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Gas stations are beginning to incorporate deep learning to set the price of gas, often a dozen different times per day, by predicting how customers or competitors might react to price changes under different scenarios. The development poses a challenge for antitrust regulators, who worry that AI-driven dynamic pricing may be causing companies to collude.
In one example of what can happen when prices are widely known, Germany required all gas stations to provide live fuel prices that it shared with consumer price-comparison apps. The effort appears to have boosted prices between 1.2 to 3.3 euro cents per liter, or about 5 to 13 U.S. cents per gallon, according to a discussion paper published in 2016 by the Düsseldorf Institute for Competition Economics. Makers and users of A.I. pricing said humans remain in control and that retailers’ strategic goals vary widely, which should promote competition and lower prices. “If you completely let the software rule, then I could see [collusion] happening,” said Faisal Masud, CTO for Staples, which uses A.I.-enabled software to change prices on 30,000 products a day on its website. “But let’s be clear, whatever tools we use, the business logic remains human.”
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