This paper studies dynamic inventory and pricing decisions for a set of substitutable products over a finite planning horizon. We present a general stochastic, price-dependent demand model that unifies many commonly used demand models in the literature. Unsatisfied demands are backlogged. There are linear purchasing, inventory-holding, and backordering costs. The objective is to maximize the to...

Quantity “forcing” refers to pricing schemes that reward a buyer for purchasing some threshold quantity from a firm. When there are significant scale economies and buyers are unable to coordinate, economic theory shows that a firm can profitably use quantity forcing to exclude rivals, reducing overall welfare and harming some buyers. Inducements to reach the quantity threshold may be provided t...

Motivated by the widespread adoption of dynamic pricing in industry and the empirical evidence of costly price adjustments, in this paper we consider a periodic-review inventory model with price adjustment costs that consist of both fixed and variable components. In each period, demand is stochastic and price-dependent. The firm needs to coordinate the pricing and inventory replenishment decisi...

We analyze an infinite horizon, single-product, periodic review model in which pricing and production/inventory decisions are made simultaneously. Demands in different periods are identically distributed random variables that are independent of each other, and their distributions depend on the product price. Pricing and ordering decisions are made at the beginning of each period, and all shorta...

We study the relationship between regulatory regimes and pharmaceutical firms’ pricing strategies using a unique policy experiment from Norway, which in 2003 introduced a reference price (RP) system called “index pricing” for a sub-sample of off-patent pharmaceuticals, replacing the existing price cap (PC) regulation. We estimate the effect of the reform using a product level panel dataset, cov...

The market for selling reusable products is growing rapidly. Existing works for policy optimization often ignore the dynamic property of demand and the competition among providers. This paper studies service providers’ dynamic pricing in consideration of market competition and dynamics, which makes two key contributions. First, we propose a comprehensive model that takes into account the dynami...

We analyze an infinite horizon, single product, periodic review model in which pricing and production/inventory decisions are made simultaneously. Demands in different periods are identically distributed random variables that are independent of each other and their distributions depend on the product price. Pricing and ordering decisions are made at the beginning of each period and all shortage...

This paper studies pricing strategies of a monopolist when customers are strategic and infer the product quality from historical sales and price paths. This behavior may be expected when selling a new, innovative product whose quality is unknown and customers have some, but, imperfect information about the product quality. The monopolist can sell a finite amount of inventory during a finite hor...

Differentiated Services and Integrated Services architectures rely on mechanisms to dynamically allocate network resources. Here, we investigate the feasibility of dynamically adjusting prices based on congestion. The pricing policy implements a distributed resource allocation to provide guaranteed bounds on packet loss and end-to-end delay for real-time applications. Distributed pricing roles ...

The static nature of the noncooperative power control game model in optical networks makes it difficult to study and design an appropriate pricing scheme. In this paper, we derive a first-order best response dynamics from the game-theoretical model and formulate a general multi-input and multi-output (MIMO) state-space model. We use classical linear system theory to explain the controllability ...