Two Amazon booksellers using algorithmic pricing systems created a feedback loop that drove the price of an out-of-print biology textbook to over $23 million before one seller manually corrected it.
In April 2011, two Amazon marketplace sellers using automated pricing algorithms caused the price of Peter Lawrence's 'The Making of a Fly', an out-of-print 1992 biology textbook, to spiral to $23,698,655.93. The incident was discovered by a postdoc at UC Berkeley who noticed 17 copies for sale - 15 used from $35.54 and two new copies priced over $1.7 million from sellers profnath and bordeebook. Over several days, the prices continued rising as profnath's algorithm set its price to 0.9983 times bordeebook's price (attempting to undercut), while bordeebook's algorithm set its price to 1.270589 times profnath's price. This created an exponential pricing spiral that peaked on April 18th at $23,698,655.93 plus $3.99 shipping. The pattern continued for about a week before profnath manually intervened on April 19th, dropping its price to $106.23, after which bordeebook's algorithm automatically adjusted to $134.97. Both sellers had substantial feedback ratings (over 8,000 and 125,000 ratings respectively) and were using algorithmic pricing services that lacked built-in sanity checks on the prices they generated.
Domain classification, causal taxonomy, severity scores, and national security assessments were LLM-classified and may contain errors.
AI systems that fail to perform reliably or effectively under varying conditions, exposing them to errors and failures that can have significant consequences, especially in critical applications or areas that require moral reasoning.
AI system
Due to a decision or action made by an AI system
Unintentional
Due to an unexpected outcome from pursuing a goal
Post-deployment
Occurring after the AI model has been trained and deployed
No population impact data reported.