Managing Algorithm Development among Third Party Contractors
The use of autonomous machine learning-based pricing algorithms has grown in many markets in recent years, and many firms outsource their pricing algorithms to third party developers. Recent evidence highlights the potential for pricing algorithms to soften competition, but the role of third-party developers, and how the risks of these algorithms can be managed, are less clear. Using a randomized experiment on a large online platform, we investigate the extent to which third party programmers consider downstream effects of widespread adoption of their algorithms when designing them, and whether managers outsourcing pricing algorithms can influence programmer decisions and designs. Our findings have implications for pricing algorithm development and regulation, and for managing third party programmers.
Date: 11 June 2024, 16:00 (Tuesday, 8th week, Trinity 2024)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room A or https://zoom.us/j/97439169282?pwd=bU1TUWRORUJmaUV0OWpTeS9yVWlBZz09
Speaker: Daniel Ershov (UCL School of Management)
Organising department: Department of Economics
Part of: Applied Microeconomics Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Edward Clark