Download or read book Optimal Pricing Policy for Successive Product Generations in the Presence of Value Uncertainty written by Jeongeun Sim and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: When a firm introduces newer product generations over time, forward-looking consumers can either buy the current version immediately or wait for a newer version. The value of the newer generation is ex ante uncertain. We investigate the role of pricing policies in forming consumer behavior, and study the market conditions that lead to a certain optimal pricing policy. We find that setting prices for the future version of the product in advance when customers are uncertain of the product value (preset pricing) induces consumers to delay purchasing decisions for the newer version even when the price is projected to increase. Meanwhile, setting the price of the future version after its value unveils (consequent pricing) prompts immediate purchase of the current version. When the benefit from delayed purchase decisions is significant, even setting one price for different versions (uniform pricing) can outperform consequent pricing. Presetting price also serves as an effective means to price discriminate heterogeneous consumers. We also show that preset pricing, which lacks the ability to respond to value uncertainty, can be preferable to consequent pricing when value uncertainty is high. Lastly, continuing to sell the older version with the newer version is more profitable than discontinuing it under the preset pricing policy.

Download or read book Handbook of Pricing Research in Marketing written by Vithala R. Rao and published by Edward Elgar Publishing. This book was released on 2009 with total page 617 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pricing is an essential aspect of the marketing mix for brands and products. Further, pricing research in marketing is interdisciplinary, utilizing economic and psychological concepts with special emphasis on measurement and estimation. This unique Handbook provides current knowledge of pricing in a single, authoritative volume and brings together new cutting-edge research by established marketing scholars on a range of topics in the area. The environment in which pricing decisions and transactions are implemented has changed dramatically, mainly due to the advent of the Internet and the practices of advance selling and yield management. Over the years, marketing scholars have incorporated developments in game theory and microeconomics, behavioral decision theory, psychological and social dimensions and newer market mechanisms of auctions in their contributions to pricing research. These chapters, specifically written for this Handbook, cover these various developments and concepts as applied to tackling pricing problems. Academics and doctoral students in marketing and applied economics, as well as pricing-focused business practitioners and consultants, will appreciate the state-of-the-art research herein.

Download or read book Uncertain Product Quality Optimal Pricing and Product Development written by Anthony Creane and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: A firm is developing a new product. However, the firm is uncertain as to how consumers will perceive the product's desirability or quality. Using a general model of product quality, conditions for an increase in uncertainty to increase the optimal price are derived. General conditions are derived under which the firm prefers the less risky project, the one with lower quality variability. However, if at the optimal price the firm only has positive demand for high quality realizations, then the firm prefers a more risky project. As the uncertainty exists in the consumers' preferences, welfare effects can be determined, unlike in previous work examining uncertainty.

Download or read book Multi period Pricing for Perishable Products written by Lei Kevin Zhang (S.M.) and published by . This book was released on 2006 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: (cont.) We use ideas of robust optimization, adjustable robust optimization, dynamic programming and stochastic optimization to find adaptable closed loop pricing policies. Theoretical and numerical results show how the budget of uncertainty, the presence of a reference price, delayed resource allocation, and feedback control affect the quality of the pricing policies. Second, we extend the model to a multi-period setting, where the computation becomes a major issue. We use a delayed constraint generation method to significantly increase the size of the problem that our models can handle. Finally, we consider the pricing problem in an oligopoly setting. We show the existence of solution for both the best response subproblem and the market equilibrium problem for all of the models we discuss in the thesis. We also consider an iterative learning algorithm and illustrate through simulations that an equilibrium pricing policy can be computed for all of our models.

Download or read book Optimal Pricing of Successive Generations of Product Advances written by Padmanābhan, Vi and published by . This book was released on 1991 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dynamic Pricing Under Demand Uncertainty in the Presence of Strategic Consumers written by Yinhan Meng and published by . This book was released on 2011 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the effect of strategic consumer behavior on pricing, inventory decisions, and inventory release policies of a monopoly retailer selling a single product over two periods facing uncertain demand. We consider the following three-stage two-period dynamic pricing game. In the first stage the retailer sets his inventory level and inventory release policy; in the second stage the retailer faces uncertain demand that consists of both myopic and strategic consumers. The former type of consumers purchase the good if their valuations exceed the posted price, while the latter type of consumers consider future realizations of prices, and hence their future surplus, before deciding when to purchase the good; in the third stage, the retailer releases its remaining inventory according to the release policy chosen in the first stage. Game theory is employed to model strategic decisions in this setting. Each of the strategies available to the players in this setting (the consumers and the retailer) are solved backward to yield the subgame perfect Nash equilibrium, which allows us to derive the equilibrium pricing policies. This work provides three primary contributions to the fields of dynamic pricing and revenue management. First, if, in the third stage, inventory is released to clear the market, then the presence of strategic consumers may be beneficial for the retailer. Second, we find the optimal inventory release strategy when retailers have capacity limitation. Lastly, we numerically demonstrate the retailer's optimal decisions of both inventory level and the inventory release strategy. We find that market clearance mechanism and intermediate supply strategy may emerge as the retailers optimal choice.

Download or read book The Next Generation of Electric Power Unit Commitment Models written by Benjamin F. Hobbs and published by Springer Science & Business Media. This book was released on 2006-04-11 with total page 323 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the years, the electric power industry has been using optimization methods to help them solve the unit commitment problem. The result has been savings of tens and perhaps hundreds of millions of dollars in fuel costs. Things are changing, however. Optimization technology is improving, and the industry is undergoing radical restructuring. Consequently, the role of commitment models is changing, and the value of the improved solutions that better algorithms might yield is increasing. The dual purpose of this book is to explore the technology and needs of the next generation of computer models for aiding unit commitment decisions. Because of the unit commitment problem's size and complexity and because of the large economic benefits that could result from its improved solution, considerable attention has been devoted to algorithm development in the book. More systematic procedures based on a variety of widely researched algorithms have been proposed and tested. These techniques have included dynamic programming, branch-and-bound mixed integer programming (MIP), linear and network programming approaches, and Benders decomposition methods, among others. Recently, metaheuristic methods have been tested, such as genetic programming and simulated annealing, along with expert systems and neural networks. Because electric markets are changing rapidly, how UC models are solved and what purposes they serve need reconsideration. Hence, the book brings together people who understand the problem and people who know what improvements in algorithms are really possible. The two-fold result in The Next Generation of Electric Power Unit Commitment Models is an assessment of industry needs and new formulations and computational approaches that promise to make unit commitment models more responsive to those needs.

Download or read book Optimal Pricing Policy in the Presence of Positive and Negative Network Effects written by Nako Iwaji and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose an optimal pricing model for products with both positive and negative network effects. A closed-form expression of the optimal pricing policy is derived under the assumption that the demand function is linear. When there are two customer types with different attitudes towards congestion, the monotonicity of the optimal price differs according to the price sensitivity of each customer type. We show that even if the number of customers who are averse to congestion increases, if the negative-type price sensitivity is low and the positive network effect is weak, increasing the optimal price will increase total profit.

Download or read book Operations Management for Environmental Sustainability written by Guowei Dou and published by Springer Nature. This book was released on 2023-09-26 with total page 157 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explores optimal decisions for companies and governments to build a sustainable supply chain and economy by applying analytical models from new perspectives. Taking differentiated carbon permit-buying and -selling prices into consideration, it investigates the optimal emission permit cap under the “cap-and-trade” regulation and discusses how to establish a two-period carbon tax scheme with a two-period planning horizon. Moreover, it examines how to balance the economic and environmental performances in a closed-loop supply chain, how to implement trade-in program when employing green technologies, and how to strategically use the blockchain technology to improve the environmental performance of supply chain under the carbon tax policy. This book is written for students and researchers who are specialized in the field of operations management with a focus on environmental sustainability. It is also beneficial for specialists and executives at companies that are facing carbon emission regulation challenges, as well as government officials who develop the emission control policies.

Download or read book Optimal Dynamic Pricing with Demand Model Uncertainty written by N. Bora Keskin and published by . This book was released on 2014 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider a price-setting firm that sells a product over a continuous time horizon. The firm is uncertain about the sensitivity of demand to price adjustments, and continuously updates its prior belief on an unobservable sensitivity parameter by observing the demand responses to prices. The firm's objective is to minimize the infinite-horizon discounted loss, relative to a clairvoyant that knows the unobservable sensitivity parameter. Using partial differential equations theory, we characterize the optimal pricing policy, and then derive a formula for the optimal learning premium that projects the value of learning onto prices. We compare and contrast the optimal pricing policy with the myopic pricing policy, and quantify the cost of myopically neglecting to charge a learning premium in prices. We show that the optimal learning premium for a firm that looks far into the future is the squared coefficient of variation (SCV) in the firm's posterior belief. Based on this principle, we design a simple variant of the myopic policy, namely the SCV rule, and prove that this policy is long-run average optimal.

Download or read book The Oxford Handbook of Pricing Management written by Özalp Özer and published by OUP Oxford. This book was released on 2012-06-07 with total page 976 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Oxford Handbook of Pricing Management is a comprehensive guide to the theory and practice of pricing across industries, environments, and methodologies. The Handbook illustrates the wide variety of pricing approaches that are used in different industries. It also covers the diverse range of methodologies that are needed to support pricing decisions across these different industries. It includes more than 30 chapters written by pricing leaders from industry, consulting, and academia. It explains how pricing is actually performed in a range of industries, from airlines and internet advertising to electric power and health care. The volume covers the fundamental principles of pricing, such as price theory in economics, models of consumer demand, game theory, and behavioural issues in pricing, as well as specific pricing tactics such as customized pricing, nonlinear pricing, dynamic pricing, sales promotions, markdown management, revenue management, and auction pricing. In addition, there are articles on the key issues involved in structuring and managing a pricing organization, setting a global pricing strategy, and pricing in business-to-business settings.

Download or read book Consumer Driven Demand and Operations Management Models written by Serguei Netessine and published by Springer Science & Business Media. This book was released on 2009-06-02 with total page 488 pages. Available in PDF, EPUB and Kindle. Book excerpt: This important book is by top scholars in supply chain management, revenue management, and e-commerce, all of which are grounded in information technologies and consumer demand research. The book looks at new selling techniques designed to reach the consumer.

Download or read book New Product Diffusion Models written by Vijay Mahajan and published by Springer Science & Business Media. This book was released on 2000-09-30 with total page 376 pages. Available in PDF, EPUB and Kindle. Book excerpt: Product sales, especially for new products, are influenced by many factors. These factors are both internal and external to the selling organization, and are both controllable and uncontrollable. Due to the enormous complexity of such factors, it is not surprising that product failure rates are relatively high. Indeed, new product failure rates have variously been reported as between 40 and 90 percent. Despite this multitude of factors, marketing researchers have not been deterred from developing and designing techniques to predict or explain the levels of new product sales over time. The proliferation of the internet, the necessity or developing a road map to plan the launch and exit times of various generations of a product, and the shortening of product life cycles are challenging firms to investigate market penetration, or innovation diffusion, models. These models not only provide information on new product sales over time but also provide insight on the speed with which a new product is being accepted by various buying groups, such as those identified as innovators, early adopters, early majority, late majority, and laggards. New Product Diffusion Models aims to distill, synthesize, and integrate the best thinking that is currently available on the theory and practice of new product diffusion models. This state-of-the-art assessment includes contributions by individuals who have been at the forefront of developing and applying these models in industry. The book's twelve chapters are written by a combined total of thirty-two experts who together represent twenty-five different universities and other organizations in Australia, Europe, Hong Kong, Israel, and the United States. The book will be useful for researchers and students in marketing and technological forecasting, as well as those in other allied disciplines who study relevant aspects of innovation diffusion. Practitioners in high-tech and consumer durable industries should also gain new insights from New Product Diffusion Models. The book is divided into five parts: I. Overview; II. Strategic, Global, and Digital Environments for Diffusion Analysis; III. Diffusion Models; IV. Estimation and V. Applications and Software. The final section includes a PC-based software program developed by Gary L. Lilien and Arvind Rangaswamy (1998) to implement the Bass diffusion model. A case on high-definition television is included to illustrate the various features of the software. A free, 15-day trial access period for the updated software can be downloaded from http://www.mktgeng.com/diffusionbook. Among the book's many highlights are chapters addressing the implications posed by the internet, globalization, and production policies upon diffusion of new products and technologies in the population.

Download or read book Dynamic Allocation and Pricing written by Alex Gershkov and published by MIT Press. This book was released on 2024-06-11 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: A new approach to dynamic allocation and pricing that blends dynamic paradigms from the operations research and management science literature with classical mechanism design methods. Dynamic allocation and pricing problems occur in numerous frameworks, including the pricing of seasonal goods in retail, the allocation of a fixed inventory in a given period of time, and the assignment of personnel to incoming tasks. Although most of these problems deal with issues treated in the mechanism design literature, the modern revenue management (RM) literature focuses instead on analyzing properties of restricted classes of allocation and pricing schemes. In this book, Alex Gershkov and Benny Moldovanu propose an approach to optimal allocations and prices based on the theory of mechanism design, adapted to dynamic settings. Drawing on their own recent work on the topic, the authors describe a modern theory of RM that blends the elegant dynamic models from the operations research (OR), management science, and computer science literatures with techniques from the classical mechanism design literature. Illustrating this blending of approaches, they start with well-known complete information, nonstrategic dynamic models that yield elegant explicit solutions. They then add strategic agents that are privately informed and then examine the consequences of these changes on the optimization problem of the designer. Their sequential modeling of both nonstrategic and strategic logic allows a clear picture of the delicate interplay between dynamic trade-offs and strategic incentives. Topics include the sequential assignment of heterogeneous objects, dynamic revenue optimization with heterogeneous objects, revenue maximization in the stochastic and dynamic knapsack model, the interaction between learning about demand and dynamic efficiency, and dynamic models with long-lived, strategic agents.

Download or read book Alternative Energy Sources and Technologies written by Mariano Martín and published by Springer. This book was released on 2016-03-22 with total page 511 pages. Available in PDF, EPUB and Kindle. Book excerpt: Presenting a comprehensive analysis of the use of alternative sources of energy and technologies to produce fuels and power, this book describes the energy value chain from harvesting the raw material, (i.e solar, wind, biomass or shale gas) followed by analysis of the processing steps into power, fuels and/or chemicals and finally the distribution of the products. Featuring an examination of the techno-economic processes and integration opportunities which can add value to by-products or promote the use of different sources of energy within the same facility, this book looks at the tools that can make this integration possible as well as utilising a real world case study. The case study of the operation of “El hierro” island is used as an example of the current effort towards more efficient use of the resources available. Tackling head on the open challenges of the supply, the variability of the source and its prediction, the description of novel processes that are being developed and evaluated for their transformation as well as how we can distribute them to the consumer and how we can integrate the new chemicals, fuels and power within the current system and infrastructure, the book takes a process based perspective with such an approach able to help us in the use and integration of these sources of energy and novel technologies.

Download or read book INFORMS Annual Meeting written by Institute for Operations Research and the Management Sciences. National Meeting and published by . This book was released on 2009 with total page 644 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Applications of Stochastic Programming written by Stein W. Wallace and published by SIAM. This book was released on 2005-01-01 with total page 724 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consisting of two parts, this book presents papers describing publicly available stochastic programming systems that are operational. It presents a diverse collection of application papers in areas such as production, supply chain and scheduling, gaming, environmental and pollution control, financial modeling, telecommunications, and electricity.