Although electronic commerce is regarded as a revolution that has transformed the structure of business and the mechanisms of economic systems, research on price competition and strategic behaviors in electronic commerce has been conducted through empirical approaches, yielding conflicting results. Considering the development of technologies supporting electronic commerce, there have been few a...

There are two major competing procedures for evaluating risky projects where managerial flexibility plays an important role: one is decision analytic, based on stochastic dynamic programming, and the other is option pricing theory (or contingent claims analysis), based on the no-arbitrage theory of financial markets. In this paper, we show how these two approaches can be profitably integrated t...

Energy projects with extended life cycles and initial investments can be non-profitable under discount cash flow methods. Therefore, real options analysis has become relevant as a pricing technique for these types of projects, with private risks and high investment levels. Following this question, this study analyses different real options approaches to select the most acceptable for investing ...

A number of Monte Carlo simulation-based approaches have been proposed within the past decade to address the problem of pricing American-style derivatives. The purpose of this paper is to empirically test some of these algorithms on a common set of problems in order to be able to assess the strengths and weaknesses of each approach as a function of the problem characteristics. In addition, we i...

This paper examines the behaviour of firms over time using different economic models as a basis for setting price. A simulation model was created in order to examine the behaviour of the economic models over time. The paper examines the behaviour of a firm using two standard neoclassical economic models: a model built on the principle of marginalism, ie. the firm produces at the point where mar...

The practice of target pricing has been a key factor in the success of Japanese manufacturers. In the more commonly-known demand-side approach, the target price for the supplier equals the manufacturer’s market price less a percent margin for the manufacturer but no cost-improvement expenses are shared. In the supply-side approach, cost-improvement expenses are shared and the target price equal...

Using tools from operations research, airlines have, for many years, taken a strategic approach to pricing the seats available on a particular flight based on demand forecasts and information. The result of this approach is that the same seat on the same flight is often offered at different fares at different times. Setting of these prices using yield-management approaches is a major activity f...

to cope with the urban congestion problem resulted from rapid urbanization some cities are successfully using electronic road pricing policy as a demand management measure. in 1982, hong kong governmenttook initiative to experiment electronic road pricing in hong kong. though, the project outcome reveals that electronic road pricing could bring tremendous economic, social and environmental bene...

We analyze the volatility surface vs. moneyness and time to expiration implied by MIBO options written on the MIB30, the most important Italian stock index. We specify and fit a number of models of the implied volatility surface and find that it has a rich and interesting structure that strongly departs from a constant volatility, Black-Scholes benchmark. This result is robust to alternative ec...