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Algorithmic Pricing Is Creating An Arms Race On Amazon’s Marketplace

Stashed in: Winner take all., Awesome, Amazon, Commerce, Turing, economics, Price Is Right!, Pricing!

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Overall, Wilson says the experience of online shopping—on Amazon, but also on the sites of many large online retailers—is getting simultaneously more complicated and less competitive. It will become more and more challenging for non-algorithmic smaller businesses to compete with sophisticated, automated pricing systems—especially in the "winner-take-all" buy-box scenario.

"The idea of all the retailers being independent is increasingly sort of quaint. They are all watching each other, and using algorithm systems to try to match each other," says Wilson. "If Amazon decides to raise the price of a product, it essentially becomes carte blanche for everyone else to raise their price. It’s not explicitly collusion, but it’s highly correlated."

If machine learning automatically does the pricing, how long till it decides how much you can pay?

What a nice graphic.

Yes, it's rather mesmerizing. 

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