Pricing Powered by Artificial Intelligence: An Assessment Model for the Sustainable Implementation of AI Supported Price Functions
Volume 35, Issue 3 (2024), pp. 529–556
Pub. online: 22 May 2024
Type: Research Article
Open Access
Open Access
Received
1 October 2023
1 October 2023
Accepted
1 May 2024
1 May 2024
Published
22 May 2024
22 May 2024
Abstract
Artificial Intelligence (AI) in the price management process is being applied in business practice and research to a variety of pricing use cases that can be augmented or automated, providing opportunities as a forecasting tool or for price optimization. However, the complexity of evaluating the technology to prioritize implementation is challenging, especially for small and medium enterprises (SMEs), and guidance is sparse. Which are the relevant stakeholder criteria for a sustainable implementation of AI for pricing purpose? Which type of AI supported price functions meet these criteria best? Theoretically motivated by the hedonic price theory and advances in AI research, we identify nine criteria and eight AI supported price functions (AISPF). A multiple attribute decision model (MADM) using the fuzzy Best Worst Method (BWM) and fuzzy combined compromise solution (CoCoSo) is set up and evaluated by pricing experts from Germany and Spain. To validate our results and model stability, we carried out several random sensitivity analyses based on the weight of criteria exchange. The results suggest accuracy and reliability as the most prominent attribute to evaluate AISPF, while ethical and sustainable criteria are sorted as least important. The AISPF which best meet the criteria are financial prices followed by procurement prices.
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Biographies
Erdmann Anett
A. Erdmann is a professor and academic director of the Marketing Department at ESIC University and director of the University Master in Marketing Management (MUDM) at ESIC University. She holds a PhD in economics and a master’s degree in economic analysis from the Universidad Carlos III de Madrid and is a fellow of the HEA. Her research focuses on the value assessment and pricing of consumer technologies and the optimization of digital marketing, leveraging data and technology.
Yazdani Morteza
M. Yazdani is a professor & senior researcher at Universidad Internacional de Valencia and chief research fellow at Vilnius Tech, Institute of Dynamic Management, Lithuania. He was a visiting professor at University of Foggia and Toulouse University last year. He previously worked at Universidad Loyola Andalucia. Morteza was an associate researcher for RUC-APS project at University of Toulouse and IRIT institute. Morteza handles research in management and operations, specifically decision making theories, supply chain management and sustainable development. He is AE of several journals indexed in web of sciences.
Mas Iglesias Jose Manuel
J.M. Mas Iglesias is a vice chancellor of Academic Policy and Faculty at ESIC University, responsible for the design and implementation of degrees, as well as the faculty. He holds a PhD in media research from UC3M. He is principal investigator of the research group Companies, Institutions and Consumers in the environment of Digital Marketing and Technology Research Group- CICDMT- ESIC-1-M-2020 of ESIC University. He has extensive experience as a professor of strategy and communication and digital marketing in undergraduate, graduate and corporate training. He has more than 15 years of professional experience in the world of communication and advertising, where he has been general manager of agencies at national and international level.
Marin Palacios Cristina
J.M. Mas Iglesias is a vice chancellor of Academic Policy and Faculty at ESIC University, responsible for the design and implementation of degrees, as well as the faculty. He holds a PhD in media research from UC3M. He is principal investigator of the research group Companies, Institutions and Consumers in the environment of Digital Marketing and Technology Research Group- CICDMT- ESIC-1-M-2020 of ESIC University. He has extensive experience as a professor of strategy and communication and digital marketing in undergraduate, graduate and corporate training. He has more than 15 years of professional experience in the world of communication and advertising, where he has been general manager of agencies at national and international level.
