Dynamic pricing with uncertain capacities
- Author(s)
- Daniel Garcia, Maarten Janssen, Radostina Shopova
- Abstract
In markets, such as those for airline tickets and hotel accommodations, firms sell time-dated products and have private information about unsold capacities. We show that competition under private information may explain observed phenomena, such as increased price dispersion and higher expected prices toward the deadline. We also show that private information severely limits the market power of firms and that information exchange about capacity increases firms’ profits. Finally, we inquire into the incentives to unilaterally disclose information or to engage in espionage about rival’s capacity and show that they increase firms’ profits compared with the private information setting.
- Organisation(s)
- Department of Economics
- Journal
- Management Science
- Volume
- 69
- Pages
- 5275-5297
- No. of pages
- 23
- ISSN
- 0025-1909
- DOI
- https://doi.org/10.1287/mnsc.2022.4613
- Publication date
- 2022
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics, 502021 Microeconomics
- Keywords
- ASJC Scopus subject areas
- Strategy and Management, Management Science and Operations Research
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/dynamic-pricing-with-uncertain-capacities(f8f57ae5-82d5-43c4-8793-2f27e3d72b46).html