A Three-Stage Stochastic Dynamic Pricing Game Model Affected by New Products into the Market

DOI: 10.4236/ojs.2015.54030   PDF   HTML   XML   2,553 Downloads   2,982 Views  


In real-life marketing, a common phenomenon is that the prices of current product will have been cut down even the new product has not gone into market yet. Thus, it is very important for merchant to set the strategy which can make the excepted revenue maximum. So, this paper constructs a three-stage stochastic dynamic pricing game model for analyzing the influence of the uncertainty of entry timing of the new products on pricing of products being sold. By analyzing of the pricing strategy, there are big differences in the predictions of new product going into market between merchant and customers; the merchant will adopt cutting price for promotion strategy to reduce negative influence of the new products on the demand of the products sold now. Otherwise, the merchant will adopt the strategy of maximizing current period’s profit.

Share and Cite:

Cheung, W. and Chen, F. (2015) A Three-Stage Stochastic Dynamic Pricing Game Model Affected by New Products into the Market. Open Journal of Statistics, 5, 284-290. doi: 10.4236/ojs.2015.54030.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Weatherford, R. and Bodily, S. (1992) A Taxonomy and Research Overview of Perishable Asset Revenue Management: Yield Management, Overbooking and Pricing. Operations Research, 10, 831-844.
[2] Feng, Y. and Gallego, G. (1995) Optimal Starting Times for End-of-Season Sales and Optimal Stopping Times for Promotional Fares. Management Science, 41, 1371-1391.
[3] Anjos, M.F., Cheng, R.C.H. and Currie, C.S.M. (2005) Optimal Pricing Policies for Perishable Products. European Journal of Operational Research, 166, 246-254.
[4] You, P.S. and Chen, T.C. (2007) Dynamic Pricing of Seasonal Goods with Spot and Forward Purchase Demands. Computers and Mathematics with Applications, 54, 490-498.
[5] Li, G.D., Xiong, Z.K., Zhou, Y. and Xiong, Y. (2013) Dynamic Pricing for Perishable Products with the Hybrid Uncertainty in Demand. Applied Mathematics and Computation, 219, 10366-10377.
[6] Cao, P., Li, J.B. and Yan, H. (2012) Optimal Dynamic Pricing of Inventories with Stochastic Demand and Discounted Criterion. Operations Research, 217, 580-588.
[7] Luo, L., Yu, Y.B. and Liu, D.W. (2006) Optimal Pricing Policies of Perishable Products with Demand Transfer. Journal of Industrial Engineering and Engineering Management, 20, 38-42.
[8] Yang, H. and Zhou, J. (2006) A Cournot Game of Setting Optimal Markdown Timing for Perishable Products. Chinese Journal of Management Science, 14, 46-50.
[9] Hamed, K. and Ashkan, R.K. (2011) Decision Making in Dynamic Stochastic Cournot Games. Mathematics and Computers in Simulation, 81, 1202-1217.

comments powered by Disqus

Copyright © 2020 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.