Standardizing Interactive Pricing for Electronic Business

Interactive pricing, the subset of dynamic pricing where buyers and sellers enter a computer mediated price-negotiation process, has stimulated academic interest ever since the introduction of Internet-related B2C and B2B applications. However, this has not yet led to the widespread use of standardized interactive pricing mechanisms within industrial applications. A recent study suggests that applicants expect the integration of interactive pricing mechanisms into existing IT infrastructure to be very costly due to high customization efforts. The standardization of interactive pricing should thus be a first step towards enabling a wider use of these mechanisms. Building on the classification of the range of dynamic pricing methods, we analyze existing business standards that should be capable of describing interactive pricing mechanisms. Our analysis reveals the shortcomings of recent business standards which therefore require the development of an enhanced model for interactive pricing applications. Addressing this issue we propose a model that integrates a price communication language with a process description format for the customization of interactive pricing mechanisms. The paper concludes with three case studies illustrating the use of