Peter Lawrence's The Making of a Fly, published in 1992, is supposed to be a great book for developmental biologists. But no matter how great and how rare it is (it's out of print), a new edition probably doesn't cost the $US23,698,655.93 it was listed for on Amazon. The used book sells for only $US35! How did this happen?
Apparently, it was algorithmic pricing strategy of two companies, Bordeebook and Profnath, that had new copies of the book listed on Amazon. Michael Eisen, the man who tracked this ridiculous pricing, says:
On the day we discovered the million dollar prices, the copy offered by bordeebook was 1.270589 times the price of the copy offered by profnath. And now [after another price jump]the bordeebook copy was 1.270589 times profnath again. So clearly at least one of the sellers was setting their price algorithmically in response to changes in the other's price. I continued to watch carefully and the full pattern emerged.
Once a day profnath set their price to be 0.9983 times bordeebook's price. 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. The pattern continued perfectly for the next week.
So it just kept going up and up! Eisen theorises that Profnath wanted to have the lowest price on the market, but not too low, thus the .9983 strategy and Bordeebook wants to be 1.270589x higher than the lowest price because they don't actually have the book in their store. Either way, it's funny to see algorithms hilariously juice a price higher and higher without the companies even knowing. [Michael Eisen]