Strategic choice of price-setting algorithms

Schwalbe, Ulrich; Muijs, Matthias; Grüb, Jens; Buchali, Katrin

Strategic choice of price-setting algorithms

dc.contributor.author	Schwalbe, Ulrich	de
dc.contributor.author	Muijs, Matthias	de
dc.contributor.author	Grüb, Jens	de
dc.contributor.author	Buchali, Katrin	de
dc.date.accessioned	2024-04-08T09:03:34Z
dc.date.available	2024-04-08T09:03:34Z
dc.date.created	2023-02-06
dc.date.issued	2023
dc.description.abstract	Recent experimental simulations have shown that autonomous pricing algorithms are able to learn collusive behavior and thus charge supra-competitive prices without being explicitly programmed to do so. These simulations assume, however, that both firms employ the identical price-setting algorithm based on Q-learning. Thus, the question arises whether the underlying assumption that both firms employ a Q-learning algorithm can be supported as an equilibrium in a game where firms can chose between different pricing rules. Our simulations show that when both firms use a learning algorithm, the outcome is not an equilibrium when alternative price setting rules are available. In fact, simpler price setting rules as for example meeting competition clauses yield higher payoffs compared to Q-learning algorithms.	en
dc.identifier.swb	1833308824
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/6807
dc.identifier.urn	urn:nbn:de:bsz:100-opus-21276
dc.language.iso	eng
dc.relation.ispartofseries	Hohenheim discussion papers in business, economics and social sciences; 2023,01
dc.rights.license	publ-mit-pod	en
dc.rights.license	publ-mit-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subject	Pricing algorithm	en
dc.subject	Algorithmic collusion	en
dc.subject	Reinforcement learning	en
dc.subject.ddc	330
dc.subject.gnd	Algorithmus	de
dc.subject.gnd	Preisbildung	de
dc.title	Strategic choice of price-setting algorithms	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.export.bibtex	@techreport{Schwalbe2023, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6807}, author = {Schwalbe, Ulrich and Muijs, Matthias and Grüb, Jens et al.}, title = {Strategic choice of price-setting algorithms}, year = {2023}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }
local.export.bibtexAuthor	Schwalbe, Ulrich and Muijs, Matthias and Grüb, Jens et al.
local.export.bibtexKey	Schwalbe2023
local.export.bibtexType	@techreport
local.faculty.number	3	de
local.institute.number	520	de
local.opus.number	2127
local.series.issueNumber	2023,01
local.series.title	Hohenheim discussion papers in business, economics and social sciences
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Business, Economics and Social Sciences	en
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institute for Economics	en
local.university.institute	Institut für Volkswirtschaftslehre	de

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