Dynamic pricing with Bayesian updates from online reviews

arXiv:2404.14953v1 Announce Type: new
Abstract: When launching new products, firms face uncertainty about market reception. Online reviews provide valuable information not only to consumers but also to firms, allowing firms to adjust the product characteristics, including its selling price. In this paper, we consider a pricing model with online reviews in which the quality of the product is uncertain, and both the seller and the buyers Bayesianly update their beliefs to make purchasing & pricing decisions. We model the seller's …

abstract arxiv bayesian consumers cs.lg dynamic dynamic pricing face information market paper price pricing product products reviews selling type uncertainty updates