Deep Q-learning of prices in oligopolies: the number of competitors matters
Dawid H, Harting P, Neugart M (2024) Universität Bielefeld Working Papers in Economics and Management; 03-2024.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.
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| Veröffentlicht | Englisch
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Abstract / Bemerkung
Artificial intelligence algorithms are increasingly used for online
pricing and are seen as a major threat to competitive markets. We
show that if firms use a deep Q-network (DQN) as an example of a
state-of-the-art machine learning algorithm, prices are supra-competitive
in duopoly but quickly move to competitive prices as the number of
competitors in an oligopoly increases. This finding is very robust concerning
variations of the exploration and learning rate used in the DQN
algorithm.
Stichworte
algorithmic price setting;
deep Q-network;
oligopoly;
supracompetitive prices
Erscheinungsjahr
2024
Serientitel
Universität Bielefeld Working Papers in Economics and Management
Band
03-2024
Seite(n)
18
Urheberrecht / Lizenzen
ISSN
2196-2173
Page URI
https://pub.uni-bielefeld.de/record/2993335
Zitieren
Dawid H, Harting P, Neugart M. Deep Q-learning of prices in oligopolies: the number of competitors matters. Universität Bielefeld Working Papers in Economics and Management. Vol 03-2024. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2024.
Dawid, H., Harting, P., & Neugart, M. (2024). Deep Q-learning of prices in oligopolies: the number of competitors matters (Universität Bielefeld Working Papers in Economics and Management, 03-2024). Bielefeld: Bielefeld University, Department of Business Administration and Economics. https://doi.org/10.4119/unibi/2993335
Dawid, Herbert, Harting, Philipp, and Neugart, Michael. 2024. Deep Q-learning of prices in oligopolies: the number of competitors matters. Vol. 03-2024. Universität Bielefeld Working Papers in Economics and Management. Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Dawid, H., Harting, P., and Neugart, M. (2024). Deep Q-learning of prices in oligopolies: the number of competitors matters. Universität Bielefeld Working Papers in Economics and Management, 03-2024, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Dawid, H., Harting, P., & Neugart, M., 2024. Deep Q-learning of prices in oligopolies: the number of competitors matters, Universität Bielefeld Working Papers in Economics and Management, no.03-2024, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
H. Dawid, P. Harting, and M. Neugart, Deep Q-learning of prices in oligopolies: the number of competitors matters, Universität Bielefeld Working Papers in Economics and Management, vol. 03-2024, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2024.
Dawid, H., Harting, P., Neugart, M.: Deep Q-learning of prices in oligopolies: the number of competitors matters. Universität Bielefeld Working Papers in Economics and Management, 03-2024. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2024).
Dawid, Herbert, Harting, Philipp, and Neugart, Michael. Deep Q-learning of prices in oligopolies: the number of competitors matters. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2024. Universität Bielefeld Working Papers in Economics and Management. 03-2024.
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