We consider pricing problems when customers choose according to the generalized extreme value (GEV) models and the products have the same price sensitivity parameter. First, we consider the static pricing problem, where we maximize the expected profit obtained from each customer. We show that the optimal prices of the different products have a constant markup over their unit costs. We provide a...

A good model of the relationship between the market demand and prices plays a fundamental role in much economic decision-making. However, many decision-making models use either incomplete demand functions which are defined only on a restricted domain, or functions that do not reflect market reality. In the first part of this paper, we explain our motivation behind a complete reasonable definiti...

T paper reports data from an experiment confirming the existence of predatory pricing in the presence of network externalities when the technology of competing firms are identical. An experiment was conducted at the University of South Carolina’s Beam Lab, based on a seven-period and one-market design. Twenty-two subjects were recruited and assigned a role as seller. ey were paired together ra...

Risk ranking of Horizontal Directional Drilling (HDD) for gas and oil wells is a key criterion in the project feasibility, pricing and for introducing a risk management strategy that aims to reduce the number of failures in the installation phase and its negative consequences. HDD is currently widely used in drilling wells in Iran, but research in the area of identification and risks ranking of...

Managerial flexibilities have to be taken into account in ex-ante decision-making on IT investment projects (ITIPs). In many papers of the IS literature, standard financial option pricing models are used to value such managerial flexibilities. Based on a review of the related literature, the paper critically discusses the assumptions of the most frequently used financial option pricing model, n...

In this paper, we consider a pricing decision problem with two competing supply chains which distribute differentiated but competing products in the same market. Each chain can be vertically integrated or decentralized based on the choice of the manufacturer. The manufacturing costs, sales costs and consumer demands are characterized as uncertain variables, whose distributions are estimated by ...

Recently fixed pricing and auctions have been brought together in a new pricing format that offers bidders the option of prematurely ending an auction at a fixed price. The growing popularity of auctions presents an interesting pricing decision for managers: whether to sell at a fixed price, in a regular auction, or through a buy-it-now auction. This paper studies eBay’s buy-it-now auction and ...

Integrating retail decisions on such aspects as assortment, pricing, and inventory greatly improves profitability. We examine a multi-period selling horizon where a retailer jointly optimizes assortment planning, pricing, and inventory decisions for a product line of substitutable products, in a market with multiple customer segments. Focusing on fast-moving retail products, the problem is mode...

Abstract: The problem of robust dynamic pricing of an abstract commodity, whose inventory is specified at an initial time but never subsequently replenished, originally studied by Perakis and Sood (2006) in discrete time, is considered from the perspective of continuous time. We use a multiplicative demand function to model the uncertain demand, and develop a robust counterpart to replace the u...