Watchdog urged to sniff out any collusion, deception in rent-setting algorithms

A US Senator has urged the FTC to scrutinize algorithms used to calculate the optimum rent for properties over fears the software could potentially allow landlords to illegally collude in cities with a housing shortage. Senator Sherrod Brown (D-OH), who chairs the Banking, Housing and Urban Affairs Committee in the Senate, …

[lglethal]

"​RealPage is always willing to engage with our policy stakeholders to ensure they have the facts and appropriate context about RealPage."

These facts can be found in these small but thick little brown envelopes. Please take them and I'm sure you will agree that there is absolutely nothing that needs to be investigated here. They'll certainly provide you with the appropriate context...

[sreynolds]

Let's think out side the algorithm....

If one whistleblower comes forward showing that there is collusion that costs the consumers X billions then why not make it worth the whistleblower's while and reward them from the billion dollars in fines that should be issued. Surely as there is no future after blowing the whistle make it worth people's whiles for doing the right thing.

Don't tell me you will see things smarted up a lot quicker.

[gryphon]

Re: Let's think out side the algorithm....

I think that already happens in the US

[sreynolds]

Re: Let's think out side the algorithm....

I don't think that they get as much as the six months of unemployment insurance they are entitled to at the moment.

[jilocasin]

Re: Let's think out side the algorithm....

yes, but if I recall, it's limited to whistleblowing on **government** waste.

[doublelayer]

Re: Let's think out side the algorithm....

I like the idea, but the risk is that people start trying to claim that reward for things that don't deserve it. These incentives have gone wrong before, so you have to have a measured and well-tested approach before you do it. Also, you need to assess enough fines that there is something to reward them with.

For an example of the way this ends badly, several religious trial systems, where people weren't guilty of any real provable crimes (witchcraft, a religion the government didn't approve of, etc.) were run on the basis that the accuser would get some of the property of the victim if they were proven guilty. Since such trials were performed using the "torture them until they confess or die" tactic, they got a lot of guilty verdicts which meant that accusing someone who didn't have an unusual way to hit back at you was likely to earn you a chunk of their property after they'd been tortured. When this incentive was removed, there were a lot fewer accusations. I don't expect governments to run reports of criminal activity like that, but still where there is an incentive, someone will try to get it without having the requirements and the system will have to plan for them.

[BobTheIntern]

Re: Let's think out side the algorithm....

This one of the serious problems with the practice of Civil Forfeiture in the US: law-enforcement agencies share in the proceeds of any civil forfeiture action their officers initiate.

[MiguelC]

This works just like a classic hub-and-spoke cartel

[eldakka]

Nice link. This is exactly what is defined in your link as a hub-and-spoke cartel:

A hub and spoke cartel can be defined as the indirect exchange of information between two independent undertakings which are horizontal competitors on the supplier or retailer level (“spokes”), through another undertaking operating at a different level of the production or distribution chain (“hub”). The hub facilitates the coordination of competition between the spokes without direct contacts between the spokes.[2] Despite the lack of a direct exchange of information among the horizontal competitors, this indirect exchange of information can be considered to have the same negative impacts on the market as a horizontal hardcore cartel.

RealPage is the hub, and the landlords are the spokes. RealPage is receiving from each of its customers - the landlords - pricing information, inventory information (how many rental properties the landlord has), and using that information to pass back down to all the landlords what to charge, and what supply constraints to implement to maintain high prices.

[Snake]

RE: Hub and Spoke

Thank you for the wonderful reference, never heard it before but it is *exactly* what is happening, no algorithm necessary. Just log on, look what your neighbor is charging, make sure you charge at least the same.

Why make things hard when a simpler form of collusion and greed works just as well??