Selling Tomorrow's Bargains Today

Consider a good (such as a hotel room) which, if not sold on time, is worth nothing to the seller. For a customer who is considering a choice of such goods, their prices may change dramatically by the time the customer needs to use the good; thus a customer who is aware of this fact might choose to gamble, delaying buying until the last moment in the hopes of better prices. While this gamble can yield large savings, it also carries much risk. However, a coordinator can offer customers a compromise between these extremes and benefits in aggregate. Here we explore how a coordinator might profit from forecasts of such future price fluctuations. Our results can be used in a general setting where customers buy products or services in advance and where market prices may significantly change in the future. We model this as a two-stage optimization problem, where the coordinator first agrees to serve some buyers, and then later executes all agreements once the final values have been rev...

• Type: Journal
• Year: 2015
• Where: ATAL
• Authors: Melika Abolhassani, Hossein Esfandiari, MohammadTaghi Hajiaghayi, Hamid Mahini, David L. Malec, Aravind Srinivasan
• Keywords: ATAL 2015, Intelligent Agents