Dynamic Pricing Decisions for Substitutable Products

Document Type: Research Paper

Authors

1 School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran

2 Department of Industrial Engineering, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran

Abstract

This paper considers a dynamic pricing decision problem, in which two different manufacturers compete to distribute substitutable products through a single retailer under two presented scenarios. In the first scenario, the pricing policy is determined via a centralized decision-making, while the second scenario manages the policy in a decentralized one. Utilizing the game-theory-based modeling approaches, the pricing decision problem is achieved under with two different structures. Numerical experiments are also given to examine the effects of the presented scenarios and provide further managerial insights on the solutions.

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