Article ID Journal Published Year Pages File Type
7543834 Operations Research Letters 2018 17 Pages PDF
Abstract
We consider optimal pricing problems for a product that experiences network effects. Given a price, the sales quantity of the product arises as an equilibrium, which may not be unique. In contrast to previous studies that take a best-case view when there are multiple equilibrium sales quantities, we maximize the seller's revenue assuming that the worst-case equilibrium quantity will arise in response to a chosen price. We compare the best- and worst-case solutions, and provide asymptotic analysis of revenues.
Related Topics
Physical Sciences and Engineering Mathematics Discrete Mathematics and Combinatorics
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