Stimulating Early Adoption of New Products through Channel Disintegration

Conventional wisdom holds that adding layers to a distribution channel is detrimental to the interests of consumers and the channel that serves them. In contrast, our study indicates that a disintegrated channel structure can be desirable in some instances. When consumers have valuation uncertainty prior to consuming a product, having an independent retailer may boost both channel profits and consumer surplus relative to direct selling by an integrated firm. The quandary in selling such products is that after early adopters make their purchase decisions, the seller may alter prices in such a way that makes early adopters' decisions appear suboptimal in hindsight. Since the seller cannot credibly commit to future prices, customers are reluctant to adopt early, choosing instead to delay their purchase decisions. This delay is certainly detrimental to the interest of the distribution channel, but the rejection of the early adoption discount can equally reduce consumer surplus. This problem can be mitigated by introducing an independent retailer. The familiar double marginalization “problem” from channel disintegration can credibly assure customers of unfavorable future prices for late adoption. This assurance attracts more customers to seek early adoption, leading to lower overall retail prices, increased supply, and higher consumer and producer surpluses.     

When Should a Firm Open its Source Code: A Strategic Analysis

Deciding to open the source code of a software product has advantages and disadvantages. The disadvantage is that the firm loses the revenue from the software. The advantage is that the users' network can contribute to the quality of the software code, which increases the demand for the software and for a complementary product. Demand for the complementary product also goes up, because demand for a product increases when the price of its complement decreases, and under open source, the price of the software product drops down to zero. This paper examines the strategic interactions at work here, within a duopoly framework, and tries to determine the circumstances under which it is optimal for a firm to open its code. We find that firms open the source code when there is a competitive software‐product market, a less competitive complementary‐product market, and when the complementary product is of high quality. Furthermore, it is more profitable for the firm to open the source code if its competitor also does so. When this happens the incentive to open the code can even be higher than in a monopoly situation. More intense competition induces symmetric equilibria in which both firms choose the same strategy.     

Open Source Development with a Commercial Complementary Product or Service

We examine optimal control decisions regarding pricing, network size, and hiring strategy in the context of open source software development. Opening the source code to a software product often implies that consumers would not pay for the software product itself. However, revenues may be generated from complementary products. A software firm may be willing to open the source code to its software if it stands to build a network for its complementary products. The rapid network growth is doubly crucial in open source development, in which the users of the firm's products are also contributors of code that translates to future quality improvements. To determine whether or not to open the source, a software firm must jointly optimize prices for its various products while simultaneously managing its product quality, network size, and employment strategy. Whether or not potential gains in product quality, network size, and labor savings are sufficient to justify opening the source code depends on product and demand characteristics of both the software and the complementary product, as well as on the cost and productivity of in‐house developers relative to open source contributors. This paper investigates these crucial elements to allow firms to reach the optimal decision in choosing between the open and closed source models.     

双寡头R&D合作与非合作时的最优溢出

本文考虑一个双寡头模型,其中两个企业都从事存在溢出的R&D活动。每个企业在产品市场上进行竞争之前,首先确定自己的R&D投资。根据在R&D阶段和产量阶段是否合作,讨论三种情况下使企业利润最大化的溢出水平。在每种情况下,都讨论了溢出的变动对R&D支出、产量、利润、消费者剩余和社会福利的影响。     

Energy Performance Contracting in a Competitive Environment*

Energy Performance Contracting (EPC) is an important and effective energy conservation mechanism, under which an energy service company (ESCO) provides an energy‐saving service to its client and shares the resulting energy cost savings. Using a game‐theoretic model, we investigate the impacts of EPC on two competing manufacturers, of which one is more energy‐efficient in production than the other. The less energy‐efficient firm first proposes an energy‐saving sharing contract to the more energy‐efficient firm, who, if accepting the contract, acts as an ESCO that decides the energy‐saving target and helps realize it for the client. Then the firms engage in Cournot competition by producing/selling substitutable products. By solving the equilibrium solutions, we show that under an EPC project, the total production quantity of both firms increases (so the market price of the product decreases) with the ESCO producing less while its client producing more, which also leads to a higher consumer surplus. Meanwhile, both manufactures are better off under EPC and would obtain strictly higher profits when the service cost rate is high. Nevertheless, EPC may not result in a better environmental performance in that the total energy consumption of both firms may be higher under EPC, which happens when the market size is small and the ESCO has not much energy‐efficiency advantage over its client. We also study four extensions: When the energy saving service and production decisions are made separately, we find the more energy‐efficient firm is worse off when implementing EPC; when the energy‐saving sharing ratio is determined by the ESCO instead of the client, the ESCO extracts all the surplus derived from the EPC project while the total energy consumption of both firms is always reduced; when the energy‐saving sharing ratio is determined via Nash bargaining, the main insights from the base model remain valid; finally, when the client sets the target of overall cost reduction, it extracts all the surplus derived from the EPC project.     

Entry Deterrence of Capacitated Competition Using Price and Non‐Price Strategies

We analyze the role of pricing and branding in an incumbent firm's decision when facing competition from an entrant firm with limited capacity. We do so by studying two price competition models (Stackelberg and Nash), where we consider the incumbent's entry‐deterrence pricing strategy based on a potential entrant's capacity size. In an extension, we also study a branding model, where the incumbent firm, in addition to pricing, can also invest in influencing market preference for its product. With these models, we study conditions under which the incumbent firm may block the entrant (i.e., prevent entry without any market actions), deter the entrant (i.e., stop entry with suitable market actions) or accommodate the entrant (i.e., allow entry and compete), and how the entrant will allocate its limited capacity across its own and the new market, if entry occurs. We also study the timing difference between the two different dynamics of the price competition models and find that the incumbent's first‐mover advantage benefits both the incumbent and the entrant. Interestingly, the entrant firm's profits are not monotonically increasing in its capacity even when it is costless to build capacity. In the branding model, we show that in some cases, the incumbent may even increase its price and successfully deter entry by investing in consumer's preference for its product. Finally, we incorporate demand uncertainty into our model and show that the incumbent benefits from demand uncertainty while the entrant may be worse off depending on the magnitude of demand uncertainty and its capacity.     

P2P Marketplaces and Retailing in the Presence of Consumers' Valuation Uncertainty

Can peer‐to‐peer (P2P) marketplaces benefit traditional supply chains when consumers may experience valuation risk? P2P marketplaces can mitigate consumers' risk by allowing them to trade mismatched goods; yet, they also impose a threat to retailers and their suppliers as they compete over consumers. Further, do profit‐maximizing marketplaces always extract the entire consumer surplus from the online trades? Our two‐period model highlights the effects introduced by P2P marketplaces while accounting for the platform's pricing decisions. We prove that with low product unit cost, the P2P marketplace sets its transaction fee to the market clearing price, thereby extracting all of the seller surplus. In this range of product unit cost, the supply chain partners are worse off due to the emergence of a P2P marketplace. However, when the unit cost is high, the platform sets its transaction fee to be less than the market clearing price, intentionally leaving money on the table, as a mechanism to stimulate first period demand for new goods in expectation for some of them to be traded later, in the second period, via the marketplace. It is not until the surplus left with the sellers is sufficiently high that the supply chain partners manage to extract some of this surplus, ultimately making them better off due to a P2P marketplace. We further analyze the impact of a P2P marketplace on consumer surplus and social welfare. In addition, we consider model variants accounting for a frictionless platform and consumer strategic waiting.     

Product Design Awards and The Market Value of The Firm

Product design has increasingly been recognized as an important source of competitive advantage. This study empirically estimates the impact of effective design on the market value of the firm. We use a firm's receipt of a product design award as a proxy for its design effectiveness. Based on data from 264 announcements of design awards given to commercialized products between 1998 and 2011, we find that award announcements are associated with statistically significant positive stock market reactions. Depending on the benchmark model used to estimate the stock market reaction, the market reaction over a two‐day period (the day of announcement and the preceding day) ranges from 0.95% to 1.02%. The market reaction is more positive for smaller firms and for firms whose award winning products are consumer goods. However, a firm's growth potential, industry competitiveness, and whether a firm is a first time or repeated award winner do not significantly affect the market reaction.     

Production and Sales Planning in Capacitated New Product Introductions

How should a firm with limited capacity introduce a new product? Should it introduce the product as soon as possible or delay introduction to build up inventory? How do the product and market characteristics affect the firm's decisions? To answer such questions, we analyze new product introductions under capacity restrictions using a two‐period model with diffusion‐type demand. Combining marketing and operations management decisions in a stylized model, we optimize the production and sales plans of the firm for a single product. We identify four different introduction policies and show that when the holding cost is low and the capacity is low to moderate, a (partial) build‐up policy is indeed optimal if consumers are sensitive to delay. Under such a policy, the firm (partially) delays the introduction of its product and incurs short‐term backlog costs to manage its future demand and total costs more effectively. However, as either the holding cost or the capacity increases, or consumer sensitivity to delay decreases, the build‐up policy starts to lose its appeal, and instead, the firm prefers an immediate product introduction. We extend our analysis by studying the optimal capacity decision of the firm and show that capacity shortages may be intentional.     

Organizational Integration for Product Development: The Effects on Glitches,On‐Time Execution of Engineering Change Orders,and Market Success

Deviations from requirements during the product development process can be considered as glitches. Fixing glitches, or problems, during the product development process consumes valuable resources, which may adversely affect product development time and hamper the firm's goal to pursue a first‐mover advantage. It is posited that an integrated organizational response can diminish incidences of glitches and improve the ability of the firm to respond to engineering changes, subsequently leading to improved market success. This organizational response frequently includes heavyweight product development managers who are seen as essential catalysts for internal integration. Though internal integration is vital, it is equally important to integrate with customers and suppliers alike because such network partners can provide access to information, knowledge, and unique and complementary resources that are otherwise unavailable to the firm. Findings, which are based on a sample of 191 product development projects in the automotive industry, suggest that some integration routines have a positive impact on product development outcomes and market success, while other routines can in fact hamper the collective effort.     

信息不对称下供应链成员的决策顺序研究

市场需求通常是不确定的，而供应链成员之间关于需求信息会存在不对称性。本文采用"信号"博弈（Signaling）的方法，探讨信息不对称结构下供应链成员的最优决策顺序。考虑由两个成员组成的供应链，各成员需要决定自己的边际收益，后决策方可以观测到先决策方的决策，并推测（Infer）市场需求信息。研究表明：1）当信息精确度较低时，拥有信息的一方偏向于先决策，而当信息精确度较高时，其会偏向于后决策；2）无论信息精确度的高低，不拥有信息的一方总是偏向于先决策；3）对于整个供应链而言，当信息精确度较低时，拥有信息的一方先决策较优，而当信息精确度较高时，拥有信息的一方后决策较优。一些结论与直观相悖，取决于"信号"成本（Signaling cost）、先行者优势（First-mover advantage）以及后行者对先行者的反应之间的权衡。     

产品责任、企业社会责任偏好与供应链中的质量-数量协调

在产品质量和产品数量（订货量）内生化的情形下，同时实现其质量和数量的协调将成为供应链管理的一个重要问题。进一步，在产品低质量对消费者造成伤害的情形下，制造商将面临着产品责任（表征制造商对消费者产品伤害的补偿），从而导致"产品责任如何影响供应链中的质量-数量协调"这一问题。最后，如果核心企业具有对消费者的企业社会责任（CSR）偏好，则这种CSR偏好又如何影响供应链中的质量-数量协调？针对这三个问题，首先，利用批发价合同构建了一个由上游制造商和下游零售商组成的两级供应链运作博弈模型；其次考察了制造商产品责任、CSR偏好程度和质量改进效率对其产品质量决策、批发价合同和相应的供应链节点企业利润的影响；最后，研究了供应链质量-数量协调问题。结果表明：（1）产品责任不影响产品质量、订货量、供应链节点企业经济利润和消费者剩余，但制造商批发价随产品责任的增加而增加；（2）随着CSR偏好程度的增加，产品质量、订货量、零售商经济利润、供应链系统经济利润和消费者剩余随之增加，而制造商经济利润随之减小；（3）质量改进效率的提高，有利于产品质量、订货量、零售商经济利润、供应链系统经济利润和消费者剩余的增加；（4）一个由数量折扣契约和质量改进成本分担契约共同构成的协调机制，可以有效的实现供应链系统的协调，其中，产品责任将促使数量折扣契约中产品批发价的增加和质量改进成本分担比例的减小，而CSR偏好程度的增加将促使数量折扣契约中产品批发价的减小，但不影响质量改进成本分担比例。     

Bertrand寡占市场企业交叉持股时定价策略和最优持股的研究

本文首先研究了公司间交叉持股的利益分配问题,导出了n个公司间交叉持股的利润分配公式。以此为基础,导出了Bertrand寡占市场公司间交叉持股时价格反应函数和均衡价格的一般表达式。通过构建一个两阶段动态博弈,着重研究了Bertrand双寡头市场两厂商交叉持股时的均衡策略问题,给出了厂商间均衡定价与最优持股,分析了均衡策略对厂商经济行为及市场绩效的影响。研究结果表明,可替代品市场的两厂商间交叉持股具有反竞争、促合作的效应。较之非交叉持股,均衡交叉持股提高了均衡价格水平,降低了两厂商各自的产量水平,使各自在较低产量水平下获得较高的利润,从而实现了两厂商间双赢的局面。然而,交叉持股将导致消费者剩余减少,社会经济福利降低。     

Seeking Closure: Competition in Complementary Markets*

When offering a product that has a complementary product in a different market, a firm must consider the interdependence between the complementary products as well as the competition within markets. If the firm participates in both markets, the balancing act becomes even more challenging. This article provides insights about strategies in this latter setting: when should the firm seek to keep its products closed to competing complementary products, and when would the firm be better off by accepting a common standard? To address these questions, we employ standard game theoretic analysis to a simple spatial model that captures aspects of both intermarket externalities and intramarket competition. We find that if a firm participates in both markets and chooses a closed standard, it achieves lower profits compared to an open standard, but gains greater market share. Surprisingly, we find that customers are better off when standards are kept closed.     

Collaborate or Compete: Examining Manufacturers' Replacement Strategies for a Substance of Concern

The recent proliferation of media reports on substances of concern has increased consumer fears, sparked scientific debate, and highlighted the need for stronger chemical regulations. When a substance of concern is identified (e.g., bisphenol‐A (BPA) in reusable water bottles), manufacturers face difficult trade‐offs in deciding whether to proactively replace the substance in their products or to defer replacement and wait to see if regulation occurs. In this study, we examine when opportunities exist for manufacturers to avoid competitively replacing (i.e., making their replacement decisions on their own), and instead, collaborate to replace a substance of concern. We model a vertically differentiated market consisting of a high‐end manufacturer and a low‐end manufacturer, both of whom sell a product that contains a substance of concern. Our analysis investigates how market dynamics (competition and consumer preferences) and external factors (replacement costs and regulatory uncertainty) influence manufacturers' collaboration, replacement, and pricing decisions. We find that when the manufacturers do not collaborate, the high‐end manufacturer can use the presence of a substance of concern to dominate the market by capturing more demand and often charging a higher price for his product than the low‐end manufacturer. Collaboration is possible when there is either a shared fixed cost savings for both manufacturers or an opportunity for the low‐end manufacturer to benefit his competitive position by motivating the high‐end manufacturer to collaborate. From a consumer perspective, although collaboration reduces consumer exposure to the substance of concern, it can decrease consumer surplus when the replacement substance is very expensive.     

寡头竞争模型下的非对称R&D分析

本文考虑的是Stackelberg寡头竞争模型下的产品市场合作对研发投入,利润,消费者剩余和福利的影响.我们发现在非时称R&D情况下,产品市场合作的产业利润总是高于产品市场竞争的情形.产品市场合作对R&D投入、消费者剩余以及福利的影响取决于知识溢出程度和R&D效率参数的大小.假如知识溢出程度足够大,R&D的效率参数足够小,产品市场的合作对生产商,消费者和社会来说比在非合作状态下更有利.     

Optimal Pricing of Two Successive‐Generation Products with Trade‐in Options under Uncertainty

To entice consumers to purchase both current and next generation products, many manufacturers and retailers offer trade‐in programs that allow buyers of the first generation product to trade‐in the product and purchase the new generation product at a lower price. By considering the interactions between “forward‐looking” consumers and a firm when a trade‐in program is offered, we analyze a two‐period dynamic game to determine the optimal prices of two successive‐generation products in equilibrium, and examine the conditions under which trade‐in programs are beneficial to the firm. Our model incorporates market heterogeneity (valuation of the first generation product varies among the consumer population), product uncertainty (the incremental value of the new product is uncertain before its introduction), and consumers' forward‐looking behavior (consumers take future product valuation and prices into consideration when making purchasing decisions). With the trade‐in option, we show that consumers are willing to pay a price that is higher than their valuations of the current product. Furthermore, trade‐in programs are more beneficial to the firm when: (i) the durability of the current product is high; (ii) the market heterogeneity is low; or (iii) the uncertainty level (or the expected incremental value) of the new product is high. Finally, when the incremental value of the new product is more uncertain, consumers are more willing to purchase the current product because of the “option” value of the trade‐in programs and thus trade‐in programs can be more beneficial to the firm in this case.     

AON众筹模式下产品线设计与信息发布策略研究

针对众筹模式下如何激励消费者投资以实现众筹项目成功的问题，从信息发布和产品线设计的角度，通过两阶段博弈的理论模型，考虑了AON（all-or-nothing）模式下众筹方采用顺序发布和同时发布两种不同信息发布方式时，产品线的菜单价格和质量设计。研究表明：在顺序发布策略下产品线的质量差异化程度依赖于消费者异质性程度和高价值消费者的比例，和传统模式下产品质量相比，当消费者异质性很大同时高保留价格消费者的比例很高时，产品线质量差异和传统模式相同；当消费者异质性较小并且高保留价格消费者的比例较低时，产品线质量差异更小；当消费者异质性较小而高保留价格消费者比例较高时，产品线质量差异更大；而在同时发布策略下，产品线质量的差异化程度和传统模式相同，但价格差异与传统模式相比更大；相对于顺序发布策略而言，同时发布策略下由于极大程度的降低了消费者可能搭便车倾向，企业可以获取更多收益。这些结果将有助于采用AON众筹模式的企业在不同信息框架下做出最优的产品线质量设计和定价决策。     

财政补贴VS.政府自营:“兜底”动机下政府干预基本公共品提供的策略选择

现代政府的一个基本功能就是保障全民的基本公共品（公共服务）,因此与一般商品相比,当企业无法满足部分居民的基本公共品需求时,政府具有全面覆盖居民需求的“兜底”动机。本文使用内生化的市场覆盖因素刻画政府的“兜底”动机,并基于市场垂直竞争框架建立了基准模型和政府干预模型两个模型以讨论政府干预的最优策略选择问题。研究显示：首先,消费者支付意愿和厂商生产意愿两个因素决定了政府干预与否的边界条件;其次,这两个因素还分别确定了补贴和自营两种干预方式的可行范围,政府应选择与之匹配的干预方式,否则将因干预方式的错配而致使干预无效;最后,出于消费者剩余最大化考虑,政府应在对应的匹配范围内选择补贴高质量厂商或自营高质量的干预策略。基于此,本文认为在现实中,政府应当重点分析未覆盖市场的产生原因,当未覆盖市场由厂商生产意愿过低所致时选择补贴高质量厂商策略,当部分未覆盖消费者具有迫切需求时选择自营高质量策略。     

Advance Selling by a Newsvendor Retailer

Retailers often face a newsvendor problem. Advance selling helps retailers to reduce demand uncertainty. Consumers, however, may prefer not to purchase in advance unless given a discount because they are uncertain about their valuation for the product in advance. It is then unclear whether or when advance selling to pass some uncertainty risk to consumers is optimal for the retailer. This paper examines the advance selling price and inventory decisions in a two‐period setting, where the first period is the advance selling period and the second is the selling (and consumption) period. We find that an advance selling strategy is not always optimal, but is contingent on parameters of the market (e.g., market potential and uncertainty) and the consumers (e.g., valuation, risk aversion, and heterogeneity). For example, we find that retailers should sell in advance if the consumers' expected valuation exceeds consumers' expected surplus when not buying early by a certain threshold. This threshold increases with the degree of risk aversion but decreases with stock out risk. If the degree of risk aversion varies across consumers, then a retailer should sell in advance if the probability for a consumer to spot buy is less than a critical fractile.