n this paper we study retail price promotions and manufacturer trade deals in markets with multiproduct retailers. We find that in situations where retailers carry more than one competing brand, the promotions across brands can be positively or negatively correlated depending on the structure of the market: the relative sizes of the various market segments (in terms of loyalty to manufacturer, ...

In this paper, we examine the issue of order coordination between a supplier and multiple retailers in a decentralized multi-echelon inventory/distribution system where the supplier provides a product to multiple retailers who experience static demand and standard inventory costs. Specifically, we propose and analyze a new policy where a manufacturer, who outsources production to an OEM, offers...

Because transportation services provided by container lines to forwarders cannot be stored, they can be considered to be newsvendor-type products. This paper discusses a method used to optimize container lines’ freight tariffs in order to maximize their expected profit by considering changes in order quantities made by forwarders responding to the price schemes suggested by the container lines....

Empirical studies reveal a surprisingly wide variety of pricing strategies among retailers, even among Internet sellers of undifferentiated homogeneous goods, such as books and music CDs. Several empirical findings remain puzzling; for example, within the same market, some small retailers decide to discount deeply, whereas others forgo the price-sensitive switchers and price high. The authors p...

The spline-based models are widely used in practice to estimate the term structure of interest rates from a set of observed coupon-bond prices. The most popular method can be traced back to McCulloch (1971). Assuming that the price of a bond is equal to the present value of its future coupon payments and redemption, cash flows are regressed on a set of basis functions to estimate discount funct...

The availability of low-cost cigarettes undermines tobacco control’s most effective measure to reduce smoking prevalence: keeping cigarette prices high by raising tobacco taxes.1 The discount cigarette market share has grown considerably since 2003,2 with discount cigarettes selling for $10-$15 less per carton than premium brands. Contraband cigarettes – cigarettes sold illegally – are even che...

BACKGROUND Reducing fruit and vegetable (F&V) prices is a frequently considered policy to improve dietary habits in the context of health promotion. However, evidence on the effectiveness of this intervention is limited. OBJECTIVE The objective was to examine the effects of a 50% price discount on F&Vs or nutrition education or a combination of both on supermarket purchases. DESIGN A 6-mo r...

Upselling is offering an additional product to a customer who just made a purchase. Most catalogers and online sellers in addition to some traditional retailers use upselling. One of the reasons that firms use upselling is to clear inventories of slow-moving items. We investigate the pricing and discounting questions for such an item, which we call the promotional product. In our model, an arri...

Two studies are reported where people are asked to accept or not a price reduction on a target product. In the high (low) relative saving version, the regular price of the target product is low (high). In both versions, the absolute value of the price reduction is the same as well as the total of regular prices of planned purchases. As first reported by Tversky and Kahneman (1981), findings sho...