Pricing Algorithms

Algorithmic Pricing and Competition: The Small-Town Gas Station Example

Twice recently I've tried to purchase something from Amazon that I had purchased just a few months before. In both cases the price of the item in second purchase had been jacked up over 25%, one was over 33%. So,... I just didn't buy one and I bought the other from amazon's competitor, walmart.com, for the price of the original amazon purchase.

The amazon algorithm knows I didn't buy either at the higher price but it doesn't know i'm a price shopping dick and that amazon lost a sale to a competitor.

I'll check every price now.  How does that get input into amazon's algorithm?

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