Algorithmic Collusion is Algorithm Orchestration
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
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2025
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| _version_ | 1866909959025852416 |
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| author | Carissimo, Cesare Falniowski, Fryderyk Rahimi, Siavash Nax, Heinrich |
| author_facet | Carissimo, Cesare Falniowski, Fryderyk Rahimi, Siavash Nax, Heinrich |
| contents | We propose a fresh `meta-game' perspective on the problem of algorithmic collusion in pricing games a la Bertrand. Economists have interpreted the fact that algorithms can learn to price collusively as tacit collusion. We argue instead that the co-parametrization of algorithms, in ways as are necessary to obtain algorithmic collusion, typically requires algorithm designers to engage in some form of explicit collusion or `algorithm orchestration.' In our model, the algorithm designers play a meta-game of parametrizing their algorithms, which then play repeated Bertrand competition. The strategic analysis at the meta-level reveals new equilibrium and collusion phenomena. (JEL: C62, C63, D43, L13) |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2508_14766 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Algorithmic Collusion is Algorithm Orchestration Carissimo, Cesare Falniowski, Fryderyk Rahimi, Siavash Nax, Heinrich Theoretical Economics Computer Science and Game Theory We propose a fresh `meta-game' perspective on the problem of algorithmic collusion in pricing games a la Bertrand. Economists have interpreted the fact that algorithms can learn to price collusively as tacit collusion. We argue instead that the co-parametrization of algorithms, in ways as are necessary to obtain algorithmic collusion, typically requires algorithm designers to engage in some form of explicit collusion or `algorithm orchestration.' In our model, the algorithm designers play a meta-game of parametrizing their algorithms, which then play repeated Bertrand competition. The strategic analysis at the meta-level reveals new equilibrium and collusion phenomena. (JEL: C62, C63, D43, L13) |
| title | Algorithmic Collusion is Algorithm Orchestration |
| topic | Theoretical Economics Computer Science and Game Theory |
| url | https://arxiv.org/abs/2508.14766 |