Dynamic Pricing on the Internet: Theory and Simulations |
| |
| Authors: | Benoît Leloup Laurent Deveaux |
| |
| Affiliation: | (1) Department of Economics, École Nationale Supérieure des Télécommunications de Bretagne, Technopôle de Brest Iroise BP832, 29285 Brest Cedex, France;(2) Research Group on Risk, Information and Decision Theory (GRID), École Normale Supérieure de Cachan, 61, Avenue du Président Wilson, 94235 Cachan Cedex, France |
| |
| Abstract: | As is the case with traditional markets, the sellers on the Internet do not usually know the demand functions of their customers. However, in such a digital environment, a seller can experiment different prices in order to maximize his profits. In this paper, we fit the dynamic pricing model of Rothschild (1974) to match the pricing problem of a Web-store. In this setting, we define the optimization problem of a Web-store and by simulations we study the price dynamics that can appear when all the sellers on a given market follow an optimal pricing policy. |
| |
| Keywords: | e-commerce, pricing uncertainty simulations Multi-armed Bandit Gittins indices |
| 本文献已被 SpringerLink 等数据库收录！ |
|
