TITLE:
Dynamic Pricing of Perishable Products with Hybrid Consumer Buying Behavior
AUTHORS:
Weiwei Ji, Xiaofan Xie, Yinghui Xiao
KEYWORDS:
Dynamic Pricing, Perishable Products, Consumer Behavior, Reference Price Effect
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.9 No.12,
December
24,
2019
ABSTRACT: The acceleration of market information allows consumers to become increasingly “smart”. According to current and historical reference price, consumers decide the buying time. Consumer buying behavior brings significant influence to the manufacturers’ pricing and revenue. Based on consumer utility function, this article established a two-stage dynamic pricing model and discussed perishable product pricing strategies under consumer behavior and reference price effect. The two-stage optimal pricing and revenue with strategic customer proportion, consumer’s valuation decrement and reliance extent of historical price are discussed. We can find that the reservation price decreasing rate declines, consumer behavior affects revenue and pricing more seriously. When the reliance extent increases, the consumers’ demand for the product in the second stage increases, the product pricing in the second stage increases. Consumer strategic behavior and reference price effect bring negative effect to manufacturers’ revenue.