Date of Award
Doctor of Philosophy
Chao Zhu, Istvan Lauko, Jay Beder, Gabriella Pinter
Constant Demand Elasticity, Dynamic Pricing, Optimal Control
We investigate a dynamic pricing model under constant demand elasticity which accounts for customers ordering multiple items at once. A closed form expression for the optimal expected revenue and pricing strategy is found. Models with the same demand are shown to have asymptotically similar expected revenue and pricing strategies, even if the order size distributions of the customers are different. Surprisingly, the relative difference between comparable models is shown to be independent of time and the magnitude of demand. Variations of the model are considered, including different low inventory behavior as well as the effect of advertising. Some numerical simulations are presented to provide better insight on the model.
Breecher, Nyles Kirk, "Dynamic Pricing with Variable Order Sizes for a Model with Constant Demand Elasticity" (2018). Theses and Dissertations. 1974.