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.     

A multiple objective particle swarm optimization approach for inventory classification

This paper presents a particle swarm optimization approach for inventory classification problems where inventory items are classified based on a specific objective or multiple objectives, such as minimizing costs, maximizing inventory turnover ratios, and maximizing inventory correlation. In addition, this approach determines the best number of inventory classes and how items should be categorized for the desired objectives at the same time. Experiments are employed to determine the best combination of algorithm parameter values. Extensive numerical studies are conducted and results are compared to other known classification methods. The performance of the algorithm on a practical case is also presented.     

Stereotype Processing's Effect on the Impact of the Myth/Fact Message Format and the Role of Personal Relevance

This research examines the effectiveness of the myth/fact message format (MFMF)—a message format that first presents a common misperception as a myth then counters it with a correcting fact—within the health‐care and social marketing context of mental illness (MI). Stereotype processing theory predicts that the use of a negative aspect of the stereotype in a MFMF may further instantiate the negative belief, thereby reducing the effectiveness of the message. Conversely, using a message format that conveys only facts (i.e., new positive beliefs) without inclusion of the myth will lead to more positive attitudes. However, this effect will only be seen among people with personal relevance with MI as only they are sufficiently motivated to suppress the automatically activated stereotype and elaborate on the message. A study demonstrates that advertising utilizing a fact‐only format leads to more positive attitudes than the MFMF among people with personal relevance while people without personal relevance to MI demonstrate no differences in attitude between myth/fact and fact‐only message formats. Personal relevance had the opposite moderating effect on perceived learning. These findings suggest that the MFMF's impact on attitudes, the typical focal point of social marketing campaigns targeting misconceptions about stereotyped groups, may be ineffective. Thus, using a fact‐only format that conveys new positive beliefs in a social marketing message is recommended within the specific context of MI and may be warranted in other health‐care and social issues.     

Monopsony and the production-location decision of the firm

This paper incorporates monopsony power in one of the input markets within the context of the Weber-Moses triangular framework and examines the effect of an increase in monopsony power on the production-location decision of the firm. In particular, this paper shows that the optimum location of the firm is independent of monopsony power if the production funstion is homogeneous of degree one. However, if the production function is not homogeneous of degree one, the firm possessing monopsony power will have an incentive to move its location away from the monopsonized input market towards other markets under certain reasonable assumptions. Finally, some important policy implications are generated from the analysis.     

Ownership Structure and IPO Valuation—Evidence from Taiwan

We investigate the effect of ownership structure on initial public offering (IPO) valuation in the Taiwanese market, in which many large shareholders exert control through pyramidal structures and cross-shareholdings with voting rights that are in excess of cash flow rights. Our analysis indicates that outside shareholders incorporate the effect of potential expropriation by entrenched large shareholders in valuing an IPO, since a deviating voting-cash structure is negatively associated with the valuation metric at both the offer and initial secondary market prices relative to the corresponding intrinsic value. We also show that a deviating voting-cash structure correlates negatively with IPO underpricing.     

Jump variance risk: Evidence from option valuation and stock returns

We study jump variance risk by jointly examining both stock and option markets. We develop a GARCH option pricing model with jump variance dynamics and a nonmonotonic pricing kernel featuring jump variance risk premium. The model yields a closed-form option pricing formula and improves in fitting index options from 1996 to 2015. The model-implied jump variance risk premium has predictive power for future market returns. In the cross-section, heterogeneity in exposures to jump variance risk leads to a 6% difference in risk-adjusted returns annually.     

Using a modified grey relation method for improving airline service quality

This study applies a modified grey relation method to improve service quality among domestic airlines in Taiwan. First, we replace the referential alternative (sequence) with an aspired alternative, which should better reflect the reality of today’s competitive markets. Second, because the compared alternatives do not usually have the same criteria/aspects, traditional methods are unsuitable to deal with them. Our model fixes this problem, allowing decision-makers to understand the gaps between alternatives and aspired levels in practice. Third, we develop a new ranking index to measure the airlines’ competitiveness in terms of service quality. To validate the effectiveness of our model, we conduct a large sample survey. We also provide managerial improvements needed by each carrier to achieve the aspired level of customer satisfaction.     

A meta-regression analysis on the willingness-to-pay for country-of-origin labelling

Food quality and food safety issues arouse increasing interest and concern among consumers and policy-makers. Consequently, the importance of country-of-origin labelling (COOL) is increasing in business, policy and research. Numerous studies have reported a wide range of estimates for consumers' willingness-to-pay (WTP) for COOL using stated preference methods and, in particular, discrete choice experiments. We apply meta-regression analyses to synthesise the heterogeneous results of 204 WTP for COOL estimates extracted from 59 studies which used discrete choice experiments and were published between 2009 and 2020. Meta-regression analysis allows an adjusted summary proxy to be derived for the WTP for COOL and the determinants of heterogeneity in reported WTP estimates are also investigated. Our results suggest that there is a significant positive WTP for COOL, and also reveal that the reported WTP estimates are unaffected by publication bias. In addition, they show systematic variation in WTP estimates across the context and methodological characteristics of the studies. More precisely, we find that the region and the product (animal- vs. plant-based) analysed, as well as certain characteristics of the choice design (e.g., the number of attributes used, or the inclusion of an opt-out option) can have a significant impact on the estimated WTP for COOL. Finally, our results reveal significant differences in price premiums between various types of COOL (e.g., domestic vs. foreign). This highlights that results from individual primary studies should not be generalised without further consideration of the underlying study design.     

The competitions of time-varying and constant loadings in asset pricing models: empirical evidence and agent-based simulations

Journal of Economic Interaction and Coordination - Under two frameworks of cross-section and time-series factors, we implement asset pricing models to dissect the abnormal returns in the Chinese...