What is Dynamic Pricing? Well, it’s a pricing strategy used for setting the cost for a product or service that is highly flexible, like that of airline tickets. This type of pricing allows the price to change in real-time in response to market demand. Most of these price changes are controlled by pricing bots that gather data and use algorithms to adjust prices. These bots usually use data like the time of day, location, level of demand, and competitors’ prices in their algorithms.
It’s interesting to me that this is actually legal and happens and it looks like it's happening more and more. Airline tickets and hotels are the most that use this pricing strategy the most. It has been seen to leak over into online retail vendors as well but has yet to be successful. I wonder if the number of people who have shopped online while in the pandemic has created enough data for this pricing strategy to be used in online shopping in the near future.