Mass rent increases based on algorithm corporation recommendations, founder once convicted of price fixing.

[Chew Toy McCoy]

Rent Going Up? One Company’s Algorithm Could Be Why.

Texas-based RealPage’s YieldStar software helps landlords set prices for apartments across the U.S. With rents soaring, critics are concerned that the company’s proprietary algorithm is hurting competition.

www.propublica.org

We don't live in a free market or anywhere near. The market highly favors and is manipulated by those with power and is propped up and defended by the government. Anybody praising the free market as a current reality is a liar benefitting from the manipulation or extremely ignorant.

 

[Nycturne]

True free markets require that both sides of the table have equal access to information, and ultimately are able to negotiate from equal positions of need. People need to be able to walk away from the table too (i.e. lack of coercion on one party or another). Neither is true here, but I’d wager that free market proponents would argue that imbalances are natural, or that people are not being coerced.

Once you start talking about core needs, that becomes a form of coercion in my book. I cannot avoid participating in the housing market, unless I want to deal with all the issues homelessness brings (which includes being much more difficult to hold a job, which effectively excludes me from participation in the market). So I am coerced into participation by the nature of “meet these needs or perish”. So that’s absolutely open to manipulation by those that own housing (i.e. landlords and investment companies that own apartments). The other aspect here is information is not being equally available. And by pooling information together like this, it exacerbates the gap between the two parties. Not to mention this is effectively collusion / price-fixing by algorithm. But since it’s an algorithm doing the collusion, it must be unbiased, right?

Pretty similar to the job market, to be honest. Corporations/employers actively suppress sharing of information in order to have a stronger hand at the negotiation table with employees, on top of the fact that not having a job excludes someone from being able to meet their needs for the vast majority of people.

 

[Herdfan]

It's not just real estate, but many companies are using algorithm based pricing. One of my clients is the GM for the local McDonald's franchise (he basically runs it while the actual franchisee hangs out in FL).. One day he needed me to come look at something and we were talking about McDonald's and how I noticed prices were different at different locations, even though they were all owned by the same person.

Seems they use an algorithm that determines price sensitivity to individual items at individual locations. No surprise, but locations in smaller towns with fewer options (ie less competition) have higher prices.

 

[Chew Toy McCoy]

It's not just real estate, but many companies are using algorithm based pricing. One of my clients is the GM for the local McDonald's franchise (he basically runs it while the actual franchisee hangs out in FL).. One day he needed me to come look at something and we were talking about McDonald's and how I noticed prices were different at different locations, even though they were all owned by the same person.

Seems they use an algorithm that determines price sensitivity to individual items at individual locations. No surprise, but locations in smaller towns with fewer options (ie less competition) have higher prices.

And it manipulates the "what the market will bear" theory. Vacancy or loss of business used to be a main factor, but not when it factors in that you can accept some vacancies or loss of business when you make up for it in higher prices. This is the dark side of tech and algorithms at its finest.

 

[Nycturne]

In this particular case, letting one company set prices for a large chunk of a single market via an algorithm also enables monopoly/oligopoly behaviors in markets that may not look like one externally.

But yes, the era of “Big data” and the computing power to analyze it has opened up whole new avenues of market shenanigans. Information gives one side or another an edge, and corporations have the resources to mine troves of (proprietary!) data to give themselves an edge and maximize returns.

I think the depressing part for me is that I went to a tech school for my bachelor’s that required an ethics class. And today, that ethics class is probably the one I think back to the most because of how machine learning is being abused, or its capabilities misunderstood. And because the data is considered proprietary by the companies that collect it, paranoia is free to roam as well. I would put my employer as one of the less harmful users of machine learning and big data, but that’s not the public impression they have. But truthfully, the public has no real way to judge for themselves and compare. So many can slip under the radar for years before the damage becomes known to anyone.

 

[Yoused]

It occurs to me what money has in common with guns: It makes one stupid. The more money one has, the stupider they get, (yes, I am looking at you, Elon – and Jeff, and …) to which there is a sort of irony, because acquiring wealth often (not always) requires a fair bit of cunning, but once it is in hand, all that goes out the window. Kind of like the way a marathon runner collapses at the finish line. It is well past time for us to re-evaluate the dynamics of our socioeconomic system.