IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v25y1977i4p696-705.html
   My bibliography  Save this article

Dynamic Optimal Pricing to Deter Entry under Constrained Supply

Author

Listed:
  • Zvi Lieber

    (Tel Aviv University, Tel Aviv, Israel)

  • Amir Barnea

    (Tel Aviv University, Tel Aviv, Israel)

Abstract

In this paper we construct an optimal pricing strategy for a monopoly with a finite level of a resource (a supply constraint) and competition induced by monopolistic selling price (a demand constraint). The model is first formulated as a general differential game problem. Then, after assumptions regarding competitors' strategy are specified, the problem becomes and is solved as an optimal control problem. It appears that the joint effect of both constraints generates an optimal price trajectory that may only have a local minimum; that is, if it is not monotonic, it will initially decrease and eventually increase.

Suggested Citation

  • Zvi Lieber & Amir Barnea, 1977. "Dynamic Optimal Pricing to Deter Entry under Constrained Supply," Operations Research, INFORMS, vol. 25(4), pages 696-705, August.
    • Handle: RePEc:inm:oropre:v:25:y:1977:i:4:p:696-705
    DOI: 10.1287/opre.25.4.696
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/opre.25.4.696
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.25.4.696?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:25:y:1977:i:4:p:696-705. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.