A Study Of Dynamic Pricing For Perishable Goods In Internet Retailing

With the rapid growing of Internet user numbers, E-commerce is thriving. The research of dynamic pricing of perishable goods selling on internet is becoming more and more important. We gave a brief introduction of the changes brought about by internet retailing in the fields of dynamic pricing of perishable goods in the beginning, made the definition of perishable goods both in a generalized and limited sense, and present the key factors in the construction of dynamic pricing model for perishable goods. We summarized the pricing strategy in E-commerce as well. Several dynamic pricing models were built respectively to analyze the effect of reserve price depreciation on firms'expected revenue in a detailed way and get the optimal pricing strategy for oligopolistic firms selling differentiated perishable goods to multiple groups of strategic consumersOur focus includes two parts as follows:(1) We analyze the effects of the consumer reserve price depreciation on firms'expected revenue, we designed both continuous time and discrete model incorporating goods'depreciation and showed how much losses sellers would experience when ignoring the goods' depreciation through numeric experiments. Continuous time model was used as a benchmark and the relation between number of price changes and sellers'expected revenue was also studied through numeric experiments in this paper, that is, losses experienced by sellers may be up to 60% when ignoring the decline of customers'reservation price. To some extent this finding provides theoretical foundation for the next research.(2) We formulated generalized dynamic pricing model for oligopolistic firms selling differentiated perishable goods to strategic consumers and to further our study, we present the dynamic pricing model for duopolistic firms facing homogeneous strategic consumers with time-based declining reserve prices and derived the optimal pricing strategy.In the end we proposed several promising areas for further study, like inventory optimization, products substitute, non-perfect information markets and demand learning.