Table 1.
A comparison between our work and relevant research.
Table 2.
Notations.
Fig 1.
The seller first decides to adopt dynamic pricing with or without price guarantee, then estimates the prior distribution of the market size, announces the initial inventory level , and finally posts the price
. Consumers observe the released information (offering of price guarantee,
, and
), form the belief
about the second-stage price, and make purchase decisions. The product is purchased in the first stage if and only if (a) the first-stage expected surplus is non-negative; and (b) the first-stage expected surplus is no less than that in the second stage. Subsequently, after observing the first-stage sales
, the seller decides whether to conduct demand learning to update the prior distribution of the market size and determines
. The remaining consumers who do not purchase in the first stage make purchase decisions based on the given
. In summary, the seller decides which pricing strategy and two-stage price to adopt, while consumers determine whether and when to buy the products.
Table 3.
The two-stage expected surplus for different dynamic pricing strategies.
Fig 2.
The impact of the initial estimate on demand learning performance.
Fig 3.
The impact of prior market size uncertainty on demand learning performance.
Table 4.
Conditions of demand learning for two dynamic pricing alternatives.
Table 5.
Percentage improvement of Revenue under Strategy over Strategy
when the seller is optimistic to the market during introduction period
.
Table 6.
Percentage improvement of Revenue under Strategy over Strategy
when the seller is pessimistic to the market during introduction period
.
Table 7.
Percentage improvement of Revenue under Strategy over Strategy
in the maturity period of products
.