Optimal Differential Pricing for Intercity High-Speed Railway Services with Time-Dependent Demand and Passenger Choice Behaviors under Capacity Constraints

Differential pricing of trains with different departure times caters to the taste heterogeneity of the time-dependent (departure time) demand and then improves the ticket revenue of railway enterprises. This paper studies optimal differential pricing for intercity high-speed railway services. The distribution features of the passenger demand regarding departure times are analyzed, and the time-dependent demand is formulated; a passenger assignment method considering departure periods and capacity constraints is constructed to evaluate the prices by simulating the ticket-booking process. Based on these, an optimization model is constructed with the aim of maximizing the ticket revenue and the decision variables for pricing train legs. A modified direct search simulated annealing algorithm is designed to solve the optimization model, and three random generation methods of new solutions are developed to search the solution space efficiently. Experimental analysis containing dozens of trains is performed on Wuhan-Shenzhen high-speed railway in China, and price solutions with different elastic demand coefficients ( ϕ ) are compared. The following results are found: (i) the optimization algorithm converges stably and efficiently and (ii) differentiation is shown in the price solutions, and the optimized ticket revenue is influenced greatly by ϕ , increasing by 7%–21%.

Tools to Incentivize Research and Development for Pharmaceuticals

This article is a review of the current state of pull mechanisms and differential pricing in relation to incentivizing pharmaceutical research and development. In many developing nations, there is a shortage of pharmaceuticals for their specific infectious diseases because these markets are not always viewed as profitable to firms. To combat this issue, governments and organizations need to work with firms to incentivize research and development for medications and vaccines for these diseases. Pull mechanisms are one way to achieve this goal as they only reward successful products; through the use of tax credits, patent buyouts, purchase agreements, or a combination, we could reward firms which makes the market more attractive to other developers too. We could also use differential pricing for the same purpose. Allowing firms to charge varied prices based on specific factors like a country's real gross domestic product per capita would increase access to needed pharmaceuticals while still keeping the market attractive. The synthesis of current literature shows that although these strategies have been moderately successful on their own, such as with the GAVI fund, they have also failed because of a lack of support, such as with the Vaccines for the New Millennium Act. Therefore, we might need to develop new strategies, such as combining policies, to spur innovation and development.

Welfare and research and development incentive effects of uniform and differential pricing schemes

This paper is about the application of optimization methods to the analysis of three pricing schemes adopted by one manufacturer in a two-country model of production and trade. The analysis focuses on pricing schemes—one uniform pricing scheme, and two differential pricing schemes—for which there is no competition coming from the so-called parallel trade. This term denotes the practice of buying a patented product like a medicine in one market at one price, then re-selling it in a second so-called gray market at a higher price, on a parallel distribution chain where it competes with the official distribution chain. The adoption of pricing schemes under which parallel trade does not arise can prevent the occurrence of its well-documented negative effects. In the work, a comparison of the optimal solutions to the optimization problems modeling the three pricing schemes is performed. More specifically, conditions are found under which the two differential pricing schemes are more desirable from several points of view (e.g., incentive for the manufacturer to do Research and Development, product accessibility, global welfare) than the uniform pricing scheme. In particular, we prove that, compared to the uniform pricing scheme, the two differential pricing schemes increase the incentive for the manufacturer to invest in Research and Development. We also prove that they serve both countries under a larger range of values for the relative market size, making the product more accessible to consumers in the lower price country. Moreover, we provide a sufficient condition under which price discrimination is more efficient from a global welfare perspective than uniform pricing. The analysis applies in particular to the case of the European Single Market for medicines. Compared to other studies, our work takes into account also the possible presence in all the optimization problems of a positive constant marginal cost of production, showing that it can have non-negligible effects on the results of the analysis. As an important contribution, indeed, our analysis clarifies the conditions—which have been overlooked in the literature about the mechanisms adopted to prevent parallel trade occurrence—that allow/do not allow one to neglect the presence of this factor. Such conditions are related, e.g., to the comparison between the positive constant marginal cost of production, the parallel trade cost per-unit, and the maximal price that can be effectively charged to the consumers in the lower price country.

‘Two Roads Diverged in [Soft]wood’ Targeted Dumping, Differential Pricing Methodology, and Zeroing: US – Canada Anti-Dumping in Softwood Lumber

The United States and Canada have a long-standing series of disputes over softwood lumber that until now have focused on alleged subsidies and countervailing duties (CVDs). The United States changed things up this time around and the US Department of Commerce (USDOC) found dumping after applying the Differential Pricing Methodology to softwood lumber from Canada. The panel found that the USDOC erroneously aggregated export price differences when applying the differential pricing methodology (DPM), but departed from the WTO Appellate Body's previous ruling in US–Washing Machines regarding the use of zeroing and the inclusion of differential prices under Article 2.4.2 of the Anti-Dumping Agreement. To date, the United States and Canada have not been able to resolve the long-standing softwood lumber dispute, and this time the focus shifts from subsidies and countervailing duties to anti-dumping duties. It remains to be seen what happens in this specific dispute on appeal – if, and when, the WTO Appellate Body starts to function again. It will also be interesting to see whether this panel decision encourages parties to argue for, and future panels to permit departures from, Appellate Body rulings with which they disagree.

Electric power supply chain networks design featuring differential pricing and preventive maintenance

The electric power supply chain network plays an important role in the world economy. It powers our homes, offices, and industries and runs various forms of transportation. This paper considers an electric power supply chain network design problem featuring differential pricing and preventive maintenance. We demonstrate that this general model can be formulated as the centralized and decentralized supply chain models. A continuous approximation approach is used to model the problems. The objective of these models is to determine the optimal power plants’ service area, electricity price, and preventive maintenance budget while maximizing the total network profit or the own organization’s benefits. Our model is applied to the case of a power company in northern Vietnam. We show that the proposed approach can be used to address real-world cases effectively. The results demonstrate that the use of differential pricing policy and preventive maintenance could much enhance power company profit.