Two-period dynamic versus fixed-ratio pricing in a capacity constrained duopoly

Daşçı, Abdullah; Karakul, Mustafa

doi:10.1016/j.ejor.2007.12.039

Cited by 19 publications

(10 citation statements)

References 35 publications

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“…market circumstances dynamic pricing fixed-ratio pricing strategic consumer behavior [5,[8][9][10][11][12] monopoly ✓ N ✓ [13][14][15][16][17][18][19] monopoly N ✓ ✓ [20,21] competition ✓ N ✓ [22,23] competition ✓ ✓ ✓ [6] zigzag competition ✓ N N [24] zigzag competition ✓ N ✓ this paper zigzag competition ✓ ✓ ✓ one firm unilaterally commits to fixed-ratio pricing and show that such commitment can be valuable for the committing firm. This literature review shows that a dynamic pricing policy that considers the presence of strategic consumers has moved from the monopoly market to a variety of pricing policies in the competitive market.…”

Section: Literaturesmentioning

confidence: 99%

“…where 1 (1, 0), 1 (1, 0), 2 (0, 1), 2 (0, 1) are shown in (21) and (22). They are the equilibrium profits of two firms under an elastic pricing policy in the market with a single consumer, where , = , and ̸ = .…”

Section: Consumersmentioning

confidence: 99%

“…Several other papers consider two kinds of pricing policy in competitive markets. Dasci [22] analyzes the impact of dynamic and fixed-ratio pricing policies on firm profits and equilibrium prices under competition. The conclusion is that fixed-ratio pricing policy may lead to greater equilibrium profits, compared to dynamic pricing policy.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Two‐Period Dynamic versus Fixed‐Ratio Pricing Policies under Duopoly Competition

Yang

et al. 2019

Mathematical Problems in Engineering

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This paper introduces a two-period, pricing policy under duopoly competition between two firms offering an identical product to consumers who are intertemporal utility maximization. Firms have equal inventories of faultlessly replaceable and perishable products. The firms adjust prices to maximize profits and determine optimal pricing policies, choosing from dynamic pricing, fixed-ratio pricing, and elastic pricing policies. According to a duopoly competition model, the consumer is limited to a single firm visit per period. The consumer decides to purchase the product at current price from a firm and remain in the market to purchase product from the other firm in the next period or exit the market. The results offer three main conclusions. First, elastic pricing is consistent with dynamic pricing. Second, the more consumers visit the firm in the first period, the more profits the firm will make. Third, we explore the effectiveness of different pricing policies. The results show that although dynamic pricing is a more complex policy than fixed-ratio pricing, it may lead to decreased equilibrium profits when the firms sharply discounts prices and consumer rationality is unlimited.

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Section: Literaturesmentioning

confidence: 99%

Section: Consumersmentioning

confidence: 99%

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Two‐Period Dynamic versus Fixed‐Ratio Pricing Policies under Duopoly Competition

Yang

et al. 2019

Mathematical Problems in Engineering

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“…Ji based on consumer utility function, established a two-stage dynamic pricing model and discussed pricing strategies under customer behavior and market competition. The author finds that the strategic customer behavior reduces both firms' revenue [10].…”

Section: Introductionmentioning

confidence: 99%

Dynamic Pricing of Airline Tickets with Strategic and Myopic Passengers

Meirong¹,

Li²

2016

dtem

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This paper studies the optimal clearance pricing of tickets in the presence of strategic and myopic passengers. We establish a two-perod dynamic pricing model, and characterize equilibrium prices and profits using equilibrium theory and backward induction method. We prove that a pure strategy equilibrium fails to exist. Instead, airlines play a mixed strategy with respect to their pricing. Finally, we use numerical examples to explore the effect of various parameters on the performance of optimal strategy.

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“…Levin Y, McGill J and Nediak M selected single and multiple-choice model to describe different choices of consumers in the case of monopoly and competition [2] [3]. Dasci A and Karakul M discussed difference between static and dynamic pricing, and studied the effects of these two pricing methods to manufacturers' equilibrium price and revenue [4]. Chen and Zhang found dynamic pricing improved revenue of the two firms, and social welfare is improved [5].…”

Section: Introductionmentioning

confidence: 99%

Dynamic Pricing of Perishable Products with Competition

Ji¹

2015

JSS

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With the development of product development technology and the rapid rise of online retailing, the market competition becomes increasingly fierce. Based on consumer utility function, this article established a two-stage dynamic pricing model and discussed pricing strategies under consumer behavior and market competition. Findings indicate that product quality difference and consumer valuation decreasing coefficient determine the order of the consumer purchase decisions. The firm who provides lower-quality products suffered more loss than the firm who provides high-quality products.

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Two-period dynamic versus fixed-ratio pricing in a capacity constrained duopoly

Cited by 19 publications

References 35 publications

Two‐Period Dynamic versus Fixed‐Ratio Pricing Policies under Duopoly Competition

Two‐Period Dynamic versus Fixed‐Ratio Pricing Policies under Duopoly Competition

Dynamic Pricing of Airline Tickets with Strategic and Myopic Passengers

Dynamic Pricing of Perishable Products with Competition

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