#TencentMeeting: 641-480-867 Reference price effect model as the piecewise-smooth dynamical system: Dynamic pricing with asymmetric reference price effects
Present by Dr. Anton Bondarev
Abstract:
In this paper we make use of the classical model of Fibich et al. (2003) on asymmetric reference price effects and apply novel methodology of piecewise-smooth dynamical systems to it’s analysis. We demonstrate that all previous results may be easily recovered by the application of our tools and moreover some novel results may be obtained. In particular we show that under loss aversion behavior there exists a continuum of symmetric pseudo equilibria in addition to classical ones. Under gain seeking, on the contrary, only classical asymmetric equilibria exist, but we show that the optimal pricing strategy depends on initial value of the reference price such that the model exhibits the pseudo-Skiba point.
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