@inproceedings{fb923b29f7054357ab2502c9d1b54716,
title = "Pricing in Dynamic Marketing: The Cases of Piece-Wise Constant Sale and Retail Discounts",
abstract = "We consider a stylized distribution channel, where a manufacturer sells a single kind of good to a retailer. In classical setting, the profit of manufacturer is quadratic w.r.t. wholesales discount, while the profit of retailer is quadratic w.r.t. retail discount (pass-through). Thus, the wholesale prices and the retail prices are continuous. These results are elegant mathematically but not adequate economically. Therefore, we assume that wholesale discount and retail discounts are piece-wise constant. We show the strict concavity of retailer{\textquoteright}s profits w.r.t. retail discount levels. As for the manufacturer{\textquoteright}s profits w.r.t. wholesale discount levels, we show that strict concavity can be guaranteed only in the case when retail discount is constant and sufficiently large.",
keywords = "Concavity, Piece-wise constant prices, Retail discount, Retailer, Wholesale discount",
author = "Igor Bykadorov",
note = "Funding Information: Acknowledgments. The study was carried out within the framework of the state contract of the Sobolev Institute of Mathematics (project no. 0314-2019-0018) and within the framework of Laboratory of Empirical Industrial Organization, Economic Department of Novosibirsk State University. The work was supported in part by the Russian Foundation for Basic Research, projects 18-010-00728 and 19-010-00910 and by the Russian Ministry of Science and Education under the 5–100 Excellence Programme. Publisher Copyright: {\textcopyright} 2020, Springer Nature Switzerland AG. Copyright: Copyright 2020 Elsevier B.V., All rights reserved.; 11th International Conference on Optimization and Applications, OPTIMA 2020 ; Conference date: 28-09-2020 Through 02-10-2020",
year = "2020",
doi = "10.1007/978-3-030-62867-3_3",
language = "English",
isbn = "9783030628666",
series = "Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)",
publisher = "Springer Science and Business Media Deutschland GmbH",
pages = "27--39",
editor = "Nicholas Olenev and Yuri Evtushenko and Michael Khachay and Vlasta Malkova",
booktitle = "Optimization and Applications - 11th International Conference, OPTIMA 2020, Proceedings",
address = "Germany",
}