Dynamic pricing with reference price effect and price-matching policy in the presence of strategic consumers

In this paper, we consider a retailer that sells a product with high storage cost over a two-period horizon. The goal is to investigate the single and combined effects of reference price and price-matching (PM) on the purchasing behavior of consumers and determine how these affect the retailer’s optimal pricing decisions and optimal total discounted revenue. We first present a discrete-time dynamic pricing (DP) model over a two-period horizon...