Learning dynamic prices in electronic retail markets with customer segmentation

Learning dynamic prices in electronic retail markets with customer segmentation

In this paper, we use reinforcement learning (RL) techniques to determine dynamic prices in an electronic monopolistic retail market. The market that we consider consists of two natural segments of customers, captives and shoppers. Captives are mature, loyal buyers whereas the shoppers are more price sensitive and are attracted by sales promotions and volume discounts. The seller is the learnin...

Electronic Retail Markets

The economic system has created a number of institutions which should, from the transaction cost point of view, assure the most advantageous distribution of needs. Thus the price can become a means of information, indicating the collective situation of supply and demand, according to microeconomic theory. Today’s market places are much more complex, remotely located and supported by mail and te...

Electronic Retail Markets

We refer to the sale of goods and services to end consumers (i.e. a mass of clients with small quantity requirements) aq retail markets. These normally include private clients, households and small businesses. Therefore, the cost of transactions in retail markets tends to be rather high compared to those encountered with instltutionalclients. Bullding upon thepotentiel that electronic ' markets...

Customer Coalitions in Electronic Markets

Customer segmentation in retail facility location planning

In this contribution, we discuss a facility location model to maximize firms’ patronage, while demand is determined by a multinomial logit model (MNL). We account for customer segmentation based on customer characteristics. Hence, we are able to reduce the bias to the objective, which is due to constant substitution patterns of the MNL. Numerical studies show that averaging customer characteris...