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Project Hammer: reduce collusion in the Canadian grocery sector

jacobfilipp.com

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Re: Project Hammer: reduce collusion in the Canadian grocery sector

#191

Post by glitchc »

huitzitziltzin wrote: post #154
surgicalcolor wrote: post #111

Earlier quoted context omitted.

Conversely, I think you're overestimating the technical capailities of Canadian federal or provincial regulatory organizations. Government departments notoriously have serious technical debt, so while they might entitled to demand this kind of data, I sincerely doubt they are doing it with anything resembling modern data analysis. These orgs aren't going to have working data lakes, spark clusters or data warehouses o…

Canadian economics departments are full of really smart economists. They are happy to help. The issue here has nothing to do with the size of the data. A grocery store will have 100,000 products at most, probably sets prices about weekly and maybe you have ten years of data. The market is an oligopoly so you have 10-15 store chains. That fits in memory. The issue is not at all the mechanics of running the analysis bu…

> Canadian economics departments are full of really smart economists. They are happy to help.

The appropriate incentive is lacking.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#192

Post by zxexz »

jfil wrote: post #102
huitzitziltzin wrote: post #92

‘’’ Reach out to me (email “jacob” at this website) if: You can do economic analysis of pricing data, and especially the interaction/correlation of multiple streams of prices across time ‘’’ The item in that quote is significantly, significantly harder than the author is giving it credit for. Canada has a competition policy agency. They are (almost surely) entitled to demand data from firms as part of an investigatio…

Hey man, I'm just creating the hammer - you can throw it in the lake, make a treehouse for your kid, smash a window, up to you :-D

In retail (or any market with elastic pricing, not sure if I'm using that term correctly), collusion is really hard to gain hard evidence (evidence that will hold up in court) using data alone. You need to use the data as a tool for on-the-ground and in-depth qualitative analysis. I would not be surprised if this holds "even more true" for consumer goods like this than it does for other, highly regulated fields like finance and healthcare. I personally like the idea of focusing on an individual good or category of item, and seeing if you can find similar patterns, in other goods.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#193

Post by randomdata »

adamomada wrote: post #89
ActionHank wrote: post #61

Earlier quoted context omitted.

Wild that Costco can be orders of magnitude cheaper than the competition despite your defending of Galen's honour.

This is the most laughable part, it means Costco has to be in on it too. And I can show they’re not, easily: the prices at Costco are more than the grocery chains! They are colluding... to keep prices low

I'm not sure your proof works. In the absence of collusion, you'd expect vendors selling the same thing to ultimately end up with the exact same prices. After all, why would the customer keep buying from Player B if Player A is selling the exact same thing for less? The only way Player B has any chance of finding any customers and dividing the market, without some other differentiating factor, is to sell at the same price as Player A.

If anything, Costco's higher prices is more likely to suggest collusion (but still does not imply it).

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#194

Post by maronato »

delichon wrote: post #108

Say I set my apple prices at 0.5 standard deviations below the average prices I can find in the vicinity. Is that an attempt to undercut the market or collude with it? If I set the price to the average, is that collusion or just trying to maximize my profit on apples? If I set it higher than average, is that collusion, or me telling the market that I think I have premium apples? How do you get from correlation to col…

> Collusion is a deceitful agreement or secret cooperation between two or more parties to limit open competition by deceiving, misleading, or defrauding others of their legal right. [1] If you decide, on your own, to sell a product at a lower price than your competitors, you are doing exactly what capitalism expects from a free market.

If you call the neighboring stores and say "hey, let's all sell apples for 2x our current price so consumers don't have a choice but to buy it for that price", then you are colluding.

Your point does stand though. From the outside it's very hard to distinguish between collusion and not by mere correlation. Prices may converge for various legitimate reasons, and without insider knowledge, reliably identifying collusion is often impossible.

The best-case scenario for the project might involve comprehensively modeling a single product category to demonstrate that only collusion could explain the pricing patterns. Success would then hinge on litigation uncovering direct evidence like incriminating communications.

[1] https://en.m.wikipedia.org/wiki/Collusion

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#195

Post by tazu »

huitzitziltzin wrote: post #92

‘’’ Reach out to me (email “jacob” at this website) if: You can do economic analysis of pricing data, and especially the interaction/correlation of multiple streams of prices across time ‘’’ The item in that quote is significantly, significantly harder than the author is giving it credit for. Canada has a competition policy agency. They are (almost surely) entitled to demand data from firms as part of an investigatio…

> ~ an actual antitrust guy

So, unfirable? Essentially useless and beholden to little if any performance metrics?

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#196

Post by xp84 »

If Canada is anything like the U.S. the snag I think you'll hit in establishing answers to questions like "what does this pound of butter cost at X chain" is that supermarkets now play so many games with pricing that there isn't one answer!

1. Prices may be regionally or locally varying based on, I assume, either inventory management needs or their idea of what people in one area will tolerate.

2. Pricing gimmicks. At my local supermarket, a standard bag of potato chips is $6.99 or so, but during some phases of the moon it becomes "$1.99 WHEN YOU BUY 4." Other products, a lot of packaged goods, go on sale in bundles: An item that may be $4.99 will be "$1.99 WHEN YOU BUY 5" participating products which may be chosen from certain unrelated stuff, like crackers, Tide, and Pillsbury biscuits. It's up to you to scrutinize the circular, the shelves don't always enumerate the eligible products. And finally, the best one, the "with digital coupon" prices. All you have to do is get on a sluggish app in terrible cell service, get properly signed in (oh, be sure to check your email because we needed to send you a 'security code') and locate and 'clip' the coupon and then you get a sale price. If you forget to do that you'll pay full price.

So in the above situations I'm concerned what kind of data integrity one would get because different consumers will pay different amounts. For instance, not everyone has room to transport 4 bags of chips home, so they may end up spending $7 for 1 instead of $8 for 4. Therefore the chips are simultaneously $2 and $7.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#197

Post by ajb »

huitzitziltzin wrote: post #154
surgicalcolor wrote: post #111

Earlier quoted context omitted.

Conversely, I think you're overestimating the technical capailities of Canadian federal or provincial regulatory organizations. Government departments notoriously have serious technical debt, so while they might entitled to demand this kind of data, I sincerely doubt they are doing it with anything resembling modern data analysis. These orgs aren't going to have working data lakes, spark clusters or data warehouses o…

Canadian economics departments are full of really smart economists. They are happy to help. The issue here has nothing to do with the size of the data. A grocery store will have 100,000 products at most, probably sets prices about weekly and maybe you have ten years of data. The market is an oligopoly so you have 10-15 store chains. That fits in memory. The issue is not at all the mechanics of running the analysis bu…

Famously , academics analysis found (virtually proved) share options manipulation by statistical analysis alone, which was a bombshell in the tech industry a decade ago, threatening many executives with imprisonment. However , it's not obvious how you could employ the same process here. with share options there was a liquid market as a source of external information.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#198

Post by willvarfar »

Here is an app idea:

Users use a smartphone app to zap the price labels on shelves in shops.

The app can provide basic price history and comparison prices etc.

Furthermore, users could organise into little community groups. The app is tracking what is a good price and what is a good shelf life etc and what is in demand and what is on specific members shopping lists etc and tells the zapper how many to buy for a common stockroom.

Of course the supermarkets will not like people wandering about their shop with an app, but they have a pretty ugly PR problem telling people they aren't allowed to use the app in their store etc?

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#199

Post by fakedang »

willvarfar wrote: post #198

Here is an app idea: Users use a smartphone app to zap the price labels on shelves in shops. The app can provide basic price history and comparison prices etc. Furthermore, users could organise into little community groups. The app is tracking what is a good price and what is a good shelf life etc and what is in demand and what is on specific members shopping lists etc and tells the zapper how many to buy for a commo…

Monetization? I explored that idea before, but soon discovered it's hard to charge customers already looking to save money. Yet unfortunately, what's easier and more lucrative is selling that same data to the retailers to keep your lights on.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#200

Post by chii »

glitchc wrote: post #191
huitzitziltzin wrote: post #154

Earlier quoted context omitted.

Canadian economics departments are full of really smart economists. They are happy to help. The issue here has nothing to do with the size of the data. A grocery store will have 100,000 products at most, probably sets prices about weekly and maybe you have ten years of data. The market is an oligopoly so you have 10-15 store chains. That fits in memory. The issue is not at all the mechanics of running the analysis bu…

> Canadian economics departments are full of really smart economists. They are happy to help. The appropriate incentive is lacking.

it should be easy to make good incentives - the analysts that produce the evidence can be awarded a (large?) portion of the fines levied to those companies that are colluding.

Just like how the SEC whistleblower laws will awarded part of the fines to those who they reported.

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