However, YieldStar transcends the Nash equilibrium—the point at which no participant can benefit by changing strategies if the others remain unchanged—by stripping tenants of any bargaining power. This ensures that the rent pricing strategy is firmly controlled, without the usual back-and-forth negotiation process.
  - dkjaudyeqooe 3y ago
    The only way you can productively refuse negotiation is by knowing the price is fixed (or you have the only supply), otherwise others will take your business.
    - jprete 3y ago
      If it's widely believed that other landlords use the same pricing system as you, then that's exactly how landlords can refuse to negotiate.
  - samatman 3y ago
    This is a strange claim. How is it that software can eliminate the possibility of rent negotiation? A tenant can negotiate, or try to. How does software eliminate the possibility that this will succeed?
    - dkjaudyeqooe 3y ago
      Because the software has set the price and the landlords are using the software's price exclusively. That is why it's price fixing.
      - chii 3y ago
        to me, it's not enough to show that the same algorithm or software is deciding the price. It has to be that there's some threat of punishment from the cartel against those who would lower their price from the agreed one. For example, the explicit agreement by the landlord to keep the price at the algorithmicaly calculated one, even so far as to leave vacancy (where as there wouldn't have been a vacancy if the price was lowered).
        radicality 3y ago
        There is. I forget the number, but the landlords are only allowed to disagree with the software (and give lower rent) only ~10% or so of the time. Otherwise they will be kicked off of the price fixing platform.
        samatman 3y ago
        Why isn't that clearly stated in the FTC brief? That's a hell of an absence of evidence, under the circumstances. If there's a smoking gun, why leave it out?
    - cogman10 3y ago
      It's the scope and breadth of deployment and the algorithm/business pressures. > 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. This is the key to why it's price fixing. Everyone playing ball and means that the raising rent rates increases everyone's take home even if a few operate with lower occupancy. The software calculates rent rates that make sure occupancy isn't too low to keep everyone in line. It removes bargaining with the promise that "if you play ball, you'll be rich". Tenants can negotiate prices just like you can theoretically haggle with amazon.
vineyardmike 3y ago
What’s missing here is that landlords agree to use the algorithm or leave the unit empty. It’s part of the TOS. So when many marker participants do this, it’s colluding.
- AnthonyMouse 3y ago
  Wow, that's brazen if true. I don't know why anybody is even talking about algorithms. That's a contract to fix prices. It also implies that all of the landlords using it are idiots. Not only is price fixing illegal, joining the cartel is optional and costs you money for no personal advantage because you'd have to leave your units vacant instead of immediately renting them out at the higher price induced by the "selfless" idiots in the cartel.
  - jprete 3y ago
    If holding back 20% of the units in every building drives up prices by 30% - this is completely possible in something like real estate where supply is so inflexible - then each individual landlord might have a motivation to defect, but the group as a whole has a reason to cooperate. The purpose of the software is to give the coordinators visibility into who's cooperating. Note that the TOS requires a landlord to always use the algorithm's pricing decision, including leaving units empty, and requires reporting back on every lease transaction so the company can measure compliance. This really is collusion as a service.
    - mlrtime 3y ago
      I agree, but one missing component is how many housing units are represented by this software in a given market. If everything here is true [price fixing] but the number of units is small 20%, it still won't work. Consumers will go to the 80% where the actual market lives. Now maybe someone better at economics can tell me how many units does it take to shift the market? 50%?

by jkic47 3y ago

dkjaudyeqooe 3y ago

> ate you sure it is that? after all, we all independently use the Kelley Blue book value of a car before we sell. That book doesn't price individual cars, only types and the price of the actual car is open to interpretation and usually negotiation.

slrainka 3y ago
The key distinction lies in how YieldStar approaches setting rental prices compared to other systems. YieldStar not only recommends rental prices by analyzing the entire inventory it oversees but also incorporates a strategy that effectively eliminates the possibility of rent negotiation with potential tenants. This approach mirrors the dynamics of the prisoner’s dilemma, a situation in game theory where individuals may not cooperate, even if it’s in their best interest to do so. However, YieldStar transcends the Nash equilibrium—the point at which no participant can benefit by changing strategies if the others remain unchanged—by stripping tenants of any bargaining power. This ensures that the rent pricing strategy is firmly controlled, without the usual back-and-forth negotiation process.
- dkjaudyeqooe 3y ago
  The only way you can productively refuse negotiation is by knowing the price is fixed (or you have the only supply), otherwise others will take your business.
  - jprete 3y ago
    If it's widely believed that other landlords use the same pricing system as you, then that's exactly how landlords can refuse to negotiate.
- samatman 3y ago
  This is a strange claim. How is it that software can eliminate the possibility of rent negotiation? A tenant can negotiate, or try to. How does software eliminate the possibility that this will succeed?
  - dkjaudyeqooe 3y ago
    Because the software has set the price and the landlords are using the software's price exclusively. That is why it's price fixing.
    - chii 3y ago
      to me, it's not enough to show that the same algorithm or software is deciding the price. It has to be that there's some threat of punishment from the cartel against those who would lower their price from the agreed one. For example, the explicit agreement by the landlord to keep the price at the algorithmicaly calculated one, even so far as to leave vacancy (where as there wouldn't have been a vacancy if the price was lowered).
      - radicality 3y ago
        There is. I forget the number, but the landlords are only allowed to disagree with the software (and give lower rent) only ~10% or so of the time. Otherwise they will be kicked off of the price fixing platform.
        samatman 3y ago
        Why isn't that clearly stated in the FTC brief? That's a hell of an absence of evidence, under the circumstances. If there's a smoking gun, why leave it out?
  - cogman10 3y ago
    It's the scope and breadth of deployment and the algorithm/business pressures. > 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. This is the key to why it's price fixing. Everyone playing ball and means that the raising rent rates increases everyone's take home even if a few operate with lower occupancy. The software calculates rent rates that make sure occupancy isn't too low to keep everyone in line. It removes bargaining with the promise that "if you play ball, you'll be rich". Tenants can negotiate prices just like you can theoretically haggle with amazon.

vineyardmike 3y ago

What’s missing here is that landlords agree to use the algorithm or leave the unit empty. It’s part of the TOS. So when many marker participants do this, it’s colluding.

AnthonyMouse 3y ago
Wow, that's brazen if true. I don't know why anybody is even talking about algorithms. That's a contract to fix prices. It also implies that all of the landlords using it are idiots. Not only is price fixing illegal, joining the cartel is optional and costs you money for no personal advantage because you'd have to leave your units vacant instead of immediately renting them out at the higher price induced by the "selfless" idiots in the cartel.
- jprete 3y ago
  If holding back 20% of the units in every building drives up prices by 30% - this is completely possible in something like real estate where supply is so inflexible - then each individual landlord might have a motivation to defect, but the group as a whole has a reason to cooperate. The purpose of the software is to give the coordinators visibility into who's cooperating. Note that the TOS requires a landlord to always use the algorithm's pricing decision, including leaving units empty, and requires reporting back on every lease transaction so the company can measure compliance. This really is collusion as a service.
  - mlrtime 3y ago
    I agree, but one missing component is how many housing units are represented by this software in a given market. If everything here is true [price fixing] but the number of units is small 20%, it still won't work. Consumers will go to the 80% where the actual market lives. Now maybe someone better at economics can tell me how many units does it take to shift the market? 50%?