The bad things that happen when algorithms run online shops

Smart software controls the prices and products you see when you shop online – and sometimes it can go spectacularly wrong, discovers Chris Baraniuk.

The BBC has a stroy about The bad things that happen when algorithms run online shops. The story describes how e-commerce systems designed to set prices dynamically (in comparison with someone else’s price, for example) can go wrong and end up charging customers much more than they will pay or charging them virtually nothing so the store loses money.

The story links to an instructive blog entry by Michael Eisen about how two algorithms pushed up the price on a book into the millions, Amazon’s $23,698,655.93 book about flies. The blog entry is a perfect little story about about the problems you get when you have algorithms responding iteratively to each other without any sanity checks.