price competition
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2022 ◽  
Author(s):  
Esther Gal-Or ◽  
Qiaoni Shi

We consider a subscription platform that offers services to variety-seeking consumers who incorporate transportation costs in their decision of how many and which vendor services to consume. ClassPass in fitness and MoviePass in entertainment are examples of such platforms. We find that for the platform to be successful, it should enter markets where consumers’ added benefit from patronizing more than one vendor is relatively high, thus strengthening the position of the platform in negotiations with the vendors. As well, managers should consider entering markets where competition between the vendors is relatively weak and in particular, where vendors benefit from local monopoly positions because of high transportation costs incurred by consumers. When entering such markets, offering the subscription contract is likely to attract new customers who are not active when the platform does not exist. Moreover, appropriate crafting of the agreement with the vendors in this case allows the parties to fully extract the surplus derived by platform customers. Last, the platform’s managers should be cognizant of the need to identify tools that facilitate alleviated price competition with vendors. Negotiating over an appropriate transfer fee per customer to pay the vendor or imposing restrictions on the level of service that their customers can use may be such tools. Offering customers lower-quality services when using the vendor in comparison with the quality they could obtain by buying directly from him may not be a successful tool to alleviate price competition. This paper was accepted by Duncan Simester, marketing.


2022 ◽  
Vol 0 (Online First) ◽  
pp. 1
Author(s):  
Changying Li ◽  
Jianhu Zhang ◽  
Youping Li
Keyword(s):  

2021 ◽  
pp. 193229682110675
Author(s):  
Mark C. Matli ◽  
Andrea B. Wilson ◽  
Leah M. Rappsilber ◽  
Farron P. Sheffield ◽  
Miranda L. Farlow ◽  
...  

On March 23, 2020, all insulin products were reclassified as biologics instead of drugs under the Biological Price Competition and Innovation (BPCI) Act of 2009. This allows biosimilar insulin products to be manufactured when the patent expires for the reference biologic, sometimes called the originator or brand name product. A biosimilar product may not be substituted for the reference biologic at the pharmacy counter unless the biosimilar undergoes further switch trials to earn the designation as an interchangeable biosimilar. Insulin glargine-yfgn 100 units/mL is the first biosimilar insulin to attain interchangeable status with the reference insulin glargine. In the INSTRIDE 1 and INSTRIDE 2 trials, insulin glargine-yfgn has proven noninferiority regarding blood glucose reduction and adverse effect profile versus reference insulin glargine; even in the INSTRIDE 3 trial in which treatment of diabetes was switched between insulin glargine-yfgn and reference insulin glargine throughout the trial without statistically significant changes to glucose levels or adverse effects. Insulin glargine-yfgn may be substituted at the pharmacy counter without consultation with the prescriber, in accordance with state laws. In suit with other biosimilars, insulin glargine-yfgn’s list price is significantly lower than other insulin glargine products. This increases market competition leading to decreases in costs of other insulin glargine products. Many patients who could not previously afford insulin therapy may now have significantly improved access to treatment. Providers will need education to increase awareness of these new biosimilars and interchangeable biosimilar insulin products, cost benefits, and substitution allowances.


2021 ◽  
Vol 6 (1) ◽  
pp. 105-109
Author(s):  
Sushil Kumar Pant

This is a case study of a pioneering airlines company in the Nepalese aviation sector. The airlines came into full operation in 1997 by flying a brand new Beachcraft-1900D for a regular sightseeing to Mount Everest. When the airlines entered the field which was opened for the private sector by the government of Nepal in the early nineties, the country’s nascent aviation sector was in a state of take-off attracting a growing number of airline companies. Despite tough competition, the company expanded its fleet from a single aircraft to seven in number in 10 years of its operation. In 2008, the company purchased two ATR-42 aircrafts under the financial assistance of the International Finance Corporations (IFC/World Bank) and added a 70-seat ATR 72-212 in June 2010. With a range of aircrafts in its fleet, Buddha Air has today spread its wings to 13 destinations, including two international (1 seasonal and 1 charter flight) and 11 domestic destinations. After more than two decades of its service to the country’s civil aviation and tourism sector, Buddha Air was recognized as “the most successful airlines” for its sustained growth as well as for the safety and satisfaction of its customers. However, it had tackled with the price war in the face of higher cost of operations as a result of the increased number of airlines in this sector. Recalling the difficult situation due to the indiscriminate price competition, the Managing Director of the airlines, said that the pricing strategy was challenging and there was a strong urge for an unfair price competition from the rivals. “The low cost strategy as pursued by our competitors was not appropriate for our company as we had relatively higher cost of operation as we owned bigger aircrafts,” he said. While the price war remained a major hurdle in its operation, an attempt to venture into international flights was another challenge it encountered for the sustained growth of the airlines.


Author(s):  
Sergio Daga ◽  
Pedro Mendi

AbstractThis paper proposes a theoretical model in which a formal upstream firm competes against informal input suppliers, which constitute an alternative, albeit lower-quality input source for formal downstream firms. The existence of an alternative source increases competition in the industry, which tends to be welfare-increasing. However, it may also distort the incentives of the formal upstream firm to invest in quality upgrading. Assuming quantity competition downstream, we analyze how these incentives change and whether the negative welfare effect of a reduced investment by the upstream firm may more than offset the positive welfare effect of increased competition brought about by informal input suppliers. We find that there are parameter values such that this is the case, and welfare decreases if informal input suppliers are present. We analyze the robustness of this result to alternative modeling assumptions, such as price competition downstream and the use of two-part tariffs by the formal upstream firm.


2021 ◽  
Vol 2021 ◽  
pp. 1-5
Author(s):  
Xiaofeng Chen ◽  
Qiankun Song

This paper investigates the location game of two players in a spoke market with linear transportation cost. A spoke market model has been proposed, which is inspired by the Hotelling model and develops two-player games in price competition. Using two-stage (position and price) patterns and the backward guidance method, the existence of price and location equilibrium results for the position games is proved.


Author(s):  
A. Burliai ◽  
◽  
O. Burliai ◽  
А. Revutska ◽  
O. Ivanenko

Competition and competitiveness issues are extremely topical at the present stage. However, the role of price and non-price competition in enterprises has not been sufficiently studied and requires a more detailed study, which was the purpose of the article. It has been established that the first theories of competition were formulated at the turn of the 17th and 18th centuries and since then have been constantly undergoing various modifications. Given the evolution of the concept of "competition", it can be defined as a set of activities carried out by market participants to achieve their goals and consist in the integration of various instruments of competition - the provision of additional services by joining the offer of related services; formation of attractive prices by differentiating the forms and terms of payment; improving the forms and channels of product sales, customer service, improving communication through prompt and reliable information. The importance of dividing competition into price and non-price competition has been proven. Price competition. This is a kind of struggle with competitors by reducing the price of goods. Non-price competition offers more progressive and modern methods. These include isolating their products from similar competitors' products, introducing special features, expanding the range of products, improving quality, increasing advertising and warranty costs. Non-price competition allows you to focus on progress and drive sales without price fluctuations. Non-price competition indicates a higher level of quality of interactions in the market. The main advantages and disadvantages of non-price competition are determined. Thus, we can conclude that competition is an integral part of the market. The concept of competition has changed with the development of society, various economic trends and schools have contributed to this concept. From the point of view of microeconomics, it is important to divide competition into price and non-price, the use of which contributes to the increase in the efficiency of entrepreneurial activity.


2021 ◽  
Author(s):  
Pan Liu ◽  
Zhang Ziran ◽  
Li Ye

Abstract Applications of the blockchain-based traceability service (hereafter, BBTS) will not only help members of high-quality agri-food supply chain (hereafter, FPSC) improve consumers' perception on product quality and safety, but also increase their extra expenditure. Competitive AFSC as an important component of AFSC, its investment and coordination laws after using the BBTS obtain more attentions. To explore these laws, we constructed two competitive AFSCs, and each of them includes a supplier and a retailer. Considering the new changes of consumers' perception on product quality and safety after using the BBTS, the demand function was modified. Then, considering the BBTS costs and the new changes of consumers perceived on quality and safety, we built the income functions of chain members under the proposed three situations, i.e., 1) neither of the two supply chains invests in the BBTS, and 2) one supply chain invests in the BBTS, and 3) both supply chains invest in the BBTS. The research finds that: 1) if both of the two supply chains invest in the BBTS, supply chain members will gain a bigger threshold value sum of the BBTS costs, moreover, supply chain members will gain more benefits compared with them no investment BBTS. Thus, governments need to guide more enterprises to adopt BBTS. 2) The competitor’s perceived quality is negative with the threshold value sum of the BBTS costs. When the competitor’s perceived quality is high, investors should reduce investment costs. 3) If investors or decision makers about BBTS want to get a big the threshold value sum of the BBTS costs, they should reduce the cost optimization coefficient and avoid fierce price competition as much as possible. Results can offer a theoretical guidance of adopting BBTS for FPSC.


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