Kimitoshi Sato

Bio: Kimitoshi Sato is an academic researcher from Kanagawa University. The author has contributed to research in topics: Dynamic pricing & Revenue management. The author has an hindex of 5, co-authored 27 publications receiving 97 citations. Previous affiliations of Kimitoshi Sato include Waseda University & Nanzan University.

Dynamic pricing of high-speed rail with transport competition

Abstract: In recent years, high-speed rails (HSR) have received strong attention in the transport market because of the growing competition with air transport. In this article, we present a revenue management model of dynamic pricing for a competitive route. We suppose that the passengers are allowed to choose among other transport modes and that each transport mode offers the multiple substitutable schedules. In addition, the cancellation, no-show and overbooking are incorporated in our model. Using the multinomial logit model to describe the customer's discrete choice, we derive an optimal pricing policy so as to maximize the expected total revenue for substitutable schedules for HSR. Furthermore, we obtain some analytical properties for the optimal price. Finally, we present several numerical results to show the effect of competition on pricing strategies.

A Continuous-Time Dynamic Pricing Model Knowing the Competitor’s Pricing Strategy

Abstract: In this paper the authors consider a dynamic pricing model for a firm knowing that a competitor adopts a static pricing strategy. The authors establish a continuous time model to analyze the effect of the dynamic pricing on the improvement of revenue in the duopoly market. Suppose that customers arrive to purchase tickets in accordance with a geometric Brownian motion. The authors derive an explicit closed-form expression for optimal pricing policy to maximize the expected revenue. It is shown that when the competitor adopts a flat rate pricing policy, a dynamic pricing is not always effective in terms of the expected revenue compared to the fixed pricing strategy. Moreover, the authors show that the size of reduction for expected revenue depends on the competitor’s pricing strategy. Numerical results are presented to illustrate the dynamic pricing policy.

Effects of High-Speed Rail and Air Transport Competition on Prices, Profits and Welfare

Abstract: This paper studies competition between air transport and high-speed rail (HSR). While airlines are assumed to maximize profit, HSR may maximize a weighted sum of profit and social welfare. The authors show that both airfare and HSR fare fall as the weight on welfare increases, while airfare decreases, and rail fare increases, in the airport access time. Furthermore, airfare decreases in the rail speed if the marginal cost of HSR with respect to the rail speed is not too large. On the other hand, whether rail fare increases in the rail speed depends on the marginal cost of HSR with respect to the rail speed as well as on the welfare weight. The authors further compare prices, profits and welfare between “with price discrimination” in which airlines price discriminate business from leisure passengers and “without price discrimination”. Welfare in the HSR system can be either higher or lower with price discrimination: In particular, the welfare is higher under price discrimination when the travel benefit difference is sufficiently larger than the time value difference between business and leisure passengers.

Optimal impulse control for a multidimensional cash management system with generalized cost functions

Abstract: We consider the optimal control of a multidimensional cash management system where the cash balances fluctuate as a homogeneous diffusion process in R n . We formulate the model as an impulse control problem on an unbounded domain with unbounded cost functions. Under general assumptions we characterize the value function as a weak solution of a quasi-variational inequality in a weighted Sobolev space and we show the existence of an optimal policy. Moreover we prove the local uniform convergence of a finite element scheme to compute numerically the value function and the optimal cost. We compute the solution of the model in two-dimensions with linear and distance cost functions, showing what are the shapes of the optimal policies in these two simple cases. Finally our third numerical experiment computes the solution in the realistic case of the cash concentration of two bank accounts made by a centralized treasury.