Artificial intelligence, algorithmic pricing, and collusion

Feb 6, 2019

A worker prepares prepares a network server of a stand for the upcoming CeBIT fair inside a hall in Hanover February 27, 2009. The world's biggest IT fair CeBIT with 4300 exhibitors from 69 countries opens its doors to the public on March 3, and runs through March 8, 2009. REUTERS/Hannibal Hanschke (GERMANY) - BM2E52R14YB01

Image: REUTERS/Hannibal Hanschke

Sergio Pastorello

Professor of Econometrics,, University of Bologna

Vincenzo Denicolò

Professor of Economics, , University of Bologna and University of Leicester (currently on leave); Research Fellow, CEPR

Emilio Calvano

Assistant Professor of Economics, , University of Bologna and Associate Faculty, Toulouse School of Economics.

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Note: The blue and red lines show the price dynamic over time of two autonomous pricing algorithms (agents) when the red algorithm deviates from the collusive price in the first period.

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