Browse Definitions :
Definition

dynamic pricing

Dynamic pricing, also called real-time pricing, is an approach to setting the cost for a product or service that is highly flexible. The goal of dynamic pricing is to allow a company that sells goods or services over the Internet to adjust prices on the fly in response to market demands. 

Changes are controlled by pricing bots, which are software agents that gather data and use algorithms to adjust pricing according to business rules. Typically, the business rules take into account such things as the customer's location, the time of day, the day of the week, the level of demand and competitors' pricing.  With the advent of big data and big data analytics, however, business rules for price adjustments can be made more granular. By collecting and analyzing data about a particular customer, a vendor can more accurately predict what price the customer is willing to pay and adjust prices accordingly.

Dynamic pricing is legal, and the general public has learned to accept dynamic pricing when purchasing airline tickets or reserving hotel rooms online.  The approach, which is sometimes marketed as a personalization service, has been less successful with online retail vendors. Dynamic pricing can be contrasted with fixed pricing, an approach to setting the selling price for a product or service that does not fluctuate.

See also: fair and reasonable price, consumption-based pricing model

 

 

This was last updated in December 2015

Continue Reading About dynamic pricing

Join the conversation

1 comment

Send me notifications when other members comment.

Please create a username to comment.

So the answer will be to create bots that can do "Dynamic Purchasing" and let them duke it out with the Pricing bots and send the whole system into a death spiral -
- just like the stock market?
Cancel

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • compliance audit

    A compliance audit is a comprehensive review of an organization's adherence to regulatory guidelines.

  • regulatory compliance

    Regulatory compliance is an organization's adherence to laws, regulations, guidelines and specifications relevant to its business...

  • Whistleblower Protection Act

    The Whistleblower Protection Act of 1989 is a law that protects federal government employees in the United States from ...

SearchSecurity

  • deprovisioning

    Deprovisioning is the process of removing access to a system from an end user who will no longer be utilizing that system.

  • payload (computing)

    In computing, a payload is the carrying capacity of a packet or other transmission data unit. The term has its roots in the ...

  • passphrase

    A passphrase is a string of characters longer than the usual password (which is typically from four to 16 characters long) that ...

SearchHealthIT

SearchDisasterRecovery

SearchStorage

  • computational storage

    Computational storage is defined as an architecture that couples compute with storage in order to reduce data movement. In doing ...

  • data deduplication

    Data deduplication -- often called intelligent compression or single-instance storage -- is a process that eliminates redundant ...

  • public cloud storage

    Public cloud storage, also called storage-as-a-service or online storage is a service model that provides data storage on a ...

Close