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Why sellers are switching to dynamic pricing

Illustration by Liz Meyer for TIME

Maybe you didn't notice it in the Christmas crush, but a huge shift took place this holiday shopping season: merchants changed the price of goods online more quickly than at any other time in retail history. How often? According to Eric Best, CEO of Mercent, a Seattle firm that creates and manages automated pricing programs, the most aggressive sellers were jiggling prices in 10-to-15-minute windows. That's why they call it dynamic pricing.

You're probably most familiar with dynamic pricing from buying airline tickets. The model, introduced by American Airlines in the '80s, is designed to shift capacity risk (i.e., empty seats)...

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