A series of studies demonstrate that consumers have fairness judgments about the retailer＇s price which will impact their shopping decisions. Thus, it is necessary for the retailer to take consumers＇ fairness concer...A series of studies demonstrate that consumers have fairness judgments about the retailer＇s price which will impact their shopping decisions. Thus, it is necessary for the retailer to take consumers＇ fairness concerns into account when setting his pricing policies. We assume that when the retailer＇s price is lower than a consumer＇s justice reference price, the consumer is likely to sense a positive price unfairness that will lead to increased consumer utility, and when the retailer＇s price is higher than a consumer＇s justice reference price, the consumer is likely to sense a negative price unfairness-that will have a negative effect on consumer utility. According to the information conditions of the consumers＇ justice reference price, the retailer should consider three situations： certain information, random information and partial information. In all situations, we show that the retailer has a unique optimal pricing strategy. Finally, through numerical examples, we find that our distribution-free policies perform almost the same as the results under the distributions that maximize the entropy. Our results reveal that it is important for the retailer to consider consumers＇ fairness concerns, otherwise he may suffer losses when Pc is very small.展开更多
We study a dynamic pricing problem of a firm facing stochastic reference price effect.Randomness is incorporated in the formation of reference prices to capture either consumers’heterogeneity or exogenous factors tha...We study a dynamic pricing problem of a firm facing stochastic reference price effect.Randomness is incorporated in the formation of reference prices to capture either consumers’heterogeneity or exogenous factors that affect consumers’memory processes.We apply the stochastic optimal control theory to the problem and derive an explicit expression for the optimal pricing strategy.The explicit expression allows us to obtain the distribution of the steady-state reference price.We compare the expected steadystate reference price to the steady-state reference price in a model with deterministic reference price effect,and we find that the former one is always higher.Our numerical study shows that the two steady-state reference prices can have opposite sensitivity to the problem parameters and the relative difference between the two can be very significant.展开更多
The existence of irreversible demand is tested, whereby price increases induce a different absolute magnitude of quantity change than price decreases. Irreversibility is potentially likely in retail food settings for ...The existence of irreversible demand is tested, whereby price increases induce a different absolute magnitude of quantity change than price decreases. Irreversibility is potentially likely in retail food settings for storable products that are consumed regularly and can affect pricing strategy performance. If irreversibility exists, the subsequent research question for storable product demand is whether loss aversion effects dominate stockpiling effects, or vice versa. A two-period theoretical model is developed, which predicts more elastic responses to downward price movements via stockpiling, but empirical tests on secondary data are needed to evaluate offsetting loss aversion effects. A variant of the Rotterdam demand model is developed to allow differential response to price increases and decreases. The model is applied to scanner data of short periodicity （weekly in this case）, which are necessary to measure meaningful demand responses to food price changes. The products selected are U.S. cheeses and table spreads that are storable over multiple weeks. The results suggest that stockpiling dominates loss aversion. One potential cause of this behavior may be that marketers asymmetrically provide consumers with more reference price information when lowering prices, but not when raising prices. When stockpiling effects dominate, given the typically price-elastic store-level demand for food products, high-low pricing strategies should produce higher revenue. Regarding measurement of average demand response, reversible demand models applied to weekly data may overestimate own-price elasticities.展开更多
The newly issued regulation on the reference prices of cars by state government is well concerned by people. The price for cars in China is much higher than the price in most other countries. People is expecting the p...The newly issued regulation on the reference prices of cars by state government is well concerned by people. The price for cars in China is much higher than the price in most other countries. People is expecting the price will go down.展开更多
To evaluate the long-term effect of Drug Purchasing under Joint Price Caps Policy in Fujian Province on price,prescription volume,medical insurance expense and patient’s burden a total of 59968 reimbursement records,...To evaluate the long-term effect of Drug Purchasing under Joint Price Caps Policy in Fujian Province on price,prescription volume,medical insurance expense and patient’s burden a total of 59968 reimbursement records,during the period of 2012.1-2018.8,were processed into monthly data and analyzed through interrupted time series(ITS)regression models.The ITS analysis showed that after the implementation of the policy,(1)the price of competitive drugs was significantly increased by 128.9%(P<0.01),while the price of non-competitive drugs was significantly decreased by 18.9%(P<0.01).(2)The prescription volume of sample drugs was decreased by 32.3%(P<0.01),and that of competitive drugs was decreased by 45.9%(P<0.01),while that of non-competitive drugs was increased by 19.1%(P<0.01).(3)There was no significant change in the monthly medical insurance expense per capita of sample drugs.(4)There was no significant effect on the overall patient’s burden,while the out-of-pocket payment per capita of competitive drugs was increased by 81.4%(P<0.01).展开更多
基金partially supported by the Fundamental Research Funds for the Central Universities of China(Grant number:CDJKXB14004)
文摘A series of studies demonstrate that consumers have fairness judgments about the retailer＇s price which will impact their shopping decisions. Thus, it is necessary for the retailer to take consumers＇ fairness concerns into account when setting his pricing policies. We assume that when the retailer＇s price is lower than a consumer＇s justice reference price, the consumer is likely to sense a positive price unfairness that will lead to increased consumer utility, and when the retailer＇s price is higher than a consumer＇s justice reference price, the consumer is likely to sense a negative price unfairness-that will have a negative effect on consumer utility. According to the information conditions of the consumers＇ justice reference price, the retailer should consider three situations： certain information, random information and partial information. In all situations, we show that the retailer has a unique optimal pricing strategy. Finally, through numerical examples, we find that our distribution-free policies perform almost the same as the results under the distributions that maximize the entropy. Our results reveal that it is important for the retailer to consider consumers＇ fairness concerns, otherwise he may suffer losses when Pc is very small.
基金This research is partly supported by the National Science Foundation(Nos.CMMI-1030923,CMMI-1363261,CMMI-1538451 and CMMI-1635160)the National Natural Science Foundation of China(Nos.71228203,71201066 and 71520107001)research Grant of National University of Singapore(Project R-314-000-105-133).
文摘We study a dynamic pricing problem of a firm facing stochastic reference price effect.Randomness is incorporated in the formation of reference prices to capture either consumers’heterogeneity or exogenous factors that affect consumers’memory processes.We apply the stochastic optimal control theory to the problem and derive an explicit expression for the optimal pricing strategy.The explicit expression allows us to obtain the distribution of the steady-state reference price.We compare the expected steadystate reference price to the steady-state reference price in a model with deterministic reference price effect,and we find that the former one is always higher.Our numerical study shows that the two steady-state reference prices can have opposite sensitivity to the problem parameters and the relative difference between the two can be very significant.
文摘The existence of irreversible demand is tested, whereby price increases induce a different absolute magnitude of quantity change than price decreases. Irreversibility is potentially likely in retail food settings for storable products that are consumed regularly and can affect pricing strategy performance. If irreversibility exists, the subsequent research question for storable product demand is whether loss aversion effects dominate stockpiling effects, or vice versa. A two-period theoretical model is developed, which predicts more elastic responses to downward price movements via stockpiling, but empirical tests on secondary data are needed to evaluate offsetting loss aversion effects. A variant of the Rotterdam demand model is developed to allow differential response to price increases and decreases. The model is applied to scanner data of short periodicity （weekly in this case）, which are necessary to measure meaningful demand responses to food price changes. The products selected are U.S. cheeses and table spreads that are storable over multiple weeks. The results suggest that stockpiling dominates loss aversion. One potential cause of this behavior may be that marketers asymmetrically provide consumers with more reference price information when lowering prices, but not when raising prices. When stockpiling effects dominate, given the typically price-elastic store-level demand for food products, high-low pricing strategies should produce higher revenue. Regarding measurement of average demand response, reversible demand models applied to weekly data may overestimate own-price elasticities.
文摘The newly issued regulation on the reference prices of cars by state government is well concerned by people. The price for cars in China is much higher than the price in most other countries. People is expecting the price will go down.
文摘To evaluate the long-term effect of Drug Purchasing under Joint Price Caps Policy in Fujian Province on price,prescription volume,medical insurance expense and patient’s burden a total of 59968 reimbursement records,during the period of 2012.1-2018.8,were processed into monthly data and analyzed through interrupted time series(ITS)regression models.The ITS analysis showed that after the implementation of the policy,(1)the price of competitive drugs was significantly increased by 128.9%(P<0.01),while the price of non-competitive drugs was significantly decreased by 18.9%(P<0.01).(2)The prescription volume of sample drugs was decreased by 32.3%(P<0.01),and that of competitive drugs was decreased by 45.9%(P<0.01),while that of non-competitive drugs was increased by 19.1%(P<0.01).(3)There was no significant change in the monthly medical insurance expense per capita of sample drugs.(4)There was no significant effect on the overall patient’s burden,while the out-of-pocket payment per capita of competitive drugs was increased by 81.4%(P<0.01).
