Dynamic Pricing and Inventory Control of Substitute Products
Manufacturing & Service Operations Management
Consumer Returns Policies and Supply Chain Performance
Manufacturing & Service Operations Management
Inventory, Discounts, and the Timing Effect
Manufacturing & Service Operations Management
Technical Note---Personalized Dynamic Pricing of Limited Inventories
Operations Research
Optimal Pricing with Speculators and Strategic Consumers
Management Science
Buy Now and Match Later: Impact of Posterior Price Matching on Profit with Strategic Consumers
Manufacturing & Service Operations Management
Intertemporal Pricing and Consumer Stockpiling
Operations Research
Selling with Binding Reservations in the Presence of Strategic Consumers
Management Science
Strategic Capacity Rationing when Customers Learn
Manufacturing & Service Operations Management
Dynamic Pricing of Limited Inventories When Customers Negotiate
Operations Research
Supply Chain Dynamics and Channel Efficiency in Durable Product Pricing and Distribution
Manufacturing & Service Operations Management
The Value of Product Variety When Selling to Strategic Consumers
Manufacturing & Service Operations Management
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We analyze the optimal design of a markdown pricing mechanism with preannounced prices. In the presence of limited supply, buyers who choose to purchase at a lower price may face a scarcity in supply. Our focus is on the structure of the optimal markdown mechanisms in the presence of rational or strategic buyers who demand multiple units. We first examine a complete information setting where the set of customer valuations is known but the seller does not know the valuation of each individual customer (i.e., cannot exercise perfect price discrimination). We then generalize our analysis to an incomplete valuation information setting where customer valuations are drawn from known distributions. For both settings, we compare the seller's profit resulting from the optimal markdown mechanism and the optimal single price. We provide a number of managerial insights into designing profitable markdown mechanisms.