@article{c59857d6a77a478c8b8b31d80da1eea3,
title = "Dynamic pricing and revenue management process in Internet retailing under uncertainty: An integrated real options approach",
abstract = "Competition and demand volatility often cause modern enterprises to be confronted by uncertain environments. When a firm manages revenue in such competitive and risky environments, the optimization of pricing and capacity allocation, subject to a fixed time and capacity, becomes a complicated problem. Many previous papers concerning revenue management (RM) and pricing require that the firm possesses the ability to know the demand curve (or demand distribution) and set prices on it to maximize profits. However, this assumption may not be the case in some industries. Therefore, this paper focuses on the dynamic lead indicators rather than assumptive lag indicators to establish a concise and flexible decision model for practical use. This paper provides an integrated real options (IRO) approach with analytic hierarchy process (AHP) for the auction RM problem under competitive/dynamic pricing and revenue uncertainty in Internet retailing. A numerical example is also presented to illustrate that the IRO approach can generate better decisions than the nai{dotless{\"}}ve (or risk unawareness) approach in revenue quality of safety and profitability. The new perspective and approach proposed by this paper can be extended to other RM fields whenever both profitability and risk are critical to decision making.",
keywords = "Analytic hierarchy process, Competition, Dynamic pricing, Integrated real options approach, Internet retailing, Revenue management, Uncertainty",
author = "Tsai, {Wen Hsien} and Hung, {Shih Jieh}",
note = "Funding Information: Theories of knowledge such as feature lists, semantic networks, and localist neural nets typically use a single global symbol to represent a property that occurs in multiple concepts. Thus, a global symbol represents mane across HORSE, PONY, and LION. Alternatively, perceptual theories of knowledge, as well as distributed representational systems, assume that properties take different local forms in different concepts. Thus, different local forms of mane exist for HORSE, PONY, and LION, each capturing the specific form that mane takes in its respective concept. Three experiments used the property verification task to assess whether properties are represented globally or locally (e.g., Does a PONY have mane?). If a single global form represents a property, then verifying it in any concept should increase its accessibility and speed its verification later in any other concept. Verifying mane for PONY should benefit as much from having verified mane for LION earlier as from verifying mane for HORSE. If properties are represented locally, however, verifying a property should only benefit from verifying a similar form earlier. Verifying mane for PONY should only benefit from verifying mane for HORSE, not from verifying mane for LION. Findings from three experiments strongly supported local property representation and ruled out the interpretation that object similarity was responsible (e.g., the greater overall similarity between HORSE and PONY than between LION and PONY). The findings further suggest that property representation We are grateful to Sarah Bunton, Yanti Nizar, and Catherine Norris for laboratory assistance; to James Hampton, Barbara Luka, Wenchi Yeh, and Ling-Ling Wu for helpful discussion; and to Gordon Logan, Bradley Love, Elizabeth Lynch, Douglas Medin, Lynne Nygaard, Edward Wisniewski, and two anonymous reviewers for helpful comments on earlier drafts. This work was supported by National Science Foundation Grants SBR-9421326, SBR-9796200, and SBR-9905024 to Lawrence W. Barsalou.",
year = "2009",
month = apr,
doi = "10.1016/j.omega.2007.07.001",
language = "???core.languages.en_GB???",
volume = "37",
pages = "471--481",
journal = "Omega (United Kingdom)",
issn = "0305-0483",
number = "2",
}