中文

Journal of Shanghai University（Natural Science Edition） ›› 2016, Vol. 22 ›› Issue (4): 524-532.doi: 10.3969/j.issn.1007-2861.2016.02.002

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Dynamic pricing of conspicuous goods

WEN Xiaoqin, HAN Guangyao   

  1. School of Management, Shanghai University, Shanghai 200444, China
  • Received:2015-12-11 Online:2016-08-30 Published:2016-08-30

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Abstract:

This paper studies the pricing strategy of luxury goods in a strong market and a weak market with the revenue management theory. Optimal pricing models are first established in a two-stage sales period. Based on theoretical and numerical analysis of the models, with unlimited production capacity, the vendors choose to set a higher price in the first phase and a lower price in the second phase in a strong market. A strong market has a positive impact on the expected revenue of the sellers. However, a weak market is quite different. It has a negative effect on the expected revenue of the sellers. To make maximum gains, the vendors cannot have a too high price tag in a weak market.

Key words:  pricing strategy,  strong market ,  weak market , conspicuous consumption