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

SearchCompliance

  • regulatory compliance

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

  • privacy compliance

    Privacy compliance is a company's accordance with established personal information protection guidelines, specifications or ...

  • data governance policy

    A data governance policy is a documented set of guidelines for ensuring that an organization's data and information assets are ...

SearchSecurity

  • asymmetric cryptography (public key cryptography)

    Asymmetric cryptography, also known as public-key cryptography, is a process that uses a pair of related keys -- one public key ...

  • Evil Corp

    Evil Corp is an international cybercrime network that uses malicious software to steal money from its victims' bank accounts.

  • Plundervolt

    Plundervolt is a method of hacking that involves depriving an Intel chip of power so that processing errors occur.

SearchHealthIT

  • telemedicine (telehealth)

    Telemedicine is the remote delivery of healthcare services, such as health assessments or consultations, over the ...

  • Project Nightingale

    Project Nightingale is a controversial partnership between Google and Ascension, the second largest health system in the United ...

  • medical practice management (MPM) software

    Medical practice management (MPM) software is a collection of computerized services used by healthcare professionals and ...

SearchDisasterRecovery

SearchStorage

  • M.2 SSD

    An M.2 SSD is a solid-state drive (SSD) that conforms to a computer industry specification written for internally mounted storage...

  • RAID (redundant array of independent disks)

    RAID (redundant array of independent disks) is a way of storing the same data in different places on multiple hard disks or ...

  • cache memory

    Cache memory, also called CPU memory, is high-speed static random access memory (SRAM) that a computer microprocessor can access ...

Close