DEVI Seminar – Claudio Piga (Huddersfield University Business School)

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Date - Heure / Date - Hour
Date(s) - 26/09/2019
10h30 - 11h30

Emplacement / Location
ENAC, bât. Bréguet, Amphi Boucher


Linking Algorithms to Static and Dynamic pricing: theory and evidence

Abstract: We show how the main features of a pricing algorithm  are shaped by organizational frictions, which impede continuous  price adjustments. In our theoretical multi-unit capacity, multi-period pricing model, frictions lead the algorithm to set prices for each unit, which remain constant during a “static pricing spell”; dynamic pricing occurs when the algorithm modifies at least one price. Using airline data, we find evidence of static spells lasting long enough to suggest carriers cannot adjust fares constantly, consistent with the model’s assumptions and predictions.

Coffee will be served from 10h00 – 10h30.