Game Theory Explains How Algorithms Can Drive Up Prices

Algorithms may not meet in smoke-filled back rooms, but they’re increasingly shaping the prices we all pay—and sometimes in ways that look a lot like collusion. Researchers are finding that even ‘benign’ learning systems can nudge each other toward higher prices without ever exchanging a threat or agreement. That puts regulators in a bind: the old rules were built for human schemers, not code that discovers profitable behavior on its own. As scientists probe these dynamics, one thing is clear—fair pricing in the algorithmic age is getting much harder to guarantee.

Ben Brubaker

WIRED

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