OEM product design in a price competition with remanufactured product

An original equipment manufacturer (OEM) produces new products and often faces a dilemma when determining the level of interchangeability in its product design. The interchangeability is considered as a degree to which the product can be disassembled without force, and thus an increasing degree of interchangeability would decrease the OEM's production cost, but it would also lower a remanufacturer's cost in cannibalizing used items. Decreasing the level of interchangeability to deter the remanufacturer, on the other hand, would simultaneously increase the production costs of the OEM. We thus formulate a two-period supply chain model consisting of two chain members, an OEM and a remanufacturer, to investigate the product design decision of the OEM and both chain members' competitive pricing strategies. We then characterize the equilibrium decisions and profits with regard to costs and consumers' preference for the remanufactured product. We also evaluate a strategic game in which the OEM chooses the degree of interchangeability, and the remanufacturer determines its collection strategy. We find that the product-design strategy is effective for the OEM in competing with the remanufacturer, but it is not necessarily harmful to the remanufacturer.     

An Empirical Analysis of Virtual Goods Permission Rights and Pricing Strategies

With the rapid development of the virtual world industry in the past few years, trading of virtual goods and services has grown significantly. Virtual goods creators can set different permissions to their creations, such as the length of usage, the ability to copy or modify a virtual good, or the ability to give the good to others. The permissions of virtual goods endow their creators with additional power to control the allocation and exchange of virtual goods in a virtual world. We examine how the unique virtual goods permission settings (copy, modify, and transfer) and other factors are associated with virtual goods prices. Using data from a Second Life marketplace, we find that permissions of virtual goods are not random, as creators strategically set the permissions for their virtual creations. Our results show that the copy and transfer permissions are significant factors associated with virtual goods prices. The impact of other factors on virtual goods prices is analyzed and managerial implications are discussed.     

Optimal ordering and pricing decisions for a target oriented newsvendor

This paper is the first to study pricing and target oriented decision making together in the newsvendor model. Specifically, this paper studies a newsvendor who decides on order quantity and selling price to maximize the probability of achieving both profit and revenue targets simultaneously. First, it is shown that the probability of a newsvendor achieving both targets depends critically on the relative magnitudes of the profit margin and the ratio between the profit target and the revenue target. Second, the closed-form expressions of the optimal order quantity, the optimal selling price, and the maximal profit and revenue probability are obtained. It is shown that if the product has greater price elasticity, the best strategy is always to price lower and order more.     

Pricing decisions in a multi-criteria setting for product recovery facilities

Unpredictability in the arrival time and quantity of discarded products at product recovery facilities (PRFs) and varying demand for recovered components contribute to the volatility in their inventory levels. Achieving profit under such capricious inventory levels and stringent environmental legislations remains a challenge to many PRFs. This paper presents a multi-criteria decision model to determine a pricing policy that can simultaneously address two issues: stabilize inventory fluctuations and boost profits. The model considers that PRFs passively accepts discarded products as well as acquires them proactively if necessary. Under a multi-criteria setting, the current work determines prices of reusable and recyclable components to maximize revenue and minimize product recovery costs. A genetic algorithm is employed to solve the multi-criteria decision making problem. Sensitivity analysis is performed to investigate the effect of sorting yield, disassembly yield, and reusable component yield on the profits, prices, inventory levels, and disposal quantities.     

农地流转农户协商定价机制的经济学分析

文章在农地使用权物权化流转的基础上,构建了一个农地流转供求模型,从经济学的视角分析了农地流转农户协商定价的市场机制。研究发现：（1）在既定的影响因素下,转入方的市场势力将会导致流转交易价格和交易量下降,进而影响农地流转效率。（2）在既定的农地流转影响因素不变时,不管转入方是处于完全竞争市场还是垄断市场,外生影响因素对流转交易均衡价格和交易量的影响方向都是一样的,最后为农地流转市场的相关政府管理部门提出了政策建议。     

Optimal Pricing Strategies for Capacity Leasing Based on Time and Volume Usage in Telecommunication Networks

In this study, we examined optimal pricing strategies for “pay‐per‐time,” “pay‐per‐volume,” and “pay‐per‐both‐time‐and‐volume” based leasing of data networks in a monopoly environment. Conventionally, network capacity distribution includes short‐/long‐term bandwidth and/or usage time leasing. When customers choose connection‐time–based pricing, their rational behavior is to fully utilize the bandwidth capacity within a fixed time period, which may cause the network to burst (or overload). Conversely, when customers choose volume‐based strategies their rational behavior is to send only the minimum bytes necessary (even for time‐fixed tasks for real time applications), causing the quality of the task to decrease, which in turn creates an opportunity cost for the provider. Choosing a pay‐per time and volume hybridized pricing scheme allows customers to take advantage of both pricing strategies while lessening the disadvantages of each, because consumers generally have both time‐ and size‐fixed tasks such as batch data transactions. One of the key contributions of this study is to show that pay‐per both time and volume pricing is a viable and often preferable alternative to the offerings based on only time or volume, and that judicious use of such a pricing policy is profitable to the network provider.     

论政府的理性与社会政策面向

当前,我国日渐成熟完善的市场与日益扩大的政府干预产生了“共生现象”,而市场与政府失灵的问题也成为社会转型背景下社会政策主体面向尤为关键的问题。本文认为市场和政府失灵的实质是资源性配置的问题,如果我们无视政府功能的限度,政府必然失灵,也必然不能真正消除政府失灵。我们目前不能也没有必要在政府和市场之间选择,更没有必要争议“纯福利”还是“准市场”的价值体现,我们必须重申“政府理性”,也必须尝试一种新的社会政策面向,实现政府与市场的有效功能组合。本文认为政府理性就是一种公民社会路径下的政府公共理性。面向的是社会的公共利益和据此做出的社会政策面向。就是说,政府除了面向商业部门购买服务而发挥市场的力量之外,需要所谓“视界向下的革命”,不断拓展社区面向和非政府组织面向,从而实施有效的资源动员与政策执行。     

The Contingent-Claims Approach to Investment Decisions*

This paper presents a contingent-claims approach to project valuation when capital expenditures are made sequentially over time. It focuses on an important facet of sequential investment projects that the firm can undertake—or pass up projects—as more information becomes available. The contingent-claims approach takes account of this important feature of firms' investment decision process, whereas the traditional capital budgeting procedure does not. Since the traditional method does not reflect the options nature of investment opportunities, it underestimates the value of sequential investment projects. As a result, a naive implementation of the traditional capital budgeting procedure could result in rejecting profitable projects. The extent of undervaluation associated with the traditional capital budgeting procedure is greater when the correlation between the random component of the future asset value and that of the required capital expenditure is smaller and/or when the growth rate of the required capital expenditure is higher.     

A Probabilistic Dealing Strategy

A probabilistic dealing strategy is proposed which allows all premium brands in an established market to earn nonnegative profits without cooperation. Following the strategy, brands take turns attracting deal-responsive customers. Relative to a reactive competitive strategy, the proposed strategy improves the positions of all premium brands. With use of the strategy, average deal sizes are positively related to a brand's market share, the proportion of quality conscious customers, the proportion of informed customers, the span of regular prices in a market, and the range of customers' acceptable prices.     

The Individually Responsible and Rational Decision Approach to Economic Lot Sizes for One Vendor and Many Purchasers

Banerjee's [2] joint economic lot size (JELS) model, along with related works by Monahan [12] and Lal and Staelin [10], represents one approach to minimizing the total inventory carrying and ordering costs of a vendor and his purchaser(s). Noting that JELS philosophy requires a coordinated system and that its practical implementation is problematic, we present an alternative approach to the same problem: the individually responsible and rational decision (IRRD) approach. The IRRD approach is consistent with a free enterprise system and easy to implement. In order to show that the IRRD approach is also more economical than the JELS approach, we first build a more refined JELS model for the case of one vendor and many identical purchasers. Drawing on earlier criticisms of specific JELS models, our refinement relaxes the lot-for-lot assumption commonly used by JELS scholars. To be comparable with earlier works, we retain the assumption of deterministic conditions and demonstrate the economic advantages of IRRD over JELS through a numerical example. An algebraic proof of IRRD's superiority over JELS is offered in the more general and realistic case of a vendor dealing with K nonidentical purchasers with reasonably predictable annual demand but uncertain order quantities and timings.