Abstract

Traditionally, dynamic pricingmodels take an "isolated'' view of customer behavior by assuming demand isindependent and the firm can price each potential purchase individually. Withthe rise of "social'' technologies that quickly and intimately connect consumers,this traditional view is being challenged. Consumers within a social mediacircle can significantly influence each other's preferences. Moreover, socialmedia platforms can simultaneously notify followers of new content, leading tothe potential synchronization of purchases and challenging the view that eachpurchase can be priced individually.

We propose a modelingframework for dynamic pricing that embraces the challenges and opportunitiesafforded by this emerging "social'' economy. One goal of social mediamarketing is to quickly create "hype'' within the niche followings ofsocial influencers. Our framework can be used to dynamically "price hype''by allowing demand to depend on past sales, initial availability, and currentinventory. We also allow for periodic pricing policies, where the number ofprice changes is an input, acknowledging the fast-moving nature of demand inniche markets.

To analyze problems in thisframework, we propose a certainty equivalent (CE) heuristic policy that takesas input only the conditional expectation of demand for a single good betweeneach price change. Our CE policy performs well asymptotically: as the potentialmarket size m for a product increases, the percentage loss as compared to theoptimal policy converges to zero sublinearly. Our numerical results show thateven with relatively small values of m and very few price changes, the CEpolicy performs impressively. Finally, we look at the joint optimization ofpricing and initial inventory and leverage our CE analysis to provideasymptotically optimal recommendations on whether and how much to"underserve'' the market by restricting initial inventory.

(Coauthor:Hyun-Soo Ahn,Christopher Ryan, Joline Unichanco)

Time

1月10日（周四）16:15-17:15

Speaker

Mengzhenyu (Zhenyu) Zhang studiesTechnology and Operations at the Ross School of Business, University ofMichigan. She is currently a fourth year PhD candidate. Her research advisorsare Professor Hyun-Soo Ahn and Professor Joline Unichanco.

Hercurrent research mainly focuses on studying operations decisions (pricing,inventory management) by considering the non-stationarity of the market (suchas word-of-mouth effect or scarcity effect in product demand). The focus ofresearch is using analytical tools such as optimization and statistical learningto develop policies that are implementable in realistic settings.

注：张孟珍钰为我院培养的第一代学生。

Venue

信息管理与工程学院102室

上海财经大学（第三教学楼西侧）

上海市杨浦区武东路100号