Open Access

ARTICLE

Dynamic Pricing Model of E-Commerce Platforms Based on Deep Reinforcement Learning

Chunli Yin^1,*, Jinglong Han²

1 College of Economics and Administration, Tonghua Normal University, Jilin, 130000, China
2 Department of Administration Section, Tonghua Normal University, Jilin, 130000, China

* Corresponding Author: Chunli Yin. Email:

(This article belongs to the Special Issue: Innovation and Application of Intelligent Processing of Data, Information and Knowledge in E-Commerce)

Computer Modeling in Engineering & Sciences 2021, 127(1), 291-307. https://doi.org/10.32604/cmes.2021.014347

Received 19 September 2020; Accepted 12 November 2020; Issue published 30 March 2021

Abstract

With the continuous development of artificial intelligence technology, its application field has gradually expanded. To further apply the deep reinforcement learning technology to the field of dynamic pricing, we build an intelligent dynamic pricing system, introduce the reinforcement learning technology related to dynamic pricing, and introduce existing research on the number of suppliers (single supplier and multiple suppliers), environmental models, and selection algorithms. A two-period dynamic pricing game model is designed to assess the optimal pricing strategy for e-commerce platforms under two market conditions and two consumer participation conditions. The first step is to analyze the pricing strategies of e-commerce platforms in mature markets, analyze the optimal pricing and profits of various enterprises under different strategy combinations, compare different market equilibriums and solve the Nash equilibrium. Then, assuming that all consumers are naive in the market, the pricing strategy of the duopoly e-commerce platform in emerging markets is analyzed. By comparing and analyzing the optimal pricing and total profit of each enterprise under different strategy combinations, the subgame refined Nash equilibrium is solved. Finally, assuming that the market includes all experienced consumers, the pricing strategy of the duopoly e-commerce platform in emerging markets is analyzed.

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