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Strategic customer behavior

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Full-Text Articles in Other Social and Behavioral Sciences

Strategic Customer Behavior, Commitment, And Supply Chain Performance, Xuanming Su, Fuqiang Zhang Oct 2008

Strategic Customer Behavior, Commitment, And Supply Chain Performance, Xuanming Su, Fuqiang Zhang

Operations, Information and Decisions Papers

This paper studies the impact of strategic customer behavior on supply chain performance. We start with a newsvendor seller facing forward-looking customers. The seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is realized. Customers anticipate future sales and choose purchase timing to maximize their expected surplus. We characterize the rational expectations equilibrium, where we find that the seller's stocking level is lower than that in the classic model without strategic customers. We show that the seller's profit can be improved by promising either that quantities available ...


Intertemporal Pricing With Strategic Customer Behavior, Xuanming Su May 2007

Intertemporal Pricing With Strategic Customer Behavior, Xuanming Su

Operations, Information and Decisions Papers

This paper develops a model of dynamic pricing with endogenous intertemporal demand. In the model, there is a monopolist who sells a finite inventory over a finite time horizon. The seller adjusts prices dynamically to maximize revenue. Customers arrive continually over the duration of the selling season. At each point in time, customers may purchase the product at current prices, remain in the market at a cost to purchase later, or exit, and they wish to maximize individual utility. The customer population is heterogeneous along two dimensions: they may have different valuations for the product and different degrees of patience ...