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Case Study: Dynamic Pricing for a Marketplace

From surge rules to a constrained bandit policy, measured with switchbacks and gated by off-policy evaluation

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Model interview answer for surge-style dynamic pricing in a ride-hailing or delivery marketplace: a constrained reward with liquidity and trust guardrails, a simulation showing that a user-level A/B recovers only 16 percent of the true profit effect, a switchback design with block length, burn-in, cluster standard errors and a design effect, a supply-response measurement, a policy ladder from a clearing rule to a Thompson-sampling bandit with a measured exploration cost, an off-policy gate (IPS, SNIPS, doubly robust) that catches a candidate breaching the exposure cap, a non-inferiority test on a trust metric, and serving and monitoring plans. All numbers come from a re-runnable synthetic simulation.

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Practice questions (5)

Design the Switchback for a Surge Multiplier Test

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Write the Constrained Reward for a Surge Policy

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Bandit or Reinforcement Learning for Surge Pricing?

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Fairness and Trust Guardrails for a Surge Policy

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What Must the Off-Policy Gate Show Before Launch?

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Quizzes (1)

Case Study: Dynamic Pricing for a Marketplace Quiz

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