Search

We assess the consequences for market quality and welfare of different entry regimes and exchange pricing policies. To do so, we integrate a microstructure model with a free-entry, exchange competition model where exchanges have market power in technological services. Free-entry delivers superior liquidity and welfare outcomes vis-á-vis an unregulated monopoly, but entry can be excessive or insufficient. Depending on the extent of the monopolist's technological services undersupply compared to the first best, a planner can achieve a higher welfare controlling entry or platform fees. Review of Financial Studies, forthcoming [ABSTRACT FROM AUTHOR]

We consider a single inventoried product that is sold by two competing firms (i.e. a duopoly). The two firms are located at both endpoints of a straight line. We assume the firms are unequal in their access to information on consumer locations, that is, only one of the two firms has full information about consumer location. By modelling the profit maximisation problem as a non-cooperative game, we obtain the best response function of the firm who does not have access to accurate consumer information. We show that this response function is translated into a unique, global solution. Through an extensive numerical example, we conclude that asymmetric information on consumer location has a significant effect on the profit gap between the competing firms and on the market share that each firm is able to attract. We conclude that when one firm inaccurately estimates consumer information about location, this can cause a significant deterioration in the profits of both firms and the consumers are the ones who gain from this information asymmetry. This conclusion encourages information sharing with the uninformed firm. Surprisingly, it also emerges from our computation that the higher the travelling costs the higher profits both firms obtain. [ABSTRACT FROM PUBLISHER]

Many software firms, especially mobile app providers, offer perpetually free basic products to users, but premiums are charged for access to the additional features or functionalities. While the free offering helps capture potential customers, it might cannibalize the sales of premium goods or services. This paper adopts a game theoretical approach to examine the impact of free offering on the competition between two firms in the presence of network effects. The firms can either offer a free core product and a paid service or offer them as a bundle. The core product has stand-alone value and can be used separately but the value-added service has no value without the core product. We derive the market equilibria and present conditions under which the free offering strategy outperforms the bundling strategy. We show that when a firm’s core product has a sufficient advantage in product quality, it is better for this firm to sell the bundle but for the other to use free strategy. However, if the core products are similar in terms of quality, it is optimal for them to use the same strategies. Whether to offer a free product depends largely on the core products’ quality. We also show that the firms may be caught in a prisoner’s dilemma when both adopt the free strategy. Finally, we find that the profitability of the firm that offers a free product always increases in network effects intensity and market size, but this is not the case for the firm that sells the bundle. This study contributes to understanding the behavior of feature-limited free offering in a duopoly setting. Our findings also provide insights into the design of free product and the impact of network effects on the firms’ offering decisions. [ABSTRACT FROM PUBLISHER]

This paper presents an inventory model with a constant rate of deterioration of the product, and shortages are allowed at the end of the cycle. The stock-dependent and price-sensitive demand have been considered with a policy of providing price discount to uplift the market demand. Preservation technology is applied to preserve the items from deterioration. The objective of this model is to maximize the total profit function by finding the optimal replenishment time, the optimal preservation technology investment and the optimal quantity. Next, we have shown that the total profit is a concave function of the replenishment time and preservation technology cost. Discount in pricing may be offered at a time of festival, season breaks down, lockdown and clearance of stock, before introducing a new product with up-gradations, etc. Numerical examples and graphical analysis are provided to explain the model. The discount policy could help any business organizations for smooth running of the business and obtain respective optimal profit. [ABSTRACT FROM AUTHOR]

In this paper, we suggest an optimal pricing policy in a growing market for a deteriorating product. Here, the demand rate is considered as a function of selling price, time and stock level. When the product is introduced into the market, the demand for the product increases slowly according to the performance of the product and depending on market conditions. In maturity stage, the demand is gradually increasing and hence the need arises of developing a pricing policy in a growing market. This paper proves that there exists an optimal increasing-price policy, especially in a growing market for a product. The final recommendations are made based on a sensitivity analysis. [ABSTRACT FROM AUTHOR]

Copyright of Energy Policy Journal / Polityka Energetyczna is the property of Mineral & Energy Economy Research Institute of the Polish Academy of Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Background: In China, some medicines had a supply problem. In 2015, to address this problem, the Chinese government issued a policy to raise the price cap for some shorted low-cost medicines (LCMs). The objective was to assess the effects on medicine prices and supply of medicines from a medicine pricing policy reform point of view.Methods: This study was conducted in Shandong, an eastern province of China with a population of 99.4 million. We collected procurement data of all (n = 1494) LCM medicines available between April 2014 and February 2017 from the web-based Provincial Drug Centralized Bidding Procurement System. This study used the Drug Price index and the average price to reveal the price change of LCMs and used the interrupted time series to evaluate the effects of LCM policy on medicine supply by measuring the change of monthly procurement volume, the number of products, and the average delivery time of LCMs.Results: After the policy implementation in October 2015, the quarterly average price of all LCM products, especially traditional Chinese medicines, showed a sudden growth trend. Then after two-quarter implementation of policy, the price recovered to the same trend before policy intervention, which is consistent with the trend of the Drug price index. There were 466 of LCM products available in October 2015. After the policy intervention, the number of products available increased by 109.87% (n = 978) in February 2017, at a growth rate of 6.44% per month (Value = 30.02, P < 0.001). Besides after the intervention in October 2015, the monthly procurement volumes of LCMs increased rapidly, on average, at a rate of 28.93% per month (Value = 474,000, P < 0.001) for all LCMs. The average delivery time of LCMs kept on decreasing from 33.37 days to 10.69 days at a reduced rate of 3.63% (Value = - 1.21, P < 0.001) per month before the policy, while no significant changes were noted. Also, average monthly delivery time was stable at 9 days after the intervention.Conclusions: The policy promoted the supply of low-cost medicines, which is beneficial for the Universal Health Coverage. However, future policies should focus on monitoring price change and reducing the delivery time of generic medicines. [ABSTRACT FROM AUTHOR]

This study investigates an inventory model for a non-instantaneous deteriorating item with partial backlogging wherein the demand is stochastic in nature and depends on price and promotional effort whereas the deterioration rate is time proportional. Under these settings, a mathematical model is developed with the objective to maximise the expected profit per unit time by determining the optimal price and the length of replenishment cycle. Some useful theoretical results are established to deduce the optimal replenishment schedule. An effective algorithmic procedure is developed to find the optimal solutions to the proposed model. The applicability of the proposed model is illustrated by numerical example. Sensitivity analysis of the optimal solution with respect to key parameters has been carried out and the implications are discussed. The study indicates that though promotional effort stimulates the market demand, it is beneficial in an economic sense when it applies in a conservative manner. [ABSTRACT FROM AUTHOR]

Abstract In the Big Data era, targeted advertising occurs some changes in increasing the marketing accurateness and its valuation model. When the low-carbon product traders adopt targeted advertising, consumer preference information also gets their attentions. In this process, the pricing rules and coordination issues become their attention problems considering targeted advertising and consumer performance information in the new background, but efforts about it are still a gap. Thus, to explore these problem, a low-carbon supply chain with one retailer and one low-carbon manufacturer was chosen. Afterwards, the demand function was revised considering the targeted advertising and the carbon emission level, and four common cost-sharing models and its pricing rules were put forward and analyzed. Finally, revenue-sharing contract was used to coordinate supply chain in the proposed four models. Results indicates that sharing the BDAT inputs, the costs for obtaining consumer preference information and the carbon emission reduction costs can help the retailer obtain a low wholesale price and gain more benefits. When the value of revenue-sharing coefficient is bigger than 0.25 and lower than 0.5, the revenue-sharing contract can achieve the low-carbon supply chain coordinate. [ABSTRACT FROM AUTHOR]

Crowdfunding marks a popular and sustainable means by which small and microentrepreneurs obtain financial resources for their innovative project. Consumers increasingly rely on online reviews to make purchase decisions. However, the crowdfunding nowadays lacks a form type of review system. This paper is designed to extend research on the optimal pricing decision with review system for the reward-based crowdfunding. Firstly, a Bayesian analysis is established to construct consumers' belief update process in presence of review system. Secondly, we take the strategies without the review system as a benchmark to explore the impacts of review system under preannounced pricing and responsive pricing. Finally, through the equilibrium analysis, we find that the review system has a positive impact on the creator under responsive pricing policy. The fraction of favorable review has a large effect on the profit of preannounced pricing. When the fraction is about 80%, the profit is the maximum. Generally speaking, the review system will make more profit for the creator. [ABSTRACT FROM AUTHOR]

Highlights • Pricing and investment decisions are not independent. • The social profitability of a project depends on the pricing policy. • The charging scheme is important when comparing different investment alternatives. • A certain pricing policy may favor the creation of a certain transport network. • We use a case study in Spain to illustrate this phenomenon. Abstract Pricing and investment decisions are not independent; causality in the relationship cuts both ways. Optimal prices, once the investment has been made and is irreversible, are quite different compared with the situation contemplated in the ex-ante evaluation of the project, when no cost is already sunk, and various capacity options are still open. This paper deals with this critical aspect of the relationship in the planning process, when deciding on alternative transport infrastructures. Pricing affects demand and, hence, social welfare. The social profitability of the project can vary significantly depending on the pricing policy. Therefore, before deciding whether it is socially worthwhile to invest in a project, the government needs to be clear about the charging scheme that will be applied. In this paper we show that, when comparing different transport alternatives, a particular charging scheme may favor the creation of a particular transport infrastructure network, leading to irreversible long-term equilibria that would not be optimal under other charging schemes. [ABSTRACT FROM AUTHOR]

This paper studies the optimal pricing policy and optimal lot-sizing decision in growing market for deteriorating products. Pricing policy for growing market is entirely different than the decline market. Price reducing is the best strategy in decline market whereas price increasing may be the best-strategy in growing market. When a product is introduced in the market the demand of product increases slowly according to the performance of the product and depends on market conditions. In maturity stage, the demand is gradually increasing and thus it needs to obtain a pricing policy in growing market. This enables in deriving a new optimal lot-sizing and optimal price setting that maximizes the profit of the system. A numerical example presented to illustrate the proposed model and for practical use. The sensitivity analysis studied for key parameters and recommendations are made to be based on it. [ABSTRACT FROM AUTHOR]

Although the Supreme Court seemed sharply divided in its 1981-82 and 1982-83 terms, its decisions continue to be important to marketers. Not only did the Court render decisions that were important in determining pricing and advertising practices, particularly in the professions, it also made significant decisions impacting on marketing organization. Finally, in what appear to be its most important holdings in these two terms, the Court decided procedural questions that may alter the actions of both the judiciary and the regulatory agencies. A Court with a new composition may soon be forthcoming, and the resulting judicial regulation of marketing could change significantly. [ABSTRACT FROM AUTHOR]

The article discusses the relationship between U.S. marketing practice and the renegotiation of war contract prices. Sales segregation is a significant problem due to the amount of business subject to renegotiation. Indirect sales present complex problems because the channels of distribution for a given product can be extremely intricate. The Renegotiation Act of 1943 is outlined. In part, the Act instructs price adjustment boards to consider the extent of risk assumed, including risks incidental to reasonable pricing policies.

The article discusses a study pertaining to the geographical price policies of the U.S. grocery trade in 1941. The research revealed that the typical product priced uniformly over the U.S. was advertised nationally, had a strong specialty character or relatively high specific value, and was faced with a small number of direct competitors. Zone uniform pricing was utilized for advertised products of high specific value if they were sold regionally. Basing point pricing was found only for branded sugars.

The article reports on retail trade in Central Europe and evaluates the effectiveness of policies after World War I which were designed to protect the small retailer, but did not. A chart is presented with estimates of the percent of total trade conducted by independent retailers in Czechoslovakia, Germany, Poland and Austria. In these countries, large scale distributors held very little economic power even before the restrictions. The impact of fascism, price maintenance laws, unequal sales taxes and other restrictive methods are described in terms of their impact on retail trade.

Do present interpretations of the Robinson-Patman Act cause sellers to discriminate against large customers? This article deals with a new computer-based analysis procedure for improvement in consistency and reduction in discrimination in pricing practices. The authors show the steps needed to develop computer-based, marketing-oriented cost accounting systems and the application of this new pricing practice to an actual business situation. [ABSTRACT FROM AUTHOR]

The article presents information on legal developments in marketing relative to the regulation of price competition. The article focuses on United States court cases pertaining to price control and price maintenance. The cases of Schwegmann Brothers Giant Super Market v. Eli Lilly & Co., Sunbeam Corp. v. Chase & Sherman Inc., and Miles Laboratories Inc. v. Eckerd are presented.

The article reports on legal developments related to the regulation of price competition in the field of marketing in the U.S. The author provides information about the court cases American Can Company v. Bruce's Juices, Incorporated; Schwegmann Brothers et al. v. Calvert Distillers Corporation; U.S. Federal Trade Commission v. Standard Brands, Incorporated.

The article reports on a pricing controversy within the field of marketing in the U.S. The author focuses on analyzing the basing point controversy by discussing two relevant court cases: The Federal Trade Commission v. The Cement Institute et al. and the Federal Trade Commission v. the United States Steel Corporation. In the latter case, the U.S. Federal Trade Commission issued a cease and desist order against United States Steel based on violations of the Clayton Act and the Federal Trade Commission Act. The implementation of the Robinson-Patman Act is discussed in relation to the prevention of price discrimination. The Wheeler-Lea Act is also mentioned.

The article presents details and general comments on the "Report of the Federal Trade Commission on Resale Price Maintenance," which was submitted to the U.S. Congress on December 13, 1945. An extensive definition of resale price maintenance is provided; it primarily involves an obligation for sellers, typically at the consumer level, to sell at a price which conforms with the other sellers. The author reports on the history of the Sherman Antitrust Act, the Tydings-Miller Act and states' Fair Trade Acts.

Highlights • Formulate the day-to-day evolution of departure time choice under bounded rationality. • Show the evolution has stationary points equivalent to boundedly rational user equilibria. • Propose a dynamic pricing policy implemented in the day-to-day evolution process to reach system optimum. Abstract We extend the proportional swap system by Smith (1984a) and the network tatonnement process by Friesz et al. (1994) to formulate the day-to-day evolution of departure time choice under bounded rationality in the bottleneck model. It is shown that the stationary points of the doubly dynamical systems exist and are equivalent to the boundedly rational user equilibrium (BRUE) points. We propose a dynamic pricing policy implemented in the day-to-day evolution process. Despite that the stationary points correspond to a set of BRUE points and the day-to-day departure rate without pricing may not converge to the set of BRUE points, the pricing policy can drive the day-to-day departure rate to reach a new equilibrium state, which is system-optimal (SO). The convergence to the SO state is theoretically proved. Finally, by numerical examples, we demonstrate the properties of the doubly dynamical systems and the effectiveness of the pricing policy. [ABSTRACT FROM AUTHOR]

The Taiwan high-speed rail (HSR) markedly reduces the travel time from the north of Taiwan to the south, or vice versa, relative to other modes of public overland transportation. The HSR is faster than those modes, but also more expensive to ride. The pricing of HSR tickets has gained limited public acceptance because it lacks justification, indicating the need for a theoretical method for objectively justifying the ticket prices. With continuing improvements in data analytics, the computational capacity of computers, and visualization techniques, constructing a time–space model of a long-distance transportation system has become increasingly feasible, and such a model can be used to examine the time–space compression of the HSR. The first part of this investigation uses multidimensional scaling to obtain fitting coordinates based on travel times for various combinations of departure/destination HSR stations, and a geographic information system to generate time–space maps of the relative locations of those stations. Through these maps, we can directly estimate the traveling time between pairs of stations. The second part constructs a floating ticket-pricing model that accounts for the riding costs of the HSR. The model's power to explain the prices of HSR tickets is evaluated. Based on the analytical results, suggestions to the current HSR ticket fare were proposed to set the feasible rate concerning the operating, passenger-perceived, and time-space compression costs. Recommendations for future research are made. [ABSTRACT FROM AUTHOR]

A monopolist sells its product in separated markets. The effects of requiring a uniform profit margin instead of monopoly pricing are assessed. A margin equal to the output-weighted arithmetic mean of the monopoly margins raises consumer surplus but reduces total output. When the margin equals the (lower) harmonic mean total output exceeds the monopoly level if the demand functions are convex, and social welfare rises. Extensions cover a uniform price-marginal cost ratio and a uniform margin when the initial price is uniform and costs differ. The analysis uses convexity relations and the implications of profit-maximization. [ABSTRACT FROM AUTHOR]

Regulatory intervention is necessary to overcome market failures. However, this kind of intervention may also create Protection for Sale conditions in the market—which might, in turn, lead to an inefficient resource allocation. This paper examines the effect of an indirect intervention on regulated market welfare under Optimal Regulation and Protection for Sale conditions. Although under Optimal Regulation conditions there is zero welfare-loss as it derives from Differential Price Policy (DPP), it seems that under substantial Protection for Sale conditions this price policy increases the welfare-loss, and therefore a Uniform Price Policy (UPP) might achieve a smaller welfare-loss—due to the “free-riding” effect. Furthermore, this paper suggests that in between these two price policies lays a third option, a Combined Price Policy, that can balance between the accurate resource allocation (DPP) and the political pressure reduction (UPP) in order to reduce the welfare-loss and to increase the market efficiency. [ABSTRACT FROM AUTHOR]

This research paper investigates the revenue management practices of Romanian classified hotels through a survey of 85 managers. The information found shows that the focus is on the pricing policy and not necessarily on their dynamics, on the optimization of the inventory sales and less on forecasting. The over-represented hotels are the four-star hotels. Most of the respondents are non-affiliated hotels without an employed manager. The revenue management activities are the general manager's responsibilities in most of the cases. The answers received show a balance in the choice of customer perception or profitability as factors in price setting. The most important distribution channels are other websites, not the hotel's or OTA. [ABSTRACT FROM AUTHOR]

In Russia, the grain market is the foundation of the entire food market. Although grain production is a major part of the Russian economy, it faces several challenges associated with weather conditions, labor quality, low wages, the feeding of livestock, and the depreciation of fixed assets. In light of these factors, grain production can be developed with the aid of government regulation, expansion of interindustry cooperation, the implementation of competitive strategies, and investment in technology. [ABSTRACT FROM AUTHOR]

Since, in other industries, revenue management has proven to result in higher productivity and profitability, it is much wanted in the restaurant industry. Therefore, the idea of this research study is to find out “How is restaurant revenue management (RRM) currently managed in full-service restaurants and what RRM developments are expected to be put into practise within the upcoming 1-3 years?”. Regarding the short-term future, no major changes are expected, only the today’s techniques might evolve. New tools and techniques will be introduced later, but depend on the direction that service will go. If RRM becomes more transactional, the restaurant industry will look more like the hotel industry, which includes a standardized service with the emphasis on tools that collect and analyse data automatically. On the contrary, if service becomes more personalized, it will be about emotional engagement, a greater emphasis on loyalty to optimize revenue. [ABSTRACT FROM AUTHOR]

Studying the heterogeneity of consumers allows to price the product differently for consumer segments or groups of a product. In this paper, we estimate a model of aggregate demand for Perm Opera and Ballet Theatre focusing on the heterogeneity in price effect on demand for tickets on different performances and seats. We estimate the parameters of demand function using censored quantile regression that accounts for the limited capacity of the theatre house. We reveal the price effect variation across different types of theatrical productions and seats with lower elastic demand on ballets and for seats of higher quality. [ABSTRACT FROM AUTHOR]

This paper extends the work on Pareto-improving hybrid rationing and pricing policy for general road networks by considering heterogeneous users with different values of time. Mathematical programming models are proposed to find a multiclass Pareto-improving pure road space rationing scheme (MPI-PR) and multiclass hybrid rationing and pricing schemes (MHPI and MHPI-S). A numerical example with a multimodal network is provided for comparing both the efficiency and equity of the three proposed policies. We discover that MHPI-S can achieve the largest reduction in total system delay, MHPI can induce the least spatial inequity and MHPI-S is a progressive policy which is appealing to policy makers. Furthermore, numerical results reveal that different classes of users react differently to the same hybrid policies and multiclass Pareto-improving hybrid schemes yield less delay reduction when compared to their single-class counterparts. [ABSTRACT FROM AUTHOR]

I exploit a change in Spanish regulations to test the effect of the relaxation of entry restrictions on the equilibrium retail price of diesel. In February 2013, a Central Government reform permitted gasoline stations to operate in industrial and commercial areas. Over the following 2-year period, this deregulation led to a high number of new market entrants in these newly designated free entry areas. By isolating markets exposed to entry and markets unaffected by new entrants, and adopting a difference-in-difference approach, results show that gasoline stations exposed to a new market entrant within a one-mile radius lower their prices by an average 1.04%. This result is significant, representing almost one fifth of the average retail margin. Additionally, the results show that the reduction in the equilibrium price is caused by the first market entrant and that the effect decreases over time. [ABSTRACT FROM AUTHOR]

This paper analyzes the process of changing a competition-oriented room rate pricing approach into a company-wide value-based pricing process from the perspective of the resource-based view. From a sample of 33 hotels in 16 countries it evaluates data from 55 open-ended interviews, documentation and archival records. Employing systems methodology the study illustrates that pricing is an intra/inter-organizational activity involving cross-disciplinary processes at various hierarchical levels. It finds that changing to value-based pricing involves a remarkable level of especially intangible resources. The study identifies these resources and their impact, identifying how constraints and tensions influence the shift in pricing orientation. It suggests that pricing in a value-driven policy comprises a capability. Without this capability interpersonal realities and goal conflicts, most prominently between sales and revenue, are found to impose major effects on the alignment of functional levels, the change in pricing processes, and the degree to which these are really value-driven. [ABSTRACT FROM AUTHOR]

We study the prevalence of multiattribute loss aversion and reference effects in a revenue management setting based on data of individual-level purchases over a series of concert performances. The reference dependence that drives consumer choice is not only based on the price but also on observed sales (as a fraction of the seating capacity) during their past visits.We find that consumers suffer from loss aversion on both prices and seats sold: consumers incur significant utility loss when prices are above their references or when the actual seat sales are lower than their references.We suggest pricing policies that can address consumer decisions driven by such reference dependence and loss aversion. [ABSTRACT FROM AUTHOR]

Most economists agree that the price system offers the best method for allocating scarce resources among competing ends. Yet, churches, nonprofits, governments, and corporations in disaster-stricken communities, often under voluntary or mandated price freezes, must often rely on nonprice responses to meet short-term, localized shifts in demand. Evidence suggests that the private sector outperforms the public sector at this task. This paper explores how private sector organizations, both nonprofit and for-profit, learn about and respond to community needs in the aftermath of disasters. We explain and demonstrate how organizations observe credible signals of shifts in demand without the aid of prices. Our findings expand our understanding of why public sector disaster recovery efforts tend to be less effective than private sector efforts. We also find that price gouging laws have additional negative consequences beyond the standard economic account. [ABSTRACT FROM AUTHOR]

Copyright of Revue d'Economie Politique is the property of Editions Dalloz Sirrey and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In a dynamic pricing problem where the demand function is not known a priori, price experimentation can be used as a demand learning tool. Existing literature usually assumes no constraint on price changes, but in practice, sellers often face business constraints that prevent them from conducting extensive experimentation. We consider a dynamic pricing model where the demand function is unknown but belongs to a known finite set. The seller is allowed to make at most m price changes during T periods. The objective is to minimize the worst-case regret-i.e., the expected total revenue loss compared with a clairvoyant who knows the demand distribution in advance. We demonstrate a pricing policy that incurs a regret of O(log( m) T), or m iterations of the logarithm. Furthermore, we describe an implementation of this pricing policy at Groupon, a large e-commerce marketplace for daily deals. The field study shows significant impact on revenue and bookings. The e-companion is available at . [ABSTRACT FROM AUTHOR]

A monopolist offers a product to a market of consumers with heterogeneous quality preferences. Although initially uninformed about the product quality, they learn by observing past purchase decisions and reviews of other consumers. Our goal is to analyze the social learning mechanism and its effect on the seller's pricing decision. Consumers follow an intuitive, non-Bayesian decision rule. Under conditions that we identify, we show that consumers eventually learn the product's quality. We show how the learning trajectory can be approximated in settings with high demand intensity via a mean-field approximation that highlights the dynamics of this learning process, its dependence on the price, and the market heterogeneity with respect to quality preferences. Two pricing policies are studied: a static price and one with a single price change. Finally, numerical experiments suggest that pricing policies that account for social learning may increase revenues considerably relative to policies that do not. This paper was accepted by Yossi Aviv, operations management. [ABSTRACT FROM AUTHOR]

In the Big Data era, targeted advertising develops to a more precise direction, and to improve their marketing accuracy and success rate, many enterprises begin to use it. However, the operation model of targeted advertising has changed. Meanwhile, for a green supply chain, products green degree is also an important factor in influencing sale. To study the pricing policies of a green supply considering targeted advertising input and products greening costs in the Big Data environment, a green supply chain with one green manufacturer and one retailer was chosen. Then, the operation model of targeted advertising in the Big Data environment was analyzed, and the demand function was revised. Based on these, four Game situations were proposed based on the Stackelberg game and Nash Equilibrium game theories and the change trends of prices with the green degree and the input level of targeted advertising were analyzed. Results indicated that the optimal retail price and the wholesale price had a negative correlation with the green degree and the input level of targeted advertising. In addition, the green manufacturer or the retailer as the leader will improve their own benefits, this shows that “first-mover advantage” is existing. For green supply chain members, this study offered a theoretical guidance on pricing policies considering targeted advertising and products green degree in the Big Data environment. [ABSTRACT FROM AUTHOR]

We present an extension of vendor-managed inventory (VMI) problems by considering advertising and pricing policies. Unlike the results available in the literature, the demand is supposed to depend on the retail price and advertising investment policies of the manufacturer and retailers, and is a random variable. Thus, the constructed optimization model for VMI supply chain management is a stochastic bi-level programming problem, where the manufacturer is the upper level decision-maker and the retailers are the lower-level ones. By the expectation method, we first convert the stochastic model into a deterministic mathematical program with complementarity constraints (MPCC). Then, using the partially smoothing technique, the MPCC is transformed into a series of standard smooth optimization subproblems. An algorithm based on gradient information is developed to solve the original model. A sensitivity analysis has been employed to reveal the managerial implications of the constructed model and algorithm: (1) the market parameters of the model generate significant effects on the decision-making of the manufacturer and the retailers, (2) in the VMI mode, much attention should be paid to the holding and shortage costs in the decision-making. [ABSTRACT FROM AUTHOR]