College of Business
AACSB International EQUIS - European Quality Improvement System

Research Seminar

Seminar: To Ration Or Not To Ration? Selling To Strategic Customers Under Shortage Effect

Abstract: In this paper, we study the dynamic pricing and availability decisions of a firm that repeatedly introduces new generations of a product over time. Customers are strategic and are affected by two types of scarcity effects----direct scarcity effect and relative scarcity effect. Firm-induced scarcity is never optimal in the absence of scarcity effects but it can be optimal when customers are affected by scarcity effects. We study the long-run optimal policy of the firm and characterize when firm-induced scarcity is optimal. Our results show that, the firm’s long-run optimal policy may be a constant availability policy or a varying availability policy, depending on the profit margins, the market size and asymmetry in customers’ perception. In addition, the impacts of direct scarcity effect and relative scarcity effect on the optimal availability could be different. Joint work with Stephen SHUM and Peng HU.
Date: 18 October 2017 (Wednesday)
Time: 11:00AM - 12:30PM
Speaker: Ms Hanqing LIU
PhD Student
Department of Management Sciences
City University of Hong Kong
Venue: Room 7-208, 7/F, Lau Ming Wai Academic Building

[ Back ]