This book offers the first introduction to the concepts, theories, and
applications of pricing and revenue optimization. From the initial
success of "yield management" in the commercial airline industry down to
more recent successes of markdown management and dynamic pricing, the
application of mathematical analysis to optimize pricing has become
increasingly important across many different industries. But, since
pricing and revenue optimization has involved the use of sophisticated
mathematical techniques, the topic has remained largely inaccessible to
students and the typical manager. With methods proven in the MBA courses
taught by the author at Columbia and Stanford Business Schools, this
book presents the basic concepts of pricing and revenue optimization in
a form accessible to MBA students, MS students, and advanced
undergraduates. In addition, managers will find the practical approach
to the issue of pricing and revenue optimization invaluable.
With updates to every chapter, this second edition covers topics such as
estimation of price-response functions and machine-learning-based price
optimization. New discussions of applications of dynamic pricing and
revenue management by companies such as Amazon, Uber, and Disney, and in
industries such as sports, theater, and electric power, are also
included. In addition, the book provides current coverage of important
applications such as revenue management, markdown management, customized
pricing, and the behavioral economics of pricing.
