authors propose an optimal control model, maximizing the intertemporal profit with consumers sensitive to the selling price … and to a reference price. The optimal dynamic pricing policy is solved with Pontryagin's maximum principle with a … structural (general) demand function. They obtain an original pricing rule, which explicitly accounts for the impact of price and …

authors propose an optimal control model, maximizing the intertemporal profit with consumers sensitive to the selling price … and to a reference price. The optimal dynamic pricing policy is solved with Pontryagin's maximum principle with a … price and inventory on future profits. The dynamics of price do not have to imitate the dynamics of the reference price …

A firm that accounts for consumer behavior sets the selling price of a product considering the reference price of … consumers. In the literature, a reference price is usually modeled as depending on past selling prices. That is, past selling … prices implicitly constrain the current selling price of a product. In this article, the author explicitly measures this …

A firm usually sets the selling price of a product by taking into account consumers' reference price. A behavioral … pricing scheme integrating reference effects would suggest that the higher the reference price, the higher the firm can set … the price. In this paper, the author investigates this intuition by accounting for reference dependence in an optimal …