Related papers: Trial Length, Pricing, and Rationally Inattentive …
Time-varying pricing tariffs incentivize consumers to shift their electricity demand and reduce costs, but may increase the energy burden for consumers with limited response capability. The utility must thus balance affordability and…
The computation of equilibrium prices at which the supply of goods matches their demand typically relies on complete information on agents' private attributes, e.g., suppliers' cost functions, which are often unavailable in practice.…
Digital services face a fundamental trade-off in content selection: they must balance the immediate revenue gained from high-reward content against the long-term benefits of maintaining user engagement. Traditional multi-armed bandit models…
A rational behavior of a consumer is analyzed when the user participates in a Peak Time Rebate (PTR) mechanism, which is a demand response (DR) incentive program based on a baseline. A multi-stage stochastic programming is proposed from the…
We consider "time-of-use" pricing as a technique for matching supply and demand of temporal resources with the goal of maximizing social welfare. Relevant examples include energy, computing resources on a cloud computing platform, and…
The recent rise of Large Reasoning Models (LRMs) has significantly improved multi-step reasoning performance, but often at the cost of generating excessively long reasoning chains. This paper revisits the efficiency of such reasoning…
Price discrimination, which refers to the strategy of setting different prices for different customer groups, has been widely used in online retailing. Although it helps boost the collected revenue for online retailers, it might create…
Online experiments are the gold standard for evaluating impact on user experience and accelerating innovation in software. However, since experiments are typically limited in duration, observed treatment effects are not always permanently…
Online marketplace designers frequently run A/B tests to measure the impact of proposed product changes. However, given that marketplaces are inherently connected, total average treatment effect estimates obtained through Bernoulli…
We briefly review our recent studies on stochastic processes modelling internet on-line trading. We present a way to evaluate the average waiting time between the observation of the price in financial markets and the next price change,…
I analyze long-term contracting in insurance markets with asymmetric information. The buyer privately observes her risk type, which evolves stochastically over time. A long-term contract specifies a menu of insurance policies, contingent on…
We consider the revenue maximization problem for an online retailer who plans to display in order a set of products differing in their prices and qualities. Consumers have attention spans, i.e., the maximum number of products they are…
A growing body of evidence has shown that incorporating behavioral economics principles into the design of financial incentive programs helps improve their cost-effectiveness, promote individuals' short-term engagement, and increase…
This paper proposes a two-stage pricing strategy for nondurable (such as typical electronics) products, where retail price is cut down at certain time points of the product lifecycle. We consider learning effect of electronic products that,…
We develop a model for pricing, lead-time quotation and delay compensation in a Markovian make-to-order production or service system with strategic customers who exhibit risk aversion. Based on a concave utility function of their net…
We investigate the optimal pricing strategy in a service-providing framework, where customers can leave the system prior to service completion. In this setting, a price is quoted to an incoming customer based on the current number of…
This study examines the dynamics of customer behavior with trial and return options in omnichannel retailing, where retailers face challenges in integrating physical and online stores. Recently, major retailers have begun offering customers…
We study how loyalty behavior of customers and differing costs to produce undifferentiated products by firms can influence market outcomes. In prior works that study such markets, firm costs have generally been assumed negligible or equal,…
We consider a dynamic pricing problem for repeated contextual second-price auctions with multiple strategic buyers who aim to maximize their long-term time discounted utility. The seller has limited information on buyers' overall demand…
We modify the standard model of price competition with horizontally differentiated products, imperfect information, and search frictions by allowing consumers to flexibly acquire information about a product's match value during their…