People face various situations that they have to decide whether to buy or not, before uncertainty is resolved.Under the uncertain conditions, it is most crucial part for consumers that they should consider the expected valuation derived from purchasing tickets or services.Thus, it is important to contemplate buyer uncertainty about future valuation. Xie and Shugan presented the relationship between spot price and advance price in a situation that involves uncertainty.Their findings provide the explicit advance pricing strategies that can create profit improvements(Xie and Shugan, 2001).Their findings lay a foundation of this problem, because buyers are almost always not sure about their future valuations for most services(Xie and Shugan, 2001).In addition to these findings, the researchers found that profits under option pricing strategy outperform those from advance pricing strategy(Preethika Sainam, 2010).They introduce the concept of consumer options and analytically prove that consumer options can make more profits(Preethika Sainam, 2010).
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