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Limit price
About: Limit price is a research topic. Over the lifetime, 4865 publications have been published within this topic receiving 148546 citations.
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TL;DR: In this paper, the authors examined the relationship between price and reference quality and their combined effect on profits and developed an analytical modeling approach aimed at solving the optimal solution for the profit maximization problem under these conditions.
Abstract: The purpose of this study is to examine the relationship between price and reference quality and their combined effect on profits. An analytical modeling approach aimed at solving the optimal solution for the profit maximization problem under these conditions is developed, enabling the exact path of the optimal price and quality over time to be depicted. Based on separating the effects of price and reference quality on demand, this analysis also provides insight into the contribution of these two effects to the steady-state solution through elasticities. Our results show that a monotonic inverse relationship exists between price and quality, such that a steady-state level is obtained where the quality–price ratio is lower when reference quality effects exist than when such effects do not exist. In other words, consumers obtain higher quality for a higher price but with a lower price per unit of quality. Overall, accounting for reference quality effects will increase a firm’s profits.
73 citations
TL;DR: In this article, the authors identify a theoretical explanation for these patterns of pricing behavior, and look for evidence consistent with the theory by examining market structure, conduct, and spatial pricing patterns in different retail gasoline markets in Canada.
Abstract: Retail gasoline markets have been found to exhibit either price volatility and price dispersion or price rigidity and uniformity across large metropolitan areas. The purpose of this paper is to identify a theoretical explanation for these patterns of pricing behavior, and to look for evidence consistent with the theory by examining market structure, conduct, and spatial pricing patterns in different retail gasoline markets in Canada. The study utilizes a novel source of price data: price observations reported to internet data collection sites. The firm and station specific price data are consistent with the presence of tacitly collusive behavior in one retail gasoline market and the presence of maverick retailers that prevent tacit collusion in the other retail market.
72 citations
Book•
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04 Feb 2004
TL;DR: This chapter discusses the three Levels of Price Management and discusses how to bring these levels together to create a Pricing Architecture that works for the modern marketplace.
Abstract: Preface.Acknowledgments.PART ONE: PRICING FUNDAMENTALS.Chapter 1. Introduction.Chapter 2. The Three Levels of Price Management.PART TWO: EXPLORING THE LEVELS.Chapter 3. Transaction.Chapter 4. Product/Market Strategy.Chapter 5. Industry Strategy.PART THREE: SPECIAL TOPICS.Chapter 6. New Product Pricing.Chapter 7. Solutions, Bundles, and Other Packaged Offerings.PART FOUR: UNIQUE EVENTS.Chapter 8. Postmerger Pricing.Chapter 9. Price Wars.PART FIVE: EXPANDING THE BOUNDARIES.Chapter 10. Technology-Enabled Pricing.Chapter 11. Legal Issues.PART SIX: BRINGING IT TOGETHER.Chapter 12. Pricing Architecture.Chapter 13. Driving Pricing Change.Chapter 14. The Monarch Battery Case.Chapter 15. Epilogue.Appendix 1: Sample Pocket Price and Pocket Margin Waterfalls.Appendix 2: Antitrust Issues.Appendix 3: List of Acronyms.About the Authors.Index.
72 citations
Patent•
08 Mar 2004TL;DR: In this paper, the price of a derivative product order (bid or offer) is updated based on changes in the prices of a related underlying product, such as delta and gamma.
Abstract: Methods and systems for an exchange to handle variable derivative product order prices are disclosed. The price of a derivative product order (bid or offer) is updated based on changes in the price of a related underlying product. Price determination variable(s), such as delta and gamma, are used to determine the price of the order. The exchange may periodically recalculate the price without requiring the trader to transmit additional information to the exchange.
72 citations
Posted Content•
TL;DR: The empirical literature reveals that many prices change infrequently, in part because of physical costs of price adjustment as discussed by the authors. But, infrequent price adjustment also seems to be related to long-term buyer-seller relationships in ways that are not yet well understood.
Abstract: How often do the nominal prices of individual goods change? What is the nature and magnitude of costs of price adjustment? Economists seeking to construct macroeconomic models useful for monetary policy analysis must know the answers to these questions. The empirical literature reveals that many prices change infrequently, in part because of physical costs of price adjustment. However, infrequent price adjustment also seems to be related to long-term buyer-seller relationships in ways that are not yet well understood.
72 citations