Pricing of Digital Product

Pricing in electronic commerce is based on the mechanism of bargaining.Automatic pricing refers to a methodology of automatically setting sales prices during transaction to optimal prices,based on the needs of sellers and buyers.Price (setting) algorithm for demand sensitive model helps sellers to get decision variables,price per unit that maximizes profit for the quantity ordered by buyers.The conclusion is that the share of the sales benefit between firm and consumer is decided by discount factors.In this paper we discuss the pricing method based on stochastic approximation,show the shortcoming of this method.Furthermore,we propose the price setting algorithms of demand sensitive model.The investigation shows that an increase in demand ordered decreases price per unit of a good, at the same time increasing profit of seller and(decreasing) the sales cost. Buyers do not pay the same amount of total price for the good ordered within the same group of order,because of the difference in the net browsing cost.