An Optimal Threshold Strategy in the Two-Envelope Problem with Partial Information

Egozcue, Martín; García, Luis Fuentes

doi:10.1017/s0021900200012377

J. Appl. Probab.

2015

DOI: 10.1017/s0021900200012377

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An Optimal Threshold Strategy in the Two-Envelope Problem with Partial Information

Martín Egozcue¹,

Luis Fuentes García²

Abstract: In this paper we propose a strategy that gives an optimal lower bound of the average gain for the two-envelope problem within the McDonnell and Abbott (2009) and McDonnell et al. (2011) framework. We obtain this result with partial information about the probability distribution of the envelope's contents.

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2017

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Optimal two-stage pricing strategies from the seller’s perspective under the uncertainty of buyer’s decisions

Egozcue

Zitikis

2017

J Stat Distrib App

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In Punta del Este, a resort town in Uruguay, real-estate property is in demand by both domestic and foreign buyers. There are several stages of selling residential units: before, during, and after the actual construction. Different pricing strategies are used at every stage. Our goal in this paper is to derive, under various scenarios of practical relevance, optimal strategies for setting prices within two-stage selling framework, as well as to explore the optimal timing for accomplishing these tasks in order to maximize the overall seller's expected revenue. Specifically, we put forward a general two-period pricing model and explore pricing strategies from the seller's perspective, when the buyer's decisions in the two periods are uncertain: commodity valuations may or may not be independent, may or may not follow the same distribution, be heavily or just lightly influenced by exogenous economic conditions, and so on. Our theoretical findings are illustrated with numerical and graphical examples using appropriately constructed parametric models.

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Optimal two-stage pricing strategies from the seller’s perspective under the uncertainty of buyer’s decisions

Egozcue

Zitikis

2017

J Stat Distrib App

View full text Add to dashboard Cite

show abstract

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An Optimal Threshold Strategy in the Two-Envelope Problem with Partial Information

Cited by 1 publication

References 9 publications

Optimal two-stage pricing strategies from the seller’s perspective under the uncertainty of buyer’s decisions

Optimal two-stage pricing strategies from the seller’s perspective under the uncertainty of buyer’s decisions

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