Economists have long understood the importance of co-locating decision authority with the knowledge that is valuable to those decisions. Following this prescription, marketing scholars have developed strong theoretical arguments in favor of delegating pricing authority to the sales force. Empirical work, however, reveals a significant number of sales organizations yielding only minimal authorit...

W study a seller that starts with an initial inventory of goods, has a target horizon over which to sell the goods, and is subject to a set of financial milestone constraints on the revenues and sales that need to be achieved at different time points along the sales horizon. We characterize the revenue maximizing dynamic pricing policy for the seller and highlight the effect of revenue and sale...

To formulate a single-leg seat inventory control problem in an airline ticket sales system, the concept and techniques of revenue management are applied in this research. In this model, it is assumed the cabin capacity is stochastic and hence its exact size cannot be forecasted in advance, at the time of planning. There are two groups of early-reserving and late-purchasing customers demanding t...

We develop a model to derive an optimal price for bundle of two goods when buyers are risk averse and uncertain about the valuation each good. In theory, depends not only on probability positive good, but also correlation between valuations. analyze unique airlines dataset in which we directly observe prices both bundled (round trip ticket) unbundled items (two one-way tickets) identical itiner...

Three types of payments confront in business dealings viz. advance, cash and credit. A payment is ubiquitously practiced, while a credit scheme escalates sales advance technique implemented to avoid cancellation orders. These are recognized as advance-cash-credit (ACC) which conventional transactions. By implicating ACC the aim determine optimal pricing ordering policies. Inventory items observ...

A fundamental decision for any manufacturer is when to sell to a downstream retailer. A manufacturer can sell either early, i.e., well in advance of the selling season, or late, i.e., close to the selling season. This paper examines the impact of information asymmetry, retailer sales effort, and contract type on the manufacturer’s sale-timing decision. We find that if information is symmetric, ...

The recent Common Agricultural Policy (CAP) reform of the financial support mechanism for farms was introduced in 2005. According to this reform, the level of support that each farm receives is paid regardless of the current level of production. The decoupling of direct payments is expected to change production decisions, as farmers will change their mainly subsidy revenue maximization objectiv...

This paper examines how nominal uncertainty affects the choice firms face to serve a foreign market through exports or to produce abroad as a multinational. I develop a two-country, stochastic general equilibrium model in which firms make production and pricing decisions in advance, and I consider its implications for the relative attractiveness of exporting and multinational production. I find...