Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › Research › peer-review
Pricing in Dynamic Marketing : The Cases of Piece-Wise Constant Sale and Retail Discounts. / Bykadorov, Igor.
Optimization and Applications - 11th International Conference, OPTIMA 2020, Proceedings. ed. / Nicholas Olenev; Yuri Evtushenko; Michael Khachay; Vlasta Malkova. Springer Science and Business Media Deutschland GmbH, 2020. p. 27-39 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 12422 LNCS).Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › Research › peer-review
}
TY - GEN
T1 - Pricing in Dynamic Marketing
T2 - 11th International Conference on Optimization and Applications, OPTIMA 2020
AU - Bykadorov, Igor
N1 - Funding Information: Acknowledgments. The study was carried out within the framework of the state contract of the Sobolev Institute of Mathematics (project no. 0314-2019-0018) and within the framework of Laboratory of Empirical Industrial Organization, Economic Department of Novosibirsk State University. The work was supported in part by the Russian Foundation for Basic Research, projects 18-010-00728 and 19-010-00910 and by the Russian Ministry of Science and Education under the 5–100 Excellence Programme. Publisher Copyright: © 2020, Springer Nature Switzerland AG. Copyright: Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020
Y1 - 2020
N2 - We consider a stylized distribution channel, where a manufacturer sells a single kind of good to a retailer. In classical setting, the profit of manufacturer is quadratic w.r.t. wholesales discount, while the profit of retailer is quadratic w.r.t. retail discount (pass-through). Thus, the wholesale prices and the retail prices are continuous. These results are elegant mathematically but not adequate economically. Therefore, we assume that wholesale discount and retail discounts are piece-wise constant. We show the strict concavity of retailer’s profits w.r.t. retail discount levels. As for the manufacturer’s profits w.r.t. wholesale discount levels, we show that strict concavity can be guaranteed only in the case when retail discount is constant and sufficiently large.
AB - We consider a stylized distribution channel, where a manufacturer sells a single kind of good to a retailer. In classical setting, the profit of manufacturer is quadratic w.r.t. wholesales discount, while the profit of retailer is quadratic w.r.t. retail discount (pass-through). Thus, the wholesale prices and the retail prices are continuous. These results are elegant mathematically but not adequate economically. Therefore, we assume that wholesale discount and retail discounts are piece-wise constant. We show the strict concavity of retailer’s profits w.r.t. retail discount levels. As for the manufacturer’s profits w.r.t. wholesale discount levels, we show that strict concavity can be guaranteed only in the case when retail discount is constant and sufficiently large.
KW - Concavity
KW - Piece-wise constant prices
KW - Retail discount
KW - Retailer
KW - Wholesale discount
UR - http://www.scopus.com/inward/record.url?scp=85097408124&partnerID=8YFLogxK
U2 - 10.1007/978-3-030-62867-3_3
DO - 10.1007/978-3-030-62867-3_3
M3 - Conference contribution
AN - SCOPUS:85097408124
SN - 9783030628666
T3 - Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
SP - 27
EP - 39
BT - Optimization and Applications - 11th International Conference, OPTIMA 2020, Proceedings
A2 - Olenev, Nicholas
A2 - Evtushenko, Yuri
A2 - Khachay, Michael
A2 - Malkova, Vlasta
PB - Springer Science and Business Media Deutschland GmbH
Y2 - 28 September 2020 through 2 October 2020
ER -
ID: 27084097