Dynamic Pricing in a Digitized World

Abstract

Digital technologies favor the use of dynamic pricing, i.e., prices that vary unannounced for a product that basically remains unchanged. However, different forms of dynamic pricing are often mixed in the public discussion, which makes a meaningful analysis of the advantages and disadvantages of dynamic pricing difficult. The aim of this paper is to present the economic foundations of dynamic pricing as well as to discuss and to classify its design options. In addition, the paper assesses dynamic pricing from a buyer and seller perspective. Finally, the paper discusses implications for business research.