scholarly journals Dynamic Pricing in the Presence of Social Learning and Strategic Consumers

2017 ◽  
Vol 63 (4) ◽  
pp. 919-939 ◽  
Author(s):  
Yiangos Papanastasiou ◽  
Nicos Savva
Keyword(s):  
Social Learning ◽  
Dynamic Pricing ◽  
Strategic Consumers

scholarly journals Dynamic Pricing Based on Strategic Consumers and Substitutes in a Duopoly Setting

2014 ◽  
Vol 2014 ◽  
pp. 1-9
Author(s):  
Gongbing Bi ◽  
Lechi Li ◽  
Feng Yang ◽  
Liang Liang
Keyword(s):  
Decision Making ◽  
Nash Equilibrium ◽  
Product Differentiation ◽  
Dynamic Pricing ◽  
Dynamic Game ◽  
Solution Concept ◽  
Expected Value ◽  
Decision Making Process ◽  
Pricing Model ◽  
Strategic Consumers

Based on the rational strategic consumers, we construct a dynamic game to build a two-period dynamic pricing model for two brands of substitutes which are sold by duopoly. The solution concept of the dynamic game is Nash equilibrium. In our model, consumers have been clearly segmented into several consumption classes, according to their expected value of the products. The two competing firms enter a pricing game and finally reach the state of Nash equilibrium. In addition, decision-making process with only myopic consumers existing in the market is analyzed. To make the paper more practical and realistic, the condition, in which the myopic and strategic consumers both exist in the market, is also considered and studied. In order to help the readers understand better and make it intuitively more clearly, a numerical example is given to describe the influence of the main parameters to the optimal prices. The result indicates that, to maintain the firms’ respective optimal profits, the prices of the products should be adjusted appropriately with the changes of product differentiation coefficient.

The Reference Effects on a Retailer’s Dynamic Pricing and Inventory Strategies with Strategic Consumers

2015 ◽  
Vol 63 (6) ◽  
pp. 1320-1335 ◽  
Author(s):  
Shining Wu ◽  
Qian Liu ◽  
Rachel Q. Zhang
Keyword(s):  
Dynamic Pricing ◽  
Strategic Consumers

Fixed, flexible, and dynamics pricing decisions of Airbnb mode with social learning

2020 ◽  
pp. 135481661989695 ◽  
Author(s):  
Yuting Chen ◽  
Rong Zhang ◽  
Bin Liu
Keyword(s):  
Social Learning ◽  
Dynamic Pricing ◽  
Positive Impact ◽  
Sharing Economy ◽  
Competitive Market ◽  
Risk Level ◽  
Risk Sensitivity ◽  
Peak Period ◽  
Pricing Decisions ◽  
Pricing Decision

The rise of the sharing economy has changed the traditional way of providing service to consumers. Airbnb is the most successful peer-to-peer model in the hospitality industry. This article investigates how to conduct strategic dynamic pricing in a competitive market by considering market conditions, quality, and risk sensitivity. Our research yields three main conclusions. First, we observe that the higher the risk level suppliers face, the more profit they will get; the lower the risk level consumers face, the more utilities they obtain. Second, we find that fixed pricing may be optimal or near-optimal for the platform when market size is small, the accommodation quality is better, and consumers’ reliability is low. Otherwise, a flexible pricing strategy is optimal. Finally, we extend the research into dynamic pricing decision in presence of Bayesian social learning and propose that the less-perfect accommodation requires social learning more urgently. In tourism peak period, social learning has less positive impact when the Airbnb accommodation is much perfect. These conclusions provide useful guidance on how the Airbnb and hotel can take advantage of the competitive market.

Influence of strategic consumers on the network goods market

2021 ◽  
Vol 57 (4) ◽  
pp. 5
Author(s):  
Nikolai Svetlov
Keyword(s):  
Dynamic Pricing ◽  
Network Effect ◽  
Commodity Market ◽  
Strategic Consumers ◽  
Integral Effect ◽  
Goods Market ◽  
Price Growth ◽  
Modern Economic ◽  
Heterogeneous Consumers ◽  
Network Goods

One of the important trends in modern economic development is the expanding variety ofso-called network commodities. Network commodity is such a good the usefulness of which for each consumer depends on the total number of using it consumers. The purpose of the paper is to study dynamic pricing in the network commodity market with a positive network effect in the presence of two types of consumers: myopic, taking into account only the current utility of the commodity, and strategic, focused on utility for the entire period of use of the commodity. Market dynamics, including price trajectories maximizing the monopolist supplier's revenues, are established by running numerical experiments on the corresponding theoretical model. The features of this dynamics are revealed for the cases of a large share of myopic consumers and under the conditions of dominance of strategic consumers. It is demonstrated that, in contrast to the situation in the market of ordinary commodities, a monopoly supplier of the network commodity may be interested in the presence of strategic consumers in the market. The more such consumers are present, the shorter the period of warming up the market by the supplier by means of low prices and the higher the rate of the consequent price growth. Strategic consumers find themselves hostage of their own focus on the integral effect in consumption. The directions of further research of the market of network commodities with the heterogeneous consumers are presented.

Dynamic Pricing in the Presence of Myopic and Strategic Consumers: Theory and Experiment

2016 ◽  
Vol 26 (1) ◽  
pp. 116-133 ◽  
Author(s):  
Mirko Kremer ◽  
Benny Mantin ◽  
Anton Ovchinnikov
Keyword(s):  
Dynamic Pricing ◽  
Strategic Consumers ◽  
Theory And Experiment

scholarly journals Dynamic Pricing under Cost Reduction in the Presence of Myopic and Strategic Consumers

2019 ◽  
Vol 2019 ◽  
pp. 1-15
Author(s):  
Guangning Liu ◽  
Zhenzhong Guan ◽  
Hua Wang
Keyword(s):  
Dynamic Pricing ◽  
Cost Reduction ◽  
Pricing Strategy ◽  
Future Price ◽  
Purchase Decisions ◽  
Pricing Strategies ◽  
Strategic Consumers ◽  
Technology Advancement ◽  
Significant Cost Reduction ◽  
Strategic Waiting

After release, a product usually suffers cost reductions during its whole lifespan. Compared to the myopic, strategic consumers may have stronger incentive to delay the purchase once they perceive that a significant cost reduction will result in a markdown. The strategic (compared to the myopic) properties influence the seller both quantitatively in terms of proportion of strategic consumers and qualitatively in terms of customer patience. To forecast the reaction of the whole market under cost reduction, it is necessary to acquire the strategic properties. In this paper, we study the impacts of proportion of strategic consumers, customer patience, and cost reduction on dynamic pricing strategy when cost reduction comes from technology advancement. The seller makes pricing strategies when facing unknown future cost, and the buyer makes purchase decisions when facing unknown future price. Our study shows that generally both higher strategic consumer proportion and customer patience contribute to a delay in sales. Further, profit diversion happens under great combination of strategic properties. In addition, with the increase of customer patience, not only strategic but also myopic consumers will buy less. Finally, the strategic properties moderate the pricing strategy in latter stage when there is a cost reduction. This indicates a threshold as combination of strategic properties, upon which seller tends to offer a smaller markdown to discourage strategic waiting, and under which seller tends to offer a greater markdown to divert strategic consumers to the latter period.

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