Feeds

Amazon algorithms price bio book at over $23m

Drosophila melanogastic cockup

Internet Security Threat Report 2014

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. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
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?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.