The Political Economy of Algorithmic Pricing: A Normative Analysis

This thesis discusses the various ways in which algorithmic pricing harms consumers, and explores the normative implications of these claims in terms of law, design, and policy. I bring together all the disparate concerns about algorithmic pricing—exploitation, manipulation, discrimination, and collusion—into a unified normative analysis of the technology’s effect on consumers and the market. I apply a consequentialist harm-based moral theory to the appraisal of algorithmic pricing. I ground this theory in a naturalist metaethics, in order to show how common-sense moral intuitions based on empirical observation can be systematised to provide normative insights into contemporary policy debates. The first six chapters are unified by a concern with the ways in which some forms of algorithmic pricing threaten resource equality and political equality. I begin in the first chapter by presenting a mixed subjective-objective theory of wellbeing, whose causally necessary (but insufficient) conditions include political and resource equality. It follows that when algorithmic pricing increases inequality, it threatens aggregate wellbeing and is pro tanto wrong. In Chapters 2 to 5 of this thesis, I develop normative theories of exploitation, manipulation, discrimination, and collusion to clarify why some instances of algorithmic pricing are pro tanto wrong. In Chapter 6 I present a theory of price regulation in general, applicable not only to algorithmic pricing but also to analog pricing. In the second part of the thesis, Chapters 7-10, I turn to more empirical questions in order to better understand the phenomenon and prescribe remedies. I conduct a review of existing legal protections in the US, the UK, and the EU. I identify gaps suggest how they can be addressed through policy and design to protect consumers and the market from the harms identified in Part I.