Accurate forecasting of market price developments is essential in achieving superior market performance. Especially in oligopolistic markets for durable consumer products a robust understanding of selling prices is important, as it drives pricing behavior as well as procurement, inventory and production decisions. Moreover, a supply chain perspective is indispensable for pricing forecasts since companies not only compete for product sales but also for limited resources. This paper explores the use of dynamic multivariate hedonics-based pricing models that explicitly model selling prices with the market valuation of constituting parts. The model is applied to TAC SCM, a supply-chain trading agent competition. To find unknown component prices series we apply the Kalman filter technique to smooth and forecast implicit prices using the EM algorithm. Finally, we present results of our analysis to establish the viability of this method. Copyright 2012 ACM.

Agent-based modeling, Dynamic pricing, Economic regimes, Hedonic price models, Kalman filter, Market modeling, Oligopolistic competition, State-space model, Trading agent competition,
12th International Conference on Electronic Commerce, ICEC 2010
Erasmus School of Economics

van Dalen, J, Ketter, W, Lucchese, G, & Collins, J. (2010). A kalman filter approach to analyze multivariate hedonics pricing model in dynamic supply chain markets. Presented at the 12th International Conference on Electronic Commerce, ICEC 2010. doi:10.1145/2389376.2389385