Analysing the effect of demand uncertainty in dynamic pricing with EAs.

Shakya, Siddhartha; Oliveira, Fernando; Owusu, Gilbert

Abstract

Dynamic pricing is a pricing strategy where a firm adjust the price for their products and services as a function of its perceived demand at different times. In this paper, we show how Evolutionary algorithms (EA) can be used to analyse the effect of demand uncertainty in dynamic pricing. The experiments are conducted in a range of dynamic pricing problems considering a number of different stochastic scenarios with a number of different EAs. The results are analysed, which suggest that higher demand fluctuation may not have adverse effect to the profit in comparison to the lower demand fluctuation, and that the reliability of EA for finding accurate policy could be higher when there is higher fluctuation then when there is lower fluctuation.

Citation

SHAKYA, S., OLIVEIRA, F. and OWUSU, G. 2009. Analysing the effect of demand uncertainty in dynamic pricing with EAs. In Bramer, M., Petridis, M. and Coenen, F. (eds.) Research and development in intelligent systems XXV: proceedings of the 28th British Computer Society's Specialist Group on Artificial Intelligence (SGAI) international conference on innovative techniques and applications of artificial intelligence (AI-2008), 9-11 December 2008, Cambridge, UK. London: Springer [online], pages 77-90. Available from: https://doi.org/10.1007/978-1-84882-171-2_6

• Presentation Conference Type: Conference Paper (published)
• Conference Name: 28th British Computer Society's Specialist Group on Artificial Intelligence (SGAI) international conference on innovative techniques and applications of artificial intelligence (AI-2008)
• Start Date: Dec 9, 2008
• End Date: Dec 11, 2008
• Acceptance Date: Jul 21, 2008
• Online Publication Date: Dec 31, 2009
• Publication Date: Dec 31, 2009
• Deposit Date: Nov 19, 2023
• Publicly Available Date: Jun 28, 2024
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Pages: 77-90
• Book Title: Research and development in intelligent systems XXV
• ISBN: 9781848821705
• DOI: https://doi.org/10.1007/978-1-84882-171-2_6
• Keywords: Dynamic pricing; Evolutionary algorithms; Financial modelling; Financial simulation
• Public URL: https://rgu-repository.worktribe.com/output/2152337