Risk analysis of monopoly pricing under demand uncertainty in dynamic markets

Price hedge theory is a stochastic model of pricing processes,which follow a random walk. such a random phenomenon is the risk of marketing. this theory assumes that the profit of a product is correlated with the demand. by eliminating the randomness of market,the price of a product is determined dynamically. from this theory,we analyze risks from the pricing strategy. we define and calculate several risk coefficients,called greeks,to understand risks induced by price hedging strategy. such a risk analysis can remedy the lack of risk concepts in previous pricing theories. © 2012 pakistan journal of statistics.