We show that loyalty discounts create an externality among buyers even without economies of scale or downstream competition, and whether or not buyers make any commitment. Each buyer who signs a loyalty discount contract softens competition and raises prices for all buyers. We prove that, provided the entrant’s cost advantage is not too large, with enough buyers, this externality implies that i...

With nearly a quarter of the population enrolled in Health Maintenance Organizations (HMOs) the Mineapolis/St. Paul metropolitan area provides a unique opportunity for studies dealing with the effects of prepaid health plans on the health care marketplace. This study explores one aspect of that market; discounts obtained by HMOs for hospital inpatient service. Using information gathered from st...

Daily-deal business model is a type of performance-based advertising wherein a publisher provides advertising space to a merchant who pays a proportion of revenue generated on the website to the publisher. We develop a two-period model to capture the strategic interaction between a publisher and a merchant where consumers are heterogeneous in their willingness to pay for quality and awareness a...

In this paper, we have proposed an improved genetic algorithm (GA) to solve constrained knapsack problem in fuzzy environment. Some of the objects among all the objects are associated with a discount. If at least a predetermined quantity of the object(s) (those are associated with a discount) is selected, then an amount (in $) is considered as discount. The aim of the model is to maximize the t...

Supplier selection and material procurement planning are the most important issues in supply chain management. This decision is complicated when the buyers face with discount price schemes. In real situation, each supplier may apply different methods such as different types of discount schedules and various types of payment in order to increase market share. In this situation, buyers try to sel...

We exploit a unique merchant-level dataset from the monopoly payment card network in China to study payment card pricing. We develop hypotheses associating payment card pricing to card penetration rate, profitability and fraud risk. Our empirical analysis uses the variations in those three factors across industries to show that the card network charges a higher merchant discount for industries ...