Browsing by Author "Pazgal, Amit"
Now showing 1 - 4 of 4
Results Per Page
Sort Options
Item Dynamic Pricing Strategies(2021-04-29) Yang, Li; Pazgal, AmitPricing has been an intense research problem for a long time and my thesis mainly focuses on the pricing problem in the scenario where consumers often don’t know their exact valuations about the product before their purchase. After purchasing and using the product, they know their true valuations and then decide whether to keep the product or return it back to the seller with a refund. My dissertation work is mainly focused on how the sellers make use of such match uncertainty to orchestrate and design the optimal price prices and refund policies for different consumer segments in the market.Item Hotel Management in the Digital Age: Empirical Studies of Reputation Management and Dynamic Pricing(2016-04-01) Wang, Yang; Pazgal, Amit; Kamakura, Wagner; Kalra, Ajay; Sizova, NataliaAlthough a hotel’s basic purpose of providing a temporary place of lodging has not changed fundamentally over the course of history, the industry has continuously evolved with the newest innovations in architecture, technology, and culture. The most recent evolution is the digitization of the hotel marketplace. This thesis investigates two areas heavily influenced by the digital marketplace – online reputation management and dynamic pricing. The first study of this dissertation addresses one important facet of reputation management. How do managers’ responses to online reviews alter the opinion of subsequent reviewers? By analyzing a dataset of approximately 17 million hotel reviews, we demonstrate that managers’ responses can change the opinion of subsequent reviewers, but not always in a positive way. Responses to negative reviews generally improve subsequent opinion but responses to positive reviews can sometimes negatively influence subsequent opinion. A deep learning topic analysis of response and review texts reveals that tailored responses to positive reviews can actually negatively impact subsequent opinion. The findings in this study are shown to be consistent with the predictions of reactance theory. The second study seeks to uncover the degree to which managers’ pricing heuristics are optimal. Analyzing a year’s worth of spot prices for a focal hotel and its two competitors in the Las Vegas market, we show that managers do not price optimally in two peculiar ways. First, managers are able to set close-to-optimal average prices during off-season but dramatically underprice during peak-season. This result is consistent with agency theory that suggest the observable binary outcome of selling out the hotel may attenuate managers’ aggressiveness in setting prices. Second, managers, like untrained experimental subjects in prior literature, tend to make price changes that are too small. Furthermore, this study investigates the revenue gains due anticipating competitors’ pricing behavior and mean reversion tendencies in online reviews.Item Unknown Pricing Strategies in Competitive Environments(2020-04-24) Liu, Xueying; Pazgal, AmitThis thesis studies multiple pricing strategies in different competitive environments. It provides an in-depth analysis of pricing, customization, and product quality in oligopoly settings. The first essay investigates the pricing and optimal customization level in different market structures. The second essay examines the optimal product quality and pricing for different channel structures in the presence of gray markets. The continued development of new technologies has allowed firms to address the individual needs of their customers better. The first study in this dissertation examines firms’ choices regarding the range of customized products they offer and their impact on optimal pricing and profits in a competitive environment. Customization is increasingly important; with the development of manufacturing and information technologies, firms can customize products to fit their consumers’ individual needs at a reasonable price. Most of the research about customization characterizes optimal pricing. In this chapter, I address not only pricing but also the optimal “amount,” or level, of customization. Firms decide on the optimal amount of customization (called the “range of customization lengths”) that they offer their consumers. I investigate different competitive situations and the range of customization and pricing strategies that arise in them. I show that when two firms compete, they may find themselves in a “prisoner’s dilemma” type of situation. Both will offer customized products in equilibrium, leading to lower profits than without customization. This chapter further shows that, when more than two firms compete, the symmetric a-priori firms can end up in a state of asymmetric customization equilibrium, a phenomenon that few researchers had previously directly explored. It is important to note that customization costs have two components: technology (convex) and per-product (linear). My most important finding is that equilibrium outcomes depend on cost in a particular way. If the per-product customization cost is low enough, firms will offer a range of customized products regardless of how expensive the customization technology is. As the per-product customization cost increases, there are fewer firms customizing in the equilibrium. In the second study, I explore pricing in the presence of gray markets. Gray market products are original products that are sold through an unauthorized channel. They tend to have lower prices because consumers view them as lower quality even though they are authentic. Taking this into account, very little research has ever examined whether manufacturers should change the offered products’ quality, given their knowledge that gray markets exist. Most papers examine manufacturers’ pricing in the presence of the gray market and show ambiguous results. The manufacturer can be better off because gray markets increase the demand for their products and allow for better segmentation. However, they can be worse off because gray markets also lower their sales, the loss of which is not compensated for by the gain of selling through the gray marketer. This chapter expands on the previous literature by making quality choices endogenous. I show that, when the manufacturer sells directly to consumers, gray markets have a negative effect on both price and quality of products as well as manufacturer profits. However, when the manufacturer sells through a distribution channel, the quality of the offered products and the manufacturer’s and retailers’ profits can increase regardless of the source of the gray market goods. My study further shows, as expected, that gray markets always increase the total consumer surplus.Item Unknown Three Essays on Rationing, Matching and Scheduling(2014-11-24) Esmerok, Ibrahim Baris; Boylan, Richard; Hartley, Peter; Pazgal, AmitThis dissertation consists of three chapters. In the first chapter, we are considering the problem of rationing a disposable indivisible good under satiated preferences. A standard of gains rationing (s.g.r.) method allocates successive units of good by following a linear ordering of individuals and non-zero demand pairs. The dual of a s.g.r. method is a standard of losses rationing (s.l.r.) method, it follows the same linear ordering to successively allocate units of deficit. In our main result, Theorem 1, we provide three characterizations of s.l.r. methods. The first characterization is by resource monotonicity (RM), strategy-proofness (SP), non-bossiness (NB), and a property we introduce in this chapter, independence of fully satisfied demand (IFSD). IFSD is weaker than both the well known consistency (CSY) axiom and a generalized version of RM that we introduce in this chapter, strong resource monotonicity (SRM). We offer the other two characterizations by replacing RM and IFSD in the first characterization with SRM, and by replacing IFSD and NB in the first characterization with CSY. We obtain an analogue of Theorem 1 for s.g.r. methods by using the duals of the axioms in Theorem 1. By combining SP and its dual with IFSD and its dual or with SRM or with the dual of SRM we provide three characterizations of fixed order priority rationing methods in Theorem 2. The second chapter is on roommate problems. We characterize Pareto efficient and group strategy-proof rules for roommate problems with an even number of individuals where individuals find all their potential partners acceptable. We define a priority rule (sequential dictatorship) as a recursive algorithm that matches individuals in successive rounds. Specifically in every round an individual with priority is matched to his top ranked partner among available individuals and the order of individuals with priority is a function of the prior matches. We then show that the class of Pareto efficient and group strategy-proof rules is equivalent to the family of priority rules. In our final chapter we consider a scheduling problem with deadlines. A group of individuals share a deterministic server which is capable of serving one job per unit of time. Every individual has a job and a cut off time slot (deadline) where service beyond this slot is as worthless as not getting any service at all. Individuals are indifferent between slots which are not beyond their deadlines (compatible slots). A schedule (possibly random) assigns the set of slots to individuals by respecting their deadlines. We only consider the class of problems where for every set of relevant slots (compatible with at least one individual) there are at least as many individuals who have a compatible slot in that set: we ignore the case of underdemand. For this class, we characterize the random scheduling rule which attaches uniform probability to every efficient deterministic schedule (uniform rule) by Pareto efficiency, equal treatment of equals, and probabilistic consistency (Chambers (2004)). We also provide an alternative description for the uniform rule by a ball drawing algorithm.