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Business Articles Awards > Economics

Should We Be Concerned That Data And Algorithms Will Soften Competition?

Paul A. Johnson, CPI Antitrust Chronicle May 2017

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Firms have always used data and algorithms. A general store at the beginning of the nineteenth century did not have modern information technology but may have marked up the goods it sold by a constant percent (a very simple algorithm) over costs (data). The large American multi-divisional firms of the beginning of the twentieth century are another example in that they collected large amounts of information from their various divisions and used those data to allocate resources and control behavior. But now some firms appear to be using new types of data in different and creative ways. Facilitated by advances in information technology, the data differ in their size and scope. And, as opposed to a focus on internal control of an organization (e.g. costs, divisional performance), these data frequently have more of an external focus.

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