A newer, faster way to create a cartel. (The Globe and Mail, four hours ago)

Algorithms are raising prices for everything. This must stop

Sometimes GasBuddy feels like a real friend. It’s a mobile app and website that tracks crowd-sourced prices of gas in Canada and the United States so you can quickly figure out where to find the cheapest gas in your neighbourhood. But imagine if gas stations are using GasBuddy to monitor each other in real time. Then it’s a collusion mechanism, not a consumer tool.

Which brings me to a concerning new phenomenon.

For long, we’ve had algorithmic pricing, which is a practice that automatically sets the price of an item for sale in a manner that maximizes profits. It is also sometimes referred to as “dynamic” pricing, and basically speaks to the near-constant microcalibration of prices that we see online, usually based on demand.

Now the use of algorithms is being taken up a notch. In contrast to what we’re used to seeing, algorithmic collusion refers to a situation where competitors use algorithms in deeper and more expansive ways, such as constantly monitoring competitors’ prices and then adjusting their own.

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