Dynamic Monopoly Pricing under a Poisson-Type Uncertain Demand.
This article explores dynamic pricing strategies in the presence of uncertainty. Diffusion dynamics, experience curve effects, and a Poisson type of uncertainty in the demand are incorporated in a model using the framework of a stochastic control problem. The results indicate that the movement of the expected price depends on the relative strength of the contingent effects and the effects of the experience. If the direction of the former is opposite to the latter and is substantial enough to dominate it, the expected price path will show a pattern different from the one predicted by a deterministic model. Copyright 1992 by University of Chicago Press.
Year of publication: |
1992
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Authors: | Chen, Yu-Min ; Jain, Dipak C |
Published in: |
The Journal of Business. - University of Chicago Press. - Vol. 65.1992, 4, p. 593-614
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Publisher: |
University of Chicago Press |
Saved in:
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