Abstract:This paper investigates dynamic pricing mechanisms of perishable products considering simultaneously consumer behaviors and the threat of entrant. According to dimensions of strategic behavior and loyal behavior, consumers in the market are divided into four types: strategic loyal consumers, strategic switchers, myopic loyal consumers and myopic switchers. A two period dynamic game is proposed among the incumbent firm, the potential entrant and strategic consumers. By an equilibrium analysis, the optimal pricing mechanisms of the incumbent and the entrant as well as the impacts of consumer behaviors on the equilibrium pricing strategies and revenues of the two firms are discussed. By an numerical study, the impact of the competitor’s entry on the pricing strategies and the revenue of the incumbent, and the interactive mechanism between strategic consumer behavior and store-switching behavior and the entry of the competitors are analyzed. The main results are: Firstly, the incumbent can adopt a smart dynamic pricing mechanism to hold or give up the opportunity to inter-temporary price-discrimination of strategic consumers to maximize his profit. In addition, strategic consumer behaviors may harm the performance of the incumbent but improve the performance of the entrant. Finally, the competitor’s entry does not necessarily result in negative impacts on the incumbent. In some conditions his entry may improve his performance by enlarging the market coverage effect. In a word, the incumbent should make efforts to culture his own loyal consumers through all measures such as a good CRM, and other promotion strategies, which not only help him to beat the threat of the entrant but to reduce the negative influence from the strategic consumer behaviors.