Dynamic Pricing Strategies that Consider Consumer Inertia in a Competitive Environment

  • Yunfu Huo
  • Mingren DingEmail author
  • Xue Yan
Conference paper
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 1147)


In this paper, a two-stage dynamic pricing model is established in an oligopolistic competitive market where inert consumers coexist with rational consumers. By introducing the inertia depth and inertia breadth into the model, the profit maximization function of the manufacturer is established, the optimal price and maximum profit are solved, and the influence of the inertia depth and inertia breadth on the optimal price and profit of the manufacturer is discussed. Numerical experiments show that the inertia depth will decrease the optimal price in the first stage and increase the optimal price in the second stage. The inertia span will decrease the optimal price in the first stage and increase the optimal price in the second stage. The depth of inertia and the breadth of inertia will increase the profits of the manufacturer.


Oligarch competition Inert consumers The best price 


  1. 1.
    Li, T., Yu, M.: Coordinating a supply chain when facing strategic consumers. Decision Sci. 48(2), 336–355 (2017)CrossRefGoogle Scholar
  2. 2.
    Papanastasiou, Y., Savva, N.: Dynamic pricing in the presence of social learning and strategic consumers. Manag. Sci. 63(4), 919–939 (2017)CrossRefGoogle Scholar
  3. 3.
    Hu, S., Ma, Z.J., Shen, J.B.: Optimal prices and trade-in rebates for successive-generation products with strategic consumers and limited trade-in duration. Transp. Res. Part B: Logistics Transp. Rev. 124, 92–107 (2019)CrossRefGoogle Scholar
  4. 4.
    Song, Y., Zhao, X.: A newsvendor problem with boundedly rational strategic customer. Int. J. Prod. Res. 55(1), 228–243 (2017)CrossRefGoogle Scholar
  5. 5.
    Yu, M., Debo, M., Kapuscinksi, R.: Strategic waiting for consumer-generated quality information: dynamic pricing of new experience goods. Manag. Sci. 62(2), 410–435 (2016)CrossRefGoogle Scholar
  6. 6.
    Zhao, N., Wang, Q., Gao, P., et al.: Dynamic pricing with reference price effect and price-matching policy in the presence of strategic consumer. J. Oper. Res. Soc. 70, 1–15 (2019)CrossRefGoogle Scholar
  7. 7.
    Su, X.M.: A model of consumer inertia with applications to dynamic pricing. Prod. Oper. Manag. 18(4), 365–380 (2009)CrossRefGoogle Scholar
  8. 8.
    Zhao, L., Tian, P., Li, X.Y.: Dynamic pricing in the presence of consumer inertia. Omega 40(2), 137–148 (2012)CrossRefGoogle Scholar
  9. 9.
    Ahmadi, R., Iravani, F., Mamani, H.: Supply chain coordination in the presence of gray markets and strategic consumers. Prod. Oper. Manag. 26(2), 252–272 (2017)CrossRefGoogle Scholar
  10. 10.
    Shum, S., Tong, S., Xiao, T.: On the impact of uncertain cost reduction when selling to strategic customers. Manag. Sci. 63(3), 843–860 (2017)CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Department of Economics and ManagementDalian UniversityDalianChina
  2. 2.Dalian UniversityDalianChina

Personalised recommendations