Waubonsee Community College

Virtual competition, the promise and perils of the algorithm-driven economy, Ariel Ezrachi, Maurice E. Stucke

eng

Includes bibliographical references and index

illustrations

index present

non fiction

Virtual competition

bibliography

946907251

Ariel Ezrachi, Maurice E. Stucke

the promise and perils of the algorithm-driven economy

While consumers reap many benefits from online purchasing, the sophisticated algorithms and data crunching that make browsing so convenient are also changing the nature of market competition, and not always for the better. Computers colluding is one danger. Although longstanding laws prevent companies from fixing prices, data-driven algorithms can now quickly monitor competitors' prices and adjust their own prices accordingly. So what is seemingly beneficial--increased price transparency--ironically can end up harming consumers. A second danger is behavioral discrimination. Here, companies track and profile consumers to get them to buy goods at the highest price they are willing to pay. The rise of superplatforms and their "frenemy" relationship with independent app developers raises a third danger. By controlling key platforms (such as the operating system of smart phones), data-driven monopolies dictate the flow of personal data and determine who gets to exploit potential buyers. The book raises timely questions. To what extent does the "invisible hand" still hold sway? In markets continually manipulated by bots and algorithms, is competitive pricing an illusion? Can our current laws protect consumers? The changing market reality is already shifting power into the hands of the few. Ezrachi and Stucke explore the resulting risks to competition, our democratic ideals, and our economic and overall well-being.--, Provided by publisher

Part I. Setting the scene: The promise of a better competitive environment -- New economic reality: the rise of big data and big analytics -- Light touch antitrust -- Looking beyond the facade of competition -- Part II. The collusion scenarios: The messenger scenario -- Hub and spoke -- Tacit collusion on steroids: the predictable agent -- Artificial intelligence -- Part III. Behavioral discrimination: Price discrimination (briefly) explained -- The age of perfect price discrimination? -- The rise of "almost perfect" behavioral discrimination -- Behavioral discrimination: economic and social perspectives -- The comparison intermediaries -- Part IV. Frenemies: The dynamic interplay among Frenemies -- Extraction and capture -- "Why invite an arsonist to your home?": understanding the Frenemy mentality -- The future of Frenemy: the rise of personal assistants -- Part V. Intervention: To regulate or not to regulate -- The enforcement toolbox