Feeds

Amazon algorithms price bio book at over $23m

Drosophila melanogastic cockup

The essential guide to IT transformation

An algorithmically induced pricing spiral drove up the price for a popular biology reference work on Amazon.com to an astronomical $23.7m.

Amazon allows third-party retailers to set their prices using algorithms that take into account what other booksellers are charging for the same title. In this case, the title was The Making of a Fly by Peter Lawrence, and the Amazonian booksellers whose pricing algorithms drove its price to ludicrous levels were bordeebook and profnath.

Cover of 'The Making of a Fly' by Peter A. Lawrence

A fine reference work, to be sure – but is it worth $23,698,655.93 plus $3.99 shipping?

According to evolutionary biologist Michael Eisen, who discovered the spiral and wrote about it on his personal blog, bordeebook and profnath employed algorithms to automatically set their prices for The Making of a Fly – which Eisen describes as "classic work in developmental biology" – based on each others' price.

"Once a day profnath set their price to be 0.9983 times bordeebook's price," Eisen writes. "The prices would remain close for several hours, until bordeebook 'noticed' profnath's change and elevated their price to 1.270589 times profnath's higher price."

These adjustments caused a seesawing effect: profnath would lower its price to slightly below that of bordeebook's, then bordeebook would bump its price up to significantly over that of profnath's. Then profnath would react, then bordeebook would respond – then profnath, then bordeebook, and so on ad infinitum.

Well, "ad $23,698,655.93", in any case.

It's not that bordeebook and profnath are either disreputable or ignorant newbies when it comes to selling books on Amazon. Both are ranked by users with four and a half out of five stars, and both have positive ratings in the mid-90 per cent range. And the two booksellers aren't small: bordeebok has over 128,000 rankings, and profnath, though significantly smaller, is no slouch at over 8,000 ratings.

"What's fascinating about all this is both the seemingly endless possibilities for both chaos and mischief," Eisen writes. "It seems impossible that we stumbled onto the only example of this kind of upward pricing spiral – all it took were two sellers adjusting their prices in response to each other by factors whose products were greater than 1."

This silliness, however, was eventually noticed – but the algorithm lives on. "The price peaked on April 18th," Eisen writes, "but on April 19th profnath’s price dropped to $106.23, and bordeebook soon followed suit to the predictable $106.23 * 1.27059 = $134.97."

As of this Tuesday, bordeebook was selling a used copy of The Making of a Fly for $956.98, despite the fact than any even-larger bookseller – any_book, with over 560,000 ratings – was selling the same book in better condition for a mere $197.67. And profnath has dropped out of the algorithmic tug o' war.

With all due respect to The Making of a Fly and its Drosophila subject matter, it appears that algorithmically managed online commerce still has a few bugs. ®

5 things you didn’t know about cloud backup

More from The Register

next story
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?