A robust dynamic pricing approach that tracks the customer's imputed valuation

Ali Yasar, James M. Tien

Research output: Contribution to journalConference article

5 Scopus citations

Abstract

We present a robust dynamic pricing approach which seeks to offer prices that can become the actual sale prices, in as much as they are at or below the cutomer's imputed valuation. The customer's maximum buying prices are imputed since they are unknown; indeed, no historical demand data are provided. The only information that we are given in each time epoch is how much of the product is sold at a sale price offered by the seller, based on the remaining time, the level of product inventory, and whether the amount sold to date is more or less than the cumulative average amount. The proposed approach is quite successful in finding and tracking the imputed customer valuation curve over a finite time horizon. The results demonstrate the superiority of the approach not only in terms of revenue generation, but also in terms of four other effectiveness measures developed herein. the approach is especially well-suited for e-commerce.

Original languageEnglish (US)
Pages (from-to)396-401
Number of pages6
JournalProceedings of the IEEE International Conference on Systems, Man and Cybernetics
Volume1
StatePublished - Nov 24 2003
Externally publishedYes
EventSystem Security and Assurance - Washington, DC, United States
Duration: Oct 5 2003Oct 8 2003

Keywords

  • C-commerce
  • Dynamic pricing
  • Finite market
  • Revenue management

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Hardware and Architecture

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