A hybrid pricing expert system based on fuzzy reasoning

Regardless of the increasingly more sophisticated and precise mathematical models formulated in the field of economics, a persistent gap remains between the predictions and the economic reality. The uncertainty and complexity of the involved phenomena fails to be encapsulated into “precise” models. With the most important part of the related information stemming from human experts, it is more than reasonable to employ models that are capable of hosting and reasoning with such knowledge. It is argued that the fuzzy logic and fuzzy reasoning framework is perfectly suited for such an approach since it provides the required expressiveness for the knowledge representation and the respective inference mechanisms to efficiently deal with the pricing problem. This argument is discussed and verified with the use of the FUZZYPRICE system that is designed and implemented to assist pricing decision-making. The results obtained are then compared to the well known PRICE-STRAT system to demonstrate the effectiveness of the current approach.