Abstract: Considering customers' reference-dependent behavior, modeling and simulation study of the revenue management pricing problem with multiplicative reference effect was focused on, which defined the concept of multiplicative reference effect, described the characteristics of the reference effect function and the demand function with multiplicative reference effect, constructed the optimal control model with continuous time and continuous prices, proposed the Hamilton-Jacobi equation, provided simulation algorithm and designed simulation experiments to compare the pricing strategies under different demand circumstances. The simulation study shows that the reference effect has substantial impact on pricing paths and total revenues. The results provide management insights for enterprises to make pricing decisions under different market environments.

Key words: revenue management, dynamic pricing, reference effect, optimal control, simulation