Nan Zhou, Li Zhang, Shijian Li, Zhijian Wang
arXiv 21 Feb 2018 · Econometrics · 3 citations (OpenAlex)
arXiv:1802.08061 · PDF · DOI · OpenAlex · Extracted main text
Algorithmic collusion is an emerging concept in current artificial intelligence age. Whether algorithmic collusion is a creditable threat remains as an argument. In this paper, we propose an algorithm which can extort its human rival to collude in a Cournot duopoly competing market. In experiments, we show that, the algorithm can successfully extorted its human rival and gets higher profit in long run, meanwhile the human rival will fully collude with the algorithm. As a result, the social welfare declines rapidly and stably. Both in theory and in experiment, our work confirms that, algorithmic collusion can be a creditable threat. In application, we hope, the frameworks, the algorithm design as well as the experiment environment illustrated in this work, can be an incubator or a test bed for researchers and policymakers to handle the emerging algorithmic collusion.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Capobianco, A., Gonzaga, P. & Nyeso, A (2017) Algorithms and collusion - background note by the secretariat | 1.000 | 10 | 4 | 100% |
| 2 | Friedman, D., Huck, S., Oprea, R. & Weidenholzer, S (2015) From imitation to collusion: Long-run learning in a low-information environment | 1.000 | 10 | 3 | 100% |
| 3 | Tirole, J (1988) The theory of industrial organization | 0.928 | 4 | 3 | 100% |
| 4 | Mcavoy, A. & Hauert, C (2016) Autocratic strategies for iterated games with arbitrary action spaces | 0.811 | 4 | 2 | 100% |
| 5 | Press, W. H. & Dyson, F. J (2012) Iterated prisoners dilemma contains strategies that dominate any evolutionary opponent | 0.737 | 3 | 2 | 100% |
| 6 | Varian, H (2018) Artificial intelligence, economics, and industrial organization | 0.737 | 3 | 2 | 100% |
| 7 | Wang, Z., Zhou, Y., Lien, J. W., Zheng, J. & Xu, B (2016) Extortion can outperform generosity in the iterated prisoner's dilemma self | 0.737 | 3 | 2 | 100% |
| 8 | Ballard, D. & Naik, A (2017) Algorithms, artificial intelligence, and joint conduct | 0.644 | 2 | 2 | 100% |
| 9 | Cox, J. C. & Walker, M (1998) Learning to play cournot duopoly strategies | 0.644 | 2 | 2 | 100% |
| 10 | Engel, C (2015) Tacit collusion: The neglected experimental evidence | 0.644 | 2 | 2 | 100% |
Showing the top 10 of 33 scored citations.