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Annual Conference on Artificial Intelligence

KI 2002: KI 2002: Advances in Artificial Intelligence pp 51–66Cite as

Dynamic Pricing of Information Products Based on Reinforcement Learning: A Yield-Management Approach

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Part of the book series: Lecture Notes in Computer Science ((LNAI,volume 2479))

Abstract

Pricing of information services gains an increasing importance in an IT environment, which is characterized by more and more decentralized computing resources (e.g. P-2-P computing). Even if pricing theory represents a kernel domain of economic research the pricing problem related to automated information production processes could not be handled satisfactory. This stems from the combination of high fixed costs with negligible variable costs. Especially in airline industries this problem is addressed by heuristics in the so called “ Yield Management” (YM) domain. The paper presented here, shows the transferability of these methods to the information production and services domain. Pricing a bundle of complementary resources can not be solved by the simple addition of value functions. Therefore we introduce Machine Learning (ML) techniques to master complexity. Artificial Neural Networks (ANN) are used for the joint representation of the multidimensional value functions and Genetic Algorithms (GA) should help train them in a first effort. While this does not lead to outstanding results, we try Reinforcement Learning (RL) in a second approach. This ML method provides encouraging results for efficient adaptive pricing of resource attribution related to the multidimensional YM problem.

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Author information

Authors and Affiliations

  1. Information Systems, Frankfurt University, D-60054, Frankfurt, Germany

    Michael Schwind (Chair of Economics) & Oliver Wendt (Chair of Economics)

Authors
  1. Michael Schwind
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  2. Oliver Wendt
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Editors and Affiliations

  1. Informatik V, RWTH Aachen, Ahornstraße 55, 52056, Aachen, Germany

    Matthias Jarke  & Gerhard Lakemeyer  & 

  2. Computer Science Research, IBM Research Laboratory, Säumerstraße 4, 8803, Rüschlikon, Switzerland

    Jana Koehler

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Schwind, M., Wendt, O. (2002). Dynamic Pricing of Information Products Based on Reinforcement Learning: A Yield-Management Approach. In: Jarke, M., Lakemeyer, G., Koehler, J. (eds) KI 2002: Advances in Artificial Intelligence. KI 2002. Lecture Notes in Computer Science(), vol 2479. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-45751-8_4

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  • DOI: https://doi.org/10.1007/3-540-45751-8_4

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-44185-4

  • Online ISBN: 978-3-540-45751-0

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