Brief article on Amazon "Robo-Pricing"

[B.]

The title ended up being more interesting than the article itself, but I think this is notable in the sense that Amazon's "robo-pricing" seems to be under some level of scrutiny.

Link didn't work so I am pasting article excerpt:

Amazon ‘robo-pricing’ sparks fears
http://www.ft.com/intl/cms/s/0/26c5bb...

High-speed trading tools pioneered in the stock market are increasingly driving price movements on Amazon as sellers use them to undercut and outwit each other.

Prices change as often as every 15 minutes as some of the 2m sellers on the site join the online retailer in using computerised tools, often developed by former data miners at banks.


The “robo-pricing” has become a source of tension as Amazon competes with its clients but has access to their sales information and greater experience of data mining.

Amazon sellers – using third-party software – can set rules to ensure their prices are always, for example, $1 lower than their rivals’. More complex algorithms can analyse data to set prices most likely to secure a prominent position on the site.

But the tools create the risk of malfunctions similar to the 2010 flash crash, when algo trading was blamed for some US stock prices falling to near zero, then rebounding in 20 minutes.

Last year, out-of-control algorithms inflated the price of The Making of a Fly, a genetics book, to more than $23m, according to Michael Eisen, a biologist who blogged about it.

The opposite is possible. Some sellers have created dummy accounts with ultra-low prices to pull down those of rivals so they can corner a market by buying their goods, say pricing experts. That violates Amazon’s rules of conduct.

[Scott, Fabled Reviewer o' Tales!]

Just another example of how math is evil.

[Jeffrey, Lentarian Fire Thrower]

LOL! Always wondered what type of computer algorithm could take a print copy of my book and inflate it to $150. For a paperback? Seriously??