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Two-period pricing and quick response with strategic customers
Stockholm University, Faculty of Social Sciences, Stockholm Business School. Chinese Academy of Sciences, China.
Number of Authors: 22019 (English)In: International Journal of Production Economics, ISSN 0925-5273, E-ISSN 1873-7579, Vol. 215, p. 165-173Article in journal (Refereed) Published
Abstract [en]

This research examines the impact of the strategic customer behavior in two-period pricing and the inventory decisions in a quick response system. A model with a differentiated value period of product is developed when customers are strategic and heterogeneous. Interestingly, the unique equilibrium is proven to exist if and only if the degree of customer strategic behavior is sufficiently high. Otherwise, the dynamic pricing strategy in one selling season is not a suitable choice for a firm. Moreover, the impact of strategic consumers on pricing and inventory strategies is investigated in the case where the clientele's taste for product value follows a uniform distribution. Surprisingly, contrary to previous studies, we found that strategic consumers may yield more revenues in specific scenarios. An extended analysis on Beta distribution is also presented, showing that there is greater chance to obtain the highest profit in the supply chain when all customers are strategic and if more people prefer low-value products.

Place, publisher, year, edition, pages
2019. Vol. 215, p. 165-173
Keywords [en]
Strategic customer, Quick response, Game theory, Inventory and dynamic pricing decisions
National Category
Other Engineering and Technologies Economics and Business
Identifiers
URN: urn:nbn:se:su:diva-170758DOI: 10.1016/j.ijpe.2017.06.007ISI: 000474323100016OAI: oai:DiVA.org:su-170758DiVA, id: diva2:1338772
Available from: 2019-07-24 Created: 2019-07-24 Last updated: 2019-07-24Bibliographically approved

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Wu, Desheng Dash
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  • apa
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  • de-DE
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  • nn-NB
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  • Other locale
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  • html
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  • asciidoc
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