AssetPricing

Last update 7 October 2021

Copyright license GNU General Public License, version 2.0, GNU General Public License, version 3.0

Software version identifier 0.0-8, 0.0-10, 0.0-11, 0.1-0, 0.1-2, 0.1-3, 1.0-0, 1.0-1, PACKAGES.rds, 1.0-3

Description

Calculates the optimal price of assets (such asairline flight seats, hotel room bookings) whose valuebecomes zero after a fixed “expiry date”. Assumespotential customers arrive (possibly in groups) accordingto a known inhomogeneous Poisson process. Also assumes aknown time-varying elasticity of demand (price sensitivity)function. Uses elementary techniques based on ordinarydifferential equations. Uses the package deSolve to effectthe solution of these differential equations.

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