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Contact Information: Tanya Klein Public Relations 973-596-3433

NJIT Industrial Engineer Invited To Discuss Dynamic Pricing at Rutgers University

NJIT Associate Professor Jian Yang, an industrial engineer, recently delivered an invited lecture at Rutgers University about dynamic pricing involving competing firms.   Dynamic pricing is a practice in which a firm adjusts its price in real time for the purpose of profit maximization.

Over a fixed-time horizon, every contestant attempts dynamic pricing to optimally influence demand, which is random and susceptible also to prices offered by other firms. The problem, which possesses features from both game theory and Markov decision processes, is difficult to analyze.  

Yang, however, first studied a nonatomic-game version, which focused on a continuum of infinitesimal firms. Under reasonable assumptions, he identified a well-behaved equilibrium pricing policy.  He then developed a general theory concerning the suitability of related equilibria to finite-game counterparts.

As the players increased, he showed that such equilibria, necessarily insensitive to players’ observations about external conditions, would become ever more suitable for their corresponding finite-player situations. For the original dynamic pricing problem, he  concluded that when there are enough firms and all of them adopt the nonatomic-game version of the equilibrium pricing policy, none of them would have any strong incentive to not follow, even for one period, the pricing policy.

Yang’s research interests are in production planning, inventory control, revenue management, stochastic modeling, and game-theoretic applications. He has published 30 peer-reviewed scholarly articles, and he received research funding from the National Science Foundation and the New Jersey Department of Transportation.

He is a member of the NJIT Department of Mechanical and Industrial Engineering in Newark College of Engineering.   He received his PhD in management science from the University of Texas at Austin. 

NJIT, New Jersey's science and technology university, enrolls approximately 10,000 students pursuing bachelor's, master's and doctoral degrees in 120 programs. The university consists of six colleges: Newark College of Engineering, College of Architecture and Design, College of Science and Liberal Arts, School of Management, College of Computing Sciences and Albert Dorman Honors College. U.S. News & World Report's 2012 Annual Guide to America's Best Colleges ranked NJIT in the top tier of national research universities. NJIT is internationally recognized for being at the edge in knowledge in architecture, applied mathematics, wireless communications and networking, solar physics, advanced engineered particulate materials, nanotechnology, neural engineering and e-learning. Many courses and certificate programs, as well as graduate degrees, are available online through the Division of Continuing Professional Education.