[Lecture] Posted Pricing versus Bargaining in Sequential Selling Process
 
time: 2017-05-18

Title: Posted Pricing versus Bargaining in Sequential Selling Process

Speaker: Qi Annabelle Feng

Time: 15:30-16:30, May 19, 2017

Venue: Zhuanghui Hall, Building 12, Wushan Campus


Host: Department of Industrial Engineering


Iintroduction to the Speaker:

Qi Annabelle Feng is the John and Donna Krenicki Chair Professor in Operations Management at Krannert School of Management, Purdue University. She was previously a faculty member at McCombs School of Business, The University of Texas at Austin.  She received her Ph.D. in Operations Management from UT Dallas in 2006. Her main research interest lies in studying firms’ sourcing decisions in the broad context of supply chain management. Her main research interest lies in studying firms’ sourcing decisions in the broad context of supply chain management. Her work focuses on individual firm’s procurement planning in uncertain environment and multiple firms’ interactions in sourcing relationships. She also works in the areas of product development and proliferation management, resource planning, economic growth models, and information system management. She is currently a Department Editor for Production and Operations Management. She received the first prize in the INFORMS Junior Faculty Paper Competition in 2009, Franz Edelman Award in 2009 and the Wickham Skinner Early-Career Research Accomplishment Award in 2012.


Abstract:

We study the role of bargaining in a firm's revenue management. The seller firm under consideration sequentially sells a fixed amount of stock to a random arrival stream of potential buyers over a finite selling season. The buyers are heterogeneous in their valuation of the product. Based on the stock level and the time to the end of the selling season, the seller may dynamically choose either to post a take-it-or-leave-it price or to engage in bargaining with an arriving buyer. A unique feature of our model is the linkage between the seller's disagreement point from a trade and her future value of the product, which differentiates our study from previous ones on revenue management with bargaining, as well as imposing analytical challenges. We introduce a stochastic order, called scaled pricing order, for the buyer's valuation distribution. The scaled pricing order measures the average portion of trade surplus that the seller can obtain by posting a price.