By Frédéric Marty, CNRS Research Fellow, UMR 7321 Gredeg (Groupe de Recherche en Droit, Economie et Gestion) / Université Côté d'Azur and Thierry Warin, Professor of Data Science for Global Transformations at HEC Montreal.

Price signals generated by algorithms can enable subtle forms of collusion between competitors. After showing how algorithmic signals operate in market mechanisms, we propose a reading grid, based on game theory, to account for the dynamics of algorithmic signaling leading to collusion. Finally, we identify the challenges that algorithmic signaling poses for competition regulators, and the means they use to characterize them.

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