Dynamic Pricing by Considering Reference Price Effects in Competitive Environment

Ghasemi, Zohre | 2018

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 50838 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Modarres, Mohammad
  7. Abstract:
  8. Taking into account the impact of advertising on the reference price, we propose an optimal pricing strategy for supply chains in competitive industries subject to reference price effect. Most of researches do not consider the competition among supply chains. An industry with two competing supply chains is considered. Each supply chain includes a manufacturer who sells his/her product via a retailer. There are two types of structures: integrated and decentralized (it is assumed that the relation in a chain is Manufacturer– Stackelberg). Each manufacturer offers wholesale price to his/her retailer anticipating the retailer’s order quantity. In addition, the retailers choose their retail price, advertising level and order quantity simultaneously.Over a finite number of periods, the chains compete with each other through the setting of prices and aim to maximize their own total profit.The reference-price effect refers to the demand deviation caused by consumers’ perceived losses or gains. We consider the impact of reference prices on product demand. It is assumed that demand is deterministic. Retailers have been applying advertisements to lure customers and boost sales. we derive the equilibrium prices and the Nash equilibrium of the supply chains. In fact, the objective is to present a method to calculate the equilibrium quantity of decision variables in different scenarios
  9. Keywords:
  10. Reference Price ; Dynamic Pricing ; Game Theory ; Competition ; Supply Chain ; Advertisement ; Adversarial Environment

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