Professor Zach Brown has been awarded one of the 2025 American Economic Journal Best Paper Awards. These awards are given out annually for exceptional papers published in the AEJ in four categories: applied economics, economic policy, macroeconomics, and microeconomics. Professor Brown, along with coauthor Alexander McKay (University of Virginia), won the microeconomics award for his 2023 paper “Competition in Pricing Algorithms.” More information about the awards can be found on the AEJ website. What follows is a description of the paper from the award page:
“In ‘Competition in Pricing Algorithms,’ authors Zach Y. Brown and Alexander MacKay document that online retailers use a wide range of pricing practices—with some updating prices hourly while others do so weekly—and that faster retailers quickly react to price changes by slower rivals. Using high-frequency price data and theoretical modeling, they estimate that these algorithmic pricing strategies increase market prices by 5 percent compared to traditional simultaneous-price competition, generating higher profits for all retailers but especially those with superior technology. Their results challenge standard assumptions about price competition in digital markets. (AEJ: Microeconomics, Vol. 15, No. 2, May 2023)”
