Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy Shoppers with Internet access and a bargain-hunting impulse can find a universe of products at their fingertips.
Ezrachi and Stucke explore the resulting risks to competition, our democratic ideals, and our economic and overall well-being..
To what extent does the "invisible hand" still hold sway? In markets continually manipulated by bots and algorithms, is competitive pricing an illusion? Can our current laws protect consumers? The changing market reality is already shifting power into the hands of the few.
Virtual Competition raises timely questions.
By controlling key platforms (such as the operating system of smartphones), data-driven monopolies dictate the flow of personal data and determine who gets to exploit potential buyers.
The rise of super-platforms and their "frenemy" relationship with independent app developers raises a third danger.
Here, companies track and profile consumers to get them to buy goods at the highest price they are willing to pay.
A second danger is behavioral discrimination.
So what is seemingly beneficial-increased price transparency-ironically can end up harming consumers.
Although long-standing laws prevent companies from fixing prices, data-driven algorithms can now quickly monitor competitors\' prices and adjust their own prices accordingly.
Computers colluding is one danger.
While consumers reap many benefits from online purchasing, the sophisticated algorithms and data-crunching that make browsing so convenient are also changing the nature of market competition, and not always for the better.
In this thought-provoking expose, Ariel Ezrachi and Maurice Stucke invite us to take a harder look at today\'s app-assisted paradise of digital shopping.
Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy Shoppers with Internet access and a bargain-hunting impulse can find a universe of products at their fingertips
