Dynamic pricing models for electronic business

Narahari, Y. ; Raju, C. V. L. ; Ravikumar, K. ; Shah, Sourabh (2005) Dynamic pricing models for electronic business Sadhana (Academy Proceedings in Engineering Sciences), 30 (2-3). pp. 231-256. ISSN 0256-2499

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Official URL: http://ns1.ias.ac.in/sadhana/Pdf2005AprJun/Pe1337....

Related URL: http://dx.doi.org/10.1007/BF02706246

Abstract

Dynamic pricing is the dynamic adjustment of prices to consumers depending upon the value these customers attribute to a product or service. Today's digital economy is ready for dynamic pricing; however recent research has shown that the prices will have to be adjusted in fairly sophisticated ways, based on sound mathematical models, to derive the benefits of dynamic pricing. This article attempts to survey different models that have been used in dynamic pricing. We first motivate dynamic pricing and present underlying concepts, with several examples, and explain conditions under which dynamic pricing is likely to succeed. We then bring out the role of models in computing dynamic prices. The models surveyed include inventory-based models, data-driven models, auctions, and machine learning. We present a detailed example of an e-business market to show the use of reinforcement learning in dynamic pricing.

Item Type:Article
Source:Copyright of this article belongs to Indian Academy of Sciences.
Keywords:Dynamic Pricing; Shopbots; Pricebots; Inventory-based Models; Data-driven Models; Reinforcement Learning
ID Code:30336
Deposited On:22 Dec 2010 09:49
Last Modified:17 May 2016 12:59

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