Seasonal goods and spoiled milk: Pricing for a limited shelf-life

Atiyeh Ashari Ghomi, Allan Borodin, Omer Lev

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

1 Scopus citations

Abstract

We consider a "price-committment model" where a single seller announces prices for some extended period of time. More specifically, we examine the case of items with a limited shelf-life where storing an item (before consumption) may carry a cost to a buyer (or distributor). For example, eggs, milk, or Groupon coupons have a fixed expiry date, and seasonal goods can suffer a decrease in value. We show how this setting contrasts with recent results by Berbeglia et al [4] for items with infinite shelf-life. We prove tight bounds on the seller's profits showing how they relate to the items' shelf-life. We show, counterintuitively, that in our limited shelf-life setting, increasing storage costs can sometimes lead to less profit for the seller which cannot happen when items have unlimited shelf-life. We also provide an algorithm that calculates optimal prices. Finally, we examine empirically the relationship between profits and buyer utility as the storage cost and shelf-life duration change, and observe properties, some of which are unique to the limited shelf-life setting.

Original languageEnglish
Title of host publication17th International Conference on Autonomous Agents and Multiagent Systems, AAMAS 2018
PublisherInternational Foundation for Autonomous Agents and Multiagent Systems (IFAAMAS)
Pages901-909
Number of pages9
ISBN (Print)9781510868083
StatePublished - 1 Jan 2018
Event17th International Conference on Autonomous Agents and Multiagent Systems, AAMAS 2018 - Stockholm, Sweden
Duration: 10 Jul 201815 Jul 2018

Publication series

NameProceedings of the International Joint Conference on Autonomous Agents and Multiagent Systems, AAMAS
Volume2
ISSN (Print)1548-8403
ISSN (Electronic)1558-2914

Conference

Conference17th International Conference on Autonomous Agents and Multiagent Systems, AAMAS 2018
Country/TerritorySweden
CityStockholm
Period10/07/1815/07/18

Keywords

  • Indivisible storable goods
  • Limited storage
  • Pricing
  • Stackelberg game

ASJC Scopus subject areas

  • Artificial Intelligence
  • Software
  • Control and Systems Engineering

Fingerprint

Dive into the research topics of 'Seasonal goods and spoiled milk: Pricing for a limited shelf-life'. Together they form a unique fingerprint.

Cite this