
Pricing algorithms can learn to collude with each other to raise prices - Vaslo
https://www.technologyreview.com/the-download/612947/pricing-algorithms-can-learn-to-collude-with-each-other-to-raise-prices/
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victorNicollet
This result is not surprising. Having a rule that sets your prices, with your
competitors' prices as the only variable input, creates a dynamic system that
can easily converge on supracompetitive prices with the right parameters, and
you are likely to change parameters when they result in a price collapse in
the first few days of operation, overfitting your way into mutual agreement.

I would be interested to see if a pricing system that tries to estimate
elasticity and seasonal demand (and product lifecycle), in effect using
customer behaviour as an input, can also converge in this way in a reasonably
short time.

