Abstract
We examine a duopolistic market with two firms competing on positioning and
pricing for customers who are variety-seeking or non-variety-seeking, and
strategic or myopic. Contrary to the conventional wisdom that variety-seeking
customers are less profitable customers, we find that firms may benefit from
more variety-seeking customers under both price commitment and dynamic
pricing when some of these customers are myopic. Strategic customer behavior
intensifies competition and hurts the firms. Under each pricing scheme, either
myopic variety-seeking customers or non-variety-seeking customers can be the
most profitable customer group.
pricing for customers who are variety-seeking or non-variety-seeking, and
strategic or myopic. Contrary to the conventional wisdom that variety-seeking
customers are less profitable customers, we find that firms may benefit from
more variety-seeking customers under both price commitment and dynamic
pricing when some of these customers are myopic. Strategic customer behavior
intensifies competition and hurts the firms. Under each pricing scheme, either
myopic variety-seeking customers or non-variety-seeking customers can be the
most profitable customer group.
| Original language | English |
|---|---|
| Publication status | Published - 18 Jun 2018 |
| Event | INFORMS International Conference 2018: A Better World Through O.R., Analytics, and AI - Taipei International Convention Center, Taipei, Taiwan, Province of China Duration: 17 Jun 2018 → 20 Jun 2018 http://meetings2.informs.org/wordpress/2018international/ |
Conference
| Conference | INFORMS International Conference 2018 |
|---|---|
| Country/Territory | Taiwan, Province of China |
| City | Taipei |
| Period | 17/06/18 → 20/06/18 |
| Internet address |
Bibliographical note
Information Management in Supply ChainsInvited Session: Operations and Decisions in Smart Manufacturing and Logistics
Chair: Weixin Shang, Lingnan University (HK)