Dynamic Pricing Under Social Learning with Strategic Consumers

Bhalla, Manaswini

doi:10.2139/ssrn.2114054

Cited by 8 publications

(7 citation statements)

References 16 publications

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“…Some researchers also study the cases of social learning on other aspects. For example, by establishing a two-period model comprising of one firm and two consumers, Bhalla [18] analyzes the scenario in which consumers learn about product quality. Swinney [19] shows that when consumers discover their preferences by social learning, the effect of quick-response practice is o en weakened since consumers tend to adopt strategic behavior.…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

Chen

2019

Discrete Dynamics in Nature and Society

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In an uncertainty market, social learning plays a signi cant role in obtaining information to make better decisions. Under cap-and-trade regulation, this paper aims to investigate rms' pricing and carbon emission abatement issues considering the impact of social learning. is paper establishes a two-period model in a market consisting of a manufacturer and heterogeneous consumers. e manufacturer produces two alternatives (ordinary product and low-carbon product) and makes decisions on sales prices and carbon emission abatement levels. Consumers make decisions on whether and which product to buy. Consumers are not sure about their valuations of products and have the opportunity to discover their true valuation by social learning. e results show that the emission abatement level on ordinary product is a ected by the pricing strategy for both types of products. However, the emission abatement level on low-carbon product is only a ected by its own pricing strategy. It also shows that social learning lowers the emission abatement level on ordinary product, whereas it improves the emission abatement level on low-carbon product when charging a high price for low-carbon product. Moreover, the price of ordinary product in period 1 is no less than that in period 2. In contrast, the price of low-carbon product in period 2 is higher than that in period 1.Hindawi

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Section: Literature Reviewmentioning

confidence: 99%

Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

Chen

2019

Discrete Dynamics in Nature and Society

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“…In a companion paper (Bhalla []) we extend the problem to a case where consumers are strategic and have the option to wait before they acquire the product. Like the non‐strategic consumer case, we find that the product is introduced sequentially at a price such that only the High type consumer buys the product.…”

Section: Extensionsmentioning

confidence: 99%

“…However, this price is less than that in the non‐strategic consumer case.Lemma (First Period Pricing under Simultaneous Launch). At any point in time t , the seller's pricing strategy in a simultaneous launch is the following: For very low beliefs, there will be no sale. For intermediate beliefs, the seller will sell only to the high type consumer at price, P * ∈ (2 f L ( q t ) − 1; 2 f H ( q t ) − 1). For sufficiently large beliefs, the seller will sell to all types of consumers at price, 2 f L ( q t ) − 1. Proof See Bhalla (). ■…”

Section: Extensionsmentioning

confidence: 99%

Waterfall Versus Sprinkler Product Launch Strategy: Influencing the Herd

Bhalla

2013

The J Industrial Economics

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A seller decides the price and sequence in which a product of unknown value is introduced to consumers. Consumers inspect the product before consumption and observe past prices and sales. Consumption at a high price is informative for later consumers as it indicates that the product is likely to be of high value. I show that on an average prices decrease over time. However, expected revenue on an average rises over time. For a high enough discount factor, I find that for extreme beliefs the firm introduces the product to all consumers but for intermediate values the product is introduced only to one consumer.

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“…In dynamic pricing, for example, there is research on interactive selling mechanisms that are sometimes also denoted "dynamic pricing", for example, auctions 5 , competitive bidding, and one-to-one negotiations (e.g. Bichler et al 2002). Regarding strategic customer behaviour, there are a number of authors who call the strategic customers we consider "(completely) rational customers" (e.g.…”

Section: Introductionmentioning

confidence: 99%

Dynamic pricing with strategic customers

et al. 2013

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This paper provides an overview of the literature on dynamic pricing with strategic customers. In the past, research on dynamic pricing was mostly concerned with optimally pricing products over time in a market with myopic customers. In recent years, the consideration of strategic customers, who can delay a purchase to take advantage of a future discount, has dramatically increased. This paper's main contribution is the development of a comprehensive classification scheme to structure the field of research and, based upon this, a systematic overview of all relevant papers. We then present in detail the various aspects considered in the literature together with their motivation from industry and state the major findings of the most relevant papers. Further attention is given to important problem extensions proposed in the literature that have been considered in only a few papers and are usually motivated by specific practical applications. Finally, promising directions for future research are indicated.

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Dynamic Pricing Under Social Learning with Strategic Consumers

Cited by 8 publications

References 16 publications

Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

Waterfall Versus Sprinkler Product Launch Strategy: Influencing the Herd

Dynamic pricing with strategic customers

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