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I think the most interesting part of this article is that this "collusion" is enabled via 3rd party data provider. This is a massive issue, that enables this so
by fcantournet 2y ago
I think the most interesting part of this article is that this "collusion" is enabled via 3rd party data provider. This is a massive issue, that enables this sort of "uncoordinated" price fixing exercises, via 3rd parties, similar to what happening on the rental market in the U.S.
I'm very surprised that there is not more work in Econ literature studying this. This is essentially breaking the efficient market hypothesis at scale, and is generalizable to every industry.
- realusername 2y agoPrice fixing by algorithm is still price fixing. Especially here that it's painfully obvious, there's not enough actors to justify this third party anyways.
- fcantournet 2y agoYes, the point I'm trying to make is that via 3rd party aggregator you can have massive price-fixing collusion without coordination, even with many actors (as long as those actors have converging interests)
- realusername 2y agoThat can be possible in theory yeah but in order for these aggregators to work well, the participants usually also send their own data and this makes it clear price fixing. If you send your own prices and then you get other prices back in return, it's 100% price fixing without any doubt. That what's making it different from a market study.
- maxwellg 2y agoTons of companies use shared 3rd party data providers like Pave to set comp bands for employees too. Your compensation is very likely determined algorithmically as well. I know mine is. I wonder how long it will last.
- knallfrosch 2y agoWhat's the reason given for using PotatoTrac anyway? Telling your competition how your own business works sounds like a bad idea.