Revenue management with minimax regret negotiations
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Date
2016
Authors
Ayvaz Çavdaroğlu, Nur
Kachani, Soulaymane
Maglaras, Costis
Journal Title
Journal ISSN
Volume Title
Publisher
Pergamon-Elsevıer Scıence Ltd
Open Access Color
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Abstract
We study the dynamic bilateral price negotiations from the perspective of a monopolist seller. We first study the classical static problem with an added uncertainty feature. Next, we review the dynamic negotiation problem, and propose a simple deterministic "fluid" analog. The main emphasis of the paper is in analyzing the relationship of the dynamic negotiation problem and the classical revenue management problems; and expanding the formulation to the case where both the buyer and seller have limited prior information on their counterparty valuation. Our first result shows that if both the seller and buyer are bidding so as to minimize their maximum regret, then it is optimal for them to bid as if the unknown valuation distributions were uniform. Building on this result and the fluid formulation of the dynamic negotiation problem, we characterize the seller's minimum acceptable price at any given point in time. (C) 2015 Elsevier Ltd. All rights reserved.
Description
Keywords
Allocation, Bidding, Resource management
Turkish CoHE Thesis Center URL
Fields of Science
Citation
8
WoS Q
Q1
Scopus Q
Q1
Source
Volume
63
Issue
Start Page
12
End Page
22