THE CHAOTIC COST-PLUS PRICING MODEL

2012 ◽  
Vol 02 (01) ◽  
pp. 46-50
Author(s):  
Vesna D. Jablanovic
Keyword(s):  
Real World ◽  
Local Stability ◽  
Demand Function ◽  
Variable Cost ◽  
Pricing Model ◽  
Oligopolistic Market ◽  
Price Growth ◽  
Stable Equilibria ◽  
Airline Tickets ◽  
Variable Cost Function

In this paper, it is examined one pricing practice often used by oligopolistic firm: cost-plus pricing. Cost-plus pricing refers to the setting of a price equal to average variable cost plus a markup. The pricing of airline tickets illustrates this concept presented in this paper as it is applied in a real-world oligopolistic market. It is important concept because the trend toward the formation of global oligopolies has accelerated as the world’s answer on the current financial crise. The basic aim of this paper is to construct a relatively simple chaotic cost-plus pricing model that is capable of generating stable equilibria, cycles, or chaos. A key hypothesis of this work is based on the idea that the coefficient,(eq in Abstract) plays a crucial role in explaining local stability of the oligopolistic firm’s output, where, d – the coefficient of the average variable cost function of the oligopolistic firm, b - the coefficient of the inverse demand function, r - the coefficient of price growth.

scholarly journals GOLD PRICE AND THE CHAOTIC GROWTH MODEL

2020 ◽  
Author(s):  
Vesna Jablanovic ◽  
Keyword(s):  
Growth Model ◽  
Local Stability ◽  
Golden Ratio ◽  
Gold Price ◽  
Chaotic Model ◽  
Price Growth ◽  
Stable Equilibria ◽  
Chaotic Growth

The basic aims of this paper are: firstly, to create the simple chaotic gold price growth model that is capable of generating stable equilibria, cycles, or chaos; secondly, to analyze the local stability of gold price in the period 2001-2015; and thirdly, to discover the equilibrium gold price with Elliott wave logic in the observed period. This paper confirms the existence of the stable convergent fluctuations of the gold price in the observed period. Also, the golden ratio can be used to define the equilibrium gold price in the presented chaotic model.

scholarly journals The Production Structure of Pennsylvania Dairy Farms

1984 ◽  
Vol 13 (2) ◽  
pp. 245-253 ◽  
Author(s):  
William Grisley ◽  
Kangethe W. Gitu
Keyword(s):  
Returns To Scale ◽  
Dairy Farms ◽  
Herd Size ◽  
Variable Cost ◽  
Production Structure ◽  
Sample Mean ◽  
Price Elasticities ◽  
Hired Labor ◽  
Constant Returns To Scale ◽  
Variable Cost Function

The production structure of a selected cross-section sample of family owner-operated dairy farms is investigated using a translog variable cost function. Elasticities of scale, input substitution, and input own- and cross-price elasticities are estimated. At the sample mean herd size of 67 cows producing at 15,173 pounds of milk per cow, the elasticity of scale parameter was 1.00, implying constant returns to scale. The elasticities of substitution between feeds and hired labor and the own- and cross-price elasticities were inelastic.

scholarly journals AN ANALYSIS OF COMMON APPLICATIONS ON HEDONIC PRICING MODEL IN VALUING ECOSYSTEM SERVICES: SIMILARITIES AND DIFFERENCE BETWEEN EUROPE, US, AND CHINA

2021 ◽  
Vol 8 (1) ◽  
pp. 1-11
Author(s):  
Xuanfei Zhang
Keyword(s):  
United States ◽  
Ecosystem Services ◽  
Real World ◽  
Housing Prices ◽  
The United States ◽  
Hedonic Pricing ◽  
Pricing Model ◽  
Hedonic Pricing Model ◽  
Real World Applications ◽  
The Common

The study made a comparison with the common applications on the hedonic pricing model that valuing ecosystem services between Europe, the United States, and China. By analyzing various reasons impacting housing prices, cultural and historical backgrounds played roles in the real-world applications.

Simulating the «Law of Supply» Formulation to Evaluate Its Accuracy

10.12737/5996 ◽  
2014 ◽  
Vol 3 (2) ◽  
pp. 45-58
Author(s):  
Юсим ◽  
Vyacheslav Yusim
Keyword(s):  
Real World ◽  
Economic Science ◽  
The Real ◽  
Price Growth ◽  
The Law

The paper shows, why frequently occuring phenomenon of supply growth as a consequence of price growth should not be considered a manifestation of the Law of Supply. Further the author provides evidence, that business companies should not base their practices on the so-called “Law of Supply” because of its invalidity. To find out, why Economic science has adopted and up to now continues to back and promote the concept, expressed by the Law of Supply, the author makes an attempt to simulate the very process, through which the Law of Supply was coined, and to reveal the real reasons of its adoption. After investigating various ideas and hypotheses put forward by economists to prove the Law of Supply accuracy, the paper concludes, that the Law of Supply introduction to the domain of Economic science can be explained by nothing else, but determination of he, who has formulated the Law, to provide relevant arguments explaining the phenomenon of market economy equilibrium, notwithstanding the inconsistency of the Law itself with real-world practice.

scholarly journals Complex Dynamics in Nonlinear Triopoly Market with Different Expectations

2011 ◽  
Vol 2011 ◽  
pp. 1-12 ◽  
Author(s):  
Junhai Ma ◽  
Xiaosong Pu
Keyword(s):  
Local Stability ◽  
Demand Function ◽  
Complex Dynamics ◽  
Three Dimensional ◽  
Game Model ◽  
Bifurcation Diagrams ◽  
Nonlinear Difference Equations ◽  
Total Cost ◽  
Attractor Bifurcation ◽  
Total Cost Function

A dynamic triopoly game characterized by firms with different expectations is modeled by three-dimensional nonlinear difference equations, where the market has quadratic inverse demand function and the firm possesses cubic total cost function. The local stability of Nash equilibrium is studied. Numerical simulations are presented to show that the triopoly game model behaves chaotically with the variation of the parameters. We obtain the fractal dimension of the strange attractor, bifurcation diagrams, and Lyapunov exponents of the system.

Estimating Cost Structures in the U.S. Nuclear Power Industry

2008 ◽  
Vol 26 (1) ◽  
pp. 1-21
Author(s):  
Supawat Rungsuriyawiboon
Keyword(s):  
Nuclear Power ◽  
Cost Savings ◽  
Variable Cost ◽  
Supporting Evidence ◽  
Firm Level ◽  
Data Set ◽  
Alternative Technologies ◽  
Cost Structures ◽  
Variable Cost Function ◽  
The U.S

With growing concerns about global warming and surging oil prices, nuclear power is now back on the U.S. energy policy agenda. This paper provides firm level analysis of the production technology and cost structures in the U.S. nuclear power generation industry. The paper applies an econometric approach into a dual restricted variable cost function within a “temporal equilibrium” framework. A panel data set of 32 nuclear power generations for major U.S. investor owned utilities over the period 1986–2002 is used. The major finding indicates that most electric utilities in the nuclear electricity generation industry over utilized capital in production. The estimated results show evidence of scale economies in the production of the electricity industry. The paper presents supporting evidence that nuclear technology is cheaper than other alternative technologies and fuels, and it can offer possible cost savings to other alternative technologies.

scholarly journals Speculative asset price dynamics and wealth taxes

2021 ◽  
Author(s):  
Sarah Mignot ◽  
Fabio Tramontana ◽  
Frank Westerhoff
Keyword(s):  
Asset Pricing ◽  
Financial Markets ◽  
Local Stability ◽  
Asset Price ◽  
Stability Domain ◽  
Steady States ◽  
Price Dynamics ◽  
Pricing Model ◽  
Asset Pricing Model ◽  
Fundamental Value

AbstractBased on the seminal asset-pricing model by Brock and Hommes (J Econ Dyn Control 22:1235–1274, 1998), we analytically show that higher wealth taxes increase the risky asset’s fundamental value, enlarge its local stability domain, may prevent the birth of nonfundamental steady states and, if they exist, reduce the risky asset’s mispricing. We furthermore find that higher wealth taxes may hinder the emergence of endogenous asset price oscillations and, if they exist, dampen their amplitudes. Since oscillatory price dynamics may be associated with lower mispricing than locally stable nonfundamental steady states, policymakers may not always want to suppress them by imposing (too low) wealth taxes. Overall, however, our study suggests that wealth taxes tend to stabilize the dynamics of financial markets.

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