| Journal of Business
A Simulation Analysis of Alternative Pricing Strategies for Dynamic Environments
Researchers of the strategic implications of the well-known demand (e.g., adoption and diffusion) and supply (e.g., experience effects) dynamics have typically sought analytical solutions. Their success in this has been achieved partly by limiting the richness of the dynamics considered. This paper describes a simulation modeling capability. SIMSTRAT, which trades off analytical solutions for richer, more realistic representations of supply and demand. We present the model and then the results of our initial investigations using SIMSTRAT. When joined with new computer graphics capabilities, the model is successful in identifying conditions conducive to skim- and penetration-pricing strategies.