Professor Michael Eisen of UC Berkeley posts an interesting short article about an apparent algorithmic pricing battle between two automated selling programs on Amazon, with some very intriguing speculation about what the two algorithms were trying to achieve, why one was behaving differently than the other, and how still other algorithms might attempt to interact with these algorithms to their own benefit.
This example is simple and easy to understand, and in this case, it appears that it was resolved without harm. On Wall Street, however, it's undertaken at high volume by well-funded participants, and pretty soon you get predatory trading and the May 2010 "Flash Crash".
Ah yes, it's not just a book about flies anymore...
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