Algorithmic Pricing and Market Competition

This book examines algorithmic pricing, defined as the use of algorithms to determine prices, and its implications for competition. The impact of algorithmic pricing on competitive markets is analysed systematically through three complementary approaches: theoretical, empirical, and simulation-based.

The book begins by situating algorithmic pricing within the broader context of product pricing and presents an empirical analysis of the factors driving firms to adopt these technologies. It then explores the theory of algorithmic collusion, using computer simulations to investigate how different learning mechanisms influence collusive outcomes. Drawing on real-world data from online retail markets, the book further examines the prevalence and competitive effects of algorithmic pricing in practice. Finally, it considers the broader implications of algorithmic pricing for competition law and policy.

Dr Cassey Lee is a Principal Fellow and Coordinator of the Regional Economic Studies Programme at the ISEAS – Yusof Ishak Institute, Singapore. He is also an Honorary Professor at the Faculty of Business and Economics at the University of Malaya, Malaysia. Prior to joining ISEAS, Dr Lee held academic appointments at the University of Wollongong, Nottingham University Business School (Malaysia) and University of Malaya. He is the co-managing editor of the Journal of Southeast Asian Economies and associate editor of the Asian Economic Journal and Asian Economic Policy Review. His research interests include competition policy, industrial policy and structural change.