Associate Professor Li Li of the School of Business published new research results in the UTD24 international authoritative journal POM

Associate Professor Li Li from the School of Business Sun Yat-sen University recently published a research paper titled "How Should Firms Adapt Pricing Strategies When Consumers are Time-Inconsistent?" as the first author on Production and Operations Management (POM), the top international academic journal of management. It reveals the multi-stage optimal pricing model and pricing strategy of competing firms in face of time-inconsistent consumers, which enriches the academic community's understanding of time-inconsistent consumer behavior, and has important theoretical and practical guiding value for enterprises to make targeted optimization for their pricing decisions and improve operational performance.

This research innovatively considers the optimal multi-stage pricing decision problem of competing firms in the face of time-inconsistent consumers. The research found that: First, the price commitment cannot effectively prevent time-inconsistent consumers from delaying their consumption decisions, but may instead make more consumers delay their purchases. Second, compared with price commitment, dynamic pricing can deal with consumers’ self-control issues more effectively, and thus may be better for firms; Third, skimming policy that reduces prices over time is not the optimal pricing strategy for all firms. Therefore, in a multi-stage sales cycle, different competing firms should strategically choose their optimal pricing model (dynamic pricing or price commitment) and pricing strategy (price increases or reduces over time) according to the degree of time inconsistency of consumers, so as to improve their income and optimize their operational performance in a more targeted manner.