2024/11/27 by Mohit Apte, Apte, Mohit, Kale, Ketan +4
Business, Management and Accounting · #Consumer Market Behavior and Pricing #Consumer Retail Behavior Studies #FOS: Computer and information sciences #Machine Learning (cs.LG) #Supply Chain and Inventory Management
paper · pdf · doi:10.48550/arxiv.2411.18261
openalex publication_date 2024/11/27 · openalex created_date 2024/12/05 · openalex updated_date 2026/07/28
This paper explores the application of a reinforcement learning (RL) framework using the Q-Learning algorithm to enhance dynamic pricing strategies in the retail sector. Unlike traditional pricing methods, which often rely on static demand models, our RL approach continuously adapts to evolving market dynamics, offering a more flexible and responsive pricing strategy. By creating a simulated retail environment, we demonstrate how RL effectively addresses real-time changes in consumer behavior and market conditions, leading to improved revenue outcomes. Our results illustrate that the RL model not only surpasses traditional methods in terms of revenue generation but also provides insights into the complex interplay of price elasticity and consumer demand. This research underlines the significant potential of applying artificial intelligence in economic decision-making, paving the way for more sophisticated, data-driven pricing models in various commercial domains.