Code and Data: Artifical Intelligence, Algorithm Design and Pricing

Principal Investigator(s):  View help for Principal Investigator(s) John Asker, UCLA; Chaim Fershtman, Tel Aviv U.; Ariel Pakes, Harvard

Version:  View help for Version V1

Name File Type Size Last Modified
Fig1a.pdf application/pdf 298.6 KB 01/13/2022 07:44:AM
Fig1a.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 85.5 KB 01/03/2022 11:16:AM
Fig1a_code.m text/x-objcsrc 4.7 KB 01/03/2022 02:07:PM
Fig1abc_code.m text/x-objcsrc 4.7 KB 01/03/2022 02:10:PM
Fig1b.pdf application/pdf 56.1 KB 01/03/2022 02:07:PM
Fig1b.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 109.1 KB 01/03/2022 10:29:AM
Fig1b_code.m text/x-objcsrc 4.5 KB 01/03/2022 02:09:PM
Fig1c.pdf application/pdf 87.4 KB 01/03/2022 02:08:PM
Fig1c.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 111.2 KB 01/03/2022 10:22:AM
Fig1c_code.m text/x-objcsrc 4.5 KB 01/03/2022 10:22:AM

Project Citation: 

Asker, John, Fershtman, Chaim, and Pakes, Ariel . Code and Data: Artifical Intelligence, Algorithm Design and Pricing . Nashville, TN: American Economic Association [publisher], 2022. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-04-07. https://doi.org/10.3886/E159401V1

Project Description

Summary:  View help for Summary We calculate the time path of prices generated by algorithmic pricing games that differ in their learning protocols. Asynchronous learning occurs when the algorithm only learns about the return from the action it actually took. Synchronous learning occurs when the AI conducts counterfactuals to learn about the returns it would have earned had it taken an alternative action. In a simple market setting we show that synchronous updating can lead to competitive pricing, while asynchronous can lead to pricing close to monopoly levels. However, building simple economic reasoning into the asynchronous algorithms significantly modifies the prices it generates.
Funding Sources:  View help for Funding Sources UCLA, HARVARD AND TEL AVIV Universities

Scope of Project

Subject Terms:  View help for Subject Terms price fluctuations
JEL Classification:  View help for JEL Classification
      L00 Industrial Organization: General
Geographic Coverage:  View help for Geographic Coverage n/a
Data Type(s):  View help for Data Type(s) other
Collection Notes:  View help for Collection Notes Computational work


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V1 [2022-04-07]

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