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Optimal product line pricing in the presence of budget-constrained consumers

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  • Mayer, Stefan
  • Steinhardt, Claudius

Abstract

The product line pricing problem is generally defined as a seller's task to determine the optimal prices for each product in a product line while accounting for both demand-side and supply-side restrictions. In this paper, we contribute to the existing literature by incorporating consumers’ budget considerations into the seller's optimisation problem. Despite playing an important role in many applications, such as the pricing of tickets for sporting or theatre seasons, budget constraints have not been considered in the academic literature in the context of product line pricing to date.

Suggested Citation

  • Mayer, Stefan & Steinhardt, Claudius, 2016. "Optimal product line pricing in the presence of budget-constrained consumers," European Journal of Operational Research, Elsevier, vol. 248(1), pages 219-233.
    • Handle: RePEc:eee:ejores:v:248:y:2016:i:1:p:219-233
    DOI: 10.1016/j.ejor.2015.07.006
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    References listed on IDEAS

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    2. Moon, Ilkyeong & Park, Kun Soo & Hao, Jing & Kim, Dongwook, 2017. "Joint decisions on product line selection, purchasing, and pricing," European Journal of Operational Research, Elsevier, vol. 262(1), pages 207-216.

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