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We study the cause of large fluctuations in prices in the London Stock Exchange. This is done at the microscopic level of individual events, where an event is the placement or cancellation of an order to buy or sell. We show that price…

Other Condensed Matter · Physics 2008-12-02 J. Doyne Farmer , Laszlo Gillemot , Fabrizio Lillo , Szabolcs Mike , Anindya Sen

Many policy counterfactuals depend on how consumers value product attributes such as sugar, sodium, caffeine, alcohol, or emissions. Standard hedonic and differentiated-products models interpret these valuations statically. That…

Theoretical Economics · Economics 2026-05-20 Josephine Auer

I present an overview of some recent advancements on the empirical analysis and theoretical modeling of the process of price formation in financial markets as the result of the arrival of orders in a limit order book exchange. After…

Trading and Market Microstructure · Quantitative Finance 2021-05-04 Fabrizio Lillo

This paper deals with a stochastic order-driven market model with waiting costs, for order books with heterogenous traders. Offer and demand of liquidity drives price formation and traders anticipate future evolutions of the order book. The…

Trading and Market Microstructure · Quantitative Finance 2015-08-11 Aimé Lachapelle , Jean-Michel Lasry , Charles-Albert Lehalle , Pierre-Louis Lions

Reasonable pricing of data products enables data trading platforms to maximize revenue and foster the growth of the data trading market. The textual semantics of data products are vital for pricing and contain significant value that remains…

Computational Engineering, Finance, and Science · Computer Science 2026-02-24 Ruize Gao , Feng Xiao , Jinpu Li , Shaoze Cui

This paper proposes a method for estimating consumer preferences among discrete choices, where the consumer chooses at most one product in a category, but selects from multiple categories in parallel. The consumer's utility is additive in…

Machine Learning · Computer Science 2023-08-08 Rob Donnelly , Francisco R. Ruiz , David Blei , Susan Athey

When online sellers use AI learning algorithms to automatically compete on e-commerce platforms, there is concern that they will learn to coordinate on higher than competitive prices. However, this concern was primarily raised in…

General Economics · Economics 2025-11-03 Hangcheng Zhao , Ron Berman

In contextual dynamic pricing, a seller sequentially prices goods based on contextual information. Buyers will purchase products only if the prices are below their valuations. The goal of the seller is to design a pricing strategy that…

Machine Learning · Statistics 2025-02-14 Matilde Tullii , Solenne Gaucher , Nadav Merlis , Vianney Perchet

The United States, a leading global producer and consumer of beef, continues to face substantial challenges in achieving price harmonization across its regional markets. This paper evaluates the validity of the Law of One Price (LOP) in the…

Econometrics · Economics 2025-07-30 Leonardo Manríquez-Méndez

As Internet-based commerce becomes increasingly widespread, large data sets about the demand for and pricing of a wide variety of products become available. These present exciting new opportunities for empirical economic and business…

Statistics Theory · Mathematics 2008-12-02 Anindya Ghose , Arun Sundararajan

The prevalence of e-commerce has made detailed customers' personal information readily accessible to retailers, and this information has been widely used in pricing decisions. When involving personalized information, how to protect the…

Cryptography and Security · Computer Science 2021-07-27 Xi Chen , David Simchi-Levi , Yining Wang

In this paper we investigate predictability of electricity prices in the Canadian provinces of Alberta and Ontario, as well as in the US Mid-C market. Using scale-dependent detrended fluctuation analysis, spectral analysis, and the…

Statistical Finance · Quantitative Finance 2015-06-01 Olga Y. Uritskaya , Vadim M. Uritsky

Problem definition: Mining for heterogeneous responses to an intervention is a crucial step for data-driven operations, for instance to personalize treatment or pricing. We investigate how to estimate price sensitivity from…

Methodology · Statistics 2025-01-08 Jean Pauphilet

We study the relation between stock price changes and the difference in the number of sell and buy orders. Using a soft spin model, we describe the price impact of order imbalances and find an analogy to the fluctuation-dissipation theorem…

Condensed Matter · Physics 2009-11-07 Bernd Rosenow

The plethora of comparison shopping agents (CSAs) in today's markets enables buyers to query more than a single CSA when shopping, and an inter-CSAs competition naturally arises. We suggest a new approach, termed "selective price…

Computer Science and Game Theory · Computer Science 2016-11-08 Chen Hajaj , Noam Hazon , David Sarne

Pricing and settlement mechanisms are crucial for efficient re-source allocation, investment incentives, market competition, and regulatory oversight. In the United States, Regional Transmission Operators (RTOs) adopts a uniform pricing…

Systems and Control · Electrical Eng. & Systems 2024-10-30 Hamid Davoudi , Fengyu Wang , Yonghong Chen , Di Shi , Alinson Xavier , Feng Qiu

The problem of market clearing is to set a price for an item such that quantity demanded equals quantity supplied. In this work, we cast the problem of predicting clearing prices into a learning framework and use the resulting models to…

Machine Learning · Computer Science 2019-06-25 Weiran Shen , Sébastien Lahaie , Renato Paes Leme

Technical trading represents a class of investment strategies for Financial Markets based on the analysis of trends and recurrent patterns of price time series. According standard economical theories these strategies should not be used…

Statistical Finance · Quantitative Finance 2011-10-25 Federico Garzarelli , Matthieu Cristelli , Andrea Zaccaria , Luciano Pietronero

We study the price impact of storage facilities in electricity markets and analyze the long-term profitability of these facilities in prospective scenarios of energy transition. To this end, we begin by characterizing the optimal operating…

Mathematical Finance · Quantitative Finance 2024-10-17 Roxana Dumitrescu , Redouane Silvente , Peter Tankov

With the proliferation of algorithmic high-frequency trading in financial markets, the Limit Order Book has generated increased research interest. Research is still at an early stage and there is much we do not understand about the dynamics…

Trading and Market Microstructure · Quantitative Finance 2019-02-05 Faisal I Qureshi