Algorithmic Collusion, Genuine and Spurious
9 Pages Posted: 22 Sep 2021
Date Written: July 2021
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.
Keywords: artificial intelligence, Collusion, exploration, Reinforcement Learning
JEL Classification: D43, D83, L13, L41
Suggested Citation: Suggested Citation
Calvano, Emilio and Calzolari, Giacomo and Denicolò, Vincenzo and Pastorello, Sergio, Algorithmic Collusion, Genuine and Spurious (July 2021). CEPR Discussion Paper No. DP16393, Available at SSRN: https://ssrn.com/abstract=3928672
Vincenzo Denicolò
University of Leicester
University Road
Leicester, LE1 7RH
United Kingdom
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