A firm facing price dependent stochastic demand aims to maximize its total expected profit over a planning horizon. In addition to the regular unit selling price, the firm can utilize quantity discounts to increase sales. We refer to this dual-pricing strategy as quantity-based price differentiation. At the beginning of each period, the firm needs to make three decisions: replenish the inventor...

The introduction of new products is an important method of competition in many markets. Towards understanding its impact on competition and welfare, this paper estimates the effects of Crystal Pepsi being introduced by PepsiCo. Estimating a structural model of the soft drink market, the competitive effect is decomposed into two parts: the effect on the prices of existing products from increased...

This paper studies duopolistic competition under dynamic price and production quantity postponement for two differentiable products, which share common components from one supplier at a certain degree of substitution. Both price and quantity postponement is benchmarked according to the Bertrand and Cournot Stackelberg game. In addition, system dynamic is applied to show the long term effect of ...

This paper describes the equilibrium price function generated by brokers in a market in which heterogeneous buyers meet heterogeneous sellers through a matching process with frictions. The equilibrium price function relates the price to alternative ratios of buyers and sellers offered by different brokers. The paper shows how brokers can enter a matching market and charge fees that yield a prof...

‎Financial market modeling and prediction is a difficult problem and drastic changes of the price causes nonlinear dynamic that makes the price prediction one of the most challenging tasks for economists‎. ‎Since markets always have been interesting for traders‎, ‎many traders with various beliefs are highly active in a market‎. ‎The competition among two agents of traders‎, ‎namely trend follo...

We consider how to jointly set the price and capacity in order to maximize the steady-state expected profit in a GI/GI/1 queue with a high rate of prospective customer arrivals. We show that the optimal price and service rate for the GI/GI/1 queue are such that the system operates in heavy traffic. Then, since it is not possible to provide analytic expressions for the exact optimal price and se...

We investigate the strategic incentives for partial vertical integration, namely, partial ownership agreements between manufacturers and retailers, when the retailers privately know their costs and engage in differentiated good price competition. The partial misalignment between the profit objectives within a partially integrated manufacturer-retailer hierarchy entails a higher retail price tha...

As online markets for the exchange of goods and services become more common, the study of markets composed at least in part of autonomous agents has taken on increasing importance. In contrast to traditional completeinformation economic scenarios, agents that are operating in an electronic marketplace often do so under considerable uncertainty. In order to reduce their uncertainty, these agents...

(2014) The case for Ofsmoke:the potential for price cap regulation of tobacco to raise £500 million per year in the UK. This version is made available in accordance with publisher policies. Please cite only the published version using the reference above. ABSTRACT Objective: A system of price-cap regulation has previously been suggested to address the market failure inherent to the tobacco indu...

In this paper, we present an inventory model for perishable items with freshness-dependent demand rate and partial backlogging. Because the customers prefer to purchasing fresh items for given price, the demand rate is assumed to be decreasing in the age of the items. The existence and uniqueness of the optimal solution of the profit per unit time are examined although the profit function is no...