Competitive Multi-period Pricing for Perishable Products: A Robust Optimization Approach |
| |
Authors: | Georgia Perakis Anshul Sood |
| |
Institution: | (1) Sloan School of Management and Operations Research Center, Massachusetts Institute of Technology, E53-359, Cambridge, MA 02139, USA;(2) Operations Research Center, Massachusetts Institute of Technology, E40-130, Cambridge, MA 02139, USA |
| |
Abstract: | We study a multi-period oligopolistic market for a single perishable product with fixed inventory. Our goal is to address
the competitive aspect of the problem together with demand uncertainty using ideas from robust optimization and variational
inequalities. The demand function for each seller has some associated uncertainty and we assume that the sellers would like
to adopt a policy that is robust to adverse uncertain circumstances. We believe this is the first paper that uses robust optimization
for dynamic pricing under competition. In particular, starting with a given fixed inventory, each seller competes over a multi-period
time horizon in the market by setting prices and protection levels for each period at the beginning of the time horizon. Any
unsold inventory at the end of the horizon is worthless. The sellers do not have the option of periodically reviewing and
replenishing their inventory. We study non-cooperative Nash equilibrium policies for sellers under such a model. This kind
of a setup can be used to model pricing of air fares, hotel reservations, bandwidth in communication networks, etc. In this
paper we demonstrate our results through some numerical examples. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|