PROOF OF CONCEPT
The data:
- The data is randomly generated.
This app provides a comprehensive platform for testing and comparing pricing policies for products with smaller price points, where extensive promotional campaigns might not be cost-effective. By configuring demand curves based on real-world or hypothetical scenarios, users can evaluate the performance of four pricing policies—Thompson Sampling, Epsilon-Greedy, Online Learning, and Uniform Pricing—against the Oracle (an unattainable ideal policy). It generates insights through regret analysis and cumulative revenue comparisons over multiple simulations. Users can also upload their own demand data or compare policies across a range of products, enabling high-level statistical summaries. While particularly valuable for automating pricing for low-cost items, which often attract significant customer interest and contribute substantially to overall revenue, the app may also offer a second opinion for pricing adjustments in higher-priced items, particularly those influenced by Veblen effects. Care is advised, however, as automated pricing algorithms must be used ethically to avoid exploiting consumer behavior and ensure a positive buying experience.
