Dynamic Pricing of Fashion-Like Multiproducts with Customers’ Reference Effect and Limited Memory

Figure 2

Effects of consumers’ memory window on revenue loss for identical products (𝐷₁(𝑝₁,𝑝₂,𝑟)=40−0.5𝑝₁+20∗𝜆₁(𝑟−𝜆₁𝑝₁−𝜆₂𝑝₂), 𝐷₂(𝑝₁,𝑝₂,𝑟)=40−0.5𝑝₂+20∗𝜆₂(𝑟−𝜆₁𝑝₁−𝜆₂𝑝₂), 𝑟₀=10,𝛼=0.2,𝛾=0.95).

(a)

(b)