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Data and Price Competition: The Special Role of Information About Rivals’ Prices

BY and | July 14, 2025

The growing use of automated pricing tools has important implications for consumers. While data-driven pricing can help firms optimize pricing and improve efficiency, the ability to monitor and respond to...

The growing use of automated pricing tools has important implications for consumers. While data-driven pricing can help firms optimize pricing and improve efficiency, the ability to monitor and respond to the prices of rivals can also soften competition and raise overall price levels in a market. Unlike other pieces of information, rival prices are a special input, and their role in pricing algorithms may merit regulatory scrutiny.

By Zach Y. Brown & Alexander MacKay[1]

 

I. Introducti

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