Dynamic Pricing Interactive
Revenue Management
Maximize total revenue by dynamically adjusting prices based on demand, capacity, and time. The airline/hotel approach applied to betting.
📊 The Revenue Management Problem
📅
Fixed Capacity
Limited inventory (risk limits, seats, offers)
⏰
Perishable
Value lost if not sold by deadline
💰
Variable Demand
Heterogeneous willingness to pay
Current State
500 2000
0 900
10 100
📊 Pricing Recommendation
Base Price $100
Optimal Price $132
Premium +32%
✓ On track. Dynamic pricing optimal.
Revenue Comparison
Fixed Price
$82K
Dynamic Pricing
$107K
Uplift
+$25K
+31%
Dynamic Pricing Over Time
As capacity fills and deadline approaches, prices rise. Late bookers pay premium.
🎛️ Pricing Levers
Time-Based
Price increases as event approaches
Ex: Deadline urgency
Capacity-Based
Price increases as inventory depletes
Ex: Scarcity premium
Demand-Based
Price based on booking velocity
Ex: Hot game premium
Segment-Based
Different prices for different users
Ex: VIP vs casual
R Code Equivalent
# Revenue management pricing
calculate_optimal_price <- function(capacity, booked, time_remaining, base_price) {
remaining <- capacity - booked
urgency <- 1 - time_remaining / 100
scarcity <- 1 - remaining / capacity
# Price multiplier based on urgency and scarcity
multiplier <- 1 + scarcity * 0.5 + urgency * 0.3
optimal_price <- base_price * multiplier
return(optimal_price)
}
# Simulate revenue
compare_strategies <- function(capacity, base_price) {
# Fixed pricing
fixed_rev <- capacity * base_price * 0.85 # 85% utilization
# Dynamic pricing (sells out at premium)
dynamic_rev <- capacity * base_price * 1.15 # Higher avg price
list(fixed = fixed_rev, dynamic = dynamic_rev,
uplift = (dynamic_rev - fixed_rev) / fixed_rev)
}
result <- compare_strategies(1000, 100)
cat(sprintf("Uplift: +%.0f%%\n", result$uplift * 100))✅ Key Takeaways
- • Revenue mgmt: price based on capacity + time
- • Perishable inventory = must sell before deadline
- • Dynamic > fixed when demand varies
- • Raise prices as capacity fills
- • Raise prices as deadline approaches
- • Segment customers by willingness to pay