TY - JOUR
T1 - Price competition under linear demand and finite inventories
T2 - Contraction and approximate equilibria
AU - Gao, Jiayang
AU - Iyer, Krishnamurthy
AU - Topaloglu, Huseyin
N1 - Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2017/7
Y1 - 2017/7
N2 - We consider a multi-period price competition among multiple firms with limited inventories of substitutable products, and study two types of equilibrium: with and without recourse. Under a linear demand model, we show that an equilibrium without recourse uniquely exists. In contrast, we show an equilibrium with recourse need not exist, nor be unique. In a low-influence regime, using the equilibrium without recourse, we construct an approximate equilibrium with recourse with the same equilibrium price trajectory.
AB - We consider a multi-period price competition among multiple firms with limited inventories of substitutable products, and study two types of equilibrium: with and without recourse. Under a linear demand model, we show that an equilibrium without recourse uniquely exists. In contrast, we show an equilibrium with recourse need not exist, nor be unique. In a low-influence regime, using the equilibrium without recourse, we construct an approximate equilibrium with recourse with the same equilibrium price trajectory.
KW - Approximate equilibrium
KW - Competitive pricing
KW - Contraction
KW - Dynamic pricing
KW - Inventory
KW - Linear demand
UR - http://www.scopus.com/inward/record.url?scp=85021202759&partnerID=8YFLogxK
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U2 - 10.1016/j.orl.2017.05.005
DO - 10.1016/j.orl.2017.05.005
M3 - Article
AN - SCOPUS:85021202759
SN - 0167-6377
VL - 45
SP - 382
EP - 387
JO - Operations Research Letters
JF - Operations Research Letters
IS - 4
ER -