Mixed-integer formulations for the Capacitated ...
Document type :
Pré-publication ou Document de travail
Title :
Mixed-integer formulations for the Capacitated Rank Pricing Problem with envy
Author(s) :
Domínguez, Concepción [Auteur]
Integrated Optimization with Complex Structure [INOCS]
Labbé, Martine [Auteur]
Integrated Optimization with Complex Structure [INOCS]
Marín, Alfredo [Auteur]
Universidad de Murcia
Integrated Optimization with Complex Structure [INOCS]
Labbé, Martine [Auteur]
Integrated Optimization with Complex Structure [INOCS]
Marín, Alfredo [Auteur]
Universidad de Murcia
English keyword(s) :
Rank Pricing Problem
Ranking-based Consumer Models
Combinatorial Optimization
Integer Programming
Valid Inequality
Bilevel Programming
Ranking-based Consumer Models
Combinatorial Optimization
Integer Programming
Valid Inequality
Bilevel Programming
HAL domain(s) :
Computer Science [cs]/Operations Research [math.OC]
English abstract : [en]
Pricing under a consumer choice model has been extensively studied in economics and revenue management. In this paper, we tackle a generalization of the Rank Pricing Problem (RPP), a multi-product pricing problem with ...
Show more >Pricing under a consumer choice model has been extensively studied in economics and revenue management. In this paper, we tackle a generalization of the Rank Pricing Problem (RPP), a multi-product pricing problem with unit-demand customers and a ranking-based consumer choice model. We generalize the RPP assuming that each product has a limited amount of copies for sale, and we call this extension the Capacitated Rank Pricing Problem (CRPP). We compare the envy-free allocation of the products (a fairness criterion requiring that customers receive their highest-ranked product given the pricing) with the envy version of the problem. Next, we focus on the CRPP with envy. We introduce two integer linear formulations for the CRPP and derive valid inequalities leveraging the structure of the problem. Afterwards, we develop separation procedures for the families of valid inequalities of greater size. The performance of the formulations and the resolution algorithms developed is tested by means of extensive computational experiments.Show less >
Show more >Pricing under a consumer choice model has been extensively studied in economics and revenue management. In this paper, we tackle a generalization of the Rank Pricing Problem (RPP), a multi-product pricing problem with unit-demand customers and a ranking-based consumer choice model. We generalize the RPP assuming that each product has a limited amount of copies for sale, and we call this extension the Capacitated Rank Pricing Problem (CRPP). We compare the envy-free allocation of the products (a fairness criterion requiring that customers receive their highest-ranked product given the pricing) with the envy version of the problem. Next, we focus on the CRPP with envy. We introduce two integer linear formulations for the CRPP and derive valid inequalities leveraging the structure of the problem. Afterwards, we develop separation procedures for the families of valid inequalities of greater size. The performance of the formulations and the resolution algorithms developed is tested by means of extensive computational experiments.Show less >
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