[Previous] [Next] - [Index] [Thread Index] - [Previous in Thread] [Next in Thread]

Subject: UKNM: Dynamic price elasticity model
From: John McCarthy
Date: Mon, 20 Mar 2000 07:26:45 GMT

> Has anyone ever discovered/used/invented a way of modelling the
> relationship between price and demand in a real-time environment? What
> I'm struggling with is a way of modelling the impact on sales of
> adjusting prices to meet demand in a web community (like an auction site
> or buying club).

The relationship between demand and price can simply drawn on a graph.
The shape of that graph depends on the product.
Some products have elestic demand characteristics - some inelastic.

All that modelling will do is formalise an equation that reproduces the
shape of the graph.
It sounds to me as though you need to know the shape of the graph first.
For this you need an emprical approach - ie. change prices and then see what
affect this has on demand
(accounting for underlying traffic rates). You will then be able to build an
idea of the graph shape.
This will serve you far better than any modelling exercise and will be
grounded in reality.

Dr. John
Attention Solutions

post new media vacancies for free uknm-jobsatchinwag [dot] com
sponsor the uk-netmarketing list and website, contact
salesatchinwag [dot] com for more details.
To unsubscribe or change your list settings go to
http://www.chinwag.com/uk-netmarketing or helpatchinwag [dot] com

  UKNM: Dynamic price elasticity model, Nick Young

[Previous] [Next] - [Index] [Thread Index] - [Next in Thread] [Previous in Thread]