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EXPRESS: Competitive Markovian Pricing

Haokun Du et al.

Production and Operations Management2026https://doi.org/10.1177/10591478261447023article
FT50UTD24AJG 4ABDC A*
Weight
0.50

What the paper says

Dynamic pricing is often complicated by strategic customer behavior. One tactic utilized by retailers to manage strategic customer behavior, known as Markovian pricing, is to offer price discounts at random intervals to prevent customers from predicting when the next discount will occur, thereby simplifying their strategic waiting behavior. In this paper, we study Markovian pricing in competitive settings. We show that retailers can effectively adopt Markovian pricing in competitive environments, establish the optimality of flash discounts under competitive Markovian pricing, and find surprisingly that increased levels of competition may benefit both retailers. We confirm the robustness of these insights and also establish their limits of applicability in two model extensions. Our findings suggest that retailers engaging in competitive Markovian pricing should refrain from naïvely applying common wisdom toward third-party price-monitoring and comparison services and reconsider the efforts in growing their loyal customer base, and more broadly highlight the unique properties of competitive Markovian pricing.

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https://doi.org/https://doi.org/10.1177/10591478261447023

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@article{haokun2026,
  title        = {{EXPRESS: Competitive Markovian Pricing}},
  author       = {Haokun Du et al.},
  journal      = {Production and Operations Management},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1177/10591478261447023},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.