The IID Prophet Inequality with Limited Flexibility

Understand

In online sales, sellers usually offer each potential buyer a posted price in a take-it-or-leave fashion.

• Buyers can sometimes see posted prices faced by other buyers, and changing the price frequently could be considered unfair.
• The literature on posted price mechanisms and prophet inequality problems has studied the two extremes of pricing policies, the fixed price policy and fully dynamic pricing.
• The former is suboptimal in revenue but is perceived as fairer than the latter.