The original version of this story appeared in Quanta Magazine. Imagine a town with two widget merchants. Customers prefer cheaper widgets, so the merchants must compete to set the lowest price.

Companies are increasingly using pricing algorithms and other AI systems to develop and improve their ability to promptly respond to market conditions, innovate product offerings, and set prices.

As price-setting by computer algorithm becomes increasingly prevalent, states are stepping in to address transparency and fairness concerns that federal legislation has yet to comprehensively tackle.