On some problems in dynamic pricing, revenue management and cost and revenue allocation

点击翻译按钮获取中文摘要

The proposed research will address the following three issues/topics: (i) Ordinarily, it is assumed that, faced with price competition, retailers follow the Nash equilibrium paradigm. That is, they price-deviate if such a deviation is strictly profitable for them. However, it is well recognized that retailers who follow the Nash paradigm are short-sighted. They completely fail to consider the effect of their deviations on other players, which eventually would lead to pricing at the marginal cost for undifferentiated products. Accordingly, one of my objectives is to endow retailers with foresight, as embodied by the largest consistent set introduced by Chwe (JET, 1994), and its possible other refinements, and to evaluate the effect of the behavior of farsighted retailers on prices and profits in a multi-period duopoly competition model. (ii) One of my objectives is to study a multi-period duopoly model wherein consumers are assumed to differ along the store-loyalty criterion. Some of the consumers are store-loyal, while others are store-switchers, due perhaps to their variety seeking desires. Explicitly, I plan to endow consumers with a utility function which accounts for the benefits of having a variety among service providers, and I will investigate the effect of the existence of such consumers on prices and profits in a multi-period duopoly competition model. (iii) I plan to analyze revenue and cost allocation problems in which the core of the corresponding cooperative game is empty. Specifically, I seek to find the smallest additional revenue or cost that has to be contributed by a third party, and which would lead to a non-empty core. Partial results were already obtained for a cooperative game induced by a routing problem on a graph, where I have shown that the smallest additional cost, that has to be contributed by a third party, leading to a non-empty core, can be found in cubic time in the number of players when the minimal edge-cutest in the graph is of cardinality three or more.