The toll effect on price of anarchy when costs are nonlinear and asymmetric

We examine the efficiency of the optimal tolls by establishing the bound for the price of anarchy when the levied tolls are also considered as a part of the cost functions. For linear and nonlinear asymmetric cost functions, we prove that the price of anarchy of the system with tolls is lower than that without tolls. Furthermore, we show that the total disutility caused to the users by the tolls is bounded by a multiple of the original optimal system cost.     

Impact of productivity on cross-training configurations and optimal staffing decisions in hospitals

Cross-training of nursing staff has been used in hospitals to reduce labor cost, provide scheduling flexibility, and meet patient demand effectively. However, cross-trained nurses may not be as productive as regular nurses in carrying out their tasks because of a new work environment and unfamiliar protocols in the new unit. This leads to the research question: What is the impact of productivity on optimal staffing decisions (both regular and cross-trained) in a two-unit and multi-unit system. We investigate the effect of mean demand, cross-training cost, contract nurse cost, and productivity, on a two-unit, full-flexibility configuration and a three-unit, partial flexibility and chaining (minimal complete chain) configurations under centralized and decentralized decision making. Under centralized decision making, the optimal staffing and cross-training levels are determined simultaneously, while under decentralized decision making, the optimal staffing levels are determined without any knowledge of future cross-training programs. We use two-stage stochastic programming to derive closed form equations and determine the optimal number of cross-trained nurses for two units facing stochastic demand following general, continuous distributions. We find that there exists a productivity level (threshold) beyond which the optimal number of cross-trained nurses declines, as fewer cross-trained nurses are sufficient to obtain the benefit of staffing flexibility. When we account for productivity variations, chaining configuration provides on average 1.20% cost savings over partial flexibility configuration, while centralized decision making averages 1.13% cost savings over decentralized decision making.     

Production decisions under joint price and production uncertainty

While production decisions in the presence of price uncertainty have been extensively studied, this is not so for the case in which the level of production is itself uncertain. In this paper,we provide a decision analysis under multiplicative production uncertainty, both with and without price uncertainty. We depict equilibrium and obtain comparative statics results with the aid of a diagram based on the difference between expected price and marginal cost. Comparative statics results are obtained for the model with production uncertainty alone and also for simultaneous price and production uncertainty (including two special cases). We first derive results based on the Arrow–Pratt coefficients of risk aversion, and then supplement these with the Ross measure of relative risk aversion, since this proves useful in the presence of multiple sources of uncertainty. We find that increases in risk (both price and production) or input prices reduce expected output. However, expected output supply is an increasing function of (expected) price only for “low” levels of risk aversion, and in general the relationship is ambiguous.     

The predictive power of price patterns

Using two sets of data, including daily prices (open, close, high and low) of all S&P 500 stocks between 1992 and 1996, we perform a satistical test of the predictive capability of candlestick patterns. Out-of-sample tests indicate statistical significance at the level of 36 standard deviations from the null hypothesis, and indicate a profit of almost 1% during a two-day holding period. An essentially non-parametric test utilizes standard definitions of three-day candlestick patterns and removes conditions on magnitudes. The results provide evidence that traders are influenced by price behaviour. To the best of our knowledge, this is the first scientific test to provide strong evidence in favour of any trading rule or pattern on a large unrestricted scale.     

Multi-period models for analyzing the dynamics of process improvement activities

Managing knowledge based resource capabilities has become very important in recent years and during a finite horizon it seems to be reasonable to develop the capabilities intensively at the beginning as one can utilize those over a longer period of time. With the help of multi-period models we check the validity of this idea and characterize the dynamics of development activities. The paper identifies the factors that shape these dynamics and from the behavior of these factors we conclude when the dynamics can be increasing or decreasing. We point out that in stable environment there is tendency for decreasing dynamics but future expectations can significantly modify this outcome. Relationships between the successful or less successful implementation of a business strategy and the dynamics of improvement activities are highlighted as well. For specific model structures explicit solutions are derived.     

A dynamic model for optimal design quality and return policies

A clearly explained and generous return policy has been established as a competitive weapon to enhance sales. From the firm’s point of view, a generous return policy will increase sales revenue, but will also increase cost due to increased likelihood of return. Design quality of the product has been used as a competitive weapon for a long time. This paper recognizes the relationship between design quality and price of the product, and the firm’s return policy. Quality level in the product would influence the amount of return directly. When the product quality is higher, the customer satisfaction rate will increase and the probability of return will decrease. We develop a profit-maximization model to jointly obtain optimal policies for the product quality level, price and the return policy over time. The model presented in this paper is dynamic in nature and considers the decisions as the product moves through the life cycle. We obtain a number of managerial guidelines for using marketing and operational strategy variables to obtain the maximum benefit from the market. We mention several future research possibilities.     

The role of retailer’s performance in optimal wholesale price discount policies

The main goal of this paper is to model the effects of wholesale price control on manufacturer’s profit, taking explicitly into account the retailer’s sales motivation and performance. We consider a stylized distribution channel where a manufacturer sells a single kind of good to a single retailer. Wholesale price discounts are assumed to increase the retailer’s motivation thus improving sales. We study the manufacturer’s profit maximization problem as an optimal control model where the manufacturer’s control is the discount on wholesale price and retailer’s motivation is one of the state variables. In particular in the paper we prove that an increasing discount policy is optimal for the manufacturer when the retailer is not efficient while efficient retailers may require to decrease the trade discounts at the end of the selling period. Computational experiments point out how the discount on wholesale price passed by the retailer to the market (pass-through) influences the optimal profit of the manufacturer.     

The price of anarchy in an exponential multi-server

We consider two criteria for routing selection in a multi-server service station: the equilibrium and social optimization. The ratio between the average mean waiting times in these two routings is called the price of anarchy (PoA). We show that the worst-case PoA is precisely the number of servers.     

The impact of price skimming on supply and exit decisions

Stochastic inventory control theory has focused on the order and/or pricing policy when the length of the selling period is known. In contrast to this focus, we examine the optimal length of the selling period—which we refer to as market exit time—in the context of a novel inventory replenishment problem faced by a supplier of a new, trendy, and relatively expensive product with a short life cycle. An important characteristic of the problem is that the supplier applies a price skimming strategy over time and the demand is modeled as a nonhomogeneous Poisson process with an intensity that is dependent on time. The supplier's problems of finding the optimal order quantity and market exit time, with the objective of maximizing expected profit, is studied. Procedures are proposed for joint optimization of the objective function with respect to the order quantity and the market exit time. Then, the effects of the order quantity and market exit time on the supplier's profitability are explored on the basis of a quantitative investigation. Copyright © 2014 John Wiley & Sons, Ltd.     

A note on price and quality competition between asymmetric firms

This paper analyzes the impact of asymmetry between firms on the outcome of price and quality competition from a microeconomic viewpoint. Consumers purchase a product based on not only its price but also its quality level; therefore, two firms compete in determining their prices and quality levels to maximize their profits. The asymmetry arises from the difference in consumers’ loyalty to each firm; that asymmetry then determines a character of differentiation between firms. Our purpose is to show how asymmetry influences competition under varying consumers’ price- and quality-sensitivity. In doing so, we extend earlier work in the area of price and quality competition. We show that in both the moderately quality-sensitive and price-sensitive markets, higher consumers’ sensitivity as well as lower consumers’ loyalty to any firm leads to intense competition, resulting in a decrease of both firms’ equilibrium profits. On the other hand, in highly quality-sensitive market, asymmetry compels the smaller firm to change its competitive strategy. In general, this is more beneficial to the larger firm, as the smaller firm’s profit tends to decline. In the worst case, the smaller firm is driven out of business under equilibrium.     

The price of quality claims

Quality claims and quality in fact of financial and industrial products as well as financial and business services are essential to entice and attract customers. For these reasons, firms are often tempted to assert claims that might or might not be met. These claims have risks which cannot always be prevented when interpreted as a ‘sure thing’ while in fact, quality performance is probabilistic. This paper considers a financial (utility based) approach to pricing a quality claim. To do so, we assume that ex‐ante, a true quality performance is defined by a density function while claims are advertised—setting expectations for a quality performance. On the basis of these assumptions we determine the price associated with such claims. Copyright © 2010 John Wiley & Sons, Ltd.     

The hidden information content of price movements

Dynamic patterns of prices in different markets may motivate (strategic) consumers, who could be monitoring price movements over time, to game vendors. Do past price movements carry information about the probability and magnitude of future price drops?Conducting empirical work in the airline industry on near 1000 US domestic routes, we find that some price-metrics carry information about future price swings: these variables can assist in predicting the likelihood and magnitude of price drops. These price-metrics yield significantly different signals which also vary as the prediction horizon changes.     

On the value of information sharing and cooperative price setting

We consider a setting of two firms that sell substitutable products under price competition. We show that private signals enable firms to improve market forecast and earn higher profits. Provided that their private signals are not perfectly correlated, firms can benefit from sharing signals with each other. This is irrespective of product substitutability. Moreover, information sharing is a strategic complement to cooperative price setting to improve the profit performance of firms.     

财政收支平衡控制模型及其应用

本文运用现代控制论的原理与方法研究了地区（或县、市）一级财政收支平衡的控制问题。把财政收支平衡的控制问题置于国民经济系统之中，运用最优控制论建立了最优积累率控制模型；进而，从所求得的最优积累率为出发点，讨论了财政收支的平衡控制，并建立了相应的控制模型。     

The price of anarchy for non-atomic congestion games with symmetric cost maps and elastic demands

By showing that there is an upper bound for the price of anarchyρ(Γ) for a non-atomic congestion game Γ with only separable cost maps and fixed demands, Roughgarden and Tardos show that the cost of forgoing centralized control is mild. This letter shows that there is an upper bound for ρ(Γ) in Γ for fixed demands with symmetric cost maps. It also shows that there is a weaker bound for ρ(Γ) in Γ with elastic demands.     

Pricing under quality of service uncertainty: Market segmentation via statistical QoS guarantees

This article examines how performance-contingent pricing schemes with long-term statistical performance guarantees can be applied to many IT services. We study two forms of performance-contingent pricing, with rebate proportional to failure rate and fixed rebate for below-threshold performance. We show that threshold-performance contingency pricing can increase both profits and fairness (customers who receive higher benefits pay higher effective price) relative to standard pricing. But an even better solution is to offer a menu of performance guarantees: this can increase the firm’s profit and segment the market. Only service providers whose performance level is sufficiently better than the industry standard can benefit from this pricing mechanism.     

On the dynamics of capital accumulation across space

We solve an optimal growth model in continuous space, continuous and bounded time. The optimizer chooses the optimal trajectories of capital and consumption across space and time by maximizing an objective function with both space and time discounting. We extract the corresponding Pontryagin conditions and prove their sufficiency. We end up with a system of two parabolic differential equations with the corresponding boundary conditions. We propose a simple numerical set-up to simulate PDE systems which we employ to study the roles of initial capital and technology distributions over space in various scenarios.     

Effects of constrained supply and price contracts on agricultural cooperatives

Planning strategies depend in part on the supply flow structure of a supply chain. In food supply chains, many firms are constrained by raw material supply (e.g. vegetables and milk). This paper first examines the economic consequences of constrained supply in agricultural cooperatives. Secondly, it deals with the effects of adding price contracts to the current cooperative contract. This model combines an inventory policy approach and a Monte-Carlo simulation, to take into account price uncertainty. We illustrate our results using the case of a dairy cooperative.