Dynamic pricing problems with elastic demand

S. Marbán, G.R.J. Zwaan, van der, A. Grigoriev, B. Hiller, T. Vredeveld

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)


We consider a dynamic pricing problem for a company that sells a single product to a group of price-sensitive customers over a finite time horizon. The objective is to set the prices over time so as to maximize revenue. Two price-sensitivity models are studied: multiplicative and additive demand change. We develop a polynomial-time algorithm for the multiplicative model. In contrast, we prove that the problem under additive demand change is NP-hard and admits an FPTAS. Keywords: Dynamic pricing; Elastic demand; Revenue optimization; Computational complexity; Approximation scheme
Original languageEnglish
Pages (from-to)175-179
Number of pages5
JournalOperations Research Letters
Issue number3
Publication statusPublished - 2012
Externally publishedYes


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