Journal article

Pricing policies for selling indivisible storable goods to strategic consumers

G Berbeglia, G Rayaprolu, A Vetta

Annals of Operations Research | Springer (part of Springer Nature) | Published : 2019

Abstract

We study the dynamic pricing problem faced by a monopolistic retailer who sells a storable product to forward-looking consumers. In this framework, the two major pricing policies (or mechanisms) studied in the literature are the preannounced (commitment) pricing policy and the contingent (threat or history dependent) pricing policy. We analyse and compare these pricing policies in the setting where the good can be purchased along a finite time horizon in indivisible atomic quantities. First, we show that, given linear storage costs, the retailer can compute an optimal preannounced pricing policy in polynomial time by solving a dynamic program. Moreover, under such a policy, we show that cons..

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University of Melbourne Researchers