DP16393 Algorithmic collusion, genuine and spurious
|Author(s):||Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolò, Sergio Pastorello|
|Publication Date:||July 2021|
|Keyword(s):||artificial intelligence, Collusion, exploration, Reinforcement Learning|
|JEL(s):||D43, D83, L13, L41|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16393|
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.