Optimal dynamic pricing and inventory policy under strategic customers

With the development of Internet,more and more firms adopt dynamic pricing as a valid method to maximize their profit,especially,when the demand is uncertainty.But on the other hand,the consumers become cleverer than before.Customers behave strategically and weigh their payoff of immediate purchase against the expected payoff of delaying their purchases.In this paper,we use the Stackelberg model and the theory of mechanism design,consider how a monopoly firm should choose his inventory and optimal price under the strategetic customer in a monoply market.we see that via its capacity choice,the firm is able to control the fill rate and hence the rationing risk faced by customers to gain larger profit.