How Dynamic Pricing Shapes Prepurchase Stage Duration and Purchase Probability
(A2025-126193)

AUTHORS

Lucas Heyden, University of Rostock; Markus Husemann-Kopetzky, Freie Universität Berlin; Lena Steinhoff, Paderborn University; Christian Brock, University of Rostock

ABSTRACT

Dynamic pricing in e-commerce is crucial for optimizing revenue and competitiveness by adjusting prices in real-time based on demand, competition, and customer behaviour. Using a large dataset from an online retailer, we analyse how price increases and reductions affect journey duration and purchase likelihood. Results show that any price change, whether an increase or reduction, extends journey duration compared to stable prices. Additionally, both price increases and reductions boost purchase likelihood, indicating that dynamic pricing drives consumer action. Absolute price reductions shorten journey durations and increase purchase likelihood, while relative changes have mixed effects. These findings highlight that the direction and framing of price changes are critical in influencing customer behaviour. Our study contributes to understanding the effects of dynamic pricing, providing insights for optimizing pricing strategies and enhancing customer experience in e-commerce.