Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265843 
Year of Publication: 
2022
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2022-067/VII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We examine recent claims that a particular Q-learning algorithm used by competitors 'autonomously' and systematically learns to collude, resulting in supracompetitive prices and extra profits for the firms sustained by collusive equilibria. A detailed analysis of the inner workings of this algorithm reveals that there is no immediate reason for alarm. We set out what is needed to demonstrate the existence of a colluding price algorithm that does form a threat to competition.
Subjects: 
collusion
Q-learning
algorithm
pricing
JEL: 
C63
L13
L44
K21
Document Type: 
Working Paper

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