Algorithmic Pricing and Price Gouging. Consequences of High-Impact, Low Probability Events

Algorithmic pricing may lead to more efficient and contestable markets, but high-impact, low-probability events such as terror attacks or heavy storms price gouging, which trigger injunctions get sellers banned from platforms Amazon eBay. This work addresses how impact prices when set by an algorithm different markets be affected. We analyze mitigate these high-impact paying attention external (market conditions) internal (algorithm design) features surrounding the algorithms. find that both forces help in partially mitigating it remains unknown complete mitigation.