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Pricing Algorithms and Collusive Signals: Economic and Competition Law
[Algorithmes de prix et signaux collusifs : approches économique et concurrentielle]

Author

Listed:
  • Frédéric Marty

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

  • Thierry Warin

    (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal, HEC Montréal - HEC Montréal)

Abstract

The pricing algorithms used by firms can underpin anticompetitive agreements, insofar as they can carry the operating rules of the cartel contract and ensure its monitoring. Economic literature has also shown that they can generate tacit collusive equilibria by themselves, guaranteeing a more rapid understanding of market functioning and the identification of a common interest. This article considers a third way in which algorithms can lead to the emergence of an anticompetitive equilibrium. They can be used to produce unilateral signals which, in an oligopolistic context, can facilitate the achievement of such an equilibrium. The aim is therefore to characterize, in the light of economic analysis and competitive decision-making practice, the way in which unilateral declarations or the creation of artificial transparency can be considered as facilitating practices that can be sanctioned, before considering the impact of algorithms, which can both exacerbate competitive risks and increase the detection capabilities of competition authorities.

Suggested Citation

  • Frédéric Marty & Thierry Warin, 2024. "Pricing Algorithms and Collusive Signals: Economic and Competition Law [Algorithmes de prix et signaux collusifs : approches économique et concurrentielle]," Post-Print halshs-04753720, HAL.
  • Handle: RePEc:hal:journl:halshs-04753720
    as

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