We study the link between price points and price rigidity, using two datasets: weekly scanner data, and Internet data. We find that: “9” is the most frequent ending for the penny, dime, dollar and ten-dollar digits; the most common price changes are those that keep the price endings at...

Optimal control theory is employed to derive explicitly the optimal (profit maximizing) price of a durable new product over time. The sales rate dynamics depends on the product price and on the unsold portion of the market. Specifically, the hazard rate (i.e. the probability of a purchase by a...

We investigate pricing strategies based on yield management systems (YMS), such as early discounting, overbooking and limiting early sales, for capacity-constrained services. We find that YMS work best when price insensitive customers prefer to buy later than price sensitive consumers. We also...

We study the link between price points and price rigidity, using two datasets containing over 100 million observations. We find that (i) 9 is the most frequently used price-ending for the penny, dime, dollar and ten-dollar digits, (ii) 9-ending prices are between 24%-73% less likely to change in...

A model of new-product adoption is proposed that incorporates price and advertising effects. An optimal control problem that uses the model as its dynamics is solved explicitly to obtain the optimal price and advertising effort over time. The model has a great potential to be used in obtaining...

The world economy is changing, this is a fact. New technology, new communication possibilities have reduced the physical boundaries and have made customers more knowledgeable and with more requirements. Overcoming those challenges, companies (in specific SMEs) are striving to develop new...

Modern revenue managers understand, anticipate, and react to market demand to maximize their businesses' revenues. They often do so by analyzing, forecasting, and optimizing their fixed, perishable inventory, and time-variable supply, through dynamic prices. Hence, the objective of pricing and...

For too long, most people who run companies have made a variety of unwarranted but detrimental assumptions about pricing. Changing prices, for example, has been looked upon as an easy, quick and reversible process, and new technologies have only reinforced that way of thinking. Similarly,...

This introductory essay briefly summarizes the eleven empirical studies of price setting and price adjustment that are included in this special issue. The studies, which use data from several European countries, were conducted as part of the European Central Bank's Inflation Persistence Network

We investigate the impact of store capacity and extent of inter-product substitution in a retailer's assortment on the optimal timing and depth of price promotions using a two step approach. First, a survey of price promotions within the shampoo and detergent assortments of four mass-market...