Joan Morris DiMicco
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 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).
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,
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.
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.
J. Morris. "Dynamic Seller
Strategies in an Auction Marketplace." Conference on
Electronic Commerce (EC '00), Minneapolis, MN, October 17-20,