Libertarian response to algorithmic price fixing
Posted by Shlazeri@reddit | Libertarian | View on Reddit | 41 comments
I’m trying to understand more about libertarian approaches to modern problems. This article talks about a CA law banning algorithmic price fixing. On one hand it seems not libertarian since the government is banning something. On the other hand it makes the market work better. https://pluralistic.net/2025/10/09/pricewars/
vegancaptain@reddit
Ultimately, prices need to be found, not just set, and this can be done in more or less efficient ways. There will be plenty of innovation here but the core principle is still the same. Prices are a function of supply and demand and needs to be found. That's why it's called price discovery mechanisms. So a price that is set too low will cause a scarcity. A price set too high will not sell. This isn't good for anyone.
So regardless of the method you use to find the price you have to find the right price in the end or you will end up with either of those two unwanted scenarios. Everyone benefits from us finding correct prices, be it via algos, guesswork or even random chance.
You also have to keep the customer happy and feel good about their purchase so implementing stuff like minute-based pricing where you grab the item at a certain price and then it changes before you reach the register likely a way to make everyone upset. Which also isn't a good thing.
Notworld@reddit
How can the market handle something like this when the price fixing is designed to subvert the natural supply/demand of the market and stifle the need for competition?
natermer@reddit
"Price fixing" isn't anything different then what Unions try to do to raise wages and benefits.
Ultimately it is the customers, the one who has the money, has the power to decide what they want to spend it on. They have the money, power, and decision making capacity to spend their money on things.
If people producing goods, offering rentals, and services don't offer their items at prices customers are willing to pay then the only possible result is going to be bankruptcy.
The California law only makes sense if you assume that the people with the money are dumb consumer cattle that will throw away their life savings just because some corporation decided to charge a extra.
All of this is just a exercise in deflection. California government is ruining the state.
They have, very successfully, artificially inflated the cost of electricity, food, gasoline, rent, mortgages, and pretty much everything else. Especially in the southern portions.
Going after people for using math to help find prices is performative. This way they can act like they are on the side of the consumer while actually doing absolutely nothing to correct the fact that they, along with the Federal governments, policies that have caused everything to get so out of hand.
Notworld@reddit
consumers don't have power if they don't have options. I don't disagree with how badly the government of California has ruined things.
I wouldn't say they are mutually exclusive, but seeing as that's not going to get fixed, and people still need an opportunity to afford a place to live, I don't really see an issue with trying to fix that symptom. It's not ideal. Sure. But nothing about anything is ideal. Seems like a stupid hill to die on at this point.
vegancaptain@reddit
But you don't want free market and you want government to be the only option. No?
Notworld@reddit
I want a real free market. But this scenario seems like the options are either the status quo or stopping what is basically a monopoly from predatory practices.
I’ll agree that the bottom line is to blame the government.
vegancaptain@reddit
The focus should be 100% on government then, not price caps or other small silly ineffective interventions.
Notworld@reddit
I don’t agree we just let these predators suck as much money as they can out of people while we throw stones at the Goliath of government.
vegancaptain@reddit
But wait. How does that justify giving government more power to combat these "predators"?
You need a consistent world view dude.
Notworld@reddit
How is saying you can’t price gouge giving the government more power?
Allowing or disallowing price gouging is giving the government more power since the government is the only player who can enforce anything.
If a landlord is preying on his tenants and they can no longer afford the rent then who do you think is going to use power to remove the tenants? Spoiler, it’s the government. Or the government can decide the landlord was acting illegally and not remove the tenants.
Just because you’re supporting the status quo doesn’t mean you’re inherently against government action.
vegancaptain@reddit
Because who will implement "anti price gouging" laws? Also, there is no such thing in a market. Just prices and consumer choices.
Allowing doesn't require any government action = the non-power route.
There is no "preying", only prices and choices. No one has the right to harm, steal or aggress in any way but they can indeed set prices and accept or not.
You can't afford rent? Move out. Simple. You can't steal someone else's apartment. The power to remove? Dude, the tenant is STEALING at that point. I don't like government and would prefer a private option but this is a case of government protecting the land lord. Good.
I don't support status quo. At all. You're not grapsing any of this becuase you're a leftist and you acn't be honest if it hit you with a shovel.
Notworld@reddit
Dude. I’m not a leftist. You’re confused. It’s like this. We are stuck in this shitty system. In this case, I’d be more for using the system to prevent companies that control virtually all the rentals in a city like NYC or LA from AGGRESSING in normal ass people trying to live their lives. Than I would be for allowing them to get screwed and pretending like they have any real power in this situation.
Fuck idealism at that point. The system we have now is a dumpster fire. I’m not going to support just carelessly tossing libertarian ideals on top of it and pretend that’s a good thing. We can’t just start being libertarian at this point. Everything is so fucked.
Keep calling me a leftist if you want to pretend like nobody on the right could think this way. But then you’re just living with your head buried in the sand.
vegancaptain@reddit
Simple, by consumer choice and competition.
What do you mean exactly? A company can't stop others from competing and they can't stop consumers from going somewhere else.
We often get these "but what if some large company buys all other and 10x the prices" kind of hypotheticals but those aren't real. They have never happened because the market is a living being. Ever changing, ever adapting, ever moving. Which is why all exploitative monopolies through history have always had government involvement or even direct backing. You have to stop competition and consumer choices to create such a scenario and only governments monopoly on aggression can do that.
Notworld@reddit
This isn't a hypothetical though. That's what happened. All the rental firms got together and used an algorithm to price fix. So it does take all the power of choice from the consumers. And it removed all the competition.
vegancaptain@reddit
When did that happen? Have rental prices increases unjustifiably? Or just in line with inflation as most other services?
How did algo pricing remove competition? That doesn't make much sense. It should be the opposite if what you say is true. A perfect opportunity for others to enter the market and undercut them.
Please, explain this to me.
Notworld@reddit
How easy do you think it is to enter the rental market as a property owner when all the property is already owned by a handful of firms? And if the price to buy is also artificially inflated, then you probably can't afford to buy something and rent it out at a lower price and make a profit.
If those firms all agreed to set their prices the same, then how can there be competition between them or consumer choice?
The only real choice consumers have would be to try to not enter the market at all, maybe living at home with their parents or something. As 30-40 year olds mind you. Or leaving the state. Which, yes is possible but really very difficult and I don't think a healthy market if it requires consumers to take on so much burden for the supply/demand to return to a natural state.
I understand the principles were are dealing with here, but it does seem kind of ridiculous to only implement them one way, when our reality is we are stuck in an artificial box anyway. Libertarian idealism isn't really going to do anything but screw over consumers aka us normal people, as long as we are trying to implement it on this bullshit foundation of fake market capitalism that we are currently stuck with.
Yes, ideally I would be all for the Cali government fucking off completely. But that's not going to happen. So, working with the reality we have, I'd rather the middle class be able to afford a decent roof over its head.
vegancaptain@reddit
If there is huge profits margins then it would be super easy to fund raise for it.
All property is owned? No, what? What? None of this makes any sense.
You can be competitive if you compete. What are you talking about? No company can stop you from opening your own shop.
You lend money to start a business dude, you get investors. How did you not know that?
You're just missing half the equation and think you've got this figured out. You're missing the most important economics parts here.
Idealism. Yeah. That one again. So you've been told what to think because I've heard this leftist template SO MANY times dude. Why are you so easily told what to think?
Notworld@reddit
And let me just add you can’t undercut the rental market. That’s not gonna affect the prices. you would just be renting your property for less than you could be because everyone else has agreed to fix the prices. That’s not gonna make theirs come down because their units are still gonna be full.
So there’s no incentive for someone else to come in and start a competitive business because there’s no benefit. you would just also charge the most that you can possibly charge. Which in this case is artificially high because everyone got together and agreed to price gouge. That’s why this is a completely broken fucking problem that can’t just be fixed by the free market because it’s subverting the free market to begin with.
Shlazeri@reddit (OP)
It does seem like if every property owner in say, manhattan, where there is very little room to build new housing, is doing this there is no way for competition to work.
vegancaptain@reddit
Of course there is. And what regulation do you propose? Rent caps are obviously not working. You need markets and you have rejected markets becuase you think "they don't work" so you're adding lots of bad policies that have made the problems much much worse and you keep doubling down on them. That's what's going on here.
Shlazeri@reddit (OP)
No one has mentioned price caps. This is about banning price collusion. You’re not addressing the issue.
vegancaptain@reddit
Everyone on the left thinks price caps are a good idea. They're not.
Banning price collusion? That sounds nice but just shows a fundamental misunderstanding how markets work. And ... they're already banned. So how did that solve the problem? Seems like not at all.
Almost like we need to build more and to have more free markets to solve it.
Notworld@reddit
“Everyone on the left”. That’s the problem. You’re arguing against an argument I haven’t been making.
vegancaptain@reddit
I don't care. I am giving you the right answer no matter how wrong you are. You should listen.
Shlazeri@reddit (OP)
So you are okay with this law which bans price collusion?
vegancaptain@reddit
No. Collude all you want. The market will completely screw you over.
vegancaptain@reddit
Be full? Then you're assuming 100x more price fixers than undercutters. Why assume that when all the incentives are for more undercutters to show up?
The benefit would be you renting your a space and earning money. What do you mean?
Then if you can charge that amount it IS the market price. The CORRECT price. What are you talking about? Don't you know what market pricing is?
Notworld@reddit
Pretty much all the property in a big city like LA or NYC. Yeah. Which is where this issue is happening. I'm not a leftist. I'm looking at the situation and seeing the issue clear as day. It's not about opening up a shop. It's about the housing market being cornered and not being a free market.
vegancaptain@reddit
Why are you not listening to economists about this though? Politicians will lie to you. 100% of the time.
https://www.youtube.com/watch?v=y8wF1PkovxY
Notworld@reddit
Who would rent something for less when they could rent it for more and have a tenant either way?
ghosthacked@reddit
Nothing a gvt does improves a market. It only can improve results for a specific group. Free and open markets work because all transactions are vaulentary. This is the key. Don't like the price. Don't buy/sell. Price moves according to suply/demand, when the price becomes acceptable, buy / sell. All interested parties have an equal say in how the market moves. Any regulations on that market distort participants influence on said market, and will thusly distort the benefits.
Notworld@reddit
I don’t know. In this case it feels like the specific group it would benefit is so large that it would improve the market.
Kind of hard for people to not rent when they need a home and there is no competition in price because of price fixing.
I don’t think in this example all the interested parties do have equal say in how the market moves.
MannequinWithoutSock@reddit
More laws to fix issues caused by zoning laws!
’Just one more law, trust me bro’
Notworld@reddit
I get the ideal that we don't want government stepping in. I just don't quite see how this example isn't a form of government: all the rental firms joining together to price fix, destroying consumer ability to choose and removing all the competition between them.
This isn't a result of zoning laws as much as it is a result of a business practice that subverts the free market. Not saying zoning laws can't be part of the problem, but it's certainly not the whole story here.
Just talking about free market ideals, especially when we don't even actually have a real free market system, doesn't seem like a good way to address an issue that's making it nearly impossible for people to afford rent.
ghosthacked@reddit
Right, but banning the price fixing in this case is a kin to price controls imo. Which isn't going to make the market better. No I admit I'm not sure if a good libertarian way to address this specific issue. But the libertain approach would be, how do we make the market free-r and restricting a particular groups participation in some fashion generally isn't it. So we want to create condition or incintives where this high level collision price fixing isnt benificial. I'm sure if I was want to really dig in to it, there is a collection of laws and regulations that make this approach very attractive.
Shlazeri@reddit (OP)
But if you have a monopoly you don’t have a market and this seems like a similar problem.
ghosthacked@reddit
Fair enough. And your not wrong. One way to define a monopoly could be the absence of a market, particularly a fair one. But the solution isn't price controls, it's creating an environment where there can be a competitive market. Most monopolies exist largely due to gvt regulation / over regulation in first place.
CanadaMoose47@reddit
"unlawful for a person to use or distribute a common pricing algorithm if the person coerces another person to set or adopt a recommended price or commercial term recommended by the common pricing algorithm for the same or similar products or services."
The use of the word coercion in this law seems quite odd to me. Would be interested to know how RealPage "coerces" landlords to raise prices.
Shlazeri@reddit (OP)
According to this piece linked in the post from the OP if you don’t raise prices as they tell you to you lose access to the data. https://popular.info/p/feds-raid-corporate-landlord-escalating
CanadaMoose47@reddit
Interesting, appreciate it.
Sketchy user terms no doubt, but I personally don't consider that properly coercive. I can see why some would consider it that way tho.
synx872@reddit
How does it make the market work better? If customers want a stable price they will avoid stores that use algorithmic pricing. This is just the government forcing consumers and business to use the pricing method they think it's best, removing the choice.