Dynamic Pricing by Restricted Boltzmann Machine

This paper presents an investigation of mechanisms for price setting algorithms on dynamic pricing based on group buying discounts for electronic commerce using Restricted Boltzmann Machine. It is proposed for the optimal cost of production functions which provide the marginal cost for the unit price of the product. The investigation finds techniques to set automatic the profitable price for online group buying discounts where the marginal cost is changing with the change of quantity demand. The simple example of production functions is used for Restricted Boltzmann Machine. The example confirmed the convergence of production costs within their isoquants. The production costs continue to decrease up to the point where they can’t decrease any more. Those are the points of the optimal costs, from which we obtain the marginal cost to be inserted automatic into the formula for the calculation of the selling price of the product.