Optimal Wine Pricing for Restaurants

Abstract : We present a simple static way of optimizing the prices of bottles of wine for restaurants with a given cellar. In contrast to classical assortment pricing models, we posit that the cellar (i.e., inventory) is given and is not taken as a variable entering the optimization program. In our model, the optimal price is driven mainly by a rating parameter after the effect of initial cost is removed. This parameter plays the role of a dominant characteristic in hedonic models, even though the levels of stocks may also be determinant when they are very low. We provide a numerical sensitivity analysis of prices to various parameters and study a realistic large-scale example based on two wine lists with 50 bottles each. Finally, several extensions are discussed.
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Contributeur : Anthony Herrada <>
Soumis le : mercredi 6 février 2019 - 14:17:09
Dernière modification le : jeudi 6 juin 2019 - 14:41:46



Guillaume Coqueret. Optimal Wine Pricing for Restaurants. Journal of Wine Economics, Cambridge University Press (CUP), 2015, 10 (02), pp.204-224. ⟨10.1017/jwe.2015.19⟩. ⟨hal-02009600⟩



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