ALGORITHMS AND THE COMPETITIVE IDEAL

Aleksandar Todorov ()
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Aleksandar Todorov: University of Economics - Varna, Varna, Bulgaria

Economic Science, education and the real economy: Development and interactions in the digital age, 2020, issue 1, 147-158

Abstract: Do modern digital algorithms contribute to more competition? The paper at hand answers this question by looking at the competitive effects of some of the most common algorithms on the Internet. At first glance, search, comparison, recommendation, and evaluation algorithms seem to bring markets closer to the competitive ideal, but a closer look reveals that they also create several distortions to competitive behavior. On the supply side, the increasingly common application of pricing algorithms bears the risk of collusive behavior. The solutions offered so far - consumer protection algorithms and an active competition policy are only partial and still immature.

Keywords: algorithms; competition; collusion (search for similar items in EconPapers)
JEL-codes: D41 K21 L41 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:vrn:cfdide:y:2020:i:1:p:147-158

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