- Series Information
- List of Figures
- List of Tables
- List of Boxes
- List of Contributors
- Why Are Prices Set the Way They Are?
- Airline Pricing
- Electric Power Pricing
- Health Care Pricing in the United States: The Case of Hospitals
- Pricing in Restaurants
- Pricing of On-line Display Advertising
- Consumer Credit Pricing
- Wireless Services Pricing in the United States
- For What IT’s Worth: Pricing Internal IT Services
- Television Advertisement Pricing in the United States
- Pricing in the Cruise Line Industry
- Less-than-Truckload Pricing
- Pricing in the North American Protein Industry
- Wine Pricing in the United States
- Pricing and sales practices at the Grand Bazaar of İstanbul
- Price Theory in Economics
- Models of Demand
- Game Theory Models of Pricing
- Behavioral Issues in Pricing Management
- Customized Pricing
- Nonlinear Pricing
- Dynamic List Pricing
- Sales Promotions
- Markdown Management
- Revenue Management
- Auction Pricing
- Services Engineering: Design and Pricing of Service Features
- Pricing in Business-to-Business Contracts: Sharing Risk, Profit, and Information
- Pricing and Inventory Management
- Structuring and Managing an Effective Pricing Organization
- Global Pricing Strategy
- Using Lean Six Sigma to Improve Pricing Execution
- Mastering your Profit Destiny in Business-to-Business Settings
- Current Challenges and Future Prospects for Pricing Management
Abstract and Keywords
This article introduces the basic concepts of game theory as applied to pricing. It first presents the basic concepts of game theory by using simple pricing examples. The article then links those examples with both the research literature and industry practice, including examples of how game theory has been used to understand P&G's value pricing initiative and the competitive response. Section 19.2 defines the basic elements of a game and describes the fundamental assumptions that underlie game theory. The remaining sections examine models that provide insight into how games work as well as how competition affects pricing. The models may be categorized according to two attributes: the timing of actions and the number of periods.
Praveen K. Kopalle is Professor of Marketing at the Tuck School of Business at Dartmouth, Dartmouth College. Praveen received his PhD from Columbia University, New York, his MBA from the Indian Institute of Management, Bangalore, and his BE from Osmania University, Hyderabad. His research interests include pricing and promotions, new product development, and game theory.
Robert A. Shumsky is Professor of Business Administration at the Tuck School of Business at Dartmouth. His research interests include the application of game theory to the coordination of service supply chains in which pricing and service design decisions are distributed among multiple firms.
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