Dynamic Pricing Algorithms
From SI410
Dynamic Pricing is a type of pricing method that adjusts prices for items based on real-time market conditions[1]. This is typically achieved by using algorithms inputting variables like competitors' prices, supply and demand quantities, customers' demographics and personal preferences, seasonal factors, and more[2]. As a result of the growth of the internet and consequently an increase in online transactions, a variety of industries utilize dynamic pricing as part of their business model. Common industries that implement dynamic pricing include advertising, entertainment, sports, airline travel, utilities, and the e-commerce industry as a whole[3]. Dynamic pricing can allow companies to collect greater profits because of rapid price adjustments, but sometimes raises ethical concerns related to areas of data privacy, social inequality, information integrity, and more.
- ↑ pwc.de. (June, 2020). "Ethical Aspects of Dynamic Pricing" PricewaterhouseCoopers GmbH. Retrieved January 25, 2023.
- ↑ Wakabayashi,Daisuke. (February 6, 2022). "Does Anyone Know What Paper Towels Should Cost?" New York Times. Retrieved January 25, 2023.
- ↑ Bertini, Marco & Koenigsberg, Oded. (September 2021). "The Pitfalls of Pricing Algorithms" Harvard Business Review Retrieved January 24, 2023.
