Alexey Ivanov on RBC: "In the modern knowledge economy, pricing loses its signal function"

Institute Director gives an expert’s opinion on the RBC report on the regulation of e-commerce and the adoption of the Fifth Antimonopoly Package.

Alexey departs from the notion that the market of online trade is in itself highly competitive and does not require the intervention of regulators. It is connected, first of all, with a high degree of concentration of capital in the hands of large companies that receive market power of a special kind: control of a limited resource and possession of huge amounts of data as a key asset of modern trade. The adoption of the Fifth Antimonopoly Package will grant new opportunities for ensuring competition.

 

Using price algorithms allows companies to cartelise markets and overly-manage them. The classical market price regulation law of supply and demand in the post-industrial economy no longer works, and monopolists act synchronously to control price. In these conditions, the state must also develop new competencies to strengthen the oversight function. Control of the behavior of algorithms in the market is possible only through the creation of a more masterful "meta-algorithm".

You can view the entire report via link.