Price Increasing Timing of Competitive Perishable Products

Zhang Wensi (), Li Jinlin () and Ran Lun ()
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Zhang Wensi: School of Management and Economics, Beijing Institute of Technology, Beijing, 100081, China
Li Jinlin: School of Management and Economics, Beijing Institute of Technology, Beijing, 100081, China
Ran Lun: School of Management and Economics, Beijing Institute of Technology, Beijing, 100081, China

Journal of Systems Science and Information, 2014, vol. 2, issue 1, 29-37

Abstract: Dynamic pricing has been proven to be an effective tool to increase revenue in many industries. We discuss the optimal time point to increase price of perishable products under duopoly competition in revenue management. We propose a game-theoretic model to describe the price increasing timing problem of competitive perishable products in the same market. By solving this problem, we show the existence of Stackelberg equilibrium point and Cournot equilibrium point when choosing the optimal price switching time. To illustrate our results, we also present a numerical example. Our results are applicable for decision makers to determine the optimal time to stop discounting.

Keywords: revenue management; dynamic pricing; competition; increasing timing; perishable products (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:jossai:v:2:y:2014:i:1:p:29-37:n:3

DOI: 10.1515/JSSI-2014-0029

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