Competition in Pricing Algorithms†

• 成果类型: Article
• 署名作者: Brown, Zach Y.; Mackay, Alexander
• 署名单位: University of Michigan System; University of Michigan; National Bureau of Economic Research; Harvard University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20210158
• 发表日期: 2023
• 页码: 109-156
• 关键词: dynamic oligopoly; equilibrium; MARKETS; prices; STABILITY; collusion; online; models; facts

摘要

We document new facts about pricing technology using high-frequency data, and we examine the implications for competition. Some online retailers employ technology that allows for more fre-quent price changes and automated responses to price changes by rivals. Motivated by these facts, we consider a model in which firms can differ in pricing frequency and choose pricing algorithms that are a function of rivals'prices. In competitive (Markov perfect) equi-librium, the introduction of simple pricing algorithms can increase price levels, generate price dispersion, and exacerbate the price effects of mergers. (JEL D21, D22, D43, G34, L13, L81)