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Algorithmic collusion, genuine and spurious

Author

Listed:
  • Calzolari, Giacomo
  • Calvano, Emilio
  • Denicolo, Vincenzo
  • Pastorello, Sergio

Abstract

We clarify the difference between the asynchronous pricing algorithms analyzed by Asker, Fershtman and Pakes (2021) and those considered in the previous literature. The difference lies in the way the algorithms explore: randomly or mechanically. We reaffirm that with random exploration, asynchronous pricing algorithms learn genuinely collusive strategies.

Suggested Citation

  • Calzolari, Giacomo & Calvano, Emilio & Denicolo, Vincenzo & Pastorello, Sergio, 2021. "Algorithmic collusion, genuine and spurious," CEPR Discussion Papers 16393, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16393
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    More about this item

    Keywords

    Artificial intelligence; Reinforcement learning; Collusion; Exploration;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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