Dynamic Pricing and Revenue Management

  • Terry L. Friesz
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 135)


An active and rapidly growing applied operations research discipline is the field known as revenue management (RM). The principal intent of revenue management is to extract all unused willingness to pay from consumers of differentiated services and products. Talluri and van Ryzin (2004) provide a comprehensive introduction to most aspects of the theory and practice of revenue management. For this chapter, our goal is to illustrate and solve some differentialNash games that occur in network revenue management and that provide critical information about pricing, resource allocation, and demand management to retailers and service providers.


Service Provider Variational Inequality Optimal Control Problem Dynamic Price Evolutionary Game 
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List of References Cited and Additional Reading

  1. Ferland, J. A. (1972). Mathematical programming with quasi-convex objective functions. Mathematical Programming 3, 296–301.CrossRefGoogle Scholar
  2. Fudenberg, D. and D. K. Levine (1999). The Theory of Learning in Games (2nd ed.). Cambridge, MA: MIT Press.Google Scholar
  3. Hofbauer, J. and K. Sigmund (1998). Evolutionary Games and Replicator Dynamics. Cambridge: Cambridge University Press.Google Scholar
  4. Kachani, S., G. Perakis, and C. Simon (2004). A transient model for joint pricing and demand learning under competition. Presented in the 4th Annual INFORMS Revenue Management and Pricing Section Conference, MIT, Cambridge.Google Scholar
  5. Mookherjee, R. and T. Friesz (2008). Pricing, allocation, and overbooking in dynamic service network competition when demand is uncertain. Production and Operations Management 14(4), 1–20.Google Scholar
  6. Perakis, G. and A. Sood (2006). Competitive multiperiod pricing for perishable products: a robust optimization approach. Mathematical Programming B 107, 295–335.CrossRefGoogle Scholar
  7. Talluri, K. T. and G. J. van Ryzin (2004). The Theory and Practice of Revenue Management. New York: Springer-Verlag.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Dept. Industrial & Manufacturing EngineeringPennsylvania State UniversityUniversity ParkUSA

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