Optimal pricing and capacity sizing for online service systems with free trials

被引:6
|
作者
Wang, Jinting [1 ]
Sun, Ke [2 ]
机构
[1] Cent Univ Finance & Econ, Sch Management Sci & Engn, Dept Management Sci, Beijing 100081, Peoples R China
[2] Beijing Univ Chem Technol, Sch Econ & Management, Beijing 100029, Peoples R China
基金
中国国家自然科学基金;
关键词
Revenue management; Bounded rationality; Online service; Free trials; Optimal pricing; QUALITY-SPEED COMPETITION; BOUNDED RATIONALITY; THROUGHPUT ANALYSIS; ALOHA SYSTEM; CHOICE; MANAGEMENT; CUSTOMERS;
D O I
10.1007/s00291-021-00655-8
中图分类号
C93 [管理学]; O22 [运筹学];
学科分类号
070105 ; 12 ; 1201 ; 1202 ; 120202 ;
摘要
This paper studies a revenue and social welfare optimization problem for an online service system which provides service-free trials to first-time users. There are two customer types: experienced customers and first-time customers, where type-1 (experienced) customers are fully rational, and they directly purchase service upon arrivals, while type-2 (first-time) customers are boundedly rational, so they may consider to purchase service or not to purchase service after experiencing the free trials. We investigate the optimal pricing strategy of service providers and social planners in two cases: service capacity is exogenous and endogenous. In the latter case, we jointly determine the optimal service price and capacity. We adopt a game theoretical approach: First, for a given price and service rate, we characterize the equilibrium behavior of post-trial customers; next, we solve optimization problems for the service provider and social planners to determine the optimal price and service rate. Our analysis reveals interesting insights and practical implications. For example, in contrast to the conventional wisdom, the service provider's optimal revenue decreases as customers become less rational.
引用
收藏
页码:57 / 86
页数:30
相关论文
共 50 条
  • [1] Optimal pricing and capacity sizing for online service systems with free trials
    Jinting Wang
    Ke Sun
    [J]. OR Spectrum, 2022, 44 : 57 - 86
  • [2] An Online Learning Approach to Dynamic Pricing and Capacity Sizing in Service Systems
    Chen, Xinyun
    Liu, Yunan
    Hong, Guiyu
    [J]. OPERATIONS RESEARCH, 2023,
  • [3] An Online Learning Approach to Dynamic Pricing and Capacity Sizing in Service Systems
    Chen, Xinyun
    Liu, Yunan
    Hong, Guiyu
    [J]. OPERATIONS RESEARCH, 2023,
  • [4] Optimal order lot sizing and pricing with free shipping
    Hua, Guowei
    Wang, Shouyang
    Cheng, T. C. E.
    [J]. EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, 2012, 218 (02) : 435 - 441
  • [5] Pricing and Capacity Sizing of a Service Facility: Customer Abandonment Effects
    Lee, Chihoon
    Ward, Amy R.
    [J]. PRODUCTION AND OPERATIONS MANAGEMENT, 2019, 28 (08) : 2031 - 2043
  • [6] Optimal pricing and capacity sizing for the GI/GI/1 queue
    Lee, Chihoon
    Ward, Amy R.
    [J]. OPERATIONS RESEARCH LETTERS, 2014, 42 (08) : 527 - 531
  • [7] Optimal joint pricing and lot sizing with fixed and variable capacity
    Kim, D
    Won, J
    [J]. EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, 1998, 109 (01) : 212 - 227
  • [8] Optimal Pricing and Capacity Planning Strategy for Cloud Service
    Gu, Xiao-hui
    Chen, Fu-zan
    Li, Min-qiang
    [J]. PROCEEDINGS OF THE 6TH INTERNATIONAL ASIA CONFERENCE ON INDUSTRIAL ENGINEERING AND MANAGEMENT INNOVATION, VOL 2: INNOVATION AND PRACTICE OF INDUSTRIAL ENGINEERING AND MANAGMENT, 2016, : 739 - 749
  • [9] OPTIMAL EQUIPMENT TRANSFER PRICING IN SERVICE SYSTEMS
    LOVE, CE
    [J]. JOURNAL OF THE OPERATIONAL RESEARCH SOCIETY, 1980, 31 (07) : 657 - 666
  • [10] Online Learning and Pricing for Service Systems with Reusable Resources
    Jia, Huiwen
    Shi, Cong
    Shen, Siqian
    [J]. OPERATIONS RESEARCH, 2024, 72 (03) : 1203 - 1241