Reference pricing intends to reduce pharmaceutical expenditures by increasing demand elasticity and stimulating generic competition. We develop a novel model where a brand-name producer competes in prices with several generics producers in a market with brand-biased and brand-neutral consumers. Comparing with coinsurance, we show that reference pricing, contrary to policy makers' intentions, di...

The Differentiated Services framework (DiffServ) has been proposed to provide multiple Quality of Service (QoS) classes over IP networks. A network supporting multiple classes of service also requires a differentiated pricing structure. In this work, we propose a pricing algorithm in a DiffServ environment based on the cost of providing different levels of quality of service to different classe...

Abstract This paper presents a two-country DSGE model with state-dependent pricing as in Dotsey, King, and Wolman (1999) in which firms price-discriminate across countries by setting prices in local currency. In this model, a domestic monetary expansion has greater spillover effects to foreign prices and foreign economic activity than an otherwise identical model with time-dependent pricing. In...

We study the effects of different pricing strategies available to a production–inventory system with capacitated supply, which operates in a fluctuating demand environment. The demand depends on the environment and on the offered price. For such systems, three plausible pricing strategies are investigated: static pricing, for which only one price is used at all times, environment-dependent pric...

Uniform spatial pricing means that a firm delivers its product to any customer at a fixed price, independent of location. Economic theory explains the use of uniform pricing by the added profit generated by absorbing freight charges of distant customers. I extend this insight by demonstrating that when demand elasticity and transportation cost are positively enough correlated, uniform pricing g...

W e analyze a model that integrates demand shaping via dynamic pricing and risk mitigation via supply diversification. The firm under consideration replenishes a certain product from a set of capacitated suppliers for a pricedependent demand in each period. Under deterministic capacities, we derive a multilevel base stock list price policy and establish the optimality of cost-based supplier sel...