Effects Of Dynamic Pricing Research Articles

A Systematic Literature Review of Dynamic Pricing Strategies

Due to its success and acceptance in the airline and hospitality industry and the growing availability of behavioral, engagement, and attitudinal consumer data, dynamic pricing strategies are gaining popularity. The purpose of this systematic literature review is to answer the research question about how do dynamic pricing strategies affect customer perceptions and behaviors to avoid negative consumer reactions. The synthesis of over 50 articles revealed eight different research streams like for example the factors moderating the impact of dynamic pricing on customer behavior, strategic purchasing behavior in response to dynamic pricing, effect of dynamic pricing on customer perception of fairness, personalized dynamic pricing (PDP) and channel differentiated pricing. To advance future research, this systematic literature review identified the six propositions for further research like for example the assessment of the efficacy of different types of communication by firms seeking to mitigate the negative impacts of dynamic pricing and the assessment of the role and relevant importance of consumers’ personal characteristics upon their perceptions of price changes. The findings of this study have a practical impact for managers and scholars. Scholars may use them to update their research agendas and managers to optimize their pricing strategies to increase revenues.

Effects of Dynamic Pricing on the Design and Operation of Distributed Energy Resource Networks

This paper presents a framework for the use of variable pricing to control electricity imported/exported to/from both fixed and unfixed residential distributed energy resource (DER) network designs. The framework shows that networks utilizing much of their own energy, and importing little from the national grid, are barely affected by dynamic import pricing, but are encouraged to sell more by dynamic export pricing. An increase in CO2 emissions per kWh of energy produced is observed for dynamic import and export, against a baseline configuration utilizing constant pricing. This is due to feed-in tariffs (FITs) that encourage CHP generation over lower-carbon technologies. Furthermore, batteries are shown to be expensive in systems receiving income from FITs and grid exports, but for the cases when they sell to/buy from the grid using dynamic pricing, their use in the networks becomes more economical.

The Effect of Dynamic Pricing on Holiday Purchase Intentions: Moderated Mediation Role of Perceived Risk

This study targets to measure the effect of dynamic pricing offers on the purchase intentions of consumers for a winter holiday by taking into consideration a moderated mediator role of perceived risk on this effect. The study employs an experimental design with discount level and timing of the offer (offer recency) as the manipulated conditions. The findings confirm that discount offers have positive direct effect and perceived risk has a negative direct effect on purchase intentions. The levels of discount and perceived risk, independently from each other, determine the level of purchase intentions. On the other hand, the effect of discount offers on purchase intentions is mediated by the perceived risk level of consumers. Finally, the timing of the discount offers moderates the effect of perceived risk on purchase intentions and eventually generates a moderated mediation role for perceived risk on the influence of discount offers on purchase intentions. Based on the findings of this study, some practical implications are provided.

Do small pecuniary incentives motivate residential peak energy reductions? Experimental evidence

ABSTRACTThis article evaluates demand-side interventions aimed at reducing residential consumption during the peak energy periods. The interventions were applied to a sample of high-income households and included a set of text message reminders advising participants to reduce electricity use during peak hours. One group of participants received accompanying intra-day increases in peak-hour kWh rates, while another group of participants did not receive any price incentives. We find that intra-day price increases, though small in absolute magnitude, produced significant reductions in peak energy use. Reductions in use, as compared to a control group, were significantly higher among the pricing group compared to the group only receiving text messages, suggesting that pricing played a central role in influencing behaviour. Our results contribute to ongoing policy discussion about the effect of dynamic pricing on consumer energy demand.

Dynamic vs. static pricing in a supply chain with advertising

With the rapid development of e-commerce, dynamic pricing, as a powerful tool to enhance company profits, has been widely adopted by companies worldwide. However, there are little researches which focus on the effects of dynamic pricing on supply chain performance. Noting that compared with the traditional retailer, it is easier for online retailer to implement dynamic pricing strategy, we consider a Stackelberg game between one manufacturer and one online retailer where the manufacturer, as the leader, decides the advertising effort and the wholesale price, and the online retailer, as the follower, sets the retail price. Specifically, the manufacturer simultaneously faces with the online retailer and an exogenous traditional distribution channel where both the wholesale price and the retail price are fixed and exogenous. Solving this differential game, we can obtain the equilibrium strategies. The results show that if the manufacturer prices dynamically, the manufacturer itself will be better off; however, the double marginalization will be aggravated, which is adverse to supply chain efficiency. In addition, the supply chain efficiency is the lowest when both the manufacturer and the online retailer price statically, and, interestingly, it is the highest when only the online retailer prices dynamically. Moreover, if the manufacturer prices uniformly, the equilibrium strategies of the manufacturer are independent of the pricing mode of the online retailer, i.e., static or dynamic. Additionally, dynamic pricing to some extent restricts the advertising investment.