Optimal price skimming by a monopolist facing rational consumers
Management Science
Pricing strategies in a dynamic duopoly: a differential game model
Management Science
Commissioned Paper: An Overview of Pricing Models for Revenue Management
Manufacturing & Service Operations Management
Competitive Multi-period Pricing for Perishable Products: A Robust Optimization Approach
Mathematical Programming: Series A and B
A Monopolistic and Oligopolistic Stochastic Flow Revenue Management Model
Operations Research
Dynamic Mechanism Design for Online Commerce
Operations Research
Intertemporal Pricing with Strategic Customer Behavior
Management Science
Strategic Capacity Rationing to Induce Early Purchases
Management Science
Manufacturing & Service Operations Management
Optimal Pricing of Seasonal Products in the Presence of Forward-Looking Consumers
Manufacturing & Service Operations Management
Feasting on Leftovers: Strategic Use of Shortages in Price Competition Among Differentiated Products
Manufacturing & Service Operations Management
Adaptive Strategies for Dynamic Pricing Agents
WI-IAT '11 Proceedings of the 2011 IEEE/WIC/ACM International Conferences on Web Intelligence and Intelligent Agent Technology - Volume 02
Markdown Pricing with Unknown Fraction of Strategic Customers
Manufacturing & Service Operations Management
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We present a dynamic pricing model for oligopolistic firms selling differentiated perishable goods to multiple finite segments of strategic consumers who are aware that pricing is dynamic and may time their purchases accordingly. This model encompasses strategic behavior by both firms and consumers in a unified stochastic dynamic game in which each firm's objective is to maximize its total expected revenues, and each consumer responds according to a shopping-intensity-allocation consumer choice model. We prove the existence of a unique subgame-perfect equilibrium, provide equilibrium optimality conditions, and prove monotonicity results for special cases. The model provides insights about equilibrium price dynamics under different levels of competition, asymmetry between firms, and multiple market segments with varying properties. We demonstrate that strategic behavior by consumers can have serious impacts on revenues if firms ignore that behavior in their dynamic pricing policies. Moreover, ideal equilibrium responses to consumer strategic behavior can recover only a portion of the lost revenues. A key conclusion is that firms may benefit more from limiting the information available to consumers than from allowing full information and responding to the resulting strategic behavior in an optimal fashion.