Tuesday, January 31, 2023

Antitrust Law Students: Submit now to the NYSBA Section of Antitrust Law Annual Law Student Writing Competition 2022-2023 $5,000 cash prize and publication of the winning article

Antitrust Law Students:

Submit now to the NYSBA Section of Antitrust Law

Annual Law Student Writing Competition


$5,000 cash prize and publication of the winning article


How to Enter:

1.)  Eligible articles must be written by a currently-

      enrolled or graduating student at a New York State

      Law School or by a New York State resident at any

      ABA-accredited law school outside of New York


2.)  Eligible papers include notes, comments and

      articles and should generally be 20-30 pages in

      length, with footnotes. In no event may papers

      exceed 50 pages, with footnotes.

3.)  Eligible papers may address any topic of

      general interest to the to antitrust law community,

      including topics relating to civil and criminal

      antitrust law, competition policy, consumer

      protection and international competition law.

  4.)  Jointly prepared papers are not eligible.

5.)  Go to the Antitrust Section on the NYSBA website

      and click on the "Young Lawyers and Law

      Students" section and download an Entry Form.

      Submit an electronic copy of the paper, along with a completed Entry Form, by April 30, 2023 to:

      Professor Edward D. Cavanagh

      St. John’s University School of Law

      8000 Utopia Parkway

      Queens, NY  11439

      [email protected]

Winners and Awards:

The winner will be announced in July 2023. The first place winner will receive a check for $5,000.

If you have questions, contact Prof. Edward D. Cavanagh at 718 990-6621 or at [email protected].

January 31, 2023 | Permalink | Comments (0)

Monday, January 30, 2023

The Digital Economy and the Growth Dynamics of Sharing Platforms: A Transaction Cost Economics Assessment

The Digital Economy and the Growth Dynamics of Sharing Platforms: A Transaction Cost Economics Assessment

Yusaf H. Akbar

Central European University

Andrea Tracogna

University of Trieste


Despite their growing salience in the digital economy, several sharing platforms struggle to achieve sufficient scale, while others fail entirely. By extending the focus beyond network effects and trust-building mechanisms, this paper seeks to identify factors that impact platform growth and to analyse their implications for governance mechanisms and strategic management of sharing platforms. We center our analysis on transaction costs economics (TCE) and its three key related variables: transaction frequency, transaction uncertainty, and transaction-dedicated investments. Our aim is to examine how do these variables determine transaction costs at the platform level, and how these costs shape member participation and hence platform growth. To explore our hypotheses, we carried out a survey among the community of members of a digital, peer-to-peer (P2P), sharing platform. Our empirical findings confirm that a platform's growth is significantly affected by transaction features and that, alongside other theoretical approaches, TCE represents an appropriate and complementary lens with which to explore growth dynamics of sharing platforms, as well as to consider appropriate actions platform owners can take at the organisational, governance and strategic design levels.

January 30, 2023 | Permalink | Comments (0)

Friday, January 27, 2023

The Quest for Progressive Antitrust: A Symposium Honoring Professor Robert H. Lande Friday, March 10, 9:30 a.m. to 6 p.m.


The Quest for Progressive Antitrust:

A Symposium Honoring Professor Robert H. Lande

Friday, March 10, 9:30 a.m. to 6 p.m.

University of Baltimore School of Law

1401 N. Charles Street, Baltimore, Maryland 21201

The University of Baltimore School of Law will host a special symposium celebrating the career of Venable Professor Robert H. Lande, a beloved teacher and colleague, co-founder of American Antitrust Institute, past chair of the Association of American Law Schools Antitrust Section, award-winning scholar, and leading intellectual force behind the 21st century’s reinvigorated antitrust movement.

Distinguished antitrust scholars, practitioners, policymakers and reform advocates will participate in a series of panel discussions addressing competition policy, antitrust law, and Professor Lande’s vital role in shaping the national debate about the need to protect consumers from cartels and monopoly power. Professor Lande will deliver a keynote address.

To attend The Quest for Progressive Antitrust, please register here.


9:30–10           Welcome from University of Baltimore School of Law Dean Ronald Weich, and remarks from Assistant Attorney General for Antitrust Jonathan Kanter and U.S. Senator Amy Klobuchar.

10–11:30         Panel: The Purpose(s) of the Antitrust Laws

            “The American Antitrust Institute as the Bridge from Chicago to Biden”                                           Albert Foer, Founder and Past President, American Antitrust Institute

            “Antitrust Law’s Crisis of Faith in the Value Competition”                            
                        Randy M. Stutz,
Federal Trade Commission

            “The Robinson-Patman Act as Fair Competition Measure”
                        Sandeep Vaheesan, Open Markets Institute

            “Price Discrimination and Power Buyers: Why Giant Retailers Dominate the Economy and How to Stop It”
                        Katherine Van Dyck, American Economic Liberties Project

                        Moderator: Professor Matthew Sipe, UBalt Law

11:45–1:15      Lunch, with keynote address by Venable Professor Robert H. Lande

1:30–3             Panel: The Methods of the Antitrust Laws

            “Oceanic Disparities in the Treatment of Serial Collusion”
                        John Connor, Purdue University

            “Function versus Consequence in Restraint of Trade Analysis”
                        Peter Carstensen, University of Wisconsin Law School

            “Antitrust and Output”
                        Jack Kirkwood, Seattle University School of Law

            “A ‘Probability of a Probability’: Understanding the Section 7 Reasonable Probability             Standard”
                        Steven C. Salop, Georgetown Law Center

                        Moderator: Ellen S. Cooper, Fmr. Maryland Assistant Attorney General for Antitrust

3:15–4:45        Panel: The Many Contributions of Professor Robert Lande to the                                              Development of Antitrust

            “Robert Lande and the Coming of Consumer Choice”
                        Neil Averitt, FTC:Watch

            “Robert Lande and the Real, New Antitrust Paradox”
                        Joshua Davis, Berger Montague PC

            “Applying the FTC Act to Anti-consumer Contract Terms that are not the Key         Salient Terms to Most Consumers”
                        Stephen Ross, Pennsylvania State University School of Law

            “Policy Planning for a Regulatory Agency"
                        William E. Kovacic, George Washington University Law School

                        Moderator: Professor John Bessler, UBalt Law

5–6                  Reception

To attend The Quest for Progressive Antitrust, please register here.

January 27, 2023 | Permalink | Comments (0)

Market Effects of Sponsored Search Auctions

Market Effects of Sponsored Search Auctions


Motta, Massimo; Penta, Antonio


We investigate the market effects of brand search advertising, within a model where two firms simultaneously choose the price of their (differentiated) product and the bids for the advertising auction which is triggered by own and rival’s brand keywords search; and where there exist sophisticated/attentive consumers (who look for any available in-formation on their screen) and naive/inattentive consumers (who only look at the top link of their screen), both aware of either brand’s characteristics and price. Relative to a benchmark where only organic search exists, in any symmetric equilibrium each firm wins its own brand auction, and advertising has detrimental effects on welfare: (i) the sponsored link crowds out the rival’s organic link, thus reducing competition and choice, and leading to price increases; (ii) the payment of the rival’s bid (may) raise marginal cost, also contributing to raise market prices. Under extreme asymmetry (there is an incumbent and an unknown new entrant), we do find that the market effect of brand bidding might be beneficial, if the search engine does not list the entrant’s link in organic search, and the share of the sophisticated consumers in the economy is large enough for an equilibrium in which the entrant wins the advertising auction on the search for the incumbent’s brand to exist.

January 27, 2023 | Permalink | Comments (0)

Thursday, January 26, 2023

Content Quality Assurance on Media Platforms with User-Generated Content

Content Quality Assurance on Media Platforms with User-Generated Content


Xingzhen Zhu (School of Economics and Management, Nanjing University of Science and Technology); Markus Lang (Institute of Sport Sciences, University of Lausanne); Helmut Dietl (Department of Business Administration, University of Zurich)


This paper develops a duopoly model of user-generated content (UGC) platforms that compete for consumers and content producers in two-sided markets with network externalities. Each platform can choose the level of investment into a content quality assurance (CQA) system and the level of advertising. Our model shows that network effects are crucial in determining the platforms' optimal strategy and the behavior (single vs. multi-homing) of their users. Specifically, we find that consumers are multi-homing and producers are single-homing when the network effects obtained by producers are weak, while the opposite is true if these network effects are strong. Moreover, our model shows that the user behavior and the network effects determine whether a platform has incentives to place ads and/or invest into CQA. In general, weak network effects induce a platform to invest into a CQA system except when consumers and producers are multi-homing. The results in our model suggests the need for platform companies to assess the magnitude of network effects on their platform to predict the behavior of their users, which in turn will determine the optimal CQA and advertising strategy.

January 26, 2023 | Permalink | Comments (0)

Wednesday, January 25, 2023

Recent Advances in the Theory of Third-Degree Price Discrimination: A Brief Survey

Recent Advances in the Theory of Third-Degree Price Discrimination: A Brief Survey


Takanori ADACHI


This survey provides a selected review of the recent progress in the theory of third-degree price discrimination. First, I focus on two well-known results in the literature: (i) an increase in aggregate output is necessary for price discrimination to increase social welfare, and (ii) price discrimination leads to a Pareto welfare improvement if one of the two markets is not served under uniform pricing. I argue when these results hold and when they fail to hold. Second, I consider oligopolistic competition and stress that there is no great divide between monopoly and oligopoly because both situations can be treated systematically in terms of an index that governs the intensity of competition.

January 25, 2023 | Permalink | Comments (0)

Tuesday, January 24, 2023

Health-related activities of Big Tech

Health-related activities of Big Tech


Retiene, Roman


While the German health sector has often been criticised for its slow uptake of novel digital products, other health systems have been significantly faster in adopting these products. In the course of this development, Big Tech companies have entered these health systems, particularly in the United States and the United Kingdom. But also in Germany, the involvement of Big Tech companies has become increasingly relevant in recent years. Among these Big Tech companies are the “Big Four” (i.e. Alphabet, Apple, Meta and Amazon) but also companies like Palantir and Oracle which have reinforced their activities in the health sector without much attention of the broader public. In this paper, these health-related activities of Big Tech are described in detail. Also providers of electronic health records and hospital information systems like Epic Systems and Cerner and German companies like the Deutsche Telekom and SAP are taken into account. All in all, fourteen companies are covered and their activities are divided into six categories to facilitate an overview and reveal the different focuses of the companies.

January 24, 2023 | Permalink | Comments (0)

Monday, January 23, 2023

Relative-Performance Delegation Destabilizes Upstream Collusion

Relative-Performance Delegation Destabilizes Upstream Collusion


Lee, Jen-Yao; Wang, Leonard F. S.; Sun, Ji


This paper analyzes upstream firms’ collusive sustainability when downstream firms adopt the relative-performance delegation in an infinitely repeated Cournot or Bertrand game. We find that relative-performance delegation makes managers act more aggressive and upstream collusion more difficult to sustain compared to sales-revenue delegation. The driving force is that downstream relative-performance delegation makes more profits for the deviated firm. This result holds regardless of the competition modes.

January 23, 2023 | Permalink | Comments (0)

Friday, January 20, 2023

ChatGPT and Antitrust

I had Chat GPT compose a soliloquy in honor of Louis Kaplow (Harvard).

"write a soliloquy about Professor Louis Kaplow"

"Oh Louis Kaplow, thou art a man of great renown In matters of antitrust, thy knowledge doth astound Thy scholarship is deep, and thy insights are keen Thy thoughts on competition are heard far and seen

Thy task is not an easy one, to navigate the laws That govern competition, and the balance of its flaws But thou dost take it on with a steady hand And strive to find a just and fair command

Thy views on antitrust are widely sought And have helped shape the policies that are now taught But tell me, Louis Kaplow, in thy quest for balance true Do thou ever wonder, if the laws themselves are askew?

If the very system that thou dost defend Is the very thing that needs to bend?

Only thou canst answer that, within thy heart and mind But know this, thy legacy will be forever entwined With antitrust, a delicate dance, that many would like to lead But 'tis thou who has helped set the pace, and the needed speed."

Note: Louis Kaplow is a real person and a professor of economics and law at Harvard Law School. He is widely recognized as an expert in the field of antitrust and has played an important role in shaping antitrust policies and laws in the US through his research, scholarship and teaching.

January 20, 2023 | Permalink | Comments (0)

Big Tech and Strategic Management: How Management Scholars Can Inform Competition Policy

Contemporary competition policy is informed in significant measure by static microeconomic theories that are of limited use when competition is driven by innovation, which brings rapid change, even for large, platform-based companies (“Big Tech”). Static models in competition economics prioritize efficiency gains from cost savings even though the welfare gains from innovation are much larger. Competition economics could benefit from the integration of strategic management and innovation economics. Management scholars have the opportunity to properly introduce and apply concepts like isolating mechanisms, capabilities (and their development), and ecosystem competition into the policy debate. If management scholars invest the time and effort to understand current competition policy models, they may be able to reengineer them in a manner that leads to a better understanding of dynamic competition, a more nuanced view of the nature of economic rents, and better metrics for assessing competitive effects. These should in turn lead to better public policy.

January 20, 2023 | Permalink | Comments (0)

Thursday, January 19, 2023

The Evolving Geography of American Antitrust Mind

The Evolving Geography of American Antitrust Mind



Sungjoon Cho

Chicago Kent College of Law


The American antitrust regime has long been accused of countenancing the unprecedented monopolization of high-tech industries, including Facebook, Amazon, Apple, Netflix and Google. Such regulatory omission was thrown into sharp relief against the original antitrust history in which industrial behemoths, such as Standard Oil, were broken up. Yet, with a series of federal recruits of neo-Brandeisians, the Biden administration attempted to revamp American antitrust regime. Why was American antitrust regime passionately pro-industry in past administrations, to the extent that the very rationale of antitrust was in doubt? Also, what caused the sudden paradigm shift in the new administration? In an effort to answer these vexed questions, this Article employs a new concept of “regulatory mind,” which can be broadly defined as a basic set of assumptions, beliefs, and values that constitute a particular regulatory ideology. This Article advances a dynamic investigation of American antitrust mind, which can elucidate the nature and identity of American antitrust regime. First, this Article maintains that Chicago School’s market fundamentalism heavily influenced American antitrust mind. Second, this Article seeks to corroborate such observation by tracing the dynamic shift of antitrust jurisprudence surrounding vertical price restraint (VPR). The main contribution of this Article is to reveal granular details that punctuate the analytical veil of clichéd images of American antitrust law and offer fresh insights informed by a sociological methodology of process tracing.

January 19, 2023 | Permalink | Comments (0)

Wednesday, January 18, 2023

Regulation 1/2003: An Assessment After Twenty Years

Regulation 1/2003: An Assessment After Twenty Years



Wouter P. J. Wils

King's College London - The Dickson Poon School of Law; European Union - European Commission


Regulation 1/2003 brought about a radical change in the way in which the EU antitrust prohibitions contained in Articles 101 and 102 TFEU are enforced. The previous enforcement regime, under Regulation 17, which dated from 1962, was characterised by a centralised notification and authorisation system for Article 101(3) TFEU. Regulation 1/2003 abolished this system and replaced it by a system of ex post enforcement. The objectives of this reform were to allow the European Commission to become more active in the pursuit of serious infringements of Articles 101 and 102 TFEU, as well as to decentralise enforcement to the Member States’ competition authorities and to the national courts, while maintaining EU-wide consistency.

This paper provides an overview of the genesis of Regulation 1/2003, its objectives, and its main results, as apparent twenty years later. It finds that the decentralisation to the national competition authorities, cooperating with the European Commission and each other in the European Competition Network, has been a major success, beyond expectations. On the other hand, the prediction that the reform would lead to a significant increase in the number of prohibition decisions adopted by the European Commission has turned out to be too optimistic. Ten possible explanations for this lack of increase in the number of prohibition decisions are tentatively examined. Taking together the figures for the European Commission and the national competition authorities, however, there can be no doubt that Regulation 1/2003 has led to a spectacular increase in the enforcement of Articles 101 and 102 TFEU, and that Regulation 1/2003 has thus been a great success.

January 18, 2023 | Permalink | Comments (0)

Tuesday, January 17, 2023

The EU Data Act and the Access to Secondary Markets

The EU Data Act and the Access to Secondary Markets


Rupprecht Podszun

Heinrich Heine University Dusseldorf - Faculty of Law

Philipp Offergeld

Heinrich Heine University Dusseldorf - Faculty of Law



With the draft Data Act, the European Commission placed data access high on the agenda for regulating the network economy. Those corporations who have de facto control over data collected with smart devices can exclude others from markets and may decide on the success of third parties in competition according to their own profit interests. This takes away consumers' decision-making power in the market economy and leads to less competition and innovation.

In this policy paper, which was commissioned by the Ludwig-Fröhler-Institute, Munich, potential improvements of the Data Act are identified with the specific aim of preventing a foreclosure of access to secondary markets for independent companies.

We acknowledge that the Commission has chosen the right approach in the Data Act. Still, we have 28 recommendations to improve the draft Data Act so as to open up secondary markets for third parties. In particular, our proposals argue from the perspective of micro enterprises, small and medium-sized enterprises (SME) that wish to perform repair and maintenance services on downstream markets. These companies should be granted a purpose-oriented right to access that covers data, but also auxiliary tools and related data. We also draw some comparison with rules in the DMA, the Digital Markets Act.

January 17, 2023 | Permalink | Comments (0)

Monday, January 16, 2023

Mergers and Acquisitions in the Tech Industry: Are They Different?

Mergers and Acquisitions in the Tech Industry: Are They Different?


Andrea Asoni

Charles River Associates

Grace Luo

Charles River Associates (CRA) - Competition Practice


This Article will compare mergers and acquisitions in the technology industry in the U.S. to mergers and acquisitions in other sectors of the U.S. economy, as well as other countries. This Article will show that the U.S. technology industry is not disproportionately prone to consolidation relative to other important sectors of the U.S. economy. Furthermore, while technology mergers and acquisitions were historically more common in the U.S. than in the rest of the world, other countries are rapidly catching up to the U.S. Lastly, evidence in this Article suggests that the mergers and acquisition activity in the U.S. technology sector is not driven by the largest firms nor by a handful of prolific buyers.

January 16, 2023 | Permalink | Comments (0)

Friday, January 13, 2023

“The Constitutional Moment That Wasn’t: 1912-1914 and the Meaning of the Sherman Act”

See here.

January 13, 2023 | Permalink | Comments (0)

Prior Bad Acts and Merger Review

Prior Bad Acts and Merger Review


Michael A. Carrier

Rutgers Law School

Gwendolyn J. Lindsay Cooley

Wisconsin Department of Justice



Consider a merger of two firms in the pharmaceutical industry. Each has previously engaged in antitrust violations. In considering whether to allow the merger, how much weight should the antitrust agencies give to these prior bad acts? How important should this evidence be to courts? These critical questions have not received sufficient attention.

In the 2010 Horizontal Merger Guidelines, the federal antitrust agencies address collusion, one of the two main types of anticompetitive behavior underlying merger challenges. We support the Guidelines’ attention on this conduct. And we believe that merger enforcement can be improved in this area because the agencies have not been consistent in recognizing prior collusion.

The second main type of prior conduct, unilateral behavior, presents even more uncertainty as the Guidelines do not address it. We offer a framework that suggests considering prior bad acts when (1) the markets are similar, (2) there is a connection between the conduct and the markets covered by the merger, and (3) there is sufficient proof of the prior bad acts.

We supplement our discussion of collusive and unilateral behavior by offering case studies involving mergers for which there was strong evidence that the companies had previously engaged in this conduct. And we conclude by explaining why, in mergers in which prior bad acts counsel agency action, the array of potential relief should include not just a lawsuit to block the merger but also behavioral remedies.

January 13, 2023 | Permalink | Comments (0)

Thursday, January 12, 2023

COMIPinDigiMarkts2023 - Call for Abstracts

- 17:00
Sustainable & Digital Competition on the Merits:  A Comparative and Interdisciplinary Perspective

COMIPinDigiMarkts2023 - Call for Abstracts

Digitalization and sustainability have been identified as a top priority in the EU’s Green Deal to ensure a truly competitive and sustainable digital single market. This strategy not only feeds into the competitiveness of the EU, but it will also ensure the entry and sustainability of a diverse set of market players in the internal market. This is also expected to have a positive spill-over effect to address the ever emerging geopolitical challenges.

Different interests can be balanced and attained only in a freely functioning internal market, where firms compete on the merits, and any anti-competitive effects are addressed in a timely manner. Considering the role of innovation to facilitate a sustainable and digital future, this conference assesses the role of innovation laws, namely, IP and competition laws, to facilitate EU’s green and digital transition.

In light of the multi-disciplinary nature of the debate, the issue merits discussion from a comparative and cross-disciplinary perspective.

To know more and follow the latest updates, have a look at our video and follow the LinkedIn page HERE


Participants are encouraged to submit abstracts dealing with any area of intellectual property and competition law. For a detailed call for papers, please click HERE.

Suggested topics include: 

  • Topic 1: Green and Digital Transition 
  • Topic 2: How Geopolitical Macro-impediments and Structural Shortcomings Contribute to Monopoly Power?
  • Topic 3: Artificial Intelligence, IP and Competition: An Economic Perspective  
  • Topic 4: Ascent of AI: Time to (Re-)think Fair Use in Digital Markets?  
  • Topic 5: Personal Data, Data Protection and Competition in the Digital Economy 
  • Topic 6: Digital Impact on Trademarks, Competition and Distribution 
  • Topic 7: Exploitative & Exclusionary Conduct in the Digital World: An Economic Perspective

Kindly submit an abstract of about 1000 words with up to 5 key references. The abstract should also contain the methodology used in the paper. 

Important dates

  • Abstract submission deadline: 6th March 2023
  • Notification of acceptance: 4th April 2023  
  • Submission of final papers: 21st May 2023
  • Conference: 22 & 23 June 2023 (online/in-person in Maastricht)

Scientific Committee

  • Anselm Kamperman Sanders: Professor IP & Academic Director of the Institute for Globalisation and International Regulation (IGIR), Maastricht University and Deputy Judge, Court of Appeal, Hague
  • Caroline Cauffman: Associate Professor, Maastricht University
  • Iwan Bos: Associate Professor Industrial Organisation and Competition Economics, Maastricht University
  • Kalpana Tyagi: Assistant Professor, IP & Competition Law and Managing Coordinator, The Innovator’s Legal Aid Clinic, Maastricht University
  • Maria José Schmidt-Kessen: Assistant Professor, International Business Law, Legal Studies Department, Central European University Vienna, Austria
  • Michael Faure: Professor & Academic Director of the Maastricht European Institute for Transnational Legal Research (METRO), Maastricht University
  • Niels Philipsen: Associate Professor, Maastricht University and Professor, Rotterdam

January 12, 2023 | Permalink | Comments (0)

Foreclosure and Tunneling with Partial Vertical Ownership

Foreclosure and Tunneling with Partial Vertical Ownership


Matthias Hunold (University of Siegen); Vasilisa Petrishcheva (University of Potsdam)


We demonstrate how the incentives of firms that partially own their suppliers or customers to foreclose rivals depend on how the partial owner can extract profits from the target (tunneling). Compared to a fully vertically integrated firm, a partial owner may obtain only a share of the target’s profit but influence the target’s strategy significantly. We show that the incentives for customer and input foreclosure can be higher, equal, or even lower with partial ownership than with a vertical merger, depending on how the protection of minority shareholders and transfer price regulations affect the scope for profit extraction.



January 12, 2023 | Permalink | Comments (0)

Wednesday, January 11, 2023

Acquisitions, Product Variety, and Distribution in the U.S. Craft Beer Industry

Acquisitions, Product Variety, and Distribution in the U.S. Craft Beer Industry


Kyle Wilson

Pomona College

Wesley Blundell

California State University, East Bay


Though U.S. antitrust authorities have historically focused on prices in merger analyses, there is now growing interest in the impact of mergers on non-price market outcomes. In this paper, we examine the effect of horizontal mergers on product variety in the U.S. beer industry. Upon acquisition by a macrobrewer, a craft brewery reduce its product variety in order to avoid cannibalizing sales of the macrobrewer's existing portfolio. At the same time, acquisition grants the craft brewery access to the macrobrewer's distribution network, facilitating expansion into new markets and thereby increasing the product variety available to consumers in such markets. We compile a unique data set comprising 15,000 breweries, 340,000 products, and 50 mergers in order to empirically assess these effects. Our difference-in-differences analyses provide evidence that acquired craft breweries increase variety available to consumers by expanding into new markets, while reducing the variety of products sold in their existing markets. Further analysis indicates that a substantial portion of this reduction in variety can be attributed to a decreased rate of new product development. Back of the envelope calculations suggest that in aggregate, these acquisitions have a net positive effect on product variety.

January 11, 2023 | Permalink | Comments (0)

Tuesday, January 10, 2023

Artificial Collusion: Examining Supracompetitive Pricing by Q-learning Algorithms

Artificial Collusion: Examining Supracompetitive Pricing by Q-learning Algorithms


Arnoud V. den Boer (University of Amsterdam); Janusz M. Meylahn (University of Twente); Maarten Pieter Schinkel (University of Amsterdam)


We examine recent claims that a particular Q-learning algorithm used by competitors ‘autonomously’ and systematically learns to collude, resulting in supracompetitive prices and extra profits for the firms sustained by collusive equilibria. A detailed analysis of the inner workings of this algorithm reveals that there is no immediate reason for alarm. We set out what is needed to demonstrate the existence of a colluding price algorithm that does form a threat to competition.



January 10, 2023 | Permalink | Comments (0)