Dynamic pricing examples can be found in ride-sharing services, airlines, BnBs and hotels, and e-commerce stores. So, we’ve seen a definition of dynamic pricing, how about some examples. This is a highly sophisticated method, individuals will use something like Tixboo to make these decisions on the fly to maximize revenue for events and meet different levels of demand. If you’re jumping on the same wagon as everyone else can expect the cost to be higher. Increase or decrease prices based on the time (this is what the intoxicated bus passenger was so infuriated about). Are you searching for a product from a high end smartphone in the Hollywood Hills? Then the price is going to be higher.
Leverage machine learning algorithms or statistical analysis to offer different prices to different groups based on factors such as device type, location, and demographic information (when lawsuits and customer complaints do happen it’s usually because of this form of dynamic pricing).
Thanks to the almost complete absence of legal action businesses are free to use dynamic pricing (sometimes called surge pricing or demand pricing) strategies in two main ways: 1. In fact, US courts and the Federal Trade Commission have repeatedly rejected dynamic price discrimination cases unless the discrimination was based on a category, such as gender, race, or sexual orientation, or was anti-competitive, which is highly unlikely to occur in an online market.
Technically, this is the same as " price discrimination," a tactic that was declared illegal under the Robinson-Patman Act of 1936.įortunately, the Robinson-Patman Act has more holes than a wheel of Swiss cheese and that makes any legal basis for a price discrimination lawsuit rather ambiguous, particularly in the case of non-commodity goods sold online. Simple huh? In practice, retailers can adjust their prices whenever they want to capitalize on a changing market. Simply put it’s a pricing strategy that utilizes variable prices instead of fixed ones. A dynamic pricing definition would be “a strategy that uses variable prices instead of fixed ones, selling the same product at different prices to different groups of people”.
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