Summary: OPERATIONS RESEARCH
Vol. 57, No. 6, NovemberDecember 2009, pp. 15231531
issn 0030-364X eissn 1526-5463 09 5706 1523
© 2009 INFORMS
Personalized Dynamic Pricing of
Department of Industrial and Operations Engineering, University of Michigan,
Ann Arbor, Michigan 48109, email@example.com
Department of Statistics and Operations Research, University of North Carolina,
Chapel Hill, North Carolina 27559, firstname.lastname@example.org
Prior work has investigated time- and inventory-level-dependent pricing of limited inventories with finite selling horizons.
We consider a third dimension--in addition to time and inventory level--that the firms can use in setting their prices: the
information that the firm has at the individual customer level. An arriving customer provides a signal to the firm, which
is an imperfect indicator of the customer's willingness to pay, and the firm makes a personalized price offer depending on
the signal, inventory level, and time. We consider two different models: full personalization and partial personalization.