Bunching with the Stars: How Firms Respond to Environmental Certification

Voluntary environmental certification programs have been a popular tool used by governments, industry groups, and nonprofit organizations alike. A central question in the design of such programs is who should pay for them. In a context where firms respond strategically to a certification, the answer to this question is a priori ambiguous and, ultimately, empirical. This paper provides important insights on this question using ENERGY STAR, a voluntary certification program for energy-efficient products, as a case study. I show that firms are highly strategic with respect to this certification and extract consumer surplus associated with certified products via three mechanisms. They offer products that bunch at the certification requirement, differentiate certified products in the energy and nonenergy dimensions, and charge a price premium on certified products. I use these findings to motivate a structural econometric model with firms’ strategic behaviors with respect to product line and pricing decisions and to investigate the incidence of a certification licensing fee to fund the certification program. This paper was accepted by Juanjuan Zhang, marketing.

Optimal pre-sale policy for deteriorating items

<p style='text-indent:20px;'>Pre-sale policy is a frequently-used sales approach for deteriorating products, e.g, fruits, vegetables, seafood, etc. In this paper, we consider an EOQ inventory model under pre-sale policy for deteriorating products, in which the demand of pre-sale period depends on price and pre-sale horizon, and the demand of spot-sale period depends on the price and stock level. Optimal pricing decisions and economic order quantity are also provided. We compare pre-sale model with a benchmark inventory model in which all the products are sold in spot-sale period. Theoretical results are derived to show the existence and uniqueness of the optimal solution. Numerical experiments are carried out to to illustrate the theoretical results. And sensitivity analysis is conducted to identify conditions under which the pre-sale policy is better off than the spot-sale only policy.</p>

Optimal Pricing and Service Investment of Home-Sharing Platforms in a Duopoly Market

In this paper, we construct a fully covered duopoly market model. In this market, two home-sharing platforms provide differentiated rental services to consumers, respectively, and each platform has two strategies: short-term rental strategy and long-term rental strategy. This paper studies the pricing decisions and service investment of home-sharing platforms in a competitive market. The results show that, in the market equilibrium, how the platform chooses the strategy largely depends on the service quality of competitors. Specifically, when the difference in service quality is small, it is better for the two platforms to adopt the short-term rental strategy; otherwise, the two platforms are more inclined to adopt the long-term rental strategy. We also find that the commission rate and service cost will also affect the profitability of the platform. Finally, we extend the model to the uncovered market.

Information and material delays effect on price setting, operating contribution margins and cash conversion cycles in feed ingredients supply chain

PurposeThe purpose of this report was to evaluate the effectiveness and practicality of system dynamics modeling in integrating econometric equations to describe the effects of supply chain material and information delays on pricing decisions and consequent financial results in an animal feed export business.Design/methodology/approachAn empirical dynamic model, loaded with econometric theory of price effect on competitive demand, was used to describe the input data.FindingsThe model simulation outputs proved themselves relevant in analyzing the complex interconnections of multiple variables affecting the profitability in a commercial routine, supporting the decision process among sales managers. The impact of information delay on price decisions and business financial results were estimated using the model proposed.Originality/valueThis paper describes an empirical model, based on system dynamics, that predicts operating contribution margins and cash conversion cycles based on estimation of information and material delays in a supply chain. The method is pragmatic and simple for business routine implementation.

Financial Security Analysis of E-Commerce Platform Based on Supply Chain for Heterogeneous Network Location Verification

The development of supply chain finance, its pricing strategy for bilateral business cooperation between e-commerce, banking institutions, and fourth-party logistics services providers has gained the attention of researchers. This paper combines the heterogeneous network location verification technology, starting from information asymmetry and Rubens bargaining game ideas, and combines it with game theory methods to provide a reference for bilateral cooperation decision-making on e-commerce platforms. The experiment results indicated the pricing decisions of e-commerce platforms which are affected by the efforts of the other party and the ability of bargaining. The quoted price increases with the decrease of the bank’s ability and the increase of the service provider’s ability. The pricing decisions of banks and service providers are only affected by the direct proportion of their respective business costs. When considering the introduction of incentive mechanism conditions, it is found that appropriate incentive conditions can increase the quotation of the e-commerce platform. The price quoted by the e-commerce platform that chooses to bargain with the bank is higher than the price quoted by the bank after negotiating with the service provider, which will help to better realize the benefits. Finally, the paper numerically analyzes the results of the bargaining game between e-commerce platforms and banks and fourth-party logistics service providers, and the numerical results verify the better performance.

Chương 6 chiến lược định giá sản phẩm (pricing strategies)

explored the three main pricing strategies and the several internal and external factors that affect a firm’s pricing decisions.