Dynamic Pricing to Minimize Maximum Regret

We consider a dynamic pricing problem that involves selling a given inventory of a single product over a short, two‐period selling season. There is insufficient time to replenish inventory during this season, hence sales are made entirely from inventory. The demand for the product is a stochastic, nonincreasing function of price. We assume interval uncertainty for demand, that is, knowledge of upper and lower bounds but not a probability distribution, with no correlation between the two periods. We minimize the maximum total regret over the two periods that results from the pricing decisions. We consider a dynamic model where the decision maker chooses the price for each period contingent on the remaining inventory at the beginning of the period, and a static model where the decision maker chooses the prices for both periods at the beginning of the first period. Both models can be solved by a polynomial time algorithm that solves systems of linear inequalities. Our computational study demonstrates that the prices generated by both our models are insensitive to errors in estimating the demand intervals. Our dynamic model outperforms our static model and two classical approaches that do not use demand probability distributions, when evaluated by maximum regret, average relative regret, variability, and risk measures. Further, our dynamic model generates a total expected revenue which closely approximates that of a maximum expected revenue approach which requires demand probability distributions.     

Optimal Bayesian Randomization

Randomization is a puzzle for Bayesians. The intuitive need for randomization is clear, but there is a standard result that Bayesians need not randomize. In this paper we propose a model in which randomization is a strictly optimal procedure. The most important aspect of our model is that there are several parties who make different decisions and observe different data. The result also sheds light on the ethical considerations involving randomization in a clinical trial.     

Postdivorce Father‐Adolescent Closeness

Research indicates that closeness of the father‐child bond following parental divorce is associated with better outcomes for children and adolescents. Unlike other investigations, this study takes a long‐term developmental approach to understanding stability and change in postdivorce father‐adolescent relationship closeness. Drawing on Add Health data (n = 483), we examine factors that explain (a) why some high‐quality father‐adolescent relationships remain the same after divorce whereas others decline, and (b) why some low‐quality relationships are stable following divorce whereas others improve. High mother‐offspring relationship quality and offspring feelings of well‐being prevented close father‐offspring relationships from deteriorating. Offspring’s childbearing and cohabitation following parental divorce increase closeness in father‐offspring relationships that were not close prior to divorce. Although a majority of offspring experienced a decline in closeness following divorce, results from this study show that some very close father‐offspring relationships are maintained and some poor relationships become closer.     

Effects of Remanufacturable Product Design on Market Segmentation and the Environment

Despite documented benefits of remanufacturing, many manufacturers have yet to embrace the idea of tapping into remanufactured‐goods markets. In this article, we explore this dichotomy and analyze the effect of remanufacturable product design on market segmentation and product and trade‐in prices by studying a two‐stage profit‐maximization problem in which a price‐setting manufacturer can choose whether or not to open a remanufactured‐goods market for its product. Our results suggest that it is optimal for a manufacturer to design a remanufacturable product when the value‐added from remanufacturing is relatively high but product durability is relatively low and innovation is nominal. In addition, we find that entering a remanufactured‐goods market in and of itself does not necessarily translate into environmental friendliness. On the one hand, the optimal trade‐in program could result in low return and/or remanufacturing rates. On the other hand, a low price for remanufactured products could attract higher demand and thereby potentially result in more damage to the environment. Meanwhile, external restrictions imposed on total greenhouse gas emissions draw criticism in their own right because they risk stifling growth or reducing overall consumer welfare. Given these trade‐offs, we therefore develop and compare several measures of environmental efficiency and conclude that emissions per revenue can serve as the best proxy for emissions as a metric for measuring overall environmental stewardship.     

Technical Note – Pricing Below Cost Under Exchange‐Rate Risk

Pricing below cost is often classified as “dumping” in international trade and as “predatory pricing” in local markets. It is legally prohibited from practice because of earlier findings that it leads to predatory behavior by either eliminating competition or stealing market share. This study shows that a stochastic exchange rate can create incentives for a profit‐minded monopoly firm to set price below marginal cost. Our result departs from earlier findings because the optimal pricing decision is based on a rational behavior that does not exhibit any malicious intent against the competition to be considered as violating anti‐trust laws. The finding is a robust result, because our analysis demonstrates that this behavior occurs under various settings such as when the firm (i) is risk‐averse, (ii) can postpone prices until after exchange rates are realized, (iii) is capable of manufacturing in multiple countries, and (iv) operates under demand uncertainty in addition to the random exchange rate.     

To live an ordinary life: resource needs and additional costs for people with a physical impairment

Disabled people face increased risks of living in poverty largely due to lower incomes and extra resource requirements compared to non-disabled people. This study incorporated the social model of disability with an economic approach to costing to estimate the additional costs required by people with a physical impairment to achieve an adequate standard of living in New Zealand. Budgets estimating the additional equipment, modifications, transport, support and time required to achieve an adequate standard of living were developed and validated through focus groups with community members. The findings suggest that reducing barriers involves substantial costs ranging from NZ$645–$2,348 per week.     

Myths and Misconceptions About University Student Volunteering: Development and Perpetuation

VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations - This paper examines myths and misconceptions about university student volunteering. Our study explored the experiences of...     

Sustainable landscaping programs in the United States and their potential to encourage conservation and support ecosystem services

Sustainable landscaping programs are voluntary initiatives that recommend a set of practices to improve the environmental quality of urban ecosystems by providing landscaping materials, guidelines, and educational resources. Our goal was to examine the recommendations and outcomes of these programs in the United States and their value for encouraging conservation practices in residential ecosystems. We conducted a comprehensive web search and identified 193 sustainable landscaping programs in the United States. Programs aim to increase native species richness, affordably manage stormwater runoff, and offer residents meaningful experiences with nature. Sustainable landscaping programs present many opportunities to engage people with local ecological knowledge and conservation practices, provide accessible spaces for environmental education, cultivate interdisciplinary research collaborations, and advance inclusion in conservation. However, assessments of their ecological value are rare, leaving many questions surrounding the benefits to biodiversity and water quality afforded by participation. Many programs also require investments in landscaping materials and certification fees that might limit participation by some households. Future work should examine how recommended practices influence urban biodiversity, identify and address barriers to participation, and generate social-ecological knowledge that can inform future programs.

     

Metropolitan influences on migration into poor and nonpoor neighborhoods

Data from the Panel Study of Income Dynamics and three decennial US censuses are used to examine the influence of metropolitan-area characteristics on black and white households’ propensity to move into poor versus nonpoor neighborhoods. We find that a nontrivial portion of the variance in the odds of moving to a poor rather to a nonpoor neighborhood exists between metropolitan areas. Net of established individual-level predictors of inter-neighborhood migration, black and white households are more likely to move to a poor or extremely poor tract rather than to a nonpoor tract in metropolitan areas containing many poor neighborhoods and a paucity of recently-built housing in nonpoor areas. Blacks are especially likely to move to a poor tract in metropolitan areas characterized by high levels of racial residential segregation and in which poor tracts have a sizeable concentration of blacks. White households are more likely to move to a poor than to a nonpoor tract in metropolitan areas that have comparatively few African Americans.