《Cachon and Swinney MS2016》.pdf

MANAGEMENT SCIENCE informs® Vol. 55, No. 3, March 2009, pp. 497–511 doi 10.1287/mnsc.1080.0948 issn 0025-1909 eissn 1526-5501 09 5503 0497 © 2009 INFORMS Purchasing, Pricing, and Quick Response in the Presence of Strategic Consumers Gérard P. Cachon The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104, cachon@ Robert Swinney Graduate School of Business, Stanford University, Stanford, California 94305, swinney@ We consider a retailer that sells a product with uncertain demand over a finite selling season. The retailer sets an initial stocking quantity and, at some predetermined point in the season, optimally marks down remaining inventory. We modify this classic setting by introducing three types of consumers: myopic con- sumers, who always purchase at the initial full price; bargain-hunting consumers, who purchase only if the discounted price is sufficiently low; and strategic consumers, who strategically choose when to make their pur- chase. A strategic consumer chooses between a purchase at the initial full price and a later purchase at an uncertain markdown price. In equilibrium, strategic consumers and the retailer make optimal decisions given their rational expectations regarding future prices, availability of inventory, and the behavior of other c