Oligopoly dynamic pricing: A repeated game with incomplete information

Under the industrial background of dual-channel, volatility in demand of consumers, we use the theory of bifurcations and numerical simulation tools to investigate the dynamic pricing game in a dual-channel supply chain with risk-averse behavior and incomplete information. Due to volatility of demand of consumers, we consider all the players in the supply chain are risk-averse. We assume there exist Bertrand game and Manufacturers’ Stackelberg in the chain which are closer to reality. The main objective of the paper is to investigate the complex influence of the decision parameters such as wholesale price adjustment speed, risk preference and service value on stability of the risk-averse supply chain and average utilities of all the players. We lay emphasis on the influence of chaos on average utilities of all the players which did not appear in previous studies. The dynamic phenomena, such as the bifurcation, chaos and sensitivity to initial values are analyzed by 2D bifurcation phase portraits, Double Largest Lyapunov exponent, basins of attraction and so on. The study shows that the manufacturers should slow down their wholesale price adjustment speed to get more utilities, if the manufacturers are willing to take on more risk, they will get more profits, but they must keep their wholesale prices in a certain range in order to maintain the market stability.

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Dynamical Analysis of a Repeated Game with Incomplete Information

Mathematics of Operations Research ◽

10.1287/moor.2016.0839 ◽

2017 ◽

Vol 42 (4) ◽

pp. 1085-1105

Author(s):

Xavier Bressaud ◽

Anthony Quas

Keyword(s):

Incomplete Information ◽

Repeated Game ◽

Dynamical Analysis

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The Achilles tendon of dynamic pricing –– the effect of consumers' fairness preferences on platform's dynamic pricing strategies

Journal of Internet and Digital Economics ◽

10.1108/jide-08-2021-0004 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Yong Wang ◽

Tianze Tang ◽

Weiyi Zhang ◽

Zhen Sun ◽

Qiaoqin Xiong

Keyword(s):

Decision Making ◽

Dynamic Pricing ◽

Design Methodology ◽

Repeated Game ◽

Decision Making Process ◽

Pricing Strategies ◽

Content Type ◽

Fair Game ◽

Game Dynamic ◽

Repeated Game Theory

PurposeIn this paper, the authors study the effect of consumers' fairness preferences on dynamic pricing strategies adopted by platforms in a non-cooperative game.Design/methodology/approachThis study applies fair game and repeated game theory.FindingsThis study reveals that, in a one-shot game, if consumers have fairness preferences, dynamic prices will slightly decline. In a repeated game, dynamic prices will be reduced even when consumers do not have fairness preferences. When fairness preferences and repeated game are considered simultaneously, dynamic prices are most likely to be set at fair prices. The authors also discuss the effect of platforms' discounting factors, the consumers' income and alternative choices of consumption on the dynamic prices.Research limitations/implicationsThe study findings illustrate the importance of incorporating behavioral elements in understanding and designing the dynamic pricing strategies for platforms and the implications on social welfare in general.Originality/valueThe authors developed a theoretical model to incorporate consumers' fairness preference into the decision-making process of platforms when they design the dynamic pricing strategies.

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Building Routines: Learning, Cooperation, and the Dynamics of Incomplete Relational Contracts

The American Economic Review ◽

10.1257/aer.100.1.448 ◽

2010 ◽

Vol 100 (1) ◽

pp. 448-465 ◽

Cited By ~ 60

Author(s):

Sylvain Chassang

Keyword(s):

Incomplete Information ◽

Common Knowledge ◽

Repeated Game ◽

Relational Contracts ◽

Conflicting Interests ◽

Path Dependent

This paper studies how agents with conflicting interests learn to cooperate when the details of cooperation are not common knowledge. It considers a repeated game in which one player has incomplete information about when and how her partner can provide benefits. Initially, monitoring is imperfect and cooperation requires inefficient punishment. As the players' common history grows, the uninformed player can learn to monitor her partner's actions, which allows players to establish more efficient cooperative routines. Because revealing information is costly, it may be optimal not to reveal all the existing information, and efficient equilibria can be path-dependent. (JEL C73, D82, D83, D86)

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