Dynamic Pricing of Perishable Products with Competition

Abstract

With the development of product development technology and the rapid rise of online retailing, the market competition becomes increasingly fierce. Based on consumer utility function, this article established a two-stage dynamic pricing model and discussed pricing strategies under consumer behavior and market competition. Findings indicate that product quality difference and consumer valuation decreasing coefficient determine the order of the consumer purchase decisions. The firm who provides lower-quality products suffered more loss than the firm who provides high-quality products.