Retailers are using artificial-intelligence software to set optimal prices, testing textbook theories of competition. The regulators are starting to pay attention - “If professional poker players are having difficulty playing against an algorithm, imagine the difficulty a consumer might have,” said one former antitrust attorney.
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Artificial Intelligence Transforms Pricing at Gas Stations, and Beyond
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Step 1. Build a database of historical transactions, include competitor’s info. Step 2. Connect software to live feeds of purchase data and other variables, including weather and traffic. Step 3. Compare data to historical numbers to predict demand. Step 4. Set strategy for each fuel at each station, including constraints such as minimum price. Step 5. Let algorithms determine price and automatically adjust pumps throughout the day. Step 6. Feed data from transactions in reaction to those prices back into the system to generate new predictions and prices.
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