STRATEGIC PRICING USING GENETIC ALGORITHM

摘要

This paper describes the application of a Genetic Algorithm (GA) in strategic pricing in a competitive market system. Strategic pricing is described as a sequential and dynamic game with incomplete, imperfect information. The pricing strategy can be represented as a matrix, which allows the GA to perform as an adaptive learning algorithm. This matrix representation can be further expanded to tackle combinatorial problem such as those in an oligopoly. Preliminary tests suggest that this method can be used in decision support systems for strategic pricing.