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End of the fixed cost era: AI analysis ushers in dynamic pricing | The Mainichi

“Just by going a few seats further in, you can get such a difference in the price?” Junichi Ochi, 70, a resident of Yokohama, got a surprise while searching online via a tablet for tickets to see the pro-baseball team Fukuoka SoftBank Hawks.

For the Wednesday April 10 game between the SoftBank Hawks and Hokkaido Nippon-Ham Fighters, first base tickets 10 rows from the front near the aisle were priced at 7,395 yen, but three seats further in on the same row cost 6,400 yen — a 995 yen saving. In the same block, standard sales prices are 8,000 yen, creating a price discrepancy as big as 1,600 yen.

Ochi was looking at the Softbank Hawks’ new “AI Ticket” system introduced in January. Prices change according to demand using technology called “dynamic pricing.” The system decides on appropriate ticket costs for each seat based on Artificial Intelligence (AI) analysis of data including the game’s day and time, the teams, the kind of seating and the starting pitcher. Seating further from the aisles is more likely to be left unsold, so the pricing system gradually cuts fees in increments as fine as a single yen, with prices slowly falling as match day comes closer allowing for detailed valuation.

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End of the fixed cost era: AI analysis ushers in dynamic pricing – The Mainichi.

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