Algorithmic Coordination
Oren Bar‐Gill, Cass Robert Sunstein · 2025
Abstract Thus far, the book has focused on algorithmic harm that results when AI-powered algorithms meet the information and rationality deficits that afflict many consumers. Chapter 5 turns to another category of algorithmic harm: harm that algorithms can inflict on consumers regardless of their rationality or sophistication. This is the harm from implicit coordination among algorithms employed by competing sellers. The concern is that algorithms will learn that coordination, that is, keeping prices high as long as other firms follow suit, more effectively attains their profit-maximization objective. The result is a new algorithmic equilibrium that is decidedly anticompetitive, where consumers are harmed by the high prices.