Dynamic Pricing And Coping Mechanisms In The Presence Of Strategic Customers

As a common strategy to improve revenue,dynamic pricing has been adopted by lots of enterprises.However,with the extensive use of dynamic pricing and the effective access to information,more and more consumers' purchasing behavior becomes strategic in recent years.These strategic consumers will form rational expectations about the products' future price and choose their favorable purchasing time.Existing researches have shown that ignoring the consumers' strategic behavior will bring great economic losses to the enterprise.Therefore,studying the dynamic pricing and coping mechanisms in the presence of strategic consumers,to mitigate the effects and improve the revenue of firms,has great theoretical and practical significance.Based on the previous studies,we will discuses the problem from some aspects including the consumer type,reference price effect,inventory and competition for fashion products.Then,we introduce three coping mechanisms including the price matching policy,capacity rationing and price commitment.The main contents are as follows:Firstly,we studies the dynamic pricing and the price matching policy within the market including myopic and strategic consumers.Inventory and competition are not taken into account in this part.Secondly,we analyse the dynamic pricing and capacity rationing assuming all the consumers have strategic behavior.Furthermore,the optimal application conditions of capacity rationing and the interaction between consumers'risk preference and strategic level are given.Finally,We expand the problem to the competitive environment without inventory limited,and two firms sell vertically different products to strategic and myopic consumers.We construct models and examines the effect of pricing commitment on the profit of both firms.Through the study,we can find that:Consumers' strategic behavior has an adverse effect on the profit of firms;In general,the price matching policy can effectively mitigate consumers' strategic behavior and improve the profit of retailer.However,when the discount factor tends to be 1,the price matching policy can be detrimental;The effect of capacity rationing depends on consumers' risk preference and numbers of high-value customers in the market;Pricing is not only affected by the demand but also the competitor's in the duopoly competition environment.Price commitment mechanism can completely eliminate consumers' idea to wait,in particular,the profit of both firms will improve greatly when high-quality firm takes price commitment mechanism.