Oblivious Learning and Collusive Pricing
On a platform with many sellers, should a pricing algorithm explicitly model competitors' prices when learning demand? Classical arguments suggest that ignoring competitors induces model misspecification and inefficiency, yet findings from algorithmic collusion suggest that ignoring competitor prices may, surprisingly, facilitate collusive outcomes and improve profits. We study this problem in a competitive market with unknown noisy demand, in which sellers repeatedly set prices, either incorporating competitor prices in learning their demand models (informed), or ignoring them (oblivious). We show that, relative to a monopolist, an oblivious seller in a competitive market must conduct mo...
| Authors | Yuhang Wu, Assaf Zeevi |
|---|---|
| Primary category | cs.GT |
| Published | 3 June 2026 |
| Last updated at source | 1 October 2026 |
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