Carragee Consulting

Monopoly pricing from SaaS?

I’ve thought about this a lot since my first pricing job was at an airline which used ATPCo to publish and receive competitive prices.

Now many more industries are getting a lot better at web scraping pricing and finding other ways to gather competitive intel.

The big platforms like Amazon, Airbnb, ServiceNow, etc have vast amounts of benchmark pricing data which is unprecedented for real-time optimization decision making.

This Atlantic article is worth the read:

“They point to a recent study of German gas stations, which found that when one major player adopted a pricing algorithm, its margins didn’t budge, but when two major players adopted different pricing algorithms, the margins for both increased by 38 percent. “In situations like these, the algorithms themselves actually learn to collude with each other,” Stucke told me. “That could make it possible to fix prices at a scale that we’ve never seen.””