Hacker News new | past | comments | ask | show | jobs | submit
“None of the companies admitted fault or liability. They did, however, agree to stop providing Realpage with their nonpublic data for use as an input in Realpage’s revenue management system’s price recommendations, and to stop using Realpage’s RMS in ways that use competitors’ non-public data to inform pricing recommendations”.

Okay but Realpage has a decade of real pricing data that it can use to continue informing these rental companies and outside of them having extremely hard boundaries in their service this is just going to happen again.

This doesn’t do a whole lot to address the actual issue, and these companies aren’t going to stop colluding over a wrist slap like this.

What about when market prices are public? Is knowing the market prices collusion?
It can be, if everyone also acts to keep prices high by behaving in ways that aren't typical.

https://en.wikipedia.org/wiki/Tacit_collusion

Reminds me of the extremely interesting paper https://arxiv.org/abs/1904.05234 Flash Boys 2.0

Basically when somebody makes a pricing error on a decentralized cryptocurrency exchange there's a mob of automated arbitrage bots that try to trade against it. Who wins and actually gets to make the trade is mainly determined by how high of a transaction fee your bot is willing to pay.

You can win instantly by offering to trade with a transaction fee so high it almost wipes out all but a cent or two of the entire arbitrage profits, because nobody else will pay a higher fee.

Instead what happens is bots offer the lowest possible fee, then immediately increase their fee as soon as they see a competing bot try to take the trade with a higher fee. This results in the bot offering the highest fee changing every several milliseconds as the fee quickly grows.

The way Ethereum mining works, this results in the winning bot being randomly selected from among the set of bots "bidding" up the transaction fee: blocks are mined at random intervals of iirc about 20 seconds, and whoever had the highest bid at the time the next block is mined wins. <20 seconds of bidding is short enough that even with the bidding, the transaction fee doesn't get bid up particularly high, and the winner makes out with a highly profitable arbitrage trade.

By giving up a guaranteed win and instead rolling the dice against other bots, transaction fees stay low and everyone has a higher expected profit. It's coordination that happens without any communication between the participants and quite possibly the participants didn't realize they were in effect cooperating when they added the high speed bidding behavior to their bots.

loading story #50402546
loading story #50404026
Tacit collusion wouldn't work in this case, because most rental markets aren't oligopolies.
Is there an actual issue? I've seen compelling arguments that places that banned the practice of algorithmic rent setting did not see any appreciable drop in rents. I'm almost convinced the problem is entirely supply side.
The problem is political, landlords run every level of government and use that power to artificially limit housing supply.
There's more housing than people. What's artificially limited is salaries. Higher salaries would mean massive benefits for workers and businesses. And catastrophe for non workers and real estate.
loading story #50405198
loading story #50404346
loading story #50405168
loading story #50404614
Is allowing price-fixing and deniability (ans a service) across 100 mile regions a problem, while you yourself are highlighting a supply-side crisis?

Yes. That’s a problem.

There is no price fixing. They just enabled landlords to find out how high the market price actually was when they didn't know it before due to it being a very opaque market.
loading story #50404451
If it's causally linked to higher prices, I agree. My question is whether we certainly know it's causally linked. In my mind right now it's similarly plausible that these things are just snake oil sold to landlords. There are a ton of conspiracy theories that would be a real problem, if true.
It's snake oil.

Landlords have an inherent trade off between holding out for a tenant who would pay a higher rent and not having the unit vacant in the meantime. Holding out for longer than that helps the other landlords at your expense. Meanwhile there are a large number of landlords, there is no way for the ones using a given system to force the others to do the same, and a significant percentage of them don't.

So if the system tells the landlords using it to do the thing that would increase rents if every landlord was using it, the "defectors" who don't use the system win out over anyone using it, which means using the system rather than defecting would cause you to lose money and everyone would have the incentive to defect.

Whereas if all the system is doing is suggesting the optimal point in the trade off between holding out for a higher paying tenant and renting the unit sooner, without assuming the other landlords are being required to use the same system, that's the same thing an individual landlord would do if they're not colluding.

The actual way landlords collude is through zoning boards, because then they have an enforcement mechanism, i.e. if someone is trying to defect by adding new units to alleviate the limited supply then the other landlords can sic the government on them, having passed the various laws against constructing those units there.

loading story #50403575