Optimization of Customized Pricing with Multiple Overlapping Competing Bids

Goutam Dutta and Sumeetha R. Natesan

No WP2016-11-02, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: In this paper, we consider the case of project procurement where there is a single buyer and multiple sellers who are bidding. We consider one seller having one or more competitors. We formulate the pricing problem from the point of view of one seller having one or multiple competitors (say n). We also assume that based on past experience, we have some idea about the distribution of bid prices of the competitors. We consider uniform distribution to describe the bid price of the competitors. The prices of the competitors are pairwise mutually independent and the price range are either identical or different and overlapping. We consider maximizing the expected contribution. Assuming the contribution as a linear function of price we compute the conditions for maximization of the expected contribution to profit in case of n bidders. Further, we also compare the optimization results with simulation results.

Date: 2016-11-22
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iim:iimawp:14554

Access Statistics for this paper

More papers in IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department Contact information at EDIRC.
Bibliographic data for series maintained by ().