Optimal pricing in the presence of strategic consumer behavior risk

This paper studies the optimal pricing in the presence of strategic consumer behavior risk. On the one hand, a monopolistic firm sells a fixed capacity of perishable items within a limited time when the demand is uncertain, in the hope of maximizing utility at a certain degree of risk-sensitivity; On the other hand, strategic consumers set the chance of purchase on the basis of expected price in the dynamic pricing. It is found that the game equilibrium exists between the behavior strategies of monopolist and those of consumers; the maximum of strategic transferring (waiting) demand is constrained by the structure of supply and demand in market; within the scope of balanced price, strategic waiting demand, expected revenue and risk increases with the initial price rise. Although the risk sensitivity under the different structures of supply and demand exerts dissimilar influence on the initial pricing, as a whole, the risk-sensitive firm tends to price conservatively.