Dynamic pricing and revenue management
ECTS:
3
Course Hours:
18
Tutorials Hours:
0
Language:
Remedial English
Examination Modality:
mém.
Objective
The purpose of this course is to describe and analyze dynamic pricing strategies such as revenue management and algorithmic pricing implemented by certain companies and to assess their effects on all stakeholders (consumers, companies and power public). It discusses conceptual and methodological tools to better understand and master these pricing strategies. The teaching method is based on the three pillars of descriptive, theoretical and empirical approaches.
Planning
The course is designed to provide a comprehensive understanding of dynamic pricing and revenue management. It is divided into three parts:
1. Expert Analysis (Frédéric Specklin): This segment comprises four 3-hour sessions that dive deep into the intricacies of revenue management practices, with a focus on practical and theoretical frameworks. It serves as the foundational block of the course.
2. Quick Overview of Models (Laurent Linnemer): Over two 2-hour sessions, key models are introduced to provide a mathematical and theoretical grounding. These models highlight the core mechanisms of dynamic pricing and revenue optimization.
3. Student Presentations: In the final segment, students present case studies or research papers. Each presentation lasts 20 minutes, providing an opportunity to explore real-world applications and foster critical discussion.
The models studied in this part of the course are central to understanding dynamic pricing strategies. They include: 1. The K-T (capacity-time) model, which explores optimal pricing strategies given finite capacity and time constraints. 2. The Newsvendor model, focusing on inventory decisions under demand uncertainty. 3. Littlewood’s rule, a classic principle in revenue management. 4. Lazear’s demand learning model, which introduces learning mechanisms in pricing strategies. 5. A brief overview of advanced topics such as: • Strategic consumers, addressing consumer behavior in response to pricing. • Behavior-Based Pricing, where pricing strategies adapt to consumer history.