Pricing and return strategy of online retailers based on return insurance

With the development of e-commerce, online shopping has become increasingly common, and as a result, consumers inevitably encounter the problem of returns. Therefore, pricing, return policy and return insurance strategy have attracted considerable research attention. In this paper, we construct four models to study pricing, return policy and return insurance strategy. We show that when a product's net residual value is greater than or equal to zero, online retailers should offer a money-back guarantee (MBG) return policy; however, they do not have to offer free return insurance because the latter does not increase their market share and profit, nor does it increase consumer surplus. The optimal strategy of insurance providers is unaffected by whether the policyholder is an online retailer or a consumer and should be neutral, which helps insurance providers gain the trust of policyholders. Consumers should buy products only when online retailers offer an MBG return policy; however, consumers should not do so if the online retailer provides free return insurance.     

The six pricing myths that kill profits

Pricing is the most important driver of profits. Pricing is also, surprisingly, the area most executives overlook when implementing initiatives to increase profits. There is a reason: Research presented in this article suggests that most executives implicitly hold on to a series of weakly held assumptions about pricing that ultimately are self-defeating. These pricing myths are that (1) costs are the basis for price setting, (2) small price changes have little impact on profits, (3) customers are highly price sensitive, (4) products are difficult to differentiate, (5) high market share leads to high profits, and (6) managing price means changing prices. This research shows how executives can overcome these misconceptions and thus implement sustainable profit improvements via pricing.     

Effectiveness of some simple pricing strategies under varying expectations of competitor behavior

A firm needs to tailor its pricing strategy to the particular competitive setting it faces. We show how a firm can select a pricing strategy that yields higher expected profit than other simple pricing strategies for the competitive conditions encountered. We show that no one strategy yields the highest expected profit for all competitive settings. In particular, we find that a more aggressive pricing strategy is needed for those markets that are either very cooperative or very competitive, while a more cooperative pricing strategy is preferred for markets which have a moderate degree of competition. We also find that a more aggressive pricing strategy is needed as the number of competitors increases. Our results suggest how to choose the pricing strategy that yields the highest expected profit given the likely behavior of a firm's competitors.The authors thank Terry Elrod and Robert Lusch for their comments on earlier versions of this paper.     

On fairness,efficiency and social structure

This paper presents an evaluation of economic efficiency and fairness, with a focus on the role of social relations in fairness evaluation. Defining fairness as the absence of envy, we introduce “switching costs” among individuals in the assessment of envy. When such costs depend on social relations, our analysis stresses the importance of social structure. When fairness is inconsistent with efficiency, we propose a measure of the cost of fairness. In a market economy, we show that fairness does not affect the validity of profit maximization. But it may require non-linear pricing. Implications of the analysis for policy are discussed.     

基于双边市场理论的物流信息平台定价策略研究

面向车货匹配的物流信息平台具有典型的双边市场特征,而价格是物流信息平台与其双边用户货主和车主利益博弈的主要工具。本文运用双边市场理论分析了物流信息平台的定价问题。文章分别从垄断平台双边定价和单边定价的角度给出了物流信息平台最优定价决策,并进行了对比分析和敏感性分析,最后扩展到竞争平台的定价决策。通过建模分析发现,物流信息平台对货主的定价与货主的网络效应强度有关,当货主的网络效应强度大于车主的网络效应时对货主收费,否则对货主免费或补贴;物流信息平台对于车主的定价与车主的增值服务效益成负相关关系,当车主为平台带来的增值服务收益大于某临界值时对车主免费甚至补贴;物流信息平台单边收费时的总利润低于双边收费时的平台总利润。最后结合我国车货匹配市场,以某物流信息平台为对象进行了案例分析。     

Product Characteristics and the Effectiveness of Dow’s Countermeasure for Predatory Pricing

Predatory pricing theoretically occurs when a firm cuts its price below cost with the intention of driving competitors out of the market so that the predatory firm can then act as a monopolist. Herbert H. Dow, founder of the Dow Chemical Company, saw his company face such a predator, the German Bromkonvention, in the American market for bromine in the early 20^th century. Dow responded with an ingenious gambit – he secretly purchased the low cost German bromine and then repackaged and resold it on the European market at a profit. This case has been offered as evidence that predatory pricing is unlikely to exist in the real world, since the prey can simply do what Dow did. This paper explores the product and market attributes that must be present in order for the Dow Gambit, or variations of it, to be used as a successful countermeasure for predatory pricing. We examine product and market attributes in 15 other well-known cases of predatory pricing to gain some empirical insight. In only two of these were the product and market characteristics as favorable for the prey to employ the Dow Gambit as they were toward Dow himself. We conclude that the Dow Gambit can only be employed in a narrow set of circumstances     

MODELS OF COMPETITION BETWEEN FIRMS: ENDOGENOUS MARKET STRUCTURE IN THE KALECKIAN MODEL

The purpose of this paper is to incorporate free entry into the Kaleckian model. To this end, we consider a model with monopolistic competition, mark‐up pricing and a free‐entry condition. Using this model, the Kaleckian model is unstable under a wage‐led growth regime, and it is stable under a profit‐led growth regime, when the interest rate is supposed to be constant. Stability under a wage‐led growth can be achieved if the interest rate is allowed to respond positively to capacity utilization. We also find that a goods market policy, but not an income distribution policy, is then effective from an economic growth perspective.     

基于超额利润再分配的供应链优化问题

供应链将零售商和制造商纳入一个利益整体,在不确定性需求下,通过建模求均衡解寻找能实现整个供应链利润最大化的产量,再对零售商和制造商的盈亏情况进行单独分析,从而分别确定在买断式定价和回购式定价情况下,能够使得供应链优化的可行的超额利润再分配比例。     

配股融资股票定价模型的实证研究——基于2000年到2005年上市公司经验数据

上市公司为了达到配股的政策要求,往往在配股前进行一系列的盈余管理,从而使公司的净资产收益率满足证监会所要求的配股条件。公司配股的盈余管理往往采用政策诱增式自愿性会计政策变更,因而研究政策性诱增式会计变更所引起的信息噪音对公司配股定价的影响就具有重要的理论和现实意义。实证结果表明:公司的配股定价受到自愿性政策对当期净利润增减变化调整的影响,从而也验证了配股行为的盈余管理多为政策诱增式会计政策变更。     

Pricing policies for services by facilities with Weibull lifetimes

To make good profits, pricing is a competitive weapon of service firms. This paper is concerned with pricing strategies for services with substantial facility maintenance costs. To address the problem, a mathematical framework that incorporates service demand and facility deterioration is proposed. The facility and customers constitute a service system driven by Poisson arrivals and exponential service times. The most common log-linear customer demand and Weibull-distributed facility lifetime are also adopted. By examining the linkage between customer demand and facility deterioration in profit model, pricing policies of the service are investigated. Then analytical conditions of customer demand and facility lifetime are derived to achieve a unique optimal pricing policy. Finally, numerical examples are presented to illustrate the effects of parameter variations on the optimal pricing policy.     

Increasing Price Transparency: Implications of Consumer Price Posting for Consumers' Haggling Behavior and a Seller's Pricing Strategies

In an attempt to gain a better position in haggling, consumers often seek a seller's pricing information (e.g., whether the posted price is negotiable, the discount and transaction prices) before going to that seller. Although traditionally difficult to obtain, such information is becoming increasingly available due to consumer price posting (CPP), whereby consumers post and share their purchase price information on the Internet. In this analytical study, we consider a market in which a seller, who chooses between a fixed price policy and a haggling policy, serves two types of consumers who differ in their willingness to pay and haggling costs. We explore how CPP can affect consumers' behavior and the seller's pricing strategies (i.e., pricing policy and the associated prices). In the absence of CPP, our model features a two-sided uncertainty: the seller does not know individual consumer's type and thus may find it optimal to use a haggling policy to price discriminate consumers, whereas consumers do not readily observe the seller's cost type and pricing policy, and thus are uncertain whether their haggling will be fruitful. In the presence of CPP, consumers' uncertainty about the seller's pricing policy is resolved. Because CPP can improve price transparency, inhibit consumers' acceptance of a posted price and spur price haggling, it seems apparent that it should benefit consumers and hurt the seller. However, our analysis shows that CPP can lead to fewer purchases, higher prices and even a greater seller profit. It further shows that although CPP surely increases information accessibility, it can also reduce the amount of information available to consumers. These results are in sharp contrast to the conventional wisdom in the literature.     

Uniform or spatially differentiated? Pricing Strategies for Information Goods under simultaneous and sequential decision-making in multi-market context

Product pricing has been one of the central issues in the field of marketing and consumer services for managers and researchers alike. However, pricing of information goods has not been paid much attention in literature. For information goods the marginal costs of production and transportation of information goods (online movies, video games, etc.) is almost zero. Hence, the pricing decisions need to be thought of purely in competitive profit maximizing terms. This paper proposes mechanisms for managers to evaluate and base their pricing decisions on rational frameworks that takes into account various situations when they enter a new market and when they are incumbent in a new market. This paper addresses the research gap of spatially differentiated pricing strategy for information goods that has not been studied in literature so far. We create stylized theoretical models under both, sequential and simultaneous decision-making conditions. We determine the equilibrium price and the equilibrium profit for the two firms for each of the four possible scenarios based on their pricing strategies. Our analysis reveals that the dominance of one pricing strategy over the other depends on product differentiation factor capturing joint effect of the product substitutability and consumer's price sensitivity under sequential decision making and the market size along with consumer's price sensitivity for simultaneous decision making. As an extension, we propose a generalized model demonstrating the uniform and spatially differentiated pricing strategies of the firms under simultaneous and sequential selection for multiple domestic and international markets.     

SIMPLE PROCESSES AND THE PRICING AND HEDGING OF CLIQUETS

For data on market prices for 246 cliquets we consider pricing these exotic options using a relatively simple path space. The path space is subsequently stressed to market implied stress levels as well as stress levels predicted from contract characteristics. An additive process transitioning from a Sato process to a Levy process is formulated and estimated on vanilla options. Ask prices constructed from predicted stress levels are observed to have an in sample correlation of 92% with market prices. Interestingly, it is observed that capped cash flows have negative stress levels while uncapped products have positive stress levels. We illustrate the effect of hedging cliquet liabilities using call options as hedging assets permitting a 10% reduction in ask prices.     

Quality, Competitors and Competitiveness

How can we measure a product's competitiveness? How does product quality affect competitiveness? To measure product competitiveness involves two interconnected stages. First, to choose a perspective from which to compare the product with its competitors. Second, to decide which are the product's main competitors. One perspective we could take is that of the product's ideal consumer – that is, the person most likely to buy. This perspective offers some fascinating insights into measuring product competitiveness and identifving competitors, and can help us understand why a nation may be losing its share of the market.     

Decimalization,ETFs and futures pricing efficiency

This study investigates the impact of decimalization (penny pricing) on the arbitrage relationship between index exchange‐traded funds and E‐mini index futures. The empirical results reveal that subsequent to penny pricing, there is a significant fall in the mean ex ante arbitrage profit, especially in the cases with higher transaction costs. Using the ordinary least squares and quantile regressions to control for the influences of changes in other market characteristics, it is found that the overall pricing efficiency has deteriorated in the post‐decimalization period. These results are consistent with the hypothesis that, due to the lowered market depth and increased execution risks, the introduction of decimalization has in general resulted in weakening the ability and the willingness of arbitrageurs to initiate arbitrage trades, which subsequently leads to a reduction in the general efficiency of the cash/futures pricing system. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 29:157–178, 2009     

中国演出产品定价机制及完善对策探究

在文化消费多样化和移动互联网技术兴起的发展趋势下,中国演艺市场面临着高成本、低回报的经营困境,作为新兴产业的演艺行业,不管是运行秩序还是行业规则方面,都有需要完善的地方。以演出产品定价为主要研究视角,提出了演出产品定价存在机制不完善、价格水平整体偏高、炒票现象严重等问题,并从建立演出产品价格管理体系、实行差异化定价策略、科学管理演艺市场3个方面提出了建议。笔者将鲍莫尔的病态成本理论作为演艺产品差异化定价的理论依据,菲利普·莱斯利的百老汇价格歧视作为将科学管理手段应用于演出产品价格管理的例证,对演艺产品定价机制及完善对策进行了初步探究。     

A comparative study of British,U.S. and Japanese marketing strategies in the British market

This empirical study compares the marketing strategies and organisations of a matched sample of American, Japanese and local competitors in the British market. Japanese subsidiaries in Britain are shown to be much more marketing oriented, more single minded in their pursuit of market share and more alert to strategic opportunities than their U.S. and British counterparts. American subsidiaries appear less committed to the UK, home country oriented and, like their British competitors, excessively concerned with short term profit performance.     

股票定价的奥尔森模型成立条件

根据奥尔森(Ohlson)1995年提出的RIV模型,对公司股票的估值只需预测其未来的盈利而不用考虑现金流和股息政策。通过研究不同的股息分配政策,利用会计理论模型,推导出该模型的成立条件。研究表明该模型在许多正常的经营情况下并不成立,股票定价模型不能回避未来现金流和股息的影响。     

Input Pricing and Market Share Delegation in a Vertically Related Market: Is the Timing Order Relevant?

This paper adds to the literature on the strategic use of managers’ contracts in competition by examining whether market‐share delegation, in which managers receive rewards based on a combination of profits and market share, and the order of moves affect input pricing in a vertically related market. It shows that: (i) input pricing is not affected by delegation form and the order of moves between upstream and downstream firms under quantity competition; (ii) downstream firms obtain the same profit as in the simple Nash equilibrium regardless of delegation forms in a delegation–input price–quantity competition game; and (iii) the upstream monopolist will set input price beforehand regardless of the delegation form. Since the outcomes in our model create higher quantity and lower price in a Cournot product market, it lessens the double‐marginalization problem in such a vertically separated industry.     

市场结构与家电零售厂商绩效——基于一线城市数据的实证检验

本文采用2002-2008年18个一线城市家电零售企业层面的数据,对家电零售行业市场结构与利润的关系进行了研究。结果表明,我国家电零售行业市场份额和市场集中度对利润率的影响都比较微弱,无论是基于合谋的SCP假说还是基于单方面效应的相对市场势力假说都不成立。而X-效率变量既与利润率呈显著正相关,又与市场份额呈显著正相关,因此相对于其他三种假说,X-效率结构假说对家电零售行业市场结构-利润关系更有一定程度的解释力。由于国美对永乐、大中的并购既没有提升利润,也没有增加市场势力,所以不应采取过分严厉的反垄断并购政策。