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An Empirical Analysis of Algorithmic Pricing

on Amazon Marketplace

Le Chen Alan Mislove Christo Wilson
Northeastern University Northeastern University Northeastern University
Boston, MA USA Boston, MA USA Boston, MA USA
leonchen@ccs.neu.edu amislove@ccs.neu.edu cbw@ccs.neu.edu

ABSTRACT tings due to lack of data (e.g., competitors’ prices) and physical
The rise of e-commerce has unlocked practical applications for al- constraints (e.g., manually relabeling prices on products). In con-
gorithmic pricing (also called dynamic pricing algorithms), where trast, e-commerce is unconstrained by physical limitations, and col-
sellers set prices using computer algorithms. Travel websites and lecting real-time data on customers and competitors is straightfor-
large, well known e-retailers have already adopted algorithmic pric- ward. Travel websites are known to use personalized pricing [25],
ing strategies, but the tools and techniques are now available to while some e-retailers are known to automatically match competi-
small-scale sellers as well. tors prices [40, 17].
While algorithmic pricing can make merchants more competi- While algorithmic pricing can make merchants more compet-
tive, it also creates new challenges. Examples have emerged of itive and potentially increase revenue, it also creates new chal-
cases where competing pieces of algorithmic pricing software inter- lenges. First, poorly implemented pricing algorithms can inter-
acted in unexpected ways and produced unpredictable prices [37], act in unexpected ways and even produce unexpected results, es-
as well as cases where algorithms were intentionally designed to pecially in complex environments populated by other algorithms.
implement price fixing [5]. Unfortunately, the public currently lack For example, two competing dynamic pricing algorithms inadver-
comprehensive knowledge about the prevalence and behavior of al- tently raised the price of a used textbook to $23M on Amazon [37];
gorithmic pricing algorithms in-the-wild. reporters have noted that similar algorithmic pricing also exists in
In this study, we develop a methodology for detecting algorith- day-to-day commodities [9]. Second, dynamic pricing algorithms
mic pricing, and use it empirically to analyze their prevalence and can implement collusive strategies that harm consumers. For exam-
behavior on Amazon Marketplace. We gather four months of data ple, the US Justice Department successfully prosecuted several in-
covering all merchants selling any of 1,641 best-seller products. dividuals who implemented a price fixing scheme on Amazon using
Using this dataset, we are able to uncover the algorithmic pricing algorithms [5]. Unfortunately, regulators and the public currently
strategies adopted by over 500 sellers. We explore the characteris- lack comprehensive knowledge about the prevalence and behavior
tics of these sellers and characterize the impact of these strategies of algorithmic pricing algorithms in-the-wild.
on the dynamics of the marketplace. In this study, our goal is to empirically analyze deployed algo-
rithmic pricing strategies on Amazon Marketplace. Specifically,
we want to understand what algorithmic pricing strategies are used
1. INTRODUCTION by participants in the market, how prevalent these strategies are,
For the last several years, growth in e-commerce has massively and ultimately how they impact customer experience. We chose
outpaced growth among traditional retailers. For example, while to focus on Amazon for three reasons: first, Amazon is the largest
retail sales shrank 1.3% in the first quarter 2015 in the US, e- e-commerce destination in the US and Europe [16]. Second, Ama-
commerce grew 3.7% [21]. Although e-commerce only accounts zon is a true marketplace populated by third-party sellers, as well
for around 7.3% of the overall $22 trillion in global retail spending as Amazon itself. Third, Amazon’s platform provides APIs that are
projected for 2015, this percentage is projected to rise to 12.4% by specifically designed to facilitate algorithmic pricing [1].
2019 [27]. Furthermore, these overall figures mask the dispropor- To implement our study, we develop a novel methodology to col-
tionate gains of e-commerce in specific sectors, such as apparel, lect data and uncover sellers that are likely using algorithmic pric-
media, and office supplies. ing. We collect four months of data from 1,641 of the most popular
The rise of e-commerce has unlocked practical applications for products on Amazon. We gather information about the top-20 sell-
algorithmic pricing (sometimes referred to as dynamic pricing al- ers of each product every 25 minutes, including the sellers’ prices,
gorithms or Revenue/Yield Management). Algorithmic pricing ratings, and other attributes. We use this data to analyze changes
strategies are challenging to implement in traditional retail set- in price over time, as well as compare the attributes of sellers. We
focus on top selling products because they tend to have multiple
sellers, and thus are likely to exhibit more competitive dynamics.
We begin by analyzing the algorithm underlying Amazon’s Buy
Box. This algorithm determines, for a given product being sold by
many sellers, which of the sellers will be featured in the Buy Box on
Copyright is held by the International World Wide Web Conference Com- the product’s landing page (i.e., which seller is the “default” seller).
mittee (IW3C2). IW3C2 reserves the right to provide a hyperlink to the As shown in Figure 1, customers use the Buy Box to add products
author’s site if the Material is used in electronic media.
WWW 2016, April 11–15, 2016, Montréal, Québec, Canada.
to their cart; sellers not selected for the Buy Box are relegated to
ACM 978-1-4503-4143-1/16/04. a separate webpage. The precise features and weights used by the
http://dx.doi.org/10.1145/2872427.2883089.

6]: strategic and successful. and § 6 explores the characteristics and impact of these sellers. § 4 explores the category. Listing Fee: High-volume sellers that list more than 2M Stock Keeping Units (SKUs. We explore the properties of these sellers. 4. zon also functions as a marketplace for third parties.58 for extremely heavy.04-$10. Seller Fee: “Individual” sellers must pay $0. and use correlative analysis to identify specific sellers whose prices track the target price over time. Overall. algorithmic sellers “win” the Buy Box more frequently (even boasts 244M active customers [22]. Although Amazon began as an on- line bookstore. We present a comprehensive overview of dynamics on Ama. is the largest e-commerce website strategies used by 3P sellers. imum referral fees of $1-$2/item.99/item sold. or tured in the Buy Box. The fee structure for 3P sellers is complicated.39 for ing. We observe that algorithmic sellers appear Figure 1: An example Buy Box on Amazon. Next. in the US and Europe [27]. Amazon also enforces min- Outline. § 5 ucts (books.. returns. Ama- frequency of price changes. including the characteristics of sellers. a seller-specified representation 2. Using Machine Learning (ML). and product weight.45 + $0.65 + $0.ccs. this work makes the following contributions: tomer retention efforts. or $0. we examine the dynamic pricing strategies used by sellers in Amazon Marketplace. We develop a technique to detect sellers likely using algo. when they do not offer the lowest price for a given product). Referral Fee: Amazon assesses a referral fee on each prod- To facilitate further study. it now sells over 20 categories of physical products 2. we determine that. in which case Amazon handles all logistics. we make our code and data available at uct sold. but that customer feedback and ratings are also used. we identify over 500 sellers who are very likely using algorithmic pricing. Media prod- algorithm that Amazon uses to select the Buy Box winner. Closing Fee: Amazon’s closing fees vary based on product and § 3 covers our data collection methodology. tablets. and do so through the Buy Box. e-books).2 The Buy Box (even fresh food in select cities [15]). they typically digital goods (e. Because of these cus- In summary. Finally. For our purposes.1 Amazon Marketplace As we discuss in § 5. presents our algorithm for detecting sellers using algorithmic pric. However. shipping. the lowest advertised price or Amazon’s price) as a time series. 3.34 We begin by briefly introducing Amazon Marketplace. we treat the target price of each product (e. we also Prime membership program. (FBA) program. 2.) themselves. the Buy Box. 2B items in 2014. ping. customers towards Amazon’s shopping apps. 1. The vast majority of cat- egories have a 15% referral fee. site [3]. To identify pricing algorithms. 44% of online shoppers navigate directly to Amazon to make purchases. downloadable and streaming music. low prices are the most impor. § 2 covers background on Amazon and the Amazon Marketplace. we compare the characteristics of algorithmic and non- algorithmic sellers. plus on the features of the market that are salient to algorithmic pric- variable per pound shipping fees ranging from $0. which gives customers free 2-day observe that the lowest price and the Buy Box for products with shipping (or better) as well as unlimited access to digital streams for algorithmic sellers are significantly more volatile than for products $99/year. phones etc.neu. and are more likely to be fea.). shipping method.) have a flat fee of $1. The fees vary between 6-45% of the total sale price.35/product. showing they are components [4. which Amazon inspires fierce loyalty among customers through their may further contribute to their feedback scores. and 3P Sellers and FBA. These rapidly fluctuating prices digital devices (Kindle e-readers.05/lb fee for standard ship- ing. representing 40% of all items sold via the web- tant feature used by the Buy Box algorithm to select sellers. including Third-Party (3P) sellers.edu depending on the product category. 2. http://personalization.g. larly shaped items. these fees influence the dynamic pricing Amazon.0005 per active SKU. BACKGROUND of an item) per month must pay $0. Other products have a $0. yet the algorithm is of criti- cal importance since 82% of sales on Amazon go through the Buy Box [38]. or they can join the Fulfilled By Amazon 3. In addition to acting as a merchant. DVDs. Amazon earned $89B in revenue in 2014. Amazon 2.Buy Box algorithm are unknown [13]. rithmic pricing.10/lb for expedited shipping. etc. The remainder of this paper is organized as follows. and involves five 4. 5. We focus packing fee per product depending on its size and type. rather than using search engines or 1. as well as a wide range of When customers purchase products from Amazon.99/month.g. Overall. sellers may become “Pro Merchants” for $39. among all claims to have 2M Third-Party (3P) sellers worldwide who sold the variables we can observe. 3P sellers can opt to handle logistics (inventory. Further. FBA Fee: Sellers that use FBA must pay a $1. to $124.. zon Marketplace. which push may lead to customer dissatisfaction [9]. but receive significantly higher amounts of feed- back (suggesting they have much higher sales volumes). visiting competing online retailers [35]. The Buy Box is shown on every product . and identify 543 such sellers. they have much higher levels of feedback than other sellers. Amazon’s success is further bolstered by their branded without any algorithmic sellers. to be more successful than non-algorithmic sellers: they offer fewer products. and more. and finally small media items. video. § 7 presents related work and § 8 concludes. understanding the Buy Box algorithm is important because sellers may choose dynamic pricing strategies that maximize their chance of being selected by the algorithm. etc. irregu- the APIs offered by Amazon Marketplace Web Services. founded in 1994.

offered for a product (or less. Appeagle. and we leave them to future work. This tool allows a 3P seller to set a prod- being offered by n sellers with prices P = {p1 . gies being used by sellers on Amazon. their shipping costs. the Buy uct’s price equal to the lowest competing offer. and changing We would ideally have liked to use the Amazon Marketplace Web Services (MWS) API to collect the seller and price informa- tion for products. Because “winning” the Buy Box is so critical for making sales on Amazon. we found that the API did not meet our requirements for two reasons: the API does not return the identity of 3P sellers (just their chosen price). prices. Instead. Amazon also has a web-based price match- seller’s offer is displayed in the Buy Box. or what the weights of the features are. DATA COLLECTION we use Machine Learning (ML) to examine the Buy Box algorithm The goal of our study is to analyze the dynamic pricing strate- in-depth in § 4.. for each product we ex- amine. Seller Platforms. sellers may use dynamic pricing strategies that give them an advantage with respect to being chosen by the algorithm. In this section. describe our data collection process. zon Marketplace Web Service (MWS). strategies offered by these services in greater detail in § 5. Figure 3: Examples of price jitter (highlighted with arrows) in the Buy Box on a product page. 100 $6. The most sophisticated of these tools is the Ama. Formally.1 Obtaining Sellers and Prices functions for listing products. we require longitudinal data about sellers and their prices—ideally for 2. As shown only adjusts the product’s price once: if the lowest price changes in Figure 1. their prices. Unfortunately. signed to facilitate dynamic pricing.49 80 $6. RepriceIt. shown in Figure 4). with pi ∈ P . page on Amazon: it contains the price of the product. we crawled the New Offers page2 (the page that is linked to in Figure 1 if one clicks on “2 new”. These ser- the features used by the Buy Box algorithm (e. used given product. which is a set of APIs for programatically interfacing with the marketplace.1 MWS also has a subscription API. offers from other sellers are relegated to a separate again. Although Amazon has released some information about ventory management with dynamic pricing capabilities. update includes aggregated information about the lowest 20 prices However. many products on Amazon are sold by multiple sellers. shipping vices enable any merchant to easily become a 3P seller and leverage options and speed) [7]. if product is ing tool for 3P sellers [8]. Each product. To achieve this goal. managing inventory. The capabilities of MWS are clearly de- Given the prominent placement of the Buy Box. In addition to scraping the New Offers pages for products. we also scraped the product pages themselves. Unfortunately. we used web scraping to obtain information on the ac- tive sellers and their prices. We discuss the types of complete.48 60 $6. and their reviews (number of reviews and average score). offer subscription-based services for 3P sellers that combine in- ers [13]. we Amazon offers an array of tools to help 3P sellers manage prod.44 1min 15mins 1hr 3hrs 1day 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 Interval Between Changes Timeline (Minutes) Figure 2: Frequency of page updates. Figure 4: An example New Offers page on Amazon. and RepricerExpress leverage MWS to the underlying algorithm the focus of much speculation by 3P sell.46 Buybox Price 20 Buybox Seller $6. · · · . this tool Box algorithm is a function B(P ) → pi . . pn }. representative data. 1 Amazon’s documentation stipulates that sellers may only update prices every 20 minutes [2]. webpage (an example is shown in Figure 4). and a button to purchase the receive near real-time price updates for specified products. 3. MWS includes 3. it is not surpris. We use the data from the product pages to analyze the Buy Box algorithm in § 4. items are not covered.3 Amazon Marketplace Web Service a large number of products—in the marketplace. including specific challenges uct inventory. that we needed to overcome to obtain useful. Specifically. a proprietary Amazon algorithm determines which In addition to MWS. This has made visor. Feed- ing that 82% of sales on Amazon go through it [38]. Companies like Sellery. Figure 1 shows an example Buy Box. This page lists all 3P sellers. the seller’s price is not automatically reduced as well.47 Price CDF Seller Page 40 $6. this information is paginated into 10 3P sellers per page. and the API is heavily rate-limited. that allows sellers to information.g. Thus. if there are fewer than 20 offers). the name of the seller. In these cases. it is unknown whether this feature list is sophisticated dynamic pricing strategies. we only focus sellers who offer new items. we describe below how we handle cases where there are more than 10 3P sell- ers. shipping prices. listing all sellers for a 2 In this study. However.45 0 $6.

Thus. not all products are equally paper.e. downloading only the first two pages massively previous price change. Next. Although the exact number of products come from 23 departments from Amazon. estimates place it at around 20–40% of best-seller products (we exclude digital goods such as e-books.5 We compare the Amazon inconsistencies) or very long timescales (> 30 minutes). 2014 and December 8. and gift cards).com/Best-Sellers/zgbs.org/details/asin_listing . as well as somewhat lower prices. Throughout the are aiming to study dynamic pricing. Amazon states that it can take up to 15 minutes for all (details of these Figures are discussed in the next section).158 products changes happen either on very short timescales (< 1 minute. all Amazon’s customers [23]. As shown in Figure 2. We choose to only download the first two pages of sellers. As shown timeseries. we choose to dataset is biased (by design) towards best-selling products. Calculating Prices. as the best-selling products change over time: there We observe that the price appears to change five times in this are 196 products in common between the two crawls. 2014. Amazon 4 may alter pages for Prime users. so we focus on best-selling products We do this as Amazon uses total price when users explicitly sort since they are likely to have many competing sellers. etc. Second Crawl (Crawl2). Altogether there are 1. two separate crawls that have different characteristics. we select a crawling frequency. but that old prices sometimes briefly reappear after a in Figures 5 and 6. luminate the tradeoff between crawling resolution and frequency. we downloaded all seller pages. we crawled data from Amazon using browsers that were http://www. We plot the cumulative distri- prices). We found that when prices are in an inconsistent of our analysis and conclusions may not extend to Prime users. we create a high-resolution dataset that will help to il. price includ.5 0 0. such as Appliances. 100 100 100 Crawl1 80 80 80 Crawl2 60 60 60 CDF CDF CDF Crawl1 Crawl1 40 Crawl2 40 Crawl2 40 20 Random 20 Random 20 0 0 0 $1 $10 $100 $1000 1 10 102 103 -1 -0. a customer cannot add the item to their shopping cart (i. It is important to note that the New Offers 3. the Buy Box price of an example product in Figure 3 (we observed similar behavior for other products. product price and the number of sellers in Figures 5 and 6. https://archive. Best-seller not logged-in to Prime accounts. we need to decide how frequently we will crawl each page. download the product page (containing the Buy Box).amazon. most briefly quantify this bias. but do not include them due to It is important to note that the first and second crawls cover dif- space constraints). 2015. likely from a public listing of all Amazon products. To cover more products at longer intervals. we observe that our best-sellers show many more sellers than random products. 3 Second. As a tradeoff There are two noteworthy limitations to our dataset. likely to have such sellers. we plot a timeseries of most of the “interesting” behavior. reflect what the majority of Amazon users see. and downloaded both the product page (covering up to 20 sellers) once per minute for 3 days. users cannot search or sort by base price alone. the Buy Box price. with a long tail of update times. the very rapid price “jitters” are likely caused by transient inconsistencies in Amazon’s infrastructure. listed several products. sellers per product. and changed their prices at products that are eligible for expedited Prime shipping. we turn to selecting the products to study. rather than actual price changes by sellers. the overall characteristics of prices and sellers price change. typically to highlight sellers and To further verify these results.. we randomly sampled 2. First Crawl (Crawl1). We select 837 best- Because 3P sellers (and Amazon) can change their price at any selling products that had at least two sellers at the beginning of the time. systems to converge to the new price. We conduct a second crawl between Specifically. but not always.3 Selecting Products page lists both the base price and the total price (i. even though a customer may see an outdated price. state. 2015 and September 21. pected. For this crawl. Thus. perfect correlation. To explore reduces the amount of data we need to collect while still capturing the origins of this high level of dynamicity. we set up an Amazon Individual Seller account. -1 is anti-correlation). Beauty. We conduct products by price. We observe that the updates are surpris- dynamic pricing algorithms) were within the first two pages 96% ingly dynamic: 40% of price changes occur within a minute of the of the time. when we refer to “price”. However. our between number of products and crawling frequency. we randomly selected 5 products from the best-seller August 11. containing the 20 sellers with the lowest frequently the Buy Box is updated. Our first crawl was conducted between 3. the customer is 5 not able to add the product to their cart at the old price). but did not To do so. ferent products. and the as we found the sellers who change their prices often (suggesting Buy Box seller in Figure 2. Thus..000 best- products3 and crawled their product page and the first 2 seller pages selling products to study. as ex- We therefore choose a crawling frequency of every 25 minutes. our dataset should accurately downloadable music. Thus. Electronics. Recall that we ing the lowest-cost shipping option) for each seller.e. (containing the Buy Box) and the first two pages of 3P sellers (typ- We first examine how frequently sellers’ prices change and how ically. some specific times.5 1 Product Price Number of Sellers per Product Spearman's ρ Figure 5: Cumulative distribution of product Figure 6: Cumulative distribution of number of Figure 7: Correlation between price and rank (1 is prices. crawl.4 Limitations Using these results.790 Prime members is unknown. We select 1. we are referring to the total price. bution of inter-update times for sellers. First.2 Determining Crawling Frequency September 15. This result is likely due to Amazon’s distributed in- are very similar between the two crawls despite the time difference frastructure.4 3.

Second. rate of returns and refunds. Box algorithm is crucial. we examine the relationship between seller rank (from the tance (calculated as the average of the Gini index among all splits in New Offers page) and the winner of the Buy Box.2 Behavior of the Buy Box Algorithm Unfortunately. response time to customer inquiries. most products see a number of changes: only 13% of products have Classifier Selection. Given our dataset. price is not the In the previous section. 1. Feedback Count: total feedback count for the seller. Amazon returns sellers sorted by price). as we ing with dynamics over time. ways sort sellers by price. will equal 1. sellers at different ranks. As shown in Figure 7.. Price Ratio to the Lowest: ratio between the seller’s price how Amazon chooses to weigh various seller features. Positive Feedback: positive feedback percentage for the sellers returned by Amazon. the Buy Box winner correlated decision trees with different feature combinations and and price is highly dynamic. and cal. and thus cannot Next. we cannot measure these features. Rank zero means they are the first seller in the list. Recall that we have already shown that Amazon does not cific questions about the customer’s experience. However. and shipping times. 100 100 100 Win Rate (%) 80 80 80 Accuracy 60 60 60 CDF 40 Price 40 40 Prediction 20 20 20 Baseline: Lowest Price Seller Baseline: Lowest Rank 0 0 0 0 1 10 100 1000 0 5 10 15 19 1 5 10 15 20 Number of Changes Rank Number of Sellers Figure 8: Cumulative distribution of changes to Figure 9: Probability of winning the Buy Box for Figure 10: Buy Box winner prediction accuracy the Buy Box price and winner. our goal is to predict which seller will be chosen to occupy the Buy Box. Figure 9 shows the trees). In both cases.3 Algorithm Features and Weights uses non-trivial strategies to evaluate sellers (i. other features are possibly used by the Buy Box sides price) when making decisions. for many products. Furthermore. Average Rating: average customer rating6 of the seller. Is Amazon the Seller?: true if the seller is Amazon. we conduct an in-depth investigation of the features and In this section. and follow up by characterizing the dynamics and be- havior of the Buy Box. since it may influence how sellers choose Model and Features. and there is a long tail of sellers at higher ranks from customer surveys asking for a star rating (0–5 stars) and spe- that win. we construct a feature vector for 4.1. the fraction of sellers at different ranks that “win” the Buy Box. the rating and feedback of a seller come win the Buy Box. This result gives us our first clue that According to Amazon’s documentation. However.e. we first examine the seller ranking algorithm as it offers clues as to 2. for products with different numbers of sellers. If the lists perfectly correspond 5. Is the Product FBA?: true if the seller uses FBA.. for each product in our dataset.e. Understanding the Buy of the features and weights used by the Buy Box algorithm. from 3P sellers. are chosen by the algorithm. . Specifically. for a product Note that in this section. we observe that Amazon 4. we demonstrated that the Buy Box algo- only factor that impacts ranking and selection for the Buy Box). quantify their impact on the Buy Box algorithm. and the list of sellers sorted by price. results show that Amazon’s systems take additional characteristics uate sellers. Taken together. suggesting that our data does capture the many dataset over the six weeks of observation. We collect the rankings for all products in our dataset. vector. We leverage a Random Forest (RF) clas- static Buy Box prices over the entire period. algorithm [13. start. since it offered by n sellers. only 60% of the top-ranked sellers 6 Fully described in § 6. some products even experience hun- bagging samples [36]. other classifiers. we only use data from Crawl2. Amazon does not al- 7. Thus. we model dynamic pricing strategies. i. seller. or many more than one per day. we see fewer changes to the Box. culate Spearman’s Rank Correlation (ρ) between the ordered list of 4. the Buy Box win. Amazon explicitly ranks all sellers for each product on the New Offers page. and the current lowest price of the product. per product. 3. then Spearman’s ρ 6. we use Machine Learning (ML) to try to infer some weights that drive the Buy Box algorithm. RF is an ideal classifier for dreds of changes.e. rithm uses features beyond just price to select the Buy Box winner. Figure 8 plots the number of changes will show. the Buy Box as a prediction problem. Surprisingly. However. To facilitate our analysis. around 20% of products have correlation <1. First. 4. our task because it outputs interpretable measures of feature impor- Next. THE BUY BOX rank sellers solely on prices (see Figure 7). such as kernel-based SVM. This includes sales volume. are harder to interpret.1 Seller Ranking each seller containing the following seven features: As shown in Figure 4. Thus. RF is an ensemble classifier that achieves low bias and low Buy Box winner: the seller winning the Buy Box is constant for variance by aggregating the decisions from a large number of low- 31% of products. We immediately see that important seller features. Price Difference to the Lowest: difference between the ner is not necessarily the seller who is ranked the highest. we examine the empirical behavior of the Buy Box. 4. (i. algorithm. each of which is characterized by a feature contains Buy Box winners and seller rankings. as well as speculation Amazon’s systems take additional seller attributes into account (be. 7]. we briefly examine Amazon’s seller ranking beyond price into account when evaluating sellers. even without these features we are able to achieve high to the price and seller in the Buy Box for all products in the Crawl2 prediction accuracy. In contrast.. Contrary to our expectations. while 50% of products sifier to predict whether a specific seller of a product wins the Buy have more than 14 changes. seller’s price and the current lowest price for the product. these We begin our analysis by exploring how Amazon’s systems eval.

such as sales vol. back. and also highlights the im. As shown of the prices pi offered by the seller at time ti : in Table 1. we build a detection algorithm that tries of sellers for a given product. pm )} Although we observe that “being Amazon” does confer some ad. These results When ρ is large. Fig. mented features and weights. (tm . p1 ). as determined by our RF classifier.05 as algorithmic pricing candidates. · · · . p0 ). if a seller exhibiting high correlation with the target price We now turn to detecting algorithmic pricing on Amazon Mar.10 2nd Lowest Price 721 494 425 370 Feedback Count 0. we lack ground truth on which sellers are using algo- validation) for all products in Crawl2. if s always offers the several features that we are unable to measure. and that the mag- suggest that sellers who use algorithmic strategies to maintain low nitude of the price changes are relatively constant. thus the age price. fier achieves 75–85% accuracy even in the most challenging cases with many sellers. as external observers https://sellerengine. r). pm )} portant than other features. (tm . Amazon’s price. Higher weights mean that the For a given seller/product pair (s.03 Is the Product FBA? 0. It is possible that Amazon scores highly in these missing lowest price for r at each time ti . We hypothesize that sellers using algorithmic pricing are likely ure 10 also depicts the accuracy of two naïve baseline classifiers.02 Table 2: Number of sellers and products with detected algorithmic pricing. For example. 50–60% accuracy. the seller’s positive feedback and feedback count are also important metrics for winning the Buy We also construct three target price time series. This makes sense intuitively: for example. r). We motivate our selection of target prices by examining popular ture used by the Buy Box algorithm. Finally.8 and choose three tar- pressive predictive power of our RF classifier. unless otherwise stated. repricing software for Amazon Marketplace. We mark pairs prices relative to their competitors are likely to gain a large advan- tage in the struggle to win the Buy Box. 2N Dr = {(t0 . with ρ ≥ 0. it is trivial to achieve to locate sellers that behave like “bots”. (tm . and the Feature Weights. ers. However. (t1 . .06 Total 918 678 543 513 Average Rating 0. which manifests in our classifier as additional weight in us from comparing Amazon’s prices against themselves. the lowest price plow i .e. sellers where the prices 100% accuracy in the 1-seller case. pamzn m )} vantage. the “Amazon is the Seller” feature. (tm . Overall. However. seller feed. 2N Dr . then LOWr will actually contain the second- ume [7]. we construct a time series feature is more predictive of who will win the Buy Box. it chooses the lowest ranked one). we calculate the similarity between Sr and LOWr . 8 ketplace. we Amazon’s Buy Box documentation states that the algorithm uses exclude the prices offered by s. sellers (and not their usage of the Amazon Marketplace API. and Amazon’s which contradicts conventional wisdom about how the Buy Box price pamzn i for r at each time ti : algorithm functions [13]. However. we other chooses the lowest ranked seller. and feedback count are all important features. (t1 . lowest price for r. · · · . In- 5. · · · . the two price-based features are significantly more im.1 Methodology To put the accuracy results of our classifier in perspective. Recall that Note that when we construct the three target price time series. Thus. and AM ZNr (respectively) using Spearman’s Rank Correlation.com/sellery/ 9 In fact. since FBA confers free shipping for Prime users. Figure 10 shows the accuracy of our RF classi. The final step in our methodology is to filter our candidates. · · · . to base their prices at least partially on the prices of other sell- One baseline classifier always predicts that the seller with the low. We note that doing so is non-trivial. Both baselines only achieve first define several target prices that the seller could match against. fier at predicting the winner of the Buy Box (using 10-fold cross. DYNAMIC PRICING DETECTION tuitively. winning the Buy Box. we caution that this does not necessarily mean that Ama- zon has tilted the Buy Box algorithm in their favor. as a function of the number rithm pricing. with the results indicating that price. nor being competitive among the sellers. we observe that Amazon’s algorithm for choosing the Once we have constructed the time series corresponding to winner of the Buy Box is a combination of a number of undocu- (s. plow low low 0 ).7 get prices for each product: lowest price. (t1 . we see that the classi. p1 ). Therefore.9 for each feature by our RF classifier. we observe that using FBA has low importance.. We are able to gain some visibility into this algorithm. such as ourselves are only able to measure the prices offered by Evaluation. the 2nd lowest price p2nd i . Sr = {(t0 . they set and the timing of changes suggest algorithmic control. p0 ). (t1 . we examine the weights calculated second lowest price. i. it means that the price changes contained in the pair of time series occur at the same moments. p1 ). etc).10 Amazon Price 297 277 176 183 Is Amazon the Seller? 0. p1 ). This exclusion rule also prevents features. Sellery provides one more option: matching to the aver- 7 Our dataset includes at least 1K samples at each rank. amzn amzn AM ZNr = {(t0 .33 Lowest Price 726 544 426 408 Positive Feedback 0. a seller who al- est price will win the Buy Box (if there are multiple sellers offering ways wants to offer the lowest on a specific product must set their the same lowest price. which reconfirms that price is not the sole fea.7 (the empirical cutoff of a strong positive correlation) and p-value ≤ 0. Interestingly. Obviously. Moreover. We use a change threshold of 20 Table 1: Relative importance of different features in winning the Buy Box. while the price relative to the competitor with the lowest price. corresponding to Box.36 Sellers Products Sellers Products Price Ratio to the Lowest 0. it is possible that FBA is an important factor in cases where the customer is an Amazon Prime LOWr = {(t0 . pm )} member. 5. thus only a subset of seller/product pairs include AM ZNr . p2nd 2nd 2nd 0 ). note that Amazon does not sell all products in our dataset. this strategy is neither likely to be useful for results are statistically significant. based on two different change thresholds. Finally. Feature Weight Threshold = 10 Threshold = 20 Strategy Price Difference to the Lowest 0. however.

Figure 13: CDF of relative price differences be- with different change thresholds. However. time. In this table. To determine the gap between the prices offered by the suspected olds. For example.. tween algorithmic sellers and target prices. To see if we can observe algorithmic sellers that include exclusive. prices offer by two other sellers. number of products they sell that we detect with change thresholds The fact that algorithmic sellers matching to Amazon tend to of 10 and 20. Thus. and a seller matching to the dence that the seller is using algorithmic pricing. Conversely. Amazon’s commission fees are around 15% for most product portant to note the different strategies are not necessarily mutually categories.2 Algorithmic Pricing Sellers the lowest). we see that 2. However. if the lowest price is likely to often match (i. correlate strongly with) number of price changes in the time series is small.5 $10 11/12 11/13 11/14 11/15 11/16 11/17 11/18 11/19 11/20 11/22 11/24 11/26 11/28 11/30 12/02 12/04 12/06 12/08 12/10 Timeline (Year 2014) Timeline (Year 2014) Figure 14: Example of 3P seller (in red) matching the lowest price of all Figure 15: A second example of 3P seller (in red) matching the lowest other sellers. lowest price are very close to the lowest price: 70% of these sellers ine the set of sellers that we find to be doing algorithmic pricing. In the case threshold as the minimum number of price changes that must occur when the change threshold is 20. our dataset use algorithmic pricing.1. that Amazon charges. to the second-lowest price as well. we plot two figures. also makes a large number of price changes. we define the change all unique numbers of sellers and products we detect. The Total line shows the over- ble that the correlation is coincidental. Fig- rapidly as we increase the change threshold. we plot the relative difference between . § 2. in the remainder of the paper. if a 3P seller and Amazon share We immediately observe that many more sellers appear to be us. We separate threshold since it represents a conservative threshold that is in the sellers matching to the lowest price and sellers matching Amazon’s “knee” of the distribution. $10 $10 Algo Amazon Seller 2 Seller 1 Seller 3 $9 $9 Price Price $8 $8 $7 Algo Amazon Seller1 Seller 2 Seller 3 $7 $6 10/30 10/31 11/01 11/02 11/03 11/04 11/05 11/06 11/07 11/08 11/09 08/23 08/24 08/25 08/26 08/27 08/28 08/29 08/30 08/31 09/01 Timeline (Year 2014) Timeline (Year 2014) Figure 16: Example of Amazon (in red) setting a premium over the lowest Figure 17: Example of Amazon (in red) matching to the lowest price over price of all other sellers. tween algorithmic sellers and target prices. we choose 20 as our change sellers’ prices and the corresponding target prices. set their price within $1 of the lowest price. a seller matches to both Amazon and low. only 40% of Table 2 shows the number of algorithmic pricing sellers and the algorithmic sellers are within $1 of Amazon’s price. we observe that the number of sellers decreases algorithmic sellers and the target prices. For example. it is im. est when Amazon is the lowest price. we briefly exam. However. 2500 100 100 To Amazon To Amazon Number of Sids 2000 Crawl1 80 To Lowest 80 To Lowest 1500 Crawl2 60 60 CDF CDF 1000 40 40 500 20 20 0 0 0 1 10 20 30 40 50 60 70 80 -$60 -$40 -$20 $0 $20 $40 $60 -200 -100 -50 0 50 100 200 Change Threshold Price Change Amount Price Change Percentage (%) Figure 11: Number of algorithmic sellers detected Figure 12: CDF of absolute price differences be. the 3P seller must charge a ing the overall lowest price (and 2nd lowest price) as the target for higher price to maintain the same profit margin. Unless otherwise ure 12 examines the absolute difference between the algorithmic stated.5 $16 Price Price $14 $9 Algo Seller Seller 2 Seller 4 Seller 1 Seller 3 $12 Algo Seller Seller1 Seller 2 $8.4% of all sellers in in a time series Sr for us to consider s as using algorithmic pricing. We observe that algorithmic sellers who match to the Now that we have described our methodology. this is 38% of all Figure 11 shows the number of sellers that we consider to be sellers that have ≥20 changes for at least one product they sell. these fees in their prices. As described in their algorithmic pricing than Amazon’s price. then it is possi. doing algorithmic pricing when we apply different change thresh.e. the same wholesale cost for a product. $20 $10 $18 $9. price in this plot (we ignore the second lowest price in this plot as matching to the second lowest price is very similar to matching to 5. As expected. we merge the sellers and products from charge higher prices may be due to the required commission fees Crawl1 and Crawl2 and present the total unique numbers. this provides more evi.

3.1 Business Practices following analysis (this only filter out 5% and 15% of algorithmic To compare the general business practices between algorithmic and non-algorithmic sellers in our dataset. we observe that there ers. we examine the feedback received by sellers from cus- the characteristics of algorithmic and non-algorithmic sellers. sellers and non-algorithmic sellers. the me- mic seller (in red) always quickly matches their price.3 Price Matching Examples methodology. dian seller/product lifetime for an algorithmic seller is 30 days. On Amazon. and thus we ignore them in the 6. we observe many cases where Amazon itself appears to be employing algorithmic pricing. we examine its As expected. Figure 20: Percentage of positive feedback for al- for algorithmic and non-algorithmic sellers. plete inventories. as shown in Figure 19. . Second. respectively. we examine the following four Figure 20 shows the cumulative distribution of positive feed- seller-level characteristics: lifespan of products. respectively. where we detected algorithmic pricing. Since Amazon itself plays a dual rithmic sellers’ positive feedback advantage is more significant. However. perhaps focusing on items that they can obtain in bulk at At this point. our data suggests that algorithmic sellers have a high price. Given our crawling 5. Amazon presents each seller’s av- non-algorithmic sellers? (2) What fraction of market dynamics are erage rating (0–5). back percentage for all sellers in our dataset. etc. we observe cases that Amazon adopts more complex collected the entire inventory for 100 randomly selected algorith- pricing strategies than simply matching lowest prices. periods of time than non-algorithmic sellers. Note that the inven- in Fig 17. that they have a large amount of inventory. Third. ing algorithmic pricing. Feedback. we conducted a separate crawl that exhaustively Fourth. Figure 14 shows an Figure 18 shows the distribution of seller/product lifespans for example where a 3P seller has a clear strategy to always match the both algorithmic and non-algorithmic sellers. This suggests that al- gorithmic sellers tend to specialize in a relatively small number of 6. The lifespan of a pair begins the 15–30% above Amazon’s price. algorithmic sellers. In the figure. First. product at a small premium relative to the lowest price. As shown mic and non-algorithmic sellers. different lengths of Crawl1 and Crawl2. role as a merchant and the host of the marketplace. In the figure. To obtain com- in time. first time we observe a seller offering that product. likely caused by algorithmic sellers? and (3) What is the impact of and total amount of feedback on the New Offers pages. Since Crawl1 and Crawl2 focused on best selling products. percentage of feedback that is positive (0–100). but that Amazon is almost always slightly more expensive. In tomers. Figure 16 shows a case where Inventory. not just which they match the lowest price. and ranking in the seller page. but below which they sell the specific products where we detect algorithmic pricing. sellers matching Amazon’s price and the overall lowest price. In this section. the algorithmic sellers’ prices and the target prices in Figure 13. 100 100 Algo 100 Algo Algo 80 80 Non-Algo 80 Non-Algo Non-Algo 60 60 60 CDF CDF CDF 40 40 40 20 20 20 0 0 0 25mins 1d 10d 2mon 0 1 10 102 103 104 105 0 20 40 60 80 100 Lifespan Number of Products Positive Feedback (%) Figure 18: Distribution of seller/product lifetimes Figure 19: Number of products sold by algorith. ANALYSIS products. the anomalies in Figure 18 around 1 month are artifacts caused by the majority of the time they sell at prices up to 40% higher. the are three other sellers that offer the lowest price at different points dataset may not contain all products sold by sellers. customers may rate sellers on a 0–5 scale particular. and Rank. and the algorith. algo- of products. given this compressed value range. algorithmic sellers sell fewer unique products by a large margin. Amazon appears to have a ceiling at around $9. above tory for algorithmic sellers includes all products they sell. mic and non-algorithmic sellers. shipping time. As shown in Figure 15. we Product Lifespan. respectively). the shortest possible lifespan is 25 minutes. we have identified the sellers who are likely us. the algorithmic seller always matches sales volume. Although we the algo. gorithmic and non-algorithmic sellers. Next. we see very different behavior between algorithmic role as a seller separately. we observe several cases where the seller offering the while it is only 15 days for a non-algorithmic seller. we are interested in answering the following questions: and also provide feedback about whether their experience with the (1) How do the business practices of algorithmic sellers compare to seller was positive or negative. Surprisingly. We observe that al- feedback volume. almost all sellers have greater than we do not have access to several seller features such as return rate 80% positive feedback. inventory size. As we show lowest price is able to sell the product well above their reserve momentarily. We begin by examining the lifespan of can observe a number of sellers who choose a new price that is seller/product pairs in our dataset. We observe that algo- lowest price across all other sellers. Note that algorithmic sellers on the Buy Box? Amazon does not display these stats for sellers with insufficient feedback (typically new sellers). we can see four rithmic sellers are active in the marketplace for significantly longer other sellers that offer the lowest price over time. we compare and contrast Next. Note that this gorithmic sellers have slightly higher positive feedback than non- list of characteristics is not comprehensive: as mentioned in § 4. For example. so the long lifespans of their products further suggest the lowest price from the other two sellers. we compare the total Amazon (in red) chooses their price to be a premium above the number of products sold by algorithmic and non-algorithmic sell- lowest price of all other sellers. and ends the last time we observe that seller offering the product. low wholesale prices. Note that the vertical rithmic seller is willing to sell the product for as low as $12. while the We conclude this section by showing a few example products longest are 3 and 1 months for Crawl1 and Crawl2.

algorithmic sellers could have much higher sales volume than list is roughly ordered from least-to-highest price.10 and there is a long tail of products whose ket. Algorithmic Non-Algorithmic 10 Overall 72% 73% Readers may notice that the number of price changes for algo- rithmic sellers in Figure 24 goes below 20. rank in the presence/absence of algorithmic sellers. To demonstrate this. non-algorithmic sellers. we plot Figure 23. our results show that algorithmic sellers exhibit sellers doing algorithmic pricing to products without such sellers. There are two reasons why this could be happening: for every product at each crawl. and they acquire significantly larger amounts of positive feed. As we observed in Figure 7. Amazon as a Seller. Although Amazon’s inventory of products for- very different distribution. they still dominate the mar- more common than not. Figure 22: Cumulative distribution of rank on the Figure 23: Cumulative distribution of Amazon’s rithmic and non-algorithmic sellers. In products with algorithmic sellers. offering around 75% of all best-selling products over time. which contrast: algorithmic sellers acquire significantly greater amounts shows the the rank of Amazon as a seller on the New Offers page of feedback. Second. even Amazon tends to be ranked lower for products where back (suggesting they may have higher sales volumes). products they sell. “Overall” means that Ama- This suggests that either there is no competitive pressure to insti- zon sold the product at some point during our crawls. As shown in Figure 22. New Offers page for algo and non-algo sellers. Figure 21 examines the amount of feedback received by algo. or the seller is unsophisticated. The feedback and sales volume characteristics of algorithmic sellers put them at an advantage with respect to non-algorithmic 6.2 Price and Buy Box Dynamics sellers. we compare the frequency of algorithmic and non- there are cases where sellers do not appear in the top 20 list. algo and non-algo sellers at different ranks. We observe that for non- a seller separately. they sell fewer unique products. algorithmic sellers could be more Overall. the first. prices change 100 or even 1000 times. Crawl” is the average percentage of products sold by Amazon dur- However. if we examine the algorithmic sellers. Table 3 shows the percentage of best-selling algorithmic sellers. However. Amazon is also known rithmic and non-algorithmic sellers. First. they participate in the marketplace for longer periods of products without such sellers. this plot includes all the products sold by the algorithmic sellers. Given Amazon’s dual role as merchant Price Changes. the price never changes for 65% of the pairs. 100 100 100 Non-Algo Algo Win Rate (%) 80 80 Price 80 60 60 Sid 60 Non-Algo CDF 40 Algo CDF 40 Sid 40 20 20 Price 20 Non-Algo Algo 0 0 0 0 1 10 100 1000 0 1 10 100 1000 0 5 10 15 19 Number of Price Changes Number of Changes Rank Figure 24: Number of price changes per Figure 25: Number of changes in the Buy Box for Figure 26: Probability of winning the Buy Box for seller/product pair. while “Each gate changes. algorithmic sellers are active. significantly different characteristics than non-algorithmic sellers: we see a dramatic difference. algorithmic sellers are much more active in the marketplace. Besides having an enormous inventory. we observe a ing each snapshot. the rank of algorithmic sellers on the ketplace. of which have <20 changes during our crawl. we observe that Amazon ranks highly for almost all aggressive about soliciting customer feedback. Note that neither CDF goes to 100% because Finally. In this case we observe a stark for their low prices. in compete. time. when comparing all the products in Next. if we compare the products that have Taken together. products that are sold by Amazon. algorithmic sellers. we move on to examining the dynamics of Amazon Mar- their respective inventories. Unsurprisingly. some Table 3: Percentage of products with Amazon as one of the listed sellers. products with and without algorithmic sellers. 100 100 100 Algo 80 80 80 Non-Algo 60 60 60 CDF CDF CDF 40 40 Algo 40 Algo 20 20 Non-Algo 20 Non-Algo 0 0 0 1 102 104 106 0 5 10 15 19 0 5 10 15 19 Number of Ratings Rank Absolute Rank Figure 21: Amount of feedback received for algo. Figure 24 shows the distribution of number and host of the marketplace. which is the change Each Crawl 62% 63% threshold we set to detect those algorithmic sellers. followed by price and product changes in the Buy Box. Thus. Pairs with at least one price change are sale does appear to change over time. algorithmic sellers winning the Buy Box. we this percentage increases to 96%. but in the products where they do we see that Amazon ranks in the top 5 sellers 88% of the time. it makes sense to examine their role as of price changes per seller/product pair. we look into price changes for each seller/product New Offers page tends to be significantly higher than that of non- pair. However. .

[30] Finally. with the ultimate goal of increasing transparency of Several empirical studies have also show that online market. and products that do not. Next. However. customers.Buy Box. findings.neu. Given the importance of winning the search community. using computer algorithms to automati- products with algorithmic sellers experience many more price and cally price goods) a realistic possibility for even small-scale sell- seller changes in the Buy Box: for example. third-party price monitoring tools like CamelCamelCamel.. and not always positive.11 We found that algorithmic sellers can be de- Buy Box. customers.. Any opinions. unintentional market distortions. this is indeed the We collected large-scale data on products and sellers on Amazon case: algorithmic sellers are more likely to win the Buy Box at all Marketplace. 14] model a pricing game and Feedvisor is a win for sellers. algorithm exacerbates the disparity between algorithmic and non- tomers convenience. this result is quite interesting: as shown in Figures 12 tecting using a target price time series. pricing receive more feedback and win the Buy Box more fre- quently. As shown in Figure 26.com . the anonymous nature of online marketplaces makes place where the Buy Box winner receives the vast majority of sales. it is not clear what the impact of dynamic pricing is on reveal that attackers can correlate the highly sensitive user informa. and we make our code and data available to the re- ranks except for the top one. Acknowledgements ing users to receive out-of-date pricing information. revealed the exis. these services have made that have algorithmic sellers. major e-commerce sites. mic sellers does not necessarily push item prices down to their re- cial network profiles on Facebook. [11. these practices. These sellers are playing a of cost-effective. [26. and CHS-1408345. [19. especially smaller merchants who played by the sellers and study the properties of its equilibria as a lack a dedicated programming staff. In this paper. winning the Buy Box. Finally. Second. Automated algorithms guably.edu 12 http://camelcamelcamel. We view our efforts to detect dynamic shill-purchasing service for escalating business’ reputations on the pricing as the first step towards long-term monitoring of algorithms Taobao online marketplace. places can cause privacy issues for consumers. algorithmic sellers tend to set their prices greater than or such sellers in our data set. they manage to win line marketplaces. the impact of algorithmic pricing on marketplaces out algorithmic sellers have zero price changes.e. the presence of algorith- tion from public profiles in eBay’s feedback system with their so. [20] studied Uber’s surge pric- ing algorithm and revealed that an implementation bug was caus. Our findings illustrate the power of algorithmic pricing in on- gorithmic sellers do not offer the lowest prices. Minkus et al. 20% of products with. we examine whether algorithmic sellers are successful at tifying sellers using algorithmic pricing on Amazon Marketplace. and we identify over 500 and 13. Furthermore. Sellers we identified as using algorithmic the Buy Box anyway due to their feedback and sales volume. [12] models with algorithmic sellers. which gives rise to the need for merchants to payment providers (e.g. However. Online marketplaces bring cus. As expected. 33] study insincere sellers that generate opin. algorithmic sellers. equal to the lowest price for a product.ccs. CNS-1319019. the impact of these algorithms on users are often poorly essary to truly understand how these factors impact customers. CONCLUDING DISCUSSION on the Buy Box. and a vast inventory of products. conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the NSF. understood. algorithmic pricing can sonal information and detailed shopping habits leaking from online cause prices to fluctuate rapidly. 10] extend the traditional price competition model ing. and tence of systemic racial discrimination on AirBnB [24]. ers. them vulnerable to manipulation and fraud conducted by unscrupu. the existence against other competitors in the market. Unfortunately. Although we do not observe any ion spam and artificial ratings to manipulate the reputation sys. 32. As shown in Figures 14–17. confusing and undesirable [9]. minate with all serious sellers adopting automation. algorithmic pricing (i. low prices. Edelman et al. as previously noted. Furthermore. user-friendly automation platforms like Sellery pricing game in the marketplace. 11 Available at http://personalization. this exposes cus. which suggests an arms race that may ter- price competition in marketplaces where equilibria rarely exist. Similarly. Recently. which they may perceive to be sellers.12 Ar- Auditing E-Commerce Algorithms. [34] discovered per. 28. even though al. as it creates a largely winner-take-all market- However. there are documented cases of algo- tems on online marketplace. Figure 25 compares the number of seller (labeled E-commerce marketplaces have changed many aspects of how as Sid) and price changes we observe in Buy Boxes for products goods are bought and sold. RELATED WORK enue than non-algorithmic sellers. Clearly. The Buy Box Issues in Online Marketplace. especially in heterogeneous products with algorithmic sellers. likely suggesting higher sales volumes and thus more rev- 7. although more quantitative and qualitative work is nec- However. this makes the shopping experience more complicated for are becoming increasingly ubiquitous on online marketplaces. markets that include competing algorithmic and non-algorithmic tomers to a great deal of volatility. [39] conduct an empirical analysis on rithms pushing prices to unrealistic heights [37] and being used to the Seller Reputation Escalation (SRE) ecosystem that provides a implement price fixing [5]. First. function of the dependencies among goods/services offered by the However. serves. e-commerce sellers are over time—especially one attempting to manage many products able to adjust their prices automatically by setting algorithmic rules simultaneously—but is trivially automated. there are also caveats introduced by algorithmic pric- sellers. increasing automation opens the door to intentional and lous parties. 29] We thank the anonymous reviewers for their helpful comments. of these issues in our data. we took the first steps towards detecting and quan- Next. in markets. [25. we observe cases where algorithmic sellers change prices tens or even hundreds of Theoretical Work on Price Competition. PayPal). 31. uncovered instances of price discrimination and price steering on This research was supported in part by NSF grants CNS-1054233. versus only 2% for and customers is not yet understood. which would be difficult for a human to maintain the Internet and computation technologies. 18. With easy access to times per day. it is challenging for non-algorithmic sellers to compete proposed by Bertrand [14] to combinatorial settings. we examine the impact of algorithmic sellers 8.

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