Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches
Autor(a) principal: | |
---|---|
Data de Publicação: | 2019 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/17634 |
Resumo: | Algorithms have played an increasingly important role in economic activity, as they becoming faster and smarter. Together with the increasing use of ever larger data sets, they may lead to significant changes in the way markets work. These developments have been raising concerns not only over the rights to privacy and consumers’ autonomy, but also on competition. Infringements of antitrust laws involving the use of algorithms have occurred in the past. However, current concerns are of a different nature as they relate to the role algorithms can play as facilitators of collusive behavior in repeated games, and the role increasingly sophisticated algorithms can play as autonomous implementers of pricing strategies, learning to collude without any explicit instructions provided by human agents. In particular, it is recognized that the use of ‘learning algorithms’ can facilitate tacit collusion and lead to an increased blurring of borders between tacit and explicit collusion. Several authors who have addressed the possibilities for achieving tacit collusion equilibrium outcomes by algorithms interacting autonomously, have also considered some form of ex-ante assessment and regulation over the type of algorithms used by firms. By using well-known results in the theory of computation, I show that such option faces serious challenges to its effectiveness due to undecidability results. Ex-post assessment may be constrained as well. Notwithstanding several challenges face by current software testing methodologies, competition law enforcement and policy have much to gain from an interdisciplinary collaboration with computer science and mathematics. |
id |
RCAP_7b3aee3e4c4a732c92c1c5d225e81c1c |
---|---|
oai_identifier_str |
oai:www.repository.utl.pt:10400.5/17634 |
network_acronym_str |
RCAP |
network_name_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository_id_str |
7160 |
spelling |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approachesCollusionAntitrustAlgorithmsFinite AutomatonTuring MachineChurch-Turing ThesisHalting ProblemRecursivenessUndecidability.Algorithms have played an increasingly important role in economic activity, as they becoming faster and smarter. Together with the increasing use of ever larger data sets, they may lead to significant changes in the way markets work. These developments have been raising concerns not only over the rights to privacy and consumers’ autonomy, but also on competition. Infringements of antitrust laws involving the use of algorithms have occurred in the past. However, current concerns are of a different nature as they relate to the role algorithms can play as facilitators of collusive behavior in repeated games, and the role increasingly sophisticated algorithms can play as autonomous implementers of pricing strategies, learning to collude without any explicit instructions provided by human agents. In particular, it is recognized that the use of ‘learning algorithms’ can facilitate tacit collusion and lead to an increased blurring of borders between tacit and explicit collusion. Several authors who have addressed the possibilities for achieving tacit collusion equilibrium outcomes by algorithms interacting autonomously, have also considered some form of ex-ante assessment and regulation over the type of algorithms used by firms. By using well-known results in the theory of computation, I show that such option faces serious challenges to its effectiveness due to undecidability results. Ex-post assessment may be constrained as well. Notwithstanding several challenges face by current software testing methodologies, competition law enforcement and policy have much to gain from an interdisciplinary collaboration with computer science and mathematics.ISEG - REM - Research in Economics and MathematicsRepositório da Universidade de LisboaGata, João E.2019-03-18T11:35:14Z2019-032019-03-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/17634engGata, João E. (2019). "Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches". Instituto Superior de Economia e Gestão – REM Working paper nº 077 - 20192184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:47:18Zoai:www.repository.utl.pt:10400.5/17634Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:02:48.089317Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
title |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
spellingShingle |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches Gata, João E. Collusion Antitrust Algorithms Finite Automaton Turing Machine Church-Turing Thesis Halting Problem Recursiveness Undecidability. |
title_short |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
title_full |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
title_fullStr |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
title_full_unstemmed |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
title_sort |
Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches |
author |
Gata, João E. |
author_facet |
Gata, João E. |
author_role |
author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Gata, João E. |
dc.subject.por.fl_str_mv |
Collusion Antitrust Algorithms Finite Automaton Turing Machine Church-Turing Thesis Halting Problem Recursiveness Undecidability. |
topic |
Collusion Antitrust Algorithms Finite Automaton Turing Machine Church-Turing Thesis Halting Problem Recursiveness Undecidability. |
description |
Algorithms have played an increasingly important role in economic activity, as they becoming faster and smarter. Together with the increasing use of ever larger data sets, they may lead to significant changes in the way markets work. These developments have been raising concerns not only over the rights to privacy and consumers’ autonomy, but also on competition. Infringements of antitrust laws involving the use of algorithms have occurred in the past. However, current concerns are of a different nature as they relate to the role algorithms can play as facilitators of collusive behavior in repeated games, and the role increasingly sophisticated algorithms can play as autonomous implementers of pricing strategies, learning to collude without any explicit instructions provided by human agents. In particular, it is recognized that the use of ‘learning algorithms’ can facilitate tacit collusion and lead to an increased blurring of borders between tacit and explicit collusion. Several authors who have addressed the possibilities for achieving tacit collusion equilibrium outcomes by algorithms interacting autonomously, have also considered some form of ex-ante assessment and regulation over the type of algorithms used by firms. By using well-known results in the theory of computation, I show that such option faces serious challenges to its effectiveness due to undecidability results. Ex-post assessment may be constrained as well. Notwithstanding several challenges face by current software testing methodologies, competition law enforcement and policy have much to gain from an interdisciplinary collaboration with computer science and mathematics. |
publishDate |
2019 |
dc.date.none.fl_str_mv |
2019-03-18T11:35:14Z 2019-03 2019-03-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/17634 |
url |
http://hdl.handle.net/10400.5/17634 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Gata, João E. (2019). "Controlling algorithmic collusion : short review of the literature, undecidability, and alternative approaches". Instituto Superior de Economia e Gestão – REM Working paper nº 077 - 2019 2184-108X |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
ISEG - REM - Research in Economics and Mathematics |
publisher.none.fl_str_mv |
ISEG - REM - Research in Economics and Mathematics |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
|
_version_ |
1799131118626144256 |