Dynamic Pricing 动态定价.ppt

Tutorial:Dynamic Pricing:Repeated Pricing Decisions Dynamic Pricing Cournot and Bertrand duopoly involved one-time decisions Most business decisions concerning P or Q are made repeatedly over time “Dynamic” pricing means multiperiod or repeated pricing decisions Dynamic or repeated pricing can result in cooperative pricing by rivals and higher profits Review One-Period Pricing Recall outcome of one-time Prisoner’s Dilemma Firms pursuing their own individual best interests end up in noncooperative Nash equilibrium cell Both firms worse off than if they could have somehow cooperated in making their decisions Let’s review this situation before we examine how repeated decision making changes things Intel and AMD: one-time pricing decision AMD’s price High Low Intel’s price High A: Cooperation $5, $2.5 B: AMD cheats $2, $3 Low C: Intel cheats $6, $0.5 D: Noncooperation (Nash) $3, $1 Payoffs in millions of dollars of profit per week. Dominant Strategy for Intel AMD’s price High Low Intel’s price High A: Cooperation $5, $2.5 B: AMD cheats $2, $3 Low C: Intel cheats $6, $0.5 D: Noncooperation (Nash) $3, $1 Payoffs in millions of dollars of profit per week. Low is dominant strategy AMD’s price High Low Intel’s price High A: Cooperation $5, $2.5 B: AMD cheats $2, $3 Low C: Intel cheats $6, $0.5 D: Noncooperation (Nash) $3, $1 Payoffs in millions of dollars of profit per week. Cooperation defined AMD’s price High Low Intel’s price High A: Cooperation $5, $2.5 B: AMD cheats $2, $3 Low C: Intel cheats $6, $0.5 D: Noncooperation (Nash) $3, $1 Payoffs in millions of dollars of profit per week. Noncooperation in the one-time decision AMD’s price High Low Intel’s price High A: Cooperation $5, $2.5 B: AMD cheats $2, $3 Low C: Intel cheats $6, $0.5 D: Noncooperation (Nash) $3, $1 Payoffs in millions of dollars of profit per week. Dynam