Amazon Automatic Pricing Lists Book At $23M

leek writes "An Amazon.com pricing algorithm which lets sellers set prices based on other sellers' prices led to a positive feedback loop, causing the biology text The Making of A Fly to reach $23M. Biologist Micheal Eisen writes: 'What's fascinating about all this is both the seemingly endless possibilities for both chaos and mischief. It seems impossible that we stumbled onto the only example of this kind of upward pricing spiral. And as soon as it was clear what was going on here, I and the people I talked to about this couldn't help but start thinking about ways to exploit our ability to predict how others would price their books down to the 5th significant digit -- especially when they were clearly not paying careful attention to what their algorithms were doing.' The price of the book was reset but is currently back up to $976.98."

Comments

Price-Fixing with no collusion?

[dmomo]

Now that robots are setting prices, must they follow the same rules as people? I would think that, without any explicit agreement, using game theory type decision making alone, a pattern of "price fixing" could certainly emerge by virtue of different algorithms making their own optimizations.

Is this okay?

Re:Price-Fixing with no collusion?

[somersault]

Of course it's okay, just don't expect me to buy anything if I don't think it's worth it!

Well, this story goes a small way towards explaining some of the ridiculous prices from some Amazon 3rd party sellers. I saw a textbook recently for hundreds of pounds and wondered wtf they were smoking when they set that price.

Re:Price-Fixing with no collusion?

[LordLimecat]

I would think that the sellers bear any responsibility for what their automated programs do.

Re:Price-Fixing with no collusion?

[Waffle Iron]

Now that robots are setting prices, must they follow the same rules as people?

No. Here are the rules for robot pricers:

• 1. A robot must maximize profits, and may not through inaction allow profits to not be less than maximized.
• 2. A robot must obey any orders given to it by human beings, except where such orders would conflict with the First Law.
• 3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

Re:Price-Fixing with no collusion?

[Waffle Iron]

I accidentally left an extra "not" in the rule while I was editing it. The logical conflict probably means that the robot is going go insane, take over the world's computer systems, and launch a global nuclear war. My bad.

Nice try, Slashdot

[Anonymous Coward]

Way to embed your affiliate code in there. You're not making anything off my purchase of a $23M book.

Re:Nice try, Slashdot

[MMMDI]

It sets a cookie on your computer, so even if you don't buy that book (and why wouldn't you?!), you'll send them a few nickels next week when you buy a DVD... unless you click someone else's referral link in the meantime.

Textbooks are too expensive

[jmac_the_man]

This is a textbook? So are we sure it was a mistake?

It happens

[Rysc]

I added Around the World in 80 Days to my cart one day and forgot about it. Later in the week I went back and saw a notice that the price of an item in my cart had changed. When I looked I found that the movie had gone from a modest ~20USD to over 800USD. I let it sit there and a few days later it changed again, this time to ~18USD. I bought it immediately before it could get worse again.

What the summary forgot to mention

[VGPowerlord]

The summary apparently forgets to mention that the sellers in this case are not Amazon themselves, but third-party vendors using Amazon's used book sales thing.

Note: The article does make this distinction, so it's just a bad summary.

This is obvious.

[ModernGeek]

They mixed it up with the RIAA pricing algorithm.

Re:Can we get this going the other way?

[JAZ]

Ooh! count me in!

My number is (212) 867-5309

Re:Unreal

[kevinNCSU]

So just to be sure I'm reading this right, your plan is to find an 'accomplice' to 'buy' a book from you for 23 million dollars and then have them 'disappear'?

price history graph

[trb]

here's a price history graph of the book http://camelcamelcamel.com/Making-Fly-Genetics-Animal-Design/product/0632030488

Re:Did they design this system or just implement i

[jd]

I've seen books on Amazon before that were in the thousands of dollars - books that you can find at any used bookstore for 50 cents, we're not talking ultra-rare stuff here. So this isn't a new bug and they're bound to have had complaints many times before. I think this is the first time they've let the loop get this far though.