Showing papers on "Fixed price published in 2002"

Revenue-maximizing pricing and capacity expansion in a many-users regime

Abstract: We consider a network where each user is charged a fixed price per unit of bandwidth used, but where there is no congestion-dependent pricing. However, the transmission rate of each user is assumed to be a function of network congestion (like TCP), and the price per unit bandwidth. We are interested in answering the following question: how should the network choose the price to maximize its overall revenue? To obtain a tractable solution, we consider a single link accessed by many users where the capacity is increased in proportion to the number of users. We show the following result: as the number of users increases, the optimal price per unit bandwidth charged by the service provider may increase or decrease depending upon the bandwidth of the link. However, for all values of the link capacity, the service provider's revenue per unit bandwidth increases and the overall performance of each user (measured in terms of a function of its throughput, the network congestion and the cost incurred by the user for bandwidth usage) improves. Since the revenue per unit bandwidth increases, it provides an incentive for the service provider to increase the available bandwidth in proportion to the number of users.

A Stackelberg Network Game with a Large Number of Followers

Abstract: We consider a hierarchical network game with multiple links, a single service provider, and a large number of users with multiple classes, where different classes of users enter the network and exit it at different nodes. Each user is charged by the service provider a fixed price per unit of bandwidth used on each link in its route, and chooses the level of its flow by maximizing an objective function that shows a tradeoff between the disutility of the payment to the service provider and congestion cost on the link the user uses, and the utility of its flow. The service provider, on the other hand, wishes to maximize the total revenue it collects. We formulate this problem as a leader-follower (Stackelberg) game, with a single leader (the service provider, who sets the price) and a large number of Nash followers (the users, who decide on their flow rates). We show that the game admits a unique equilibrium, and obtain the solution in analytic form. A detailed study of the limiting case where the number of followers is large reveals a number of interesting and intuitive properties of the equilibrium, and answers the question of whether and when the service provider has the incentive to add additional capacity to the network in response to an increase in the number of users on a particular link.

Understanding the incremental nature of e-procurement implementation at the state and local levels

Abstract: Government’s e-procurement system has not caught on as rapidly as has e-Bay! This article examines the slow implementation rate of public e-procurement systems. It challenges the notion that efficiency gains alone can entice governments to leave traditional procurement systems and principles behind. Four traditional procurement principles are reexamined to see whether they are deterrents to e-commerce: (1) low bid wins and that’s a must; (2) separation between the vendor and user is desirable to avoid claims of favoritism; (3) fixed price and fixed term contracts are best for government; and (4) open access is absolutely imperative in all situations. The jury is still out as to whether the new commerce is contingent upon a reformulation of these principles.

System and method for pooled electronic purchasing

Abstract: A retailing method executable by a computer system, including the steps of: sending a page to a prospective purchaser in response to a request, the page being associated with a specific product; receiving a purchase proposal from the prospective purchaser for direct purchase of the product at a fixed price, the purchase proposal including identifier information of persons nominated by the prospective purchaser and purchase term information selected at least in part by the prospective purchaser, the nominated persons being nominated to contribute to purchase of the product at the fixed price.

A SLA framework for QoS provisioning and dynamic capacity allocation

Abstract: Any QoS scheme must be designed from the perspective of pricing policies and service level agreements (SLAs). Although there has been enormous amount of research in designing mechanisms for delivering QoS, its applications has been limited due to the missing link between QoS, SLA and pricing. Therefore the pricing policies in practice are very simplistic (fixed price per unit capacity with fixed capacity allocation or pricing based on peak or 95-percentile load etc.). The corresponding SLAs also provide very limited QoS options. This leads to provisioning based on peak load, under-utilization of resources and high costs. We present a SLA based framework for QoS provisioning and dynamic capacity allocation. The proposed SLA allows users to buy a long term capacity at a pre-specified price. However, the user may dynamically change the capacity allocation based on the instantaneous demand. We propose a three tier pricing model with penalties (TTPP) SLA that gives incentives to the users to relinquish unused capacities and acquire more capacity as needed. This work may be viewed as a pragmatic first step towards a more dynamic pricing scenario. We solve the admission control problem arising in this scheme using the concept of trunk reservation. We also show how the SLA can be used in virtual leased-line service for VPNs, and Web hosting service by application service providers (ASPs). Using Web traces we demonstrate the proposed SLA can lead to more efficient usage of network capacity by a factor of 1.5 to 2. We show how this translates to payoffs to the user and the service provider.

LibertÃÂÃÂ di scelta e contratti prospettici: l'asimmetria informativa nel mercato delle cure sanitarie ospedaliere.

Abstract: The model studies the role of reputation in contracts between providers and purchasers of health care services. The economic literature has examined the case when the demand for health services depends on the quality offered, but because of information asymmetry, we assume that quality is not directly observable by patients. However, patients can obtain information (not perfect) about the provider, i.e. they can observe its reputation. In this paper we suppose that patient demand is influenced by the provider's reputation. The model shows that by a prospective payment contract the purchaser can overcome the quality / cost reducing effort trade off, but optimal levels for all the variables of interest are not achievable. Controlling the payment scheme (fixed price per patient treated) the purchaser can get a second best equilibrium outcome. If the main purchaser's concern is quality, he will obtain that result at the cost of a higher price than in the perfect information scenario. Information asymmetry brings an inefficient solution. Transversality conditions underline the equilibrium outcome when the demand mechanism by reputation is not used: the quality / cost trade off can not be avoided.

Strategy-proof and nonbossy allocation of indivisible goods and money

Abstract: Which strategy-proof nonbossy mechanisms exist in a model with a finite number of indivisible goods (houses, jobs, positions) and a perfectly divisible good (money)? The main finding is that only a finite number of distributions of the divisible good is consistent with strategy-proofness and nonbossiness. Under various additional assumptions - neutrality, individual rationality, object efficiency, weak decentralization - the distribution of the divisible good is further restricted. For instance, under neutrality the outcome of the mechanism can have only one distribution, which is hence independent of individual preferences. In this case the mechanism becomes serially dictatorial. On the other hand, individual rationality leads to a fixed price equilibrium with a well-defined rationing method (Gale's top-trading cycle procedure).

Comparing fixed price and discounted price strategies: the role of affect on evaluations

Abstract: Price is an important variable because it has a direct impact on a company’s profitability. However, there is limited evidence to support the effectiveness of competing strategies of fixed pricing and discounted pricing. As a result, both strategies are practised extensively in the industry. This paper draws on theories on affect, information processing, and pricing to provide a conceptual framework. The aim is to examine the effect of fixed pricing and discounted pricing on consumers’ affect and evaluation of products. Results from an experiment indicate that a fixed price format elicits more positively valenced thoughts and stronger positive affect than a discounted price format. This affective response, in turn, results in a less thorough processing of price information and, consequently, higher perceptions of quality and value for the fixed price format. Managerial implications of these findings are discussed.

A New Regional Household Demand System for GTAP

Abstract: The GTAP Model, versions 4.1 and lower, suffers from some defects in the implementation of the regional household demand system. Most seriously, the upper level of the demand system assumes that each regional household faces a fixed price for utility from private consumption. But with a private consumption demand system of the CDE form, the price of utility from private consumption depends on the level of private consumption expenditure. With no fixed price for utility from private consumption, the familiar Cobb-Douglas demand system does not apply. Accordingly, the upper-level demand equations are in error. Furthermore, utility and equivalent variation are wrongly computed in simulations with non-standard settings for the CDE expansion parameters. Even with the standard settings, in multi-step simulations the utility and equivalent variation computations are inexact. The welfare decomposition inherits the defects of the equivalent variation computation. In removing these defects we revise in passing some minor misfeatures of the old treatment: Firstly, we treat the entire final demand system as the demand system of a representative household, rather than a conglomeration of representative and region-wide demand systems (subsection 2.6). Secondly, we provide a new facility for shifting the allocation of regional income exogenously by modifying rather than overriding the final demand system (subsection 2.14). Finally, we eliminate an uninterpretable uisance term" from the decomposition of equivalent variation (subsection 4.3).

Method of evaluating security trading capacity

Abstract: A method of evaluating stock trading capacity includes the steps of providing a personal investment portfolio having a predetermined market value, setting aside a portion of an equity to form a cash reserve from the investment portfolio wherein the cash reserve serves as a cash portion of a future asset allocation, inputting a trade order of desired amount by a user wherein the trade order must include a security to be traded and a trading price when either a fixed price is desired or a price quote is unable to be retrieved automatically, producing a security balance by computing the trade order according to either a specified quantity or an amount of fund to be committed, and evaluating a cost of the trade order with respect to a disposable cash.

A Behavioural Learning Approach to the Dynamics ofPrices

Abstract: The paper studies the dynamics of market prices under the assumption of behavioural learning by sellers and buyers. The buyers are assumed to be price takers who learn about choosing sellers and acceptable prices, whilst the sellers have the possibility to offer a fixed price or to make successive reductions and learn about adequate selling behaviour and adequate price levels. The learning process was simulated and compared to the game theoretic prediction under the assumption of rational agents. The main areas of interest of the analysis concern the questions of whether bargaining on prices becomes common and whether the dynamics of prices converges.

A Framework for Estimating Benefits of Using Auctions in Revenue Management

Abstract: We develop a stochastic model to explore the benefits of incorporating auctions in revenue management. To the best of our knowledge the extant literature on modeling in revenue management has not considered auctions. We consider three models, namely, a traditional fixed price (non-auction) model, a pure auction model, and a hybrid auction model and evaluate their revenue performance under a variety of conditions. The hybrid approach outperforms the other two in all 24 scenarios and yields an average revenue increase of 16.1% over the next best. A surprise finding is that there is no significant difference between the performance of the fixed price and pure auction approaches. A sensitivity analysis reveals that the relative superiority of the hybrid revenue management strategy is reasonably robust.

Herding and price convergence in a laboratory financial market

Abstract: We study whether herding can arise in a laboratory financial market in which agents trade sequentially. Agents trade an asset whose value is unknown and whose price is efficiently set by a market maker. We show that the presence of a price mechanism destroys the possibility of herding. Most agents follow their private information and prices converge to the fundamental value. This result contrasts with the case of a fixed price, where herding and cascades arise. When the price moves, however, agents may behave as contrarian, i.e., they may trade against the market, something not accounted for by the theory. Finally, we study whether informational cascades arise when trade is costly (e.g, because of a Tobin tax). With trade costs, most subjects rationally decided not to trade and the price was unable to aggregate private information efficiently.

Computational complexity of arbitrage in frictional security market

Abstract: We are interested in computation of arbitrage condition in financial market with friction. We consider a deterministic model with a finite number of financial assets and a finite number of possible states of nature. The future return of each asset under each possible state of nature is given in the model. We derive a negative result on computational complexity of arbitrage in the case when assets are traded in integer numbers of shares and with a maximum amount of shares that can be bought for a fixed price.

Contracting for public bus transit: do techniques employed make a difference in service outcome?

Abstract: The evidence suggests deductions for non-performance and competitive solicitation methods are key determinants of contractor performance. A penalty provision is strongly associated with an increase in unit cost, while a competitive solicitation method reduces unit cost. The evidence is inconclusive for fixed price contract and contract length. The findings support the idea that contracting techniques impact contractor performance. The potential for cost savings may not be fully realized unless techniques that focus on competitive contracting are employed. Future research that addresses contract design factors for other services in other settings will provide information to help policy makers choose among the numerous contract design options.

IPO Auctions: English, Dutch,...French and Internet

Abstract: Unseasoned shares are sold through the Book Building process in the US and the UK, fixed price offerings in several countries, uniform price auctions in Israel or the new internet-based Open IPO mechanism, and an auction-like mechanism called the Mise en Vente in France. We analyze and compare the performance of these various IPO mechanisms within the context of a unified theoretical model. Fixed price offerings lead to inefficient pricing and winner's curse. Dutch auctions can also lead to inefficiencies, to the extent that they are conducive to tacit collusion by investors. The Book Building and Mise en Vente can lead to optimal information elicitation and price discovery. We document empirically the similarity between the Book Building and the Mise en Vente. We discuss the implications of our analysis for the design of optimal Internet IPO auctions.

Using weather derivatives to improve the efficiency of forward markets for electricity

Abstract: The analysis in this paper demonstrates that a combination of 1) a forward contact, with fixed price for both base land and peaking power, and 2) a collar option for the number of hot days in a summer is an effective way to reduce the risk of purchasing electricity in a spot market. The main advantages are 1) the effectiveness of price signals is strengthened by making peaking power expensive, and 2) the correlation between payouts from the weather option and high prices is increased.

Optimal Price Ceilings in a Common Value Auction

Abstract: A simple common value auction is considered where it is optimal to set a ceiling price in addition to a reserve price. The ceiling price prevents the better informed bidder from outbidding the less informed bidders. This guarantees participation from the less informed bidders raising the seller's revenues. The seller is better off by selling the good in an auction with a price ceiling compared to selling the good at a fixed price.

Riding the hat curve — Why shareholders should tender their shares in fixed price tender repurchase programs

Abstract: Marc-Olivier Lucke mluecke@whu.edu Burgstrasse 14 D-56179 Vallendar Daniel Pindur dpindur@whu.edu Bettinastr. 33 D-60325 Frankfurt am Main Acknowledgements: The authors want to thank Remy Paliard for his valuable support on our diploma thesis at the EM Lyon, which is the basis for this paper. Additionally we are very grateful to Heinz Zimmermann, WWZ Basel and Thomas Stucki for their helpful comments and suggestions.

Bureaucratic tax-seeking: the danish waste tax

Abstract: We suggest that when individual ministries are able to add differentiated green taxation on top of traditional taxation, the result is over-taxation. This is so for two reasons. Firstly, budget maximisation leads to overwhelming fiscal pressure because bureaucracies are competing for resources just like fishermen or hunters (here named 'bureaucratic tax-seeking'). Secondly, the absence of a strong and fully informed 'troop leader', i.e. overall budget co-ordinator, prevents the rational co-ordination of collective action. Taxing citizens or firms may then be likened to harvesting rents from a natural resource and we therefore apply a common-pool resource model. These suggestions are confirmed by a case study of the Danish waste tax with its fixed price approach and perverse incentives compared to that of achieving environmental target levels in a cost-minimising way. Thus, we recommend that bureaucratic institutions should coordinate their tax-seeking efforts to maximise budgets in the long run and that t...

Fixed-price unlimited eating/drinking menu operation method

Abstract: PROBLEM TO BE SOLVED: To provide a fixed-price unlimited eating/drinking menu operation method which simplifies customer's order accepting operation and billing operation at a restaurant, etc, having a 'fixed-price unlimited eating/drinking menu' SOLUTION: A waiter or waitress inputs a customer's order or additional order as it is by using a handy terminal(HT), etc Lastly, whether or not the 'fixed-price unlimited eating/drinking menu' is ordered is inputted and it is judged from an inputted dish name whether or not the dish is covered by the fixed price to generate and issue a bill

Label, label issuing device, metering label issuing device and merchandise information display

Abstract: PROBLEM TO BE SOLVED: To eliminate that a label attached to a commodity of fixed price sale gives a customer misunderstanding that the commodity is not sold at the fixed price SOLUTION: The label L1 is the label to be attached to the commodity of fixed price sale and a fixed selling price of the commodity, a unit price based on the fixed selling price and display showing that the commodity is sold at the fixed price sale, are printed thereon The commodity of the fixed price sale is sold at a fixed price independent of quantity of the commodity

Integrated method of exchanging goods electronically

Abstract: A method is provided for auctioning products or services, comprising the steps of: sending a request, from an organizer, the request comprising one or more product specification terms, quantity terms, shipment terms, and payment terms; in response to the request, receiving one or more proposals, each proposal comprising the shipment terms, quantity terms, and payment terms; converting the received shipment terms, quantity terms, and payment terms into a normalized shipment term, quantity term, and payment term, respectively; based on the normalized shipment term, quantity term, and payment term, accepting a plurality of bids from one or more bidders; and selecting one or more of the bids. A method is also provided for auctioning products or services, the method comprising the steps of: setting the terms of a contract such as contract duration, contract starting month, total contract quantity, number of shipments per month, contract price basis where price basis is determined as fixed price or a formulate related price with a reference to a publication or producer with further specifications; specifying a shipment schedule, the shipment schedule comprising a shipment month, a number of shipments within that month, a quantity per shipment and an expected shipment timing

Loan Fixed Price Strategy Analysis for Banks Based on Information Asymmetry

Abstract: 从贷款资产这一金融产品的营销理念出发,讨论按市场关系寻求贷款定价的方法.在信息不对称条件下,根据委托代理框架下的揭示原理,作为委托人的银行可以找到一种合适的途径,利用极大值原理.将信贷合同转化为最优控制问题.提出贷款利率的定价模型,求解出信贷双方目标均可得到满足的激励性对策解,并给出仿真案例及对影响贷款利率的因素作了分析.

The goods marketing and purchasing method using a discount auction in internet electronic commerce

Abstract: PURPOSE: An internet discount auction service method is provided to enable a buyer to bargain with a seller under a fixed price via various transaction conditions in buying a commodity over the internet so that it can induce a participation of more sellers and buyers. CONSTITUTION: The method comprises steps of a seller accessing a discount auction server of an EC service site, subscribing for a member of the EC service site, receiving a member ID, and inputting data on a commodity to be sold at the EC service site, for example, a name, a price, a quantity, a sale period and others, and the server storing the input sale data at a database(100), a buyer accessing the server, subscribing for a member of the EC service site, receiving a member ID and requesting sale data on a commodity(110), the server determining if the requested sale data exists(120), in a case that the requested sale data exists, the server searching for the sale data and offering the searched data to the buyer, the buyer selects the most satisfied sale data among the searched data and inputs purchase conditions, for example a desired price, a quantity or a payment method, and the server storing the purchase conditions at a database(130), the server determining if the quantity of the purchase condition is within a range of that of the sale condition and the price of the purchase condition is identical to that of the sale condition(140), in a case that the quantity of the purchase condition is within a range of that of the sale condition and the price of the purchase condition is identical to that of the sale condition, the server notifying the buyer and the seller of an auction winning result(150), the buyer confirming the auction winning result and making a payment for the commodity(160), the server requesting the seller to deliver the commodity and updating the database(170), in a case that the commodity requested by the buyer is not registered, the server enabling the buyer to register the purchase condition on a commodity, storing the purchase condition at a database, and performing a general reverse auction on the commodity(122, 124, 126), and in a case that the price of the purchase condition is not identical to that of the sale condition but the sale condition satisfies the purchase conditions, the server enabling a seller to select an auction winner(142).

The role of transaction costs and bargaining power in wildlife and landscape services production: a micro-econometric model for Dutch dairy farms /доклад на 10 конгрессе ЕААЕ, Exploring Diversity in the European Agri-Food System, Zaragoza, Spain, 28-31 August 2002

Abstract: In this paper a theoretical and empirical model is developed for analysing the decisions of individual farmers whether or not to produce wildlife and landscape services, how much of these services to produce and form an environmental co-operative in order to reduce transaction costs or to build up bargaining power. The model is applied for Dutch dairy farmers as the main users of agricultural land in the Netherlands. Simulations show that the reduction of transaction costs makes it attractive for farmers to form an environmental co-operative in case of a fixed price for wildlife and landscape services. Therefore more wildlife and landscape services are produced and more farmers are involved compared to a situation with individual supply. If demand is no longer perfectly elastic an increase in wildlife and landscape services production leads to lower prices offsetting part of the production and profit increase caused by lower transaction costs. However, if the environmental co-operative acts like a monopolist its bargaining position leads to a decrease in the production of wildlife and landscape services and higher prices.

Bilateral auctioning system on the basis of tendered and offered price ranges

Abstract: PURPOSE: An interactive auction system is provided to enable plural sellers and buyers to make a bid at a price range, not at a fixed price, to extract a rational condition from the price ranges offered by the sellers and the buyers, and to determine a winning price based on the rational condition so that it can satisfy both the seller and the buyer. CONSTITUTION: The system comprises steps of comparing a sale database, storing sale items and price ranges offered by sellers, with a purchase database, storing purchase items and price ranges(A1), checking if an intersected item exists(A2), if it exists, determining a tentative bid winning seller and buyer by considering the size of the price range, the highest maximum purchase price and the lowest minimum sale price(A3, A4), in a case that the minimum purchase price is higher that the maximum sale one, determining a middle value between the two prices as a successful bid price(A6, A7), in a case that the minimum purchase price is within the sale price range and the maximum purchase price is higher than the maximum sale price, determining a middle value between the minimum purchase price and the maximum sale price as a successful bid price(A8, A9), in a case that the maximum purchase price is within the sale price range and the minimum purchase price is lower than the minimum sale price, determining a middle value between the maximum purchase price and the minimum sale price as a successful bid price(A10, A11), in a case that the sale price range is within the purchase price range, determining a middle value of the sale price range as a successful bid price(A12, A13), in a case that the purchase price range is within the sale price range, determining a middle value of the purchase price range as a successful bid price(A14, A15), and in a case that the maximum purchase price is lower than the minimum sale price, determining the bidding of the tentative bidders as a failure and repeating the steps for the next tentative bidders(A17, A18).

Non Price Interaction and Business Fluctuations in an Agent Based Model of Firms’ Demography

Abstract: This paper presents some artificial stylised facts emerging in a simulated contestable market where firms interact with each other in taking their stay or go decision. I use nearly zero-intelligence firms: no optimisation is considered, and all the firms sell at a fixed price an equal quantity of the good. The entry of new firms is triggered by the overall profitability of the market, measured by the spread between the average rate of profit and the interest rate. The exit decision is modelled via a mean field effect, to take into account in the decision process both the performance of the individual firm, and the information about the profitability of the market that can be abduced looking at the stay or go decision of the other firms. Financial requirements of production are considered, with a spread between creditor and debtor interest rates. The model is simulated with an ACE approach, using the Swarm libraries released by the Santa Fe Institute.