| Until the early 2000s, most Revenue Management (RM) models assumed that consumers are myopic entities who consider the prevailing price and decide to either buy a unit or leave without purchasing. However, it is well understood that a significant fraction of the consumers strategize the timing of their purchases, and that ignoring this forward-looking behavior could severely hurt the revenue performance of the firm. This thesis elaborates on the RM problems where the firms take this forward-looking behavior into account when making their operational decisions to maximize revenues.;The next two chapters explore two specific mechanisms to deter strategic behavior. In Chapter 3, we study a problem in which the firm operates a markdown setting with a price-match guarantee. At the beginning of the season, the firm announces a full price and a conditional discount price. The lower price is conditional in the sense that the firm will decide later whether it will markdown or not. Upon arrival, each strategic consumer with a private valuation decides whether to buy the item at full price or wait for a possible discount and run the risk of not getting it. At the end of the season, the firm decides whether to discount the item or not. If the discount finally occurs, then the firm will reimburse the price difference to the full-price buyers who claim the refund. We prove the existence of an equilibrium consumer's strategy in this game and study the firm's revenue maximization problem. Then, through a numerical study, we compare the performance of our proposed mechanism with a preannounced discount with no price-match guarantee and a fixed-price policy. Our results show that the proposed mechanism delivers higher revenues than both benchmarks when the fraction of consumers that claim the refund is typically below 40%.;In Chapter 4, we examine a group-buy mechanism under which the firm offers units at both a regular price and a lower price that will be activated when a pre-specified number of reservations has been made. Consumers can pay the regular price and take immediate possession of a unit, or they can pay the lower price and get the item either at the end of the season or when the low-price activation threshold has been reached, whichever comes first. Strategic consumers arrive over time, and if both prices are still offered, they have to decide which one to pay. We analyze the subgame among consumers and prove the existence of a Nash equilibrium. Through an extensive numerical study, we then benchmark our group-buy mechanism against a preannounced discount policy and a fixed-price policy. We identify market conditions under which the group-buy mechanism outperforms the other two pricing policies, while delivering a higher consumer surplus.;Both proposed mechanisms are effective means to diminish the adverse impact of strategic consumer behavior. More extensive concluding remarks are included in Chapter 5.;In Chapter 2, we survey the significant body of modeling-based research that has arisen by the late 2000s and keeps growing nowadays. We discuss papers that proposed different mechanisms to mitigate the adverse impact of strategic consumer behavior. These mechanisms include the use of quick response on the production side, advance selling, preannounced discounts, dynamic pricing, and opaque selling. We also review models that account for speculative behavior and conspicuous consumption. |
