By employing dynamic pricing, the act of changing prices over time within a marketplace, sellers have the potential to increase their revenue by selling goods to buyers "at the right time, at the right price." Software agents have been used in electronic commerce systems to assist buyers, but there is limited use of selling agents in todayís markets. As dynamic pricing systems become necessary as a competitive maneuver and as market mechanisms become large scale and more complex, there is a growing need for pricing agents to be used to automate dynamic pricing, which challenges sellers to improve their understanding of what are the best agent pricing strategies for their marketplaces.

This research addresses these issues by presenting the Learning Curve Simulator, a market simulator designed for analyzing agent pricing strategies for a market in which a seller has a finite time horizon to sell its inventory. Through an analysis of several pricing strategies using the simulator, I demonstrate how the Learning Curve Simulator can be used as a tool for understanding the relevant factors in determining an effective dynamic pricing strategy. This simulation-based approach to dynamic pricing demonstrates a technique which can lead to the implementation of dynamic pricing strategies in real-world markets.

The Simulator

The simulator runs as a Java 1.3 applet. If you have the Java Plug-in version 1.3 installed, then you're all set! If you have an earlier version of the Java Plug-in installed or no plug-in, you will have difficulties! It's worth a try, so try clicking on the link below:

Learning Curve Simulator Applet

If it is not working in your browser, here are screenshots of Learning Curve.

To make sense of what is going on in the simulator, I suggest reading some of the papers listed below. My thesis covers the interface in the most detail (but it's also the longest to read).

Publications

J. Morris DiMicco, P. Maes, A. Greenwald. "Learning Curve: A Simulation-Based Approach to Dynamic Pricing." Special Issue on "Aspects of Internet Agent-based E-Business Systems," Journal of Electronic Commerce Research. Vol 3, Issues 3-4, pp. 245-276, 2003.

J. Morris. "A Simulation-based Approach to Dynamic Pricing." Master's Thesis, MIT Media Lab. May 2001.

J. Morris DiMicco, A. Greenwald, and P. Maes. "Dynamic Pricing Strategies under a Finite Time Horizon." Proceedings of the ACM Conference on Electronic Commerce (EC '01), Tampa, FL, October 14-17, 2001.

J. Morris, P. Maes, and A. Greenwald. "Learning Curve: Analysis of an Agent Pricing Strategy Under Varying Conditions." Proceedings of the 2001 International Conference on Artificial Intelligence (IC-AI'2001), pp. 1135-1141, Las Vegas, NV, June 2001.

J. Morris, P. Ree, and P. Maes. "Sardine: Dynamic Seller Strategies in an Auction Marketplace." Proceedings of the Conference on Electronic Commerce (EC '00), Minneapolis, MN, October 17-20, 2000.

Presentations

J. Morris and P. Maes. "Understanding Dynamic Pricing Agents." Software Demos, Fifth International Conference on Autonomous Agents (Agents 2001), Montreal, Canada, May 30 - June 1, 2001.

J. Morris. "Agents for Dynamic Pricing." MediaLab Europe Agents Workshop, "Software Agents: An MIT Perspective," Dublin, Ireland, 30 January 2001.