With the development of the Internet and E-commerce, retailers often offer pre-orders for new to-be-released products. To encourage pre-orders, retailers such as Amazon offer pre-order price guarantee (PG). That is, if the product price drops before or on the release date, pre-order consumers...

We consider a retail firm selling a durable product in a volatile market where the demand is price-sensitive and random but its distribution is unknown. The firm dynamically replenishes inventory and adjusts prices over time and learns about the demand distribution. Assuming that the demand...