Pricing and Positioning of Horizontally Differentiated Products with Incomplete Demand Information

• 成果类型: Article
• 署名作者: den Boer, Arnoud V.; Chen, Boxiao; Wang, Yining
• 署名单位: University of Amsterdam; University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; University of Texas System; University of Texas Dallas
• 刊物名称: OPERATIONS RESEARCH
• ISSN/ISSBN: 0030-364X
• DOI: 10.1287/opre.2021.0093
• 发表日期: 2024
• 页码: 2446-2466
• 关键词: dynamic assortment; MODEL; decisions; location

摘要

We consider the problem of determining the optimal prices and product configurations of horizontally differentiated products when customers purchase according to a locational (Hotelling) choice model and where the problem parameters are initially unknown to the decision maker. Both for the single-product and multiple-product setting, we propose a data-driven algorithm that learns the optimal prices and product configurations from accumulating sales data, and we show that their regret-the expected cumulative loss caused by not using optimal decisions-after T time periods is O(T1/2+o(1)). We accompany this result by showing that, even in the single-product setting, the regret of any algorithm is bounded from below by a constant time T-1/2, implying that our algorithms are asymptotically near optimal. In an extension, we show how our algorithm can be adapted for the case of fixed locations. A numerical study that compares our algorithms with three benchmarks shows that our algorithm is also competitive on a finite time horizon.