Capacity and Pricing Management with Demand Learning

In an environment where demand is unknown to the firm, it is important to investigate how capacity adjustment and dynamic pricing can be integrated so that the firm can learn about the demand on the fly while making capacity and pricing decisions. In this paper, we design learning algorithms for the joint capacity and pricing management problem. To evaluate the performance of our algorithms, we consider a large-demand asymptotic regime where the demand and capacity are scaled up with the selling