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

Figure 4

(a) Effects of magnitude of demand of the core products on revenue loss (𝐷₁(𝑝₁,𝑝₂,𝑟)=𝑎₁−0.5𝑝₁+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). (b) Effects of magnitude of demand of the core products on revenue loss (𝐷₁(𝑝₁,𝑝₂,𝑟)=40−𝑏₁𝑝₁+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)