Multi-generation Product Optimal Pricing with Strategic Customer Behavior

This paper uses two generations products as an example to examine the pricing problem of multi-generation product when there're several kinds of customers in the market, and analyzes the effect of percentage of multi-generation product buyers and strategic customers on pricing new generation product and on discount price of old generation product. The study shows that the price of the new generation product has positive correlation with both the proportion of strategic customer and the proportion of multi-generation product buyer. When parameters satisfy certain condition, the discount price of the old generation product has positive correlation with the proportion of the strategic customer, otherwise the correlation is negative.