Platform Design When Sellers Use Pricing Algorithms

12/3/2020 04:00 pm 12/3/2020 05:30 pm Australia/Melbourne Platform Design When Sellers Use Pricing Algorithms

The Centre for Global BusinessDigital Economy Research Network (DERN) at Monash Business School, in partnership with Hong Kong Baptist University, National Taiwan University, and Renmin University of China, invites you to ‘Platform Design When Sellers Use Pricing Algorithms’ webinar.

Professor Andrew Rhodes will present his paper and discuss the related issues with the audience.

Abstract from the paper

Using both economic theory and Artificial Intelligence (AI) pricing algorithms, we investigate the ability of a platform to design its marketplace to promote competition, improve consumer surplus, and even raise its own profits. We allow sellers to use Q-learning algorithms (a common reinforcement-learning technique from the computer-science literature) to devise pricing strategies in a setting with repeated interactions, and consider the effect of steering policies that reward firms that cut prices with additional exposure to consumers. Overall, the evidence from our experiments suggests that platform design decisions can meaningfully benefit consumers even when algorithmic collusion might otherwise emerge but that achieving these gains may require more than the simplest steering policies when algorithms value the future highly. We also find that policies that raise consumer surplus can raise the profits of the platform, depending on the platform’s revenue model. Finally, we document several learning challenges faced by the algorithms.

Dr Chengsi Wang from Monash Business School will moderate this event, and Dr Tat-How Teh from the National University of Singapore will discuss the paper.

Professor Andrew Rhodes

Andrew Rhodes is a Professor at the Toulouse School of Economics. He is currently a Research Fellow in Industrial Organization at the Centre for Economic Policy Research, and an associate editor at the International Journal of Industrial Organization and the Journal of Industrial Economics. His work has appeared in leading journals such as the Journal of Political Economy, the Review of Economic Studies, the RAND Journal of Economics and Management Science.

Join the webinar

Please click here to start or join, or go to https://monash.zoom.us/join and enter meeting ID: 829 9325 4450 and password: 225199.

Event Details

Date:
3 December 2020 at 4:00 pm – 5:30 pm
Venue:
Online - Melbourne time
Categories:
Global Business

Description

The Centre for Global BusinessDigital Economy Research Network (DERN) at Monash Business School, in partnership with Hong Kong Baptist University, National Taiwan University, and Renmin University of China, invites you to ‘Platform Design When Sellers Use Pricing Algorithms’ webinar.

Professor Andrew Rhodes will present his paper and discuss the related issues with the audience.

Abstract from the paper

Using both economic theory and Artificial Intelligence (AI) pricing algorithms, we investigate the ability of a platform to design its marketplace to promote competition, improve consumer surplus, and even raise its own profits. We allow sellers to use Q-learning algorithms (a common reinforcement-learning technique from the computer-science literature) to devise pricing strategies in a setting with repeated interactions, and consider the effect of steering policies that reward firms that cut prices with additional exposure to consumers. Overall, the evidence from our experiments suggests that platform design decisions can meaningfully benefit consumers even when algorithmic collusion might otherwise emerge but that achieving these gains may require more than the simplest steering policies when algorithms value the future highly. We also find that policies that raise consumer surplus can raise the profits of the platform, depending on the platform’s revenue model. Finally, we document several learning challenges faced by the algorithms.

Dr Chengsi Wang from Monash Business School will moderate this event, and Dr Tat-How Teh from the National University of Singapore will discuss the paper.

Professor Andrew Rhodes

Andrew Rhodes is a Professor at the Toulouse School of Economics. He is currently a Research Fellow in Industrial Organization at the Centre for Economic Policy Research, and an associate editor at the International Journal of Industrial Organization and the Journal of Industrial Economics. His work has appeared in leading journals such as the Journal of Political Economy, the Review of Economic Studies, the RAND Journal of Economics and Management Science.

Join the webinar

Please click here to start or join, or go to https://monash.zoom.us/join and enter meeting ID: 829 9325 4450 and password: 225199.