They might not share info but they will regenerate identical suggestions from market data for ask customers effectively price fixing without clear collusion
Is that "price collusion" though? How's that different than if you're selling stuff on cragislist/facebook marketplace/ebay, and you set your price by looking what other listings are?
When I'm selling something used, and I look at prices for other listings, I'm competing with them. I want to have a price that is attractive, given the landscape. I'm not messaging all the other sellers and suggesting we all raise prices by 10%, or having an algorithm run by a third party service do that indirectly.
RealPage made it so that landlords were less competitive and more cooperative. Landlords would share proprietary information and then RealPage would help them all set prices collectively. It's just old fashioned price fixing with a SaaS and an algorithm.
So the difference is using pricing info to beat your competitors vs using pricing info to collude with your competitors.
>I'm not messaging all the other sellers and suggesting we all raise prices by 10%,
The way competitors legally message each other to suggest a price increase is via the prices themselves.
E.g. an airline wants to raise the price of a ticket from New York to Los Angeles from $500 to $530 -- and they secretly want the other airlines to follow them and raise their prices too.
1) The airline submits the price increase to the global travel reservation system that all airlines can see. All the other airlines have computers constantly monitoring all the other airlines' ticket prices and can instantly adjust prices in response.
2) The airline that wants the price increase waits to see how the other airlines respond. Either (1) the competitor airlines keeps their lower prices to "take market share" -- or -- (2) they also raise their prices to match which "maintains status quo of market share" but all competitors get to take advantage of charging the higher price
3) If the other airlines don't match the higher price, the airline that "proposed" the higher price then rolls it back to $500. All this can happen within a few hours.
That's the way competitors "collude" to raise prices out in the open. The publicly visible prices are the messaging system. The loophole here is that the changing prices must be visible because the potential passengers buying the tickets need to see them too.
The above scenario has been studied by various papers and the government. The prices simultaneously act as both a "cost to buy" and as a "message to cooperate".
Legal "collusion" via price signals is easier in concentrated industries with few competitors (e.g. airlines). It's harder for fragmented markets or markets with hundreds-to-thousands of competitors. E.g. a barbershop wanting to raise the price of haircuts by $5 isn't going to get the hundred other barbershops to also raise their prices by $5.
>The above scenario has been studied by various papers and the government. The prices simultaneously act as both a "cost to buy" and as a "message to cooperate".
Yea I mean. A simple watch of movie film "A bueaitful Mind" starring John Nash as math genius russel crowe. Crowe equilibrium or whatever it's called. That scene where the nerds were in the bar trying to get the girl. his friends said let the best man win and crowe said - no - only way to win is we collude. and then they won. Now imagine that -- but it's not russel crowe, it's united airlines.
I mean if you look at companies from that crowe equilibruim perspective and treat them as sophisticated and rational.. one would expect most everything to be rigged!
If landlords want to just look at other public listings and adjust their own prices in response (which is completely legal to do) then why does a service like Realpage exist?
It’s a complete suite for property management companies that enables an org to manage and report on vast portfolios of thousands of units. Provides functions to local property managers such as contracts and evictions, rent collection, and purchase order management for vendors. Regionally it provides metrics and pricing controls. Other competitors like Yardi exist and provide similar toolkits, but RP is gigantic enough to get the bulk of attention.
Wait, your #3 appears to combine multiple factors. Is it "sharing nonpublic data" that's the problem or is it "setting prices collectively" that's a problem? Those aren't the same thing. Price-setting implies a commitment not to outbid counterparties.
> RealPage’s revenue management software has relied on nonpublic, competitively sensitive information shared by landlords to set rental prices. RealPage’s software has also included features designed to limit rental price decreases and otherwise align pricing among competitors.
The sentence you quote says Realpage used nonpublic information to facilitate the setting of prices, but does not say that the sharing of nonpublic information is itself price setting. You can do lots of things to set prices; the key feature again is a commitment against defection.
I'm not sticking up for Realpage; I don't know enough about how it works.
The software literally includes an algorithm that says "this week, you will set the rate for this apartment at $X" based on RP's data.
And, if you want to deviate from that, without being kicked off RP and losing your substantial fee payments, you will do follow that rate (and they tell you that they _will_ check), or you can "request an override" from RealPage, that they may allow or deny at their discretion (and RP agents are formally trained that override approvals may not exceed 5% of requests).
> Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing.
> An internal presentation created by Defendant Greystar explicitly
acknowledges that RealPage RM Software users should each seek to accept at
least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f
using revenue management increases more consistent outcomes.”
> Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable.
> Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent.
See, all this sounds pretty compelling! I was just stuck on the "confidential information sharing" part of it; that alone, I don't think? could be the basis of an antitrust claim?
The difference is that’s an open market. When rents change off market, going up at the end of the year for example, that information isn’t available to market participants.
>The difference is that’s an open market. When rents change off market, going up at the end of the year for example, that information isn’t available to market participants.
1. How is this any different than other sorts of transactions that occur on a recurring basis? For instance dog walking services or personal trainers? Such vendors are also presumably pricing their services based on what everyone else's pricing is, but any subsequent price changes aren't public.
2. Under current competition law, whether something is an "open market" is irrelevant to whether a given pricing strategy is illegal or not. Collusion doesn't magically become legal because it's done on the open market.
You don't go to those other people and tell them what they should set their price as. RealPage does, that's the business model. If enough real estate operators use RealPage, RealPage could arbitrary suggest a 100x price hike and it would be competitive.
Can't use nonpublic data in their models. Can't look at active leases. Can't run surveys to collect data. Can't suggest pricing narrower than at the state level. Can't align pricing among different users. Can't have features that discourage decreasing prices.
I think it's a positive step for American housing market to slowly check off the list of pointless non-solutions so that we can finally arrive at the conclusion that the only way out of the crisis is to build housing. We're just following the San Francisco process here. Ban realpage. Tax vacancies. Complain about foreign investors. Put a tax on "mansions" that's actually a tax on apartment buildings. We will slowly, slowly check off all the boxes of the pointless things. Then 50 years later we can start building houses.
The housing problem is a lot like the medical problem but with a 30-50yr head start to the regulatory capture.
You've got what was at one point a broadly accessible necessity, various degrees of government subsidy and market intervention, a bunch of ancillary industries trying to get their place on the coattails enshrined in law, etc, etc. Then that feedback loop was let to run for a couple generations and you get the current shit.
And it can't easily or promptly be cut back because it's such a huge fraction of commerce (slavery was 12% gdp in its day for comparison) that so many people would take a haircut that you'd start a war if you tried to do anything decisive. But on some level you have to, because to quote Tucker Carlson. "there's more to a national economy than real-estate and high finance" (specifically selected to be inflammatory, not like he's anywhere near the only one saying this).
One big difference:
- ~10% of Americans work in healthcare (i.e. big source of income)
- ~66% of Americans own their homes (i.e. big asset want to protect)
- there's societal stability reasons to encourage home ownership
In poorer places, people would just see a problem exists, and then solve it. Expensive housing? They'll get roommates, put up shacks, or live in cardboard boxes on the street. These things are illegal in expensive-housing places, and the more expensive the housing is, the more illegal they are - IIRC some states were considering banning roommates.
"Just build/produce more" (abundance) sounds fantastic if you are part of the upper classes who have been on the right side of wealth inequality trends. It allows us to avoid the issue of inequality. Just grow the pie!!
But surely you can see how this agenda is not appealing to most Americans who have been on the wrong side of wealth inequality? Even if you double the size of the pie, how do you convince them that their proportional slice of it won't halve in the same period? Because that HAS been their experience so far in the past ~50 years.
We do need to build more, but that has to also come with reform to be politically viable.
I'm not sure a simple citation to the law of supply and demand can count as "bad faith"? I genuinely don't understand your argument, which is why I called it incoherent.
This level of derangement pervades the housing discourse from the left, and it's best to ignore it. At best you will argue in circles forever. At worst, you will be called a fascist bootlicker, etc.
People with normal mental health agree that having enough homes for all the people is a precondition of considering the housing problem to be "solved".
Whoah, this degree of incivility also not helping the case I want to make here!
I agree with pretty much everything you've said on this thread, which makes it all the more important to me it be expressed persuasively and not angrily. Remember: you're not just writing to the person you're responding to, but also to everybody else who reads the thread. Trust readers to spot inane arguments, if you perceive them to be coming up!
Long-term rental listings jumped nearly 30% after the ban, that’s far from ‘no effect.’ For a comparison, that’s about double what Austin was getting YoY for most of its massive building boom.
Yes, no one ever visited NYC before AirBnB. And you’re ignoring a boatload of negative externalities, but that’s the glory of our current economic setup, isn’t it?
New housing is subject to cost disease. Now exacerbated because the off the books workers the industry depends on are being kicked out. You can't just materialize houses without the labor to make them.
Then reduce minimum costs. Let 50 people share an empty lot and put up a slum made of wooden planks from the hardware store. They won't allow this because it'd make house prices decrease.
So, unfortunately, even in the best case scenario, the damage is already done. There's already far too much of the economy built on top of the inflated rents and property valuations. The only way to fix things is straight-up deflation. Which will obviously be very painful.
If you hand the Fed a lever to tax corporate revenue less wages paid to the 80% lowest paid workers (and exempt all other deductions) for such situations, it lets them create inflationary pressure on worker wages and deflationary pressure on pricing, which would cure the rent market within a few years at best.
I wonder the same thing. The essence of a collusion scheme is a commitment between counterparties not to defect. Pure information is insufficient to create such a commitment.
There are other ways to distort markets besides collusion, and maybe Realpage does one of them?
Part of the complaint is that RealPage actively discourages defection
> While some landlords might achieve higher profits by setting lower prices than recommended by the algorithm, it appears RealPage takes extensive measures to prevent such behavior. As alleged in the DOJ complaint, RealPage pushes its software users to turn on the auto-accept setting so that price recommendations are automatically accepted. The complaint also alleges that the process of rejecting a price recommendation can be onerous. For instance, in order to reject a recommendation from AIRM software, users must provide a “business” reason for doing so, and they must do so separately for each floorplan in the building. When it is costly for software users to override algorithmic recommendations, supracompetitive prices—prices above what would occur under normal competition—can be sustained.
I think this is good, but I doubt it'll actually impact rental prices as much as people think, because the problem is fundamentally a housing shortage.
The problem is fundamentally a housing shortage AND RealPage recommended to large rental operators that they leave apartments empty. So they definitely did actually pour gasoline on the fire.
Landlords are completely capable of leaving units vacant all by themselves and there isn't any evidence that realpage clients were more likely to do that.
> For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.
...
> Apartment managers can reject the software’s suggestions, but as many as 90% are adopted, according to former RealPage employees.
Yeah I mean I don't know how to tell you this but that's not a source. Rental managers leave units vacant all the time, hoping for an unrealistic price. It's certainly possible and even consistent with those claims that realpage clients were no worse than general property managers in this regard. They may have even been more willing to accept lower prices based on the realpage recommendations.
Your rebuttal is literally "nuh uh." You asked for a source, you were given a source: documentation that shows RealPage discouraged landlords from negotiating, and landlords admitting to not negotiating. COULD they have negotiated? Sure, and a unicorn COULD be orbiting Saturn with 5,000 homes in tow, trying to figure out the optimal thrust vector to come to Earth. Anything COULD happen, but we know what DID happen: RealPage and services like it have enabled landlords to collude with dubious legality on rent prices, and rent prices went up as a result. The most predictable outcome.
Am I missing something, or is RealPage tentatively being given a pass on illegal price-fixing and all the harm that's caused to numerous people?
Follow the money.
They might not share info but they will regenerate identical suggestions from market data for ask customers effectively price fixing without clear collusion
Is that "price collusion" though? How's that different than if you're selling stuff on cragislist/facebook marketplace/ebay, and you set your price by looking what other listings are?
When I'm selling something used, and I look at prices for other listings, I'm competing with them. I want to have a price that is attractive, given the landscape. I'm not messaging all the other sellers and suggesting we all raise prices by 10%, or having an algorithm run by a third party service do that indirectly.
RealPage made it so that landlords were less competitive and more cooperative. Landlords would share proprietary information and then RealPage would help them all set prices collectively. It's just old fashioned price fixing with a SaaS and an algorithm.
So the difference is using pricing info to beat your competitors vs using pricing info to collude with your competitors.
>I'm not messaging all the other sellers and suggesting we all raise prices by 10%,
The way competitors legally message each other to suggest a price increase is via the prices themselves.
E.g. an airline wants to raise the price of a ticket from New York to Los Angeles from $500 to $530 -- and they secretly want the other airlines to follow them and raise their prices too.
1) The airline submits the price increase to the global travel reservation system that all airlines can see. All the other airlines have computers constantly monitoring all the other airlines' ticket prices and can instantly adjust prices in response.
2) The airline that wants the price increase waits to see how the other airlines respond. Either (1) the competitor airlines keeps their lower prices to "take market share" -- or -- (2) they also raise their prices to match which "maintains status quo of market share" but all competitors get to take advantage of charging the higher price
3) If the other airlines don't match the higher price, the airline that "proposed" the higher price then rolls it back to $500. All this can happen within a few hours.
That's the way competitors "collude" to raise prices out in the open. The publicly visible prices are the messaging system. The loophole here is that the changing prices must be visible because the potential passengers buying the tickets need to see them too.
The above scenario has been studied by various papers and the government. The prices simultaneously act as both a "cost to buy" and as a "message to cooperate".
Legal "collusion" via price signals is easier in concentrated industries with few competitors (e.g. airlines). It's harder for fragmented markets or markets with hundreds-to-thousands of competitors. E.g. a barbershop wanting to raise the price of haircuts by $5 isn't going to get the hundred other barbershops to also raise their prices by $5.
>The above scenario has been studied by various papers and the government. The prices simultaneously act as both a "cost to buy" and as a "message to cooperate".
Yea I mean. A simple watch of movie film "A bueaitful Mind" starring John Nash as math genius russel crowe. Crowe equilibrium or whatever it's called. That scene where the nerds were in the bar trying to get the girl. his friends said let the best man win and crowe said - no - only way to win is we collude. and then they won. Now imagine that -- but it's not russel crowe, it's united airlines.
I mean if you look at companies from that crowe equilibruim perspective and treat them as sophisticated and rational.. one would expect most everything to be rigged!
https://www.youtube.com/watch?v=LJS7Igvk6ZM
If landlords want to just look at other public listings and adjust their own prices in response (which is completely legal to do) then why does a service like Realpage exist?
It’s a complete suite for property management companies that enables an org to manage and report on vast portfolios of thousands of units. Provides functions to local property managers such as contracts and evictions, rent collection, and purchase order management for vendors. Regionally it provides metrics and pricing controls. Other competitors like Yardi exist and provide similar toolkits, but RP is gigantic enough to get the bulk of attention.
... isn't that what Realpage does?
No it isn't.
Companies making individual decisions about pricing is legal.
Companies asking an external source (e.g. a consulting company) to help with pricing is legal.
Companies sharing nonpublic data with their competitors and setting prices collectively as a group is illegal.
The entire reason for Realpage's existence is to facilitate #3.
Wait, your #3 appears to combine multiple factors. Is it "sharing nonpublic data" that's the problem or is it "setting prices collectively" that's a problem? Those aren't the same thing. Price-setting implies a commitment not to outbid counterparties.
They are both illegal, and realpage does both.
Literally from the linked DoJ press release
> RealPage’s revenue management software has relied on nonpublic, competitively sensitive information shared by landlords to set rental prices. RealPage’s software has also included features designed to limit rental price decreases and otherwise align pricing among competitors.
The sentence you quote says Realpage used nonpublic information to facilitate the setting of prices, but does not say that the sharing of nonpublic information is itself price setting. You can do lots of things to set prices; the key feature again is a commitment against defection.
I'm not sticking up for Realpage; I don't know enough about how it works.
The software literally includes an algorithm that says "this week, you will set the rate for this apartment at $X" based on RP's data.
And, if you want to deviate from that, without being kicked off RP and losing your substantial fee payments, you will do follow that rate (and they tell you that they _will_ check), or you can "request an override" from RealPage, that they may allow or deny at their discretion (and RP agents are formally trained that override approvals may not exceed 5% of requests).
> Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing.
> An internal presentation created by Defendant Greystar explicitly acknowledges that RealPage RM Software users should each seek to accept at least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f using revenue management increases more consistent outcomes.”
> Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable.
> Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent.
See, all this sounds pretty compelling! I was just stuck on the "confidential information sharing" part of it; that alone, I don't think? could be the basis of an antitrust claim?
The difference is that’s an open market. When rents change off market, going up at the end of the year for example, that information isn’t available to market participants.
>The difference is that’s an open market. When rents change off market, going up at the end of the year for example, that information isn’t available to market participants.
1. How is this any different than other sorts of transactions that occur on a recurring basis? For instance dog walking services or personal trainers? Such vendors are also presumably pricing their services based on what everyone else's pricing is, but any subsequent price changes aren't public.
2. Under current competition law, whether something is an "open market" is irrelevant to whether a given pricing strategy is illegal or not. Collusion doesn't magically become legal because it's done on the open market.
You don't go to those other people and tell them what they should set their price as. RealPage does, that's the business model. If enough real estate operators use RealPage, RealPage could arbitrary suggest a 100x price hike and it would be competitive.
I can't help but think of parallel reconstruction.
I agree with many comments here, but one of the terms seems absurd:
> Not use models that determine geographic effects narrower than at a state level
They are forbidden from having different models for different cities?? This seems extreme to me. Any background on this?
There seems to be nothing preventing YieldStar's actual business model:
1. Pick a rental rate. This can be based on public data, nonpublic data, or totally made-up.
2. "Strongly encourage" your users/customers to use the rate you picked.
3. 90% of your users/customers agree (historically speaking), legal collusion achieved.
>2. "Strongly encourage" your users/customers to use the rate you picked.
That's what got them whacked in the DOJ investigation/indictment though?
RTFA. The settlement prevents all of these.
Can't use nonpublic data in their models. Can't look at active leases. Can't run surveys to collect data. Can't suggest pricing narrower than at the state level. Can't align pricing among different users. Can't have features that discourage decreasing prices.
That's the rent controls that communists were supposed to bring, right? It just needs a cuty hall setting a celling on yearly increases
I don't think HN users understood the sarcasm.
I think it's a positive step for American housing market to slowly check off the list of pointless non-solutions so that we can finally arrive at the conclusion that the only way out of the crisis is to build housing. We're just following the San Francisco process here. Ban realpage. Tax vacancies. Complain about foreign investors. Put a tax on "mansions" that's actually a tax on apartment buildings. We will slowly, slowly check off all the boxes of the pointless things. Then 50 years later we can start building houses.
The housing problem is a lot like the medical problem but with a 30-50yr head start to the regulatory capture.
You've got what was at one point a broadly accessible necessity, various degrees of government subsidy and market intervention, a bunch of ancillary industries trying to get their place on the coattails enshrined in law, etc, etc. Then that feedback loop was let to run for a couple generations and you get the current shit.
And it can't easily or promptly be cut back because it's such a huge fraction of commerce (slavery was 12% gdp in its day for comparison) that so many people would take a haircut that you'd start a war if you tried to do anything decisive. But on some level you have to, because to quote Tucker Carlson. "there's more to a national economy than real-estate and high finance" (specifically selected to be inflammatory, not like he's anywhere near the only one saying this).
Interesting analogy!
One big difference: - ~10% of Americans work in healthcare (i.e. big source of income) - ~66% of Americans own their homes (i.e. big asset want to protect) - there's societal stability reasons to encourage home ownership
In poorer places, people would just see a problem exists, and then solve it. Expensive housing? They'll get roommates, put up shacks, or live in cardboard boxes on the street. These things are illegal in expensive-housing places, and the more expensive the housing is, the more illegal they are - IIRC some states were considering banning roommates.
"Just build/produce more" (abundance) sounds fantastic if you are part of the upper classes who have been on the right side of wealth inequality trends. It allows us to avoid the issue of inequality. Just grow the pie!!
But surely you can see how this agenda is not appealing to most Americans who have been on the wrong side of wealth inequality? Even if you double the size of the pie, how do you convince them that their proportional slice of it won't halve in the same period? Because that HAS been their experience so far in the past ~50 years.
We do need to build more, but that has to also come with reform to be politically viable.
The point of building more is to reduce the price of the available stock. Your rebuttal is incoherent.
Please don't engage in bad faith.
If the supply of something you need doubles, but your buying power halves, you are not necessarily better off. This is a straightforward argument.
I'm not sure a simple citation to the law of supply and demand can count as "bad faith"? I genuinely don't understand your argument, which is why I called it incoherent.
This level of derangement pervades the housing discourse from the left, and it's best to ignore it. At best you will argue in circles forever. At worst, you will be called a fascist bootlicker, etc.
People with normal mental health agree that having enough homes for all the people is a precondition of considering the housing problem to be "solved".
Whoah, this degree of incivility also not helping the case I want to make here!
I agree with pretty much everything you've said on this thread, which makes it all the more important to me it be expressed persuasively and not angrily. Remember: you're not just writing to the person you're responding to, but also to everybody else who reads the thread. Trust readers to spot inane arguments, if you perceive them to be coming up!
You skipped “ban Airbnbs” as NYC did (to no effect other than making it more difficult for people who live there to have friends come visit them).
Long-term rental listings jumped nearly 30% after the ban, that’s far from ‘no effect.’ For a comparison, that’s about double what Austin was getting YoY for most of its massive building boom.
Yes, no one ever visited NYC before AirBnB. And you’re ignoring a boatload of negative externalities, but that’s the glory of our current economic setup, isn’t it?
I didn't say "impossible", I said "more difficult".
Well that makes sense doesn't it? Shortage of X, but we don't want it to be expensive -> add some non-monetary costs of acquiring X.
Queues on the iPhone release day, for example - the price of the phone is not just the money you pay, but also all the time you spend waiting in line.
That is a temporary problem which Apple routinely solves in the long run by... making enough iPhones for all the people who want one.
I.e. exactly what we should be doing with housing.
New housing is subject to cost disease. Now exacerbated because the off the books workers the industry depends on are being kicked out. You can't just materialize houses without the labor to make them.
Then reduce minimum costs. Let 50 people share an empty lot and put up a slum made of wooden planks from the hardware store. They won't allow this because it'd make house prices decrease.
I think US immigration policy is pretty shitty, so no argument from me there.
Right, the list of counterproductive things we already tried is too long to write down in this little box. Thanks for the reminder, though.
So, unfortunately, even in the best case scenario, the damage is already done. There's already far too much of the economy built on top of the inflated rents and property valuations. The only way to fix things is straight-up deflation. Which will obviously be very painful.
https://www.youtube.com/watch?v=Kbztr5FDZtg
If you hand the Fed a lever to tax corporate revenue less wages paid to the 80% lowest paid workers (and exempt all other deductions) for such situations, it lets them create inflationary pressure on worker wages and deflationary pressure on pricing, which would cure the rent market within a few years at best.
Do Redfin and Zillow’s suggested home prices basically do the same thing? What crosses the line into price fixing or monopolistic collusion?
I wonder the same thing. The essence of a collusion scheme is a commitment between counterparties not to defect. Pure information is insufficient to create such a commitment.
There are other ways to distort markets besides collusion, and maybe Realpage does one of them?
Part of the complaint is that RealPage actively discourages defection
> While some landlords might achieve higher profits by setting lower prices than recommended by the algorithm, it appears RealPage takes extensive measures to prevent such behavior. As alleged in the DOJ complaint, RealPage pushes its software users to turn on the auto-accept setting so that price recommendations are automatically accepted. The complaint also alleges that the process of rejecting a price recommendation can be onerous. For instance, in order to reject a recommendation from AIRM software, users must provide a “business” reason for doing so, and they must do so separately for each floorplan in the building. When it is costly for software users to override algorithmic recommendations, supracompetitive prices—prices above what would occur under normal competition—can be sustained.
https://bidenwhitehouse.archives.gov/cea/written-materials/2...
And the full complaint: https://www.justice.gov/archives/opa/media/1364976/dl
Yeah, stuff like that makes sense to me! Thanks!
> I wonder the same thing. The essence of a collusion scheme is a commitment between counterparties not to defect.
Do you have any citation that supports that? That seems an awfully narrow definition.
Sure: just google ["price fixing" "jury instructions"] (this is a cheat code for a lot of legal arguments on HN). You'll get a lot of them!
I think this is good, but I doubt it'll actually impact rental prices as much as people think, because the problem is fundamentally a housing shortage.
The problem is fundamentally a housing shortage AND RealPage recommended to large rental operators that they leave apartments empty. So they definitely did actually pour gasoline on the fire.
Landlords are completely capable of leaving units vacant all by themselves and there isn't any evidence that realpage clients were more likely to do that.
My source was this article which broke the RealPage story three years ago:
https://www.propublica.org/article/yieldstar-rent-increase-r...
> For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.
...
> Apartment managers can reject the software’s suggestions, but as many as 90% are adopted, according to former RealPage employees.
Yeah I mean I don't know how to tell you this but that's not a source. Rental managers leave units vacant all the time, hoping for an unrealistic price. It's certainly possible and even consistent with those claims that realpage clients were no worse than general property managers in this regard. They may have even been more willing to accept lower prices based on the realpage recommendations.
Your rebuttal is literally "nuh uh." You asked for a source, you were given a source: documentation that shows RealPage discouraged landlords from negotiating, and landlords admitting to not negotiating. COULD they have negotiated? Sure, and a unicorn COULD be orbiting Saturn with 5,000 homes in tow, trying to figure out the optimal thrust vector to come to Earth. Anything COULD happen, but we know what DID happen: RealPage and services like it have enabled landlords to collude with dubious legality on rent prices, and rent prices went up as a result. The most predictable outcome.