A simulation based analysis of price elasticity of demand
|Author:||Bc. Michal Kubišta|
|Year:||2020 - summer|
|Leaders:|| PhDr. RNDr. Josef Stráský Ph.D.
|Work type:|| Economic Theory
|Awards and prizes:|
|Abstract:||In this work, we describe a novel methodology to analyse the price elasticity of
demand. This method combines an artificial neural network that serves as the
model of the behaviour of the customers and a subsequent simulation based
on this model. We present the validation of our approach using a real-world
dataset obtained from an e-commerce retailer and demonstrate its advantages,
notably the ability to estimate the elasticity in distinct price points and the
inclusion of the complete pricing situations (not only product’s own price).