Discussion Paper Details

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Title: Algorithmic collusion, genuine and spurious

Author(s): Emilio Calvano, Giacomo Calzolari, Vincenzo DenicolÚ and Sergio Pastorello

Publication Date: July 2021

Keyword(s): artificial intelligence, Collusion, exploration and Reinforcement Learning

Programme Area(s): Industrial Organization

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.

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Bibliographic Reference

Calvano, E, Calzolari, G, DenicolÚ, V and Pastorello, S. 2021. 'Algorithmic collusion, genuine and spurious'. London, Centre for Economic Policy Research.