Quality choice and capacity rationing in advance selling

<p style='text-indent:20px;'>This study considers a seller who sells single product to strategic consumers sensitive both price and quality over two periods: advance spot. Customers' valuations are uncertain in the first period revealed time. The seller's decisions include whether offer and, if so, of product, prices periods, ration capacity period. analysis is separated into cases: unlimited limited capacity. case acts as benchmark for latter. It found that each case, on offering choice fully determined by parameter, namely cost coefficient quality. optimal rationing policy its determinants, however, distinct these different settings. And contingent high- or low-quality offered. Further, our numerical studies show can benefit from flexibility choice. Specifically, value not evident, whereas considerably significant.</p>