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`Ambitious and politically relevant research´
Ole Kristian Dyskeland has received an award for the best PhD paper recently presented at a conference. The NHH doctoral student shares the prize with John S. Lilletvedt from UiB.
`Ambitious and politically relevant research at the forefront of the field,´ stated the committee, which awarded the two PhD candidates a prize of NOK 3,000.
PhD Candidates from UiB and NHH
At the recent annual research meeting of Samfunnsøkonomene, Ole Kristian Dyskeland, a PhD candidate at the Department of Business and Management Science, and John Sæten Lilletvedt, a PhD candidate at UiB, were invited to present their latest research.
Their paper, presentet by Lilletvedt, impressed the committee so much that they were recognized with an award.
`It’s incredibly motivating to see that work you’ve dedicated time to is recognized as valuable, ´ said Dyskeland.
He is the second author of the paper, “Do Capacity Constrained Bots Collude?”, which they presented at the conference.
Algorithmic Pricing
The committee highlighted the paper’s foundation in cutting-edge research examining whether algorithmic pricing could lead to collusion, a form of coordination among market participants. This topic has clear policy relevance.
`A general concern for competition policy is that participants may find ways to agree on or set higher prices than they would under conditions of full competition, ´ said Dyskeland.
With the rise of e-commerce and platforms like Amazon, companies increasingly delegate pricing decisions to pricing algorithms or bots. Dyskeland elaborated:
`There’s an ongoing debate among competition economists about whether these algorithms dampen competition. We test and challenge a well-known paper that suggests they do, adding the factor of limited inventory constraints.´
Testing Pricing Strategies
`What did you find? ´
`We found that prices are stable at a higher level than they would be under perfect competition. This isn’t necessarily illegal or inherently problematic—it can be explained by the fact that bots consider their limited inventory when setting prices, ´ Dyskeland explained.
To dig deeper, Lilletvedt and Dyskeland used a test where one bot lowered its price abruptly. This allowed them to observe the rival’s response.
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`If one bot that lowers its price to steal customers from its competitor is punished later with aggressive price cuts and low profits, this would indicate problematic pricing strategies. However, we did not find evidence of such punitive responses, ´ Dyskeland concluded.
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