Dynamic Pricing Strategies that Consider Consumer Inertia in a Competitive Environment
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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.
KeywordsOligarch competition Inert consumers The best price