Algorithms Won’t Solve All Your Pricing Problems

Marco Bertini, marketing professor at Esade Business School, says
more and more companies are turning to pricing algorithms to
maximize profits. But many are unaware of a big downside. The
constant price shifts can hurt the perception of the brand and its
products. He warns that overreliance on artificial intelligence and
machine learning without considering human psychology can cause
serious damage to the customer relationship. And he outlines steps
managers should take, including implementing guardrails, overrides,
and better communication tactics. With London Business School
professor Oded Koenigsberg, Bertini wrote the HBR article "The
Pitfalls of Pricing Algorithms."