Professional Documents
Culture Documents
Menu
Based on a recent paper, this post explores questions arising if prices are not set by
the sellers on a platform but by a platform’s algorithm. In other words: what if
https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/11/algorithmic-price-setting-plattforms 1/5
19/9/23, 22:38 Algorithmic Price-Setting by Platforms | Oxford Law Blogs
Amazon would use an algorithm to set uniform prices for its sellers? On a more
practical level: how do we treat the setting of the prices/fares by ride sharing
platforms (e.g. the Uber case, in the end not decided).
https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/11/algorithmic-price-setting-plattforms 2/5
19/9/23, 22:38 Algorithmic Price-Setting by Platforms | Oxford Law Blogs
seems sensible. In such situations, brokers (the hub) coordinate a horizontal cartel
amongst the sellers (the spokes) to increase prices charged to consumers. Yet, hub-
and-spoke structures are typically initiated by the sellers and not, as here, by the
brokers setting the price independentlyand via algorithms.
In the end, the fundamental questions are: do we trust the invisible digital hand,
an algorithm programmed by the platform? Do we except a second best outcome
(the loss of competition between the sellers) because it provides cheaper prices
than the third best outcome (more competition exists with the platform than
without it)? And, is it really a black or white choice between second and third best?
Julian Nowag is Associate Professor at the Faculty of Law, Lund University, and an
Associate at the CCLP Oxford.
Share
https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/11/algorithmic-price-setting-plattforms 3/5
19/9/23, 22:38 Algorithmic Price-Setting by Platforms | Oxford Law Blogs
7 July 2022
3 December 2021
https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/11/algorithmic-price-setting-plattforms 4/5
19/9/23, 22:38 Algorithmic Price-Setting by Platforms | Oxford Law Blogs
@OxfordLawFac On Youtube
Our blogs are written by individual contributors and so consist of individual opinions and viewpoints
which are not necessarily the views of either the Faculty of Law or of the University of Oxford.
Contact us
https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/11/algorithmic-price-setting-plattforms 5/5