ON-TOPIC: ECONOMIC THEORY - PRICE DISCRIMINATION - ALGORITHMIC PRICING

Algorithmic pricing and competition

This On-Topic discusses the development of algorithmic pricing and the issues it raises for competition law enforcers. Algorithmic pricing may facilitate tacit or express collusion and even generate new forms of collusion against which traditional tools of competition law enforcement must be confronted. Likewise, pricing algorithms facilitate price personalization, hence discrimination among customers. While the economic effects of such a discrimination is ambiguous, it deserves an assessment in the light of the concepts of exclusionary or exploitative abuses. This On-Topic finally addresses the broader issue of behavioral discrimination implemented by super-platforms in view of increasing the likelihood of consumers opting for their offering.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. Algorithms at the service of pricing policy: New practices, new risks? Michaël Cousin Partner, Ashurst, Paris I. The key role of algorithms in pricing 1. Pricing is a complex exercise involving multiple parameters such as business costs, inventory levels, consumer perceived value and overall market conditions. Two elements are revolutionising this exercise: on the one hand, the progress of big data [1], which allows companies to collect and process an almost unlimited number of data in real time (consumer profile, competitors' prices, demand trends, etc.); on the other hand, the increasing use of algorithms [2] which allow, based on this data, to adjust

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Cédric Nouël de Buzonnière, Michaël Cousin, Ariel Ezrachi, Etienne Pfister, Olivier Sautel, Maurice Stucke, Algorithmic pricing and competition, November 2017, Concurrences N° 4-2017, Art. N° 84906, pp. 17-31

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