Dynamic Pricing Policies in Presence of Strategic Customer Behavior

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Mohseni, Mahdi | 2009

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 39541 (01)
University: Sharif University of Technology
Department: Industrial Engineering
Advisor(s): Modarres Yazdi, Mohammad
Abstract:
The problem of developing optimal pricing and inventory allocation strategies has been extensively studied over the past two decades. However, most of the literature in this area assumes that customers are myopic price-takers, and do not respond to firm pricing strategically. In this study, we present review on a class of problems that consider a firm selling a finite number of items over a finite time horizon facing stochastic demand and a group of customers who act strategically by timing their purchases. We first review the optimal purchasing policy for the customers, and pricing policy for the firm that is the best response policy to the customer’s strategic behavior. Then we present a review on the pricing and purchasing policies converge to Nash equilibrium and also on the effects of firm’s mispricing and collusion between strategic customers. At last we show through our extensive numerical analysis the performance of the purchasing policy in terms of savings, we also examine the effect of some parameters on saving.
Keywords:
Revenue Management ; Dynamic Pricing ; Price Policies ; Nash Equilibrium Point ; Strategic Customer

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