E-commerce is everywhere. Markets have become more transparent and competitive. Products and competitors’ offers can be easily compared. It has become easy and almost costless to adjust prices. For sellers “dynamic pricing” offers many opportunities and is therefore more and more used. However, smart pricing strategies are hard to determine.
In this seminar, we learn how to compute dynamic pricing strategies. Based on data-driven approaches we will use simple regression models to quantify demand and to estimate sales probabilities (real-life data from the Amazon market place is available). We will also take a look at theoretical optimization models that can be solved using dynamic programming techniques. Finally, we will use simulation techniques to evaluate the performance of different strategies.