Applications of Reinforcement Learning in Dynamic Pricing Models for E-Commerce Businesses

Segbenu, Balogun Segun and Olateju, Mariam and Olawale, Adebayo Sulaimon and Kujore, Victoria (2025) Applications of Reinforcement Learning in Dynamic Pricing Models for E-Commerce Businesses. World Journal of Advanced Research and Reviews, 26 (3). pp. 1562-1573. ISSN 2581-9615

Dynamic pricing has become a cornerstone strategy for e-commerce businesses seeking to optimize revenue while maintaining competitive advantage in rapidly changing digital markets. This review examines the integration of reinforcement learning techniques into dynamic pricing models, exploring how these adaptive algorithms enable businesses to make real-time pricing decisions based on market conditions, consumer behavior, and competitive dynamics. The research synthesizes current methodologies, implementation frameworks, and performance outcomes across various e-commerce sectors. Reinforcement learning approaches, particularly Q-learning, deep reinforcement learning, and multi-agent systems, have demonstrated significant potential in addressing the complexity of modern pricing environments where traditional static models fail to capture market volatility. The review identifies key challenges including data quality requirements, computational complexity, and ethical considerations surrounding automated pricing decisions. Emerging trends indicate growing adoption of hybrid models that combine reinforcement learning with traditional economic theories, leading to more robust and interpretable pricing strategies. The findings suggest that while reinforcement learning offers substantial improvements in pricing optimization, successful implementation requires careful consideration of business context, regulatory constraints, and customer perception. Future research directions include developing more efficient algorithms for real-time applications and addressing fairness concerns in automated pricing systems.