How algorithms work and play together

Schlechtinger, Michael ; Kosack, Damaris ; Paulheim, Heiko ; Fetzer, Thomas

Document Type: Article
Year of publication: 2021
The title of a journal, publication series: Concurrences : Revue des Droits de la Concurrence
Volume: 2021
Issue number: 3, Article 102088
Page range: 19-23
Place of publication: Paris ; New York, NY [u.a.]
Publishing house: Transactive ; Institute of Competition Law
ISSN: 1773-9578 , 2116-0090
Publication language: English
Institution: School of Business Informatics and Mathematics > Web Data Mining (Paulheim 2018-)
School of Law and Economics > Öffentliches Recht, Regulierungsrecht und Steuerrecht (Fetzer 2011-)
Subject: 340 Law
Abstract: Pricing decisions are increasingly made by algorithms. To assess if reinforcement learning algorithms are able to reach a state of collusion autonomously and thereby may breach the cartel prohibition under Article 101(1) TFEU, we have built a simplified algorithmic scenario based on a modified version of a prisoner’s dilemma where three agents play the game of rock-paper-scissors. First, we describe how the used reinforcement learning algorithms work. We then have a look at their conduct during a multitude of game rounds, concluding that eventually they all settle in an equilibrium of a specific reward rate. We observe that all three agents achieve this by developing and following specific action patterns. However, it is not clear whether the agents simply consider the likely response of the competing agents (tacit collusion) or rather knowingly substitute practical long-term cooperation for competition (concerted practice). Moreover, this observation cannot be tied to one specific move, sequence or situation symbolizing an initial concertation which then is followed by a respective subsequent conduct. One approach to account for this characteristic of algorithmic behavior could be to assume a simultaneity of concertation and conduct. Another possibility could be to omit a distinct identification of concertation and subsequent conduct and to make basic assumptions for one or the other.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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