Optimal Rebate Strategies Under Dynamic Pricing

doi:10.1287/opre.2017.1642

CORC > 上海财经大学 > 上海财经大学

	Optimal Rebate Strategies Under Dynamic Pricing
	Hu, Shanshan 1; Hu, Xing 2; Ye, Qing 3
刊名	OPERATIONS RESEARCH
	2017-11-01
卷号	65 期号:6 页码:1546-1561
关键词	revenue management dynamic pricing rebate coupon heuristics asymptotic optimality
ISSN号	0030-364X
DOI	10.1287/opre.2017.1642
英文摘要	Instant discounts and mail-in rebates are two common pricing tools In retail, but they are not simple substitutes. On the one hand, consumers discount the face value of a mail-in rebate, making it less effective than an instant discount in inducing consumers' purchase. On the other hand, a portion of consumers with mail-in rebates fail to redeem them, resulting in savings for the retailer. We study how retailers, under pressure to move inventory, should use these two pricing tools to maximize revenue by determining the optimal use of mail-in rebates together with dynamic pricing of limited inventory. In a base model that allows frequent adjustment of product price and rebate face value, the optimal policy takes the form of "discount only," "rebate only," or a combination of the two. For useful heuristics with infrequent policy adjustment, we analyze the deterministic approximation of the base model. Interestingly, the deterministic solution splits the selling season into two segments, and it suggests using different pricing-rebate policies in each segment. Finally, we study a scenario in which the retailer has only one opportunity to introduce a static rebate, and we find that for any inventory level there is a cutoff time before which rebates should not be used. Our numerical studies show that such an optimal one-time static rebate policy performs well compared with the optimal revenue in the benchmark model.
WOS研究方向	Business & Economics ; Operations Research & Management Science
语种	英语
出版者	INFORMS
WOS记录号	WOS:000415209800009
内容类型	期刊论文
源URL	[http://10.2.47.112/handle/2XS4QKH4/855]
专题	上海财经大学
通讯作者	Hu, Shanshan
作者单位	1.Shanghai Univ Finance & Econ, Sch Int Business Adm, Shanghai 200433, Peoples R China; 2.Univ Oregon, Lundquist Coll Business, Eugene, OR 97403 USA; 3.Tsinghua Univ, Sch Econ & Management, Beijing 100084, Peoples R China
推荐引用方式 GB/T 7714	Hu, Shanshan,Hu, Xing,Ye, Qing. Optimal Rebate Strategies Under Dynamic Pricing[J]. OPERATIONS RESEARCH,2017,65(6):1546-1561.
APA	Hu, Shanshan,Hu, Xing,&Ye, Qing.(2017).Optimal Rebate Strategies Under Dynamic Pricing.OPERATIONS RESEARCH,65(6),1546-1561.
MLA	Hu, Shanshan,et al."Optimal Rebate Strategies Under Dynamic Pricing".OPERATIONS RESEARCH 65.6(2017):1546-1561.