Pricing non-storable perishable goods by using a purchase restriction: General optimality results

The aim of this paper is to investigate the validity of the optimality results derived from Li in 2001 by relaxing the following two assumptions: (a) the firm offers restricted units first and then unrestricted units later at higher price levels, and (b) only one type of product is available during the whole selling process. In the absence of (a), we establish a general optimality theorem, which shows that any optimal policy in Li remains to be optimal in the class of general policies that allow the restriction to be attached at any price level. For the simultaneous availability issue associated with (b), we demonstrate that there always exists an optimal policy that is sustainable even when all active prices are made available at the same time. These two results assure the relevance of the theoretical model in Li to current yield management practices and further improve our understanding on the role and the impact of a well-designed purchase restriction on pricing decisions.