Revenue management with costly price adjustments

Operations Research

Volumn 57, Issue 5, 2009, Pages 1206-1219

  Savin, Sergei ^a   Muharremoglu, Alp ^b   Çelik, Sabri ^c  

^a Columbia University ^*  (United States)

^b The Sanford C Bernstein Co Center for Leadership and Ethics   (United States)

^c UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

Price adjustment costs; Pricing; Revenue management

Indexed keywords

ADJUSTMENT COSTS; ASYMPTOTIC OPTIMALITY; DYNAMIC PROGRAMS; EXPECTED PROFITS; FINITE HORIZONS; FIRST-ORDER; FLUID MODELS; HEURISTIC POLICIES; INVENTORY LEVELS; MANAGEMENT PROBLEMS; NUMERICAL STUDIES; OPTIMAL PERFORMANCE; OPTIMAL POLICIES; OPTIMAL VALUE FUNCTIONS; PERISHABLE INVENTORY; PLANNING HORIZONS; PRICE ADJUSTMENT; PRICE ADJUSTMENT COSTS; PRICE LEVELS; PRICING; PROBLEM PARAMETERS; RELABELING; REVENUE MANAGEMENT; STOCHASTIC DYNAMICS; STOCHASTIC PROBLEMS; SUFFICIENT CONDITIONS;

COORDINATION REACTIONS; COST ACCOUNTING; ECONOMICS; HEURISTIC METHODS; OPTIMIZATION; PROFITABILITY; STOCHASTIC MODELS;

COSTS;

EID: 70350243050     PISSN: 0030364X     EISSN: 15265463     Source Type: Journal    
DOI: 10.1287/opre.1090.0731     Document Type: Article

References (24)

1. Abramowitz, M., I. A. Stegun. 1972. Handbook of Mathematical Functions, 10th ed. National Bureau of Standards, Washington, DC.
2. Akerlof, G. A., J. L. Yellen. 1985. A near-rational model of business cycle, with wage and price inertia. Quart. J. Econom. 100 823-838.
3. Ball, L., N. G. Mankiw. 1994. A sticky-price manifesto. Carnegie- Rochester Conference Ser. Public Policy 41 127-152.
4. Ball, L., D. Romer. 1990. Real rigidities and nonneutrality of money. Rev. Econom. Stud. 57 183-203.
5. Bitran G., R. Caldentey. 2003. Commissioned paper: An overview of pricing models for revenue management. Manufacturing Service Oper. Management 5 203-229.
6. Bitran, G. R., S. V. Mondschein. 1997. Periodic pricing of seasonal products in retailing. Management Sci. 43 64-79.
7. Blinder, A. S., E. R. D. Canetti, D. E. Lebow, J. B. Rudd. 1998. Asking About Prices: A New Approach to Understanding Price Stickiness. Russell Sage Foundation, New York.
8. Cecchetti, S. G. 1986. The frequency of price adjustment: A study of newsstand prices of magazines. J. Econometrics 31 255-274.
9. Danziger, L. 2003. Inflation, costly price and quantity adjustments, and time spent in the Keynesian regime. Econom. Lett. 80(2) 167-173.
10. Elmaghraby, W., P. Keskinocak. 2003. Dynamic pricing in the presence of inventory considerations: Research overview, current practices, and future directions. Management Sci. 49 1287-1309.
11. Feng, Y., G. Gallego. 1995. Optimal starting times for end-of-season sales and optimal stopping times for promotional fares. Management Sci. 46 1371-1391.
12. Gallego, G., G. van Ryzin. 1994. Optimal dynamic pricing of inventories with stochastic demand over finite horizons. Management Sci. 40 999-1020.
13. Levy, D., M. Bergen, S. Dutta, R. Venable. 1997. The magnitude of menu costs: Direct evidence from large U.S. supermarket chains. Quart. J. Econom. 112(August) 791-825.
14. Levy, D., S. Dutta, M. Bergen, R. Venable. 1998. Price adjustment at multiproduct retailers. Managerial Decision Econom. 19 81-120.
15. Mankiw, N. G. 1985. Small menu costs and large business cycles: A macroeconomic model of monopoly. Quart. J. Econom. 100 529-539.
16. Mankiw, N. G., R. Reis. 2002. Sticky information versus sticky prices: A proposal to replace the new Keynesian Phillips curve. Quart. J. Econom. 117(4) 1295-1328.
17. McGill, J. I., G. van Ryzin. 1999. Revenue management: Research overview and prospects. Transportation Sci. 33 233-256.
18. Netessine, S. 2006. Dynamic pricing of inventory/capacity with infrequent price changes. Eur. J. Oper. Res. 174(1) 553-580.
19. Rotemberg, J. J. 1982a. Monopolistic price adjustment and aggregate output. Rev. Econom. Stud. 49 517-531.
20. Rotemberg, J. J. 1982b. Sticky prices in the United States. J. Political Econom. 90 1187-1211.
21. Slade, M. E. 1998. Optimal pricing with costly adjustment: Evidence from retail-grocery prices. Rev. Econom. Stud. 65 87-107.
22. Slade, M. E. 1999. Sticky prices in a dynamic oligopoly: An investigation of (s S) thresholds. Internat. J. Indust. Organ. 17 477-511.
23. Talluri, K. T., G. van Ryzin. 2004. The Theory and Practice of Revenue Management. Kluwer Academic Publishers, Norwell, MA, 536.
24. Zbaracki, M. J., M. Ritson, D. Levy, S. Dutta, M. Bergen. 2004. Managerial and customer costs of price adjustment: Direct evidence from industrial markets. Rev. Econom. Statist. 86(2) 514-533.