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Competitive Dynamic Pricing Model Based on After-sale Service

Yulan Zhou

Abstract


Dynamic pricing as a pricing method is concerned by business and academia, but these existed studies generally focus on the monopoly and two periodic environments. This paper constructs the multi-period dynamic pricing model considering the competitive environment and after-sale service through learning type, and derives the optimal equilibrium of price and after-sale service by using multi-period dynamic game theory. Then the competitive dynamic pricing strategies are analyzed under different conditions. The conclusions show that the competitive manufacture with monopoly has five optional dynamic pricing strategies, namely to raise prices, lower prices, oscillate and converge to a constant, diverge price and to maintain the original price. After-sale service level affects the choice of dynamic pricing strategy in a certain extent. But these pricing strategies are also affected by the initial price, the initial after-sale service and cost coefficient of after-sale service.

Keywords


dynamic pricing model; after-sale service; monopolistic competition; price strategy.

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