Multi-Agent Reinforcement Learning for Dynamic Pricing: Balancing Profitability,Stability and Fairness

TL;DR

This paper systematically evaluates multi-agent reinforcement learning algorithms, MAPPO and MADDPG, for dynamic retail pricing, demonstrating MAPPO's superior stability and profitability in competitive simulated markets.

Contribution

It provides the first comprehensive empirical comparison of MARL algorithms for dynamic pricing, highlighting MAPPO's advantages over existing independent learning baselines.

Findings

MAPPO achieves highest average returns with low variance.

MADDPG offers the fairest profit distribution among agents.

MARL methods are scalable and stable for dynamic retail pricing.

Abstract

Dynamic pricing in competitive retail markets requires strategies that adapt to fluctuating demand and competitor behavior. In this work, we present a systematic empirical evaluation of multi-agent reinforcement learning (MARL) approaches-specifically MAPPO and MADDPG-for dynamic price optimization under competition. Using a simulated marketplace environment derived from real-world retail data, we benchmark these algorithms against an Independent DDPG (IDDPG) baseline, a widely used independent learner in MARL literature. We evaluate profit performance, stability across random seeds, fairness, and training efficiency. Our results show that MAPPO consistently achieves the highest average returns with low variance, offering a stable and reproducible approach for competitive price optimization, while MADDPG achieves slightly lower profit but the fairest profit distribution among agents. These findings demonstrate that MARL methods-particularly MAPPO-provide a scalable and stable alternative to independent learning approaches for dynamic retail pricing.