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Collusion by algorithm: the role of unobserved actions

Martin, Simon; Rasch, Alexander - 2022

We analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question....

Persistent link: https://www.econbiz.de/10013093034

Numerical solution of dynamic equilibrium models under Poisson uncertainty

Posch, Olaf; Trimborn, Timo - 2011

We propose a simple and powerful numerical algorithm to compute the transition process in continuous-time dynamic … system of functional differential equations of the retarded type. We apply the Waveform Relaxation algorithm, i.e., we …

Persistent link: https://www.econbiz.de/10009124183

Bubbles in hybrid markets : how expectations about algorithmic trading affect human trading

Farjam, Mike; Kirchkamp, Oliver - 2015

Bubbles are omnipresent in lab experiments with asset markets. Most of these experiments were conducted in environments with only human traders. Today markets are substantially determined by algorithmic traders. Here we use a laboratory experiment to measure changes of human trading behavior if...

Persistent link: https://www.econbiz.de/10011392621

Opinion dynamics via search engines (and other algorithmic gatekeepers)

Germano, Fabrizio; Sobbrio, Francesco - 2017 - First Version: December 2016

Ranking algorithms are the information gatekeepers of the Internet era. We develop a stylized framework to study the effects of ranking algorithms on opinion dynamics. We consider rankings that depend on popularity and on personalization. We find that popularity driven rankings can enhance...

Persistent link: https://www.econbiz.de/10011669418

Mechanisms in a digitalized world

Demange, Gabrielle - 2018

Due to computing and communication facilities, formal procedures, often referred to as "algorithms", are now extensively used in public, economic and social areas. These procedures, currently at the forefront of criticisms, share some features with mechanisms as defined by economists, following...

Persistent link: https://www.econbiz.de/10011822644

Collusive compensation schemes aided by algorithms

Martin, Simon; Schmal, Wolfgang Benedikt - 2021

Sophisticated collusive compensation schemes such as assigning future market shares or direct transfers are frequently observed in detected cartels. We show formally why these schemes are useful for dampening deviation incentives when colluding firms are temporary asymmetric. The relative...

Persistent link: https://www.econbiz.de/10012698813

Crowding out the truth? : a simple model of misinformation, polarization, and meaningful social interactions

Germano, Fabrizio; Gómez, Vicenç; Sobbrio, Francesco - 2022 - This version: November 2022

This paper provides a simple theoretical framework to evaluate the effect of key parameters of ranking algorithms, namely popularity and personalization parameters, on measures of platform engagement, misinformation and polarization. The results show that an increase in the weight assigned to...

Persistent link: https://www.econbiz.de/10013413453

Bao, Yongping; Danwitz, Ludwig; Dvorak, Fabian; … - 2022

Algorithm-based decision support systems play an increasingly important role in decisions involving exploration tasks … the willingness of participants to follow the advice of a reinforcement learning algorithm depends on the fit between … their own exploration preferences and the algorithm's advice. We vary the weight that the algorithm places on exploration …

Persistent link: https://www.econbiz.de/10013482224

Strategic responses to algorithmic recommendations : evidence from hotel pricing

García, Daniel; Tolvanen, Juha; Wagner, Alexander K. - 2023

We study the interaction between algorithmic advice and human decisions using high-resolution hotel-room pricing data. We document that price setting frictions, arising from adjustment costs of human decision makers, induce a conflict of interest with the algorithmic advisor. A model of advice...

Persistent link: https://www.econbiz.de/10014444885

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A hands-on machine learning primer for social scientists : math, algorithms and code

Askitas, Nikos - 2024

This paper addresses the steep learning curve in Machine Learning faced by non-computer scientists, particularly social scientists, stemming from the absence of a primer on its fundamental principles. I adopt a pedagogical strategy inspired by the adage ”once you understand OLS, you can work...

Persistent link: https://www.econbiz.de/10015070152

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