Essays On Pricing In Strategic Settings
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Essays On Pricing In Strategic Settings
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Author : Daniel Quint
language : en
Publisher:
Release Date : 2007
Essays On Pricing In Strategic Settings written by Daniel Quint and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Essays On Economics And Marketing
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Author : Yu-Hung Chen (Economics scholar)
language : en
Publisher:
Release Date : 2016
Essays On Economics And Marketing written by Yu-Hung Chen (Economics scholar) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Electronic dissertations categories.
Chapter 1: Dynamic Pricing and Price Commitment of New Experience Goods An important problem for a firm selling new experience goods is how to credibly signal its high quality. This chapter develops a dynamic model to examine how a firm with a non-durable experience good can signal its quality with dynamic spot-pricing or future-price commitment. I find that when consumers do not believe the firms price commitment to be credible, the high-quality firms most profitable equilibrium outcome is to pool in the first period and separate in the second period. In contrast, when price commitment is credible, the high-quality firm may signal its quality with either a lower-than-first-best first-period price or a higher-than-first-best second-period price. Credible price commitment will benefit the high-quality firm by lowering its signaling cost and hurt the low-quality firm, but can either increase or decrease consumer surplus and social welfare depending on the quality difference between the two types of firms. Chapter 2: Dynamic Pricing of Experience Goods in Markets with Demand Uncertainty This chapter studies a firms optimal dynamic pricing strategies for its experience goods in markets, where the distribution of consumers valuations is ex ante unknown. I find several interesting findings. First, a high-quality firm can signal its quality with either a skimming-pricing strategy or a penetration-pricing strategy in the early period. Second, though a firm with higher quality benefits more from learning market demand, in equilibrium the low-quality firm not the high-quality firm will learn demand if consumers have very different willingness to pay. Third, although consumers have higher willingness to pay for the high-quality product, in the first period the high-quality firm may actually charge a lower price than the low-quality firm. Lastly, the firm may earn higher profits when its initial pricing decision is made under demand uncertainty than under no demand uncertainty. The underlying reason is that the presence of demand uncertainty can sufficiently lower the high-quality firms signaling cost, allowing it to make higher profits by setting future prices based on its high quality. Chapter 3: Who Benefits from Big Data Collected by In-Vehicle Data Recorders? The car insurance market is plagued with problems of adverse selection and moral hazard. In-vehicle data recorders can collect massive amount of information (or "big data") about the drivers risk factors and driving behaviors. This monitoring technology allows the firm to set its insurance premium based on better estimates of the drivers risk factors, alleviating the adverse selection problem. In addition, the firm can charge a premium based on the customers recorded driving behaviors; this helps to reduce the drivers moral hazard. I provide an analytical framework to examine the impact of such monitoring technology on the insurance firms and the consumers. My analysis shows that in a duopoly one firms adoption of the monitoring technology may benefit both firms because of the less severe competition in the market. Finally, I show that if one firm has adopted the monitoring technology, its competitor may have no incentive to adopt that technology even if it is free.
Two Essays On Strategic Pricing
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Author : Hong Yuan
language : en
Publisher:
Release Date : 2005
Two Essays On Strategic Pricing written by Hong Yuan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
Essays In Market Design
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Author : Pallavi Pal
language : en
Publisher:
Release Date : 2020
Essays In Market Design written by Pallavi Pal and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with Electronic dissertations categories.
Chapter 1: Quality Differentiation and Optimal Pricing Strategy in Multi-sided MarketsThis paper analyzes the generalized quality differentiation model in multi-sided markets with positive externalities, which leads to new insights into the optimal pricing structure of the firm. We find that quality differentiation for users on one side leads to a decrease in the price charged to users on the other side, thereby affecting the pricing structure of multi-sided firms. In addition, quality differentiation affects the strategic relationships among the choice variables for the platform, so that the platform strategically uses quality differentiation to raise its profits.Chapter 2: Dynamic Game with Multidimensional Type: The Case of Carbon-Credit MarketA significant problem with the carbon credit market that has become apparent in recent years is that the market price has been far more volatile than originally envisioned. The underlying problem is the ill-understood pricing anomalies in a repeated period dynamic setting. In this paper, we drive the equilibrium price path in a dynamic setting and suggests ways to overcome price instability. The model setup allows the firms to differ in terms of their value for the carbon credit as well as the urgency of obtaining it. For example, a firm with an early deadline for obtaining the carbon credits will have a higher demand urgency. We find that the equilibrium price is affected by future demand and supply expectations. The findings show that the cap or the supply limit for each period can be used to decrease price instability. Currently, the government or the carbon credit seller decides a per period limit on the supply, which decreases over time. However, this paper suggests that to curb price fluctuation the per period supply should be a function of expected future demand. We show that correlating supply rate with expected future demand leads to a more stable price.Chapter 3: Revenue-Maximizing Number of Ads per Page in the Presence of Market ExternalitiesFirms use advertising as a medium to gain a competitive advantage, which is negatively affected if the ad appears alongside their rival's ad---a form of externality. The multiple ad display setting on search engines, such as Google and Yahoo!, introduces such externalities in the market. In this paper, I estimate a structural model based on a novel data set of Yahoo! ads to (i) quantify the effect of externality on an advertiser's willingness to pay and (ii) simulate the revenue-maximizing number of ads for a search engine. First, I find that externality depends on the quality and quantity of competing ads. For example, an advertiser's willingness to pay decreases by 18.5 percent due to the addition of a second high-quality ad, but only by 0.15 percent due to the addition of a seventh low-quality ad. Second, the counterfactual results suggest that the revenue-maximizing number of ads per page differs across the ad product category, with the average being five ads per page, and implementing the suggested number of ads would lead to a 4.5 percent increase in revenue, on average. These results provide evidence in support of recent changes in the online advertising market; for example, Microsoft introduced a service called RAIS that provides advertisers with an option of an exclusive ad display.
Essays On Market Entry And Pricing Strategy
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Author : David Blaine Ridley
language : en
Publisher:
Release Date : 2001
Essays On Market Entry And Pricing Strategy written by David Blaine Ridley and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Consumer behavior categories.
Three Essays On Pricing Strategies
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Author : Fan Liu (Ph. D.)
language : en
Publisher:
Release Date : 2017
Three Essays On Pricing Strategies written by Fan Liu (Ph. D.) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
Pricing is one of the most vital topic within the theory of Microeconomics. A firm can use a variety of pricing strategies to maximize its profit, gain market share, enter a new market or prevent potential entrants. This dissertation contains three essays exploring the equilibrium effect of various pricing strategies. The first chapter, co-authored with David S. Sibley and Wei Zhao, examines the effects of two types of vertical restrictions that are found in the cigarette and soft drink industries. In one case, a manufacturer gives discounts to the retailer in return for a commitment that the manufacturers product be priced no higher than a specified competing product. We refer to this as a vertical MFN (VMFN). The second is an agreement where the retailer commits to price in such a way that its margin on the product is no higher than the equivalent margin on a specified competing product. We refer to this as a vertical margin constraint (VMC). We show that the VMFN results in equilibrium prices that are higher than in a benchmark case without the constraint. In contrast, the VMC constraint leads to uniformly lower prices. The distributional effects are different, too. The VMFN tends to raise manufacturer profits, if different manufacturers produce very similar products. The retailer is worse off. The opposite effects arise in the VMC case. The second chapter analyzes firms giving switching discounts to consumers who purchased from their rivals rather than own past customers. By analyzing a two-period duopoly model with horizontal differentiation, we find that when the intrinsic value of the product is not high enough to make sure that the consumers will buy at least one of the product, the dynamic price path featured in the previous literature involving a raised second period price for customers with relatively high valuation will be reversed. Moreover, offering switching discounts results in a profit lower than the benchmark case, where such a pricing strategy is unavailable. The third chapter discusses how bundled discounts affect firm's decision of extending the product line by versioning the product through horizontal differentiation or vertical quality degrading. We propose a framework showing that inter-firm mixed bundling schemes may incentivize the introduction of a differentiated product, while in the absence of bundling it may not be profitable to do so. However, the consumer's surplus gain as a result of intensified competition and increased variety of goods from versioning will be dominated by the negative welfare impacts of bundling.
Essays On Pricing Strategy And Market Effects Of New Product Introduction
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Author : Ying Lin
language : en
Publisher:
Release Date : 2019
Essays On Pricing Strategy And Market Effects Of New Product Introduction written by Ying Lin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
This dissertation consists of two essays that analyze economic issues that fall within the sub-field of economics known as Industrial Organization. The essays focus on commercial aviation and coffee industries, respectively. The two essays maintain tight connections between economic theory and empirical analysis, and examine the observed economic phenomena in their respective markets in the past few years using econometric methods that are popular in Industrial Organization. The first essay investigates the U.S. domestic airlines' pricing strategies in response to the significant worldwide decline in crude oil price beginning in mid-2014 through to 2015. Specifically, this essay examines the market mechanisms through which crude oil price may influence airfare, which facilitates identifying the possible market and airline-specific characteristics that may influence the extent to which crude oil price changes affect airfare. The essay first uses a simple theoretical model of air travel demand and Nash equilibrium price-setting behavior of airlines to derive clear theoretical predictions that guide proper specification of reduced-form regression models and help with interpreting empirical results. The empirical results reveal that there is a positive pass-through from changes in crude oil price to airfare, but the magnitude of the pass-through depends on several origin-destination market and airline-specific characteristics. In particular, the magnitude of the pass-through tends to be greater in more competitive origin-destination markets, smaller in longer distance markets, and smaller among airlines that purchase fuel using hedging contracts. The second essay analyzes the market effects of the introduction of single-cup coffee brew technology on the U.S. brew-at-home coffee market, particularly on the traditional auto-drip brew coffee segment. The introduction of single-cup coffee brew technology in the late 2000s has not only changed the way many brew-at-home coffee drinkers brew and consume coffee in daily life, i.e. a change from brewing one "pot" at a time to making one cup at a time, but also altered the overall landscape of the brew-at-home coffee market in the U.S. This paper analyses the economic impacts in the U.S. brew-at-home coffee market associated with the introduction and growing presence of single-cup coffee brew technology. We find that a typical coffee drinker is willing to pay up to 2.52 cents extra per fluid ounce to consume freshly brewed coffee from single-cup brewing machines instead of using the traditional auto-drip brewing method, and this marginal willingness to pay gap increases with consumers' income level. Second, we find that both the demand and profitability of traditional auto-drip brew coffee products are substantially lower owing to the growing consumer valuation of single-cup brew technology. Last, our analysis reveals that consumers enjoy substantially higher welfare owing to the introduction and growing popularity of single-cup brew coffee products.
Essays On Retailer Pricing
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Author : Anil Kaul
language : en
Publisher:
Release Date : 1997
Essays On Retailer Pricing written by Anil Kaul and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Pricing categories.
Essays On Pricing Strategies Of A Monopolist Firm
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Author : Sreya Kolay
language : en
Publisher:
Release Date : 2006
Essays On Pricing Strategies Of A Monopolist Firm written by Sreya Kolay and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Monopolies categories.
Setting Profitable Prices
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Author : Marlene Jensen
language : en
Publisher: John Wiley & Sons
Release Date : 2013-01-29
Setting Profitable Prices written by Marlene Jensen and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-01-29 with Business & Economics categories.
Time-tested strategies for making the best possible pricing decisions and gaining an unbeatable competitive advantage Pricing is one of the most important—and difficult—marketing problems companies face when launching new products. Unfortunately, the research that goes into making optimal pricing decisions is a very time-consuming process—unless, that is, you can afford to pay a consultant or outside agency to do it for you. But if you're like most small- to medium-sized business owners and managers, time and money are two things you absolutely don't have to spare. Problem solved: Written by a nationally recognized pricing expert, this book arms you with proven strategies for guaranteeing that you'll never again leave money on the table when determining prices. And you'll spend the least possible time setting your more profitable prices. Packed with valuable worksheets and other valuable tools to help guide your research and your pricing decision-making A goldmine of expert tips for pricing in any specialty market, it offers a highly effective way to market your company's product more effectively and profitably Shows you how to avoid making your competitors' pricing mistakes and gain a powerful competitive edge in the process The author uses examples drawn from her years of consulting work with companies large and small, including Food Network, American Express Publishing, and Playboy