We study collusive pricing in duopoly with uncertain demand and exogenous capacity constraints. In this setting, collusion using only symmetric pricing can limit collusive pro…ts. We …nd that using asymmetric pricing in some demand states permits higher sustainable collusive pro…ts over the entire range of demand states. Consequently, we show joint pro…t maximizing collusion can include both sy...

Dynamic pricing is the dynamic adjustment of prices to consumers depending upon the value these customers attribute to a product or service. Today’s digital economy is ready for dynamic pricing; however recent research has shown that the prices will have to be adjusted in fairly sophisticated ways, based on sound mathematical models, to derive the benefits of dynamic pricing. This article attem...

In this paper we investigate incentive aspects of a general price-setting equilibrium principle in production economies with increasing returns or more general types of non-convexities. We do so by introducing the notion of generalized mechanism. We allow preferences and individual endowments to be unknown to the planner. We present a simple generalized mechanism whose social equilibrium alloca...

Reference pricing intends to reduce pharmaceutical expenditures by increasing demand elasticity and stimulating generic competition. We develop a novel model where a brand-name producer competes in prices with several generics producers in a market with brand-biased and brand-neutral consumers. Comparing with coinsurance, we show that reference pricing, contrary to policy makers' intentions, di...

*Assistant Professor and Extension Economist–Management, and Professor and Extension Economist–Livestock and Food Marketing, The Texas A&M System; and Professor and Extension Economist, Kansas State University. Grid prices, or value-based marketing, refers to pricing cattle on an individual animal basis. Prices differ according to the underlying value of the beef and by-products produced from e...

Keywords: Capital asset pricing model (Capm) Capital asset pricing theory Finance theory Hedonic pricing Portfolio theory Residential rental real estate investment (RRREI) Security market line Systematic/unsystematic risk

Today, many wireless device providers choose to sell devices bundled with complementary mobile social services, which exhibit strong positive network externality. Taking a reverse engineering approach, this paper aims to quantify the benefits of selling devices and complementary services under the following three strategies: separate pricing, bundled pricing, and hybrid pricing (both the separa...

Delivered pricing by a spatial monopoly amounts to third degree price discrimination. Well known results in spatial economics show that the monopolist location choice is efficient under delivered pricing and generally inefficient under mill pricing. By contrast, the present paper shows that if the monopolist sells a durable good, the location is also inefficient under delivered pricing.  2002 ...

In this paper we apply active learning algorithms for dynamic pricing in a prominent e-commerce website. Dynamic pricing involves changing the price of items on a regular basis, and uses the feedback from the pricing decisions to update prices of the items. Most popular approaches to dynamic pricing use a passive learning approach, where the algorithm uses historical data to learn various param...