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- research-articleJanuary 2023
Queueing Systems with Rationally Inattentive Customers
Manufacturing & Service Operations Management (INFORMS-MSOM), Volume 25, Issue 1Pages 266–287https://doi.org/10.1287/msom.2021.1032Problem definition: Classical models of queueing systems with rational and strategic customers assume queues to be either fully visible or invisible, while service parameters are known with certainty. In practice, however, people only have “partial ...
- research-articleDecember 2020
Technical Note—On Revenue Management with Strategic Customers Choosing When and What to Buy
In practice, when thinking about their purchasing decisions, customers usually strategize along two dimensions: (1) when to buy and (2) what to buy. That is, they might delay a purchase in anticipation of future price reductions, and/or they might ...
Consider a network revenue management model in which a seller offers multiple products, which consume capacitated resources. The seller uses an anonymous posted-price policy, and arriving customers strategize on (a) when and (b) which product to purchase ...
- research-articleJuly 2020
Selling Passes to Strategic Customers
Many service providers offer a prepaid package of credits that can be redeemed for future use, often called passes, in conjunction with regular individual sales. In dynamic pricing situations, customers can strategize on the purchase, redemption, and ...
Passes are prepaid packages of multiple units of goods or services with flexible consumption times. They may take a variety of forms such as commuter passes in transportation, capped quotas in telecommunications, or memberships in health or beauty clubs. ...
- research-articleJuly 2020
Pricing and Matching with Forward-Looking Buyers and Sellers
Manufacturing & Service Operations Management (INFORMS-MSOM), Volume 22, Issue 4Pages 717–734https://doi.org/10.1287/msom.2018.0769Problem definition: We study a dynamic market over a finite horizon for a single product or service in which buyers with private valuations and sellers with private supply costs arrive following Poisson processes. A single market-making intermediary ...
- research-articleDecember 2019
On the Efficacy of Static Prices for Revenue Management in the Face of Strategic Customers
We consider a canonical revenue management (RM) problem wherein a monopolist seller posts prices for multiple products that are for sale over a fixed horizon so as to maximize expected revenues. Products are differentiated and subject to joint capacity ...
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- research-articleNovember 2019
Joint Pricing and Inventory Management with Strategic Customers
We consider a model wherein the seller sells a product to customers over an infinite horizon. At each time, the seller decides a set of purchase options offered to customers and the inventory replenishment quantity. Each purchase option specifies a price ...
- extended-abstractJune 2019
Power of Dynamic Pricing in Revenue Management with Strategic (Forward-looking) Customers
EC '19: Proceedings of the 2019 ACM Conference on Economics and ComputationPage 395https://doi.org/10.1145/3328526.3329568The present paper considers a canonical revenue management problem wherein a monopolist seller seeks to maximize revenue from selling a fixed inventory of a product to customers who arrive over time. We assume that customers are forward-looking and ...
- articleNovember 2018
Robust Dynamic Pricing with Strategic Customers
Mathematics of Operations Research (MOOR), Volume 43, Issue 4Pages 1119–1142https://doi.org/10.1287/moor.2017.0897We consider the canonical revenue management RM problem wherein a seller must sell an inventory of some product over a finite horizon via an anonymous, posted price mechanism. Unlike typical models in RM, we assume that customers are forward looking. In ...
- articleJuly 2018
Are Strategic Customers Bad for a Supply Chain?
Manufacturing & Service Operations Management (INFORMS-MSOM), Volume 20, Issue 3Pages 481–497https://doi.org/10.1287/msom.2017.0651We consider a manufacturer serving a retailer that sells its product to customers over two periods. Each firm determines its unit price. The retailer orders the product from the manufacturer prior to the beginning of the selling periods. We consider two ...
- articleJune 2018
The Operational Advantages of Threshold Discounting Offers
We study threshold discounting, or the practice of offering a discounted-price service if at least a prespecified number of customers signal interest in it, as pioneered by Groupon. We model a capacity-constrained firm, a random-sized population of ...
- research-articleOctober 2017
When Customers Anticipate Liquidation Sales: Managing Operations Under Financial Distress
Manufacturing & Service Operations Management (INFORMS-MSOM), Volume 19, Issue 4Pages 657–673https://doi.org/10.1287/msom.2017.0634The presence of strategic customers may force an already financially distressed firm into a death spiral: sensing the firm’s financial difficulty, customers may wait strategically for deep discounts in liquidation sales. In turn, such waiting lowers the ...
- articleAugust 2017
An ?-Nash Equilibrium with High Probability for Strategic Customers in Heavy Traffic
Mathematics of Operations Research (MOOR), Volume 42, Issue 3Pages 626–647https://doi.org/10.1287/moor.2016.0820A multiclass queue with many servers is considered, where customers make a join-or-leave decision upon arrival based on queue length information, without knowing the state of other queues. A game theoretic formulation is proposed and analyzed, that ...
- articleJuly 2017
Competing with Copycats When Customers Are Strategic
Manufacturing & Service Operations Management (INFORMS-MSOM), Volume 19, Issue 3Pages 403–418https://doi.org/10.1287/msom.2016.0613In this paper, we use a two-period game theoretical model to examine the decisions of a manufacturer and a copycat firm who are competing for strategic customers. The manufacturer decides on the amount of its market expansion advertising investment in ...
- abstractJune 2017
Joint Pricing and Inventory Management with Strategic Customers
EC '17: Proceedings of the 2017 ACM Conference on Economics and ComputationPage 515https://doi.org/10.1145/3033274.3084086We consider a joint pricing and inventory management problem wherein a seller sells a single product over an infinite horizon via dynamically determining anonymous posted prices and inventory replenishment quantities. Customers arrive over time with a ...
- articleJune 2017
The Impact of Inspection Cost on Equilibrium, Revenue, and Social Welfare in a Single-Server Queue
Classical models of customer decision making in unobservable queues assume acquiring queue length information is too costly. However, due to recent advancements in communication technology, various services now make this kind of information accessible ...
- articleMarch 2017
On the Impact of Uncertain Cost Reduction When Selling to Strategic Customers
Many products undergo cost reductions over their product life cycles. However, strategic customers may have more incentive to wait if they expect a cost reduction to lead to a price drop. A firm that does not face any uncertainty can use pricing ...
- research-articleJuly 2016
On the Efficacy of Static Prices for Revenue Management in the Face of Strategic Customers
EC '16: Proceedings of the 2016 ACM Conference on Economics and ComputationPage 811https://doi.org/10.1145/2940716.2940737The present paper considers a canonical revenue management problem wherein a monopolist seller seeks to maximize revenues from selling a fixed inventory of a product to customers who arrive over time. We assume that customers are forward looking and ...
- abstractJune 2015
Robust Dynamic Pricing With Strategic Customers
EC '15: Proceedings of the Sixteenth ACM Conference on Economics and ComputationPage 777https://doi.org/10.1145/2764468.2764530We consider the canonical problem of revenue management (RM) wherein a seller must sell an inventory of some product over a finite horizon via an anonymous, posted price mechanism. Unlike typical models in RM, we assume that customers are forward ...
- articleJanuary 2015
Intertemporal Price Discrimination: Structure and Computation of Optimal Policies
We study a firm's optimal pricing policy under commitment. The firm's objective is to maximize its long-term average revenue given a steady arrival of strategic customers. In particular, customers arrive over time, are strategic in timing their ...
- articleAugust 2014
Strategic Customers in a Transportation Station: When Is It Optimal to Wait?
Operations Research (OPRH), Volume 62, Issue 4Pages 910–925We consider a transportation station, where customers arrive according to a Poisson process. A transportation facility visits the station according to a renewal process and serves at each visit a random number of customers according to its capacity. We ...