Strategic Pricing in the Service Sector: A Real Options Perspective

This paper explores how real options theory can improve service sector pricing decisions. As markets become more dynamic due to deregulation and tech innovation, flexible pricing strategies are crucial. The authors propose that service providers should treat pricing decisions as options to capitalize on uncertainty and market shifts. They review how industries like airlines, hotels, and telecoms have used revenue management techniques to optimize profits. Finally, they present a framework for using real options tools to guide strategic pricing and enhance revenue growth​