Multi Product Price Optimization And Competition Under The Nested Logit Model With Product Differentiated Price Sensitivities

Download Multi Product Price Optimization And Competition Under The Nested Logit Model With Product Differentiated Price Sensitivities full books in PDF, epub, and Kindle. Read online Multi Product Price Optimization And Competition Under The Nested Logit Model With Product Differentiated Price Sensitivities ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!

Multi-Product Price Optimization and Competition Under the Nested Logit Model with Product-Differentiated Price Sensitivities

Author : Guillermo Gallego
Publisher :
ISBN 13 :
Total Pages : 26 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Multi-Product Price Optimization and Competition Under the Nested Logit Model with Product-Differentiated Price Sensitivities by : Guillermo Gallego

Download or read book Multi-Product Price Optimization and Competition Under the Nested Logit Model with Product-Differentiated Price Sensitivities written by Guillermo Gallego and published by . This book was released on 2014 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study firms that sell multiple substitutable products and customers whose purchase behavior follows a Nested Logit model, of which the Multinomial Logit model is a special case. Customers make purchasing decision sequentially under the Nested Logit model: they first select a nest of products and subsequently purchase one within the selected nest. We consider the multi-product pricing problem under the general Nested Logit model with product-differentiated price sensitivities and arbitrary nest coefficients. We show that the adjusted markup, defined as price minus cost minus the reciprocal of price sensitivity, is constant for all products within a nest at optimality. This reduces the problem's dimension to a single variable per nest. We also show that the adjusted nest-level markup is nest-invariant for all the nests, which further reduces the problem to maximizing a single-variable unimodal function under mild conditions. We also use this result to simplify the oligopolistic multi-product price competition and characterize the Nash equilibrium. We also consider more general attraction functions that include the linear utility and the multiplicative competitive interaction models as special cases, and show that similar techniques can be used to significantly simplify the corresponding pricing problems.

Multiproduct Price Optimization Under the Multilevel Nested Logit Model

Author : Hai Jiang
Publisher :
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Multiproduct Price Optimization Under the Multilevel Nested Logit Model by : Hai Jiang

Download or read book Multiproduct Price Optimization Under the Multilevel Nested Logit Model written by Hai Jiang and published by . This book was released on 2014 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the multiproduct price optimization problem under the multilevel nested logit model, which includes the multinomial logit and the two-level nested logit models as special cases. When the price sensitivities are identical within each primary nest, that is, within each nest at level 1, we prove that the profit function is concave with respect to the market share variables. We proceed to show that the markup, defined as price minus cost, is constant across products within each primary nest, and that the adjusted markup, defined as price minus cost minus the reciprocal of the product between the scale parameter of the root nest and the price-sensitivity parameter of the primary nest, is constant across primary nests at optimality. This allows us to reduce this multidimensional pricing problem to an equivalent single-variable maximization problem involving a unimodal function. Based on these findings, we investigate the oligopolistic game and characterize the Nash equilibrium. We also develop a dimension reduction technique which can simplify price optimization problems with flexible price-sensitivity structures.

Operations Research Proceedings 2017

Author : Natalia Kliewer
Publisher : Springer
ISBN 13 : 3319899201
Total Pages : 698 pages
Book Rating : 4.3/5 (198 download)

DOWNLOAD NOW!

Book Synopsis Operations Research Proceedings 2017 by : Natalia Kliewer

Download or read book Operations Research Proceedings 2017 written by Natalia Kliewer and published by Springer. This book was released on 2018-05-25 with total page 698 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book gathers a selection of peer-reviewed papers presented at the International Conference on Operations Research (OR 2017), which was held at Freie Universität Berlin, Germany on September 6-8, 2017. More than 800 scientists, practitioners and students from mathematics, computer science, business/economics and related fields attended the conference and presented more than 500 papers in parallel topic streams, as well as special award sessions. The main theme of the conference and its proceedings was "Decision Analytics for the Digital Economy."

Tractable Multi-product Pricing Under Discrete Choice Models

Author : Philipp Wilhelm Keller
Publisher :
ISBN 13 :
Total Pages : 204 pages
Book Rating : 4.:/5 (864 download)

DOWNLOAD NOW!

Book Synopsis Tractable Multi-product Pricing Under Discrete Choice Models by : Philipp Wilhelm Keller

Download or read book Tractable Multi-product Pricing Under Discrete Choice Models written by Philipp Wilhelm Keller and published by . This book was released on 2013 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider a retailer offering an assortment of differentiated substitutable products to price-sensitive customers. Prices are chosen to maximize profit, subject to inventory/ capacity constraints, as well as more general constraints. The profit is not even a quasi-concave function of the prices under the basic multinomial logit (MNL) demand model. Linear constraints can induce a non-convex feasible region. Nevertheless, we show how to efficiently solve the pricing problem under three important, more general families of demand models. Generalized attraction (GA) models broaden the range of nonlinear responses to changes in price. We propose a reformulation of the pricing problem over demands (instead of prices) which is convex. We show that the constrained problem under MNL models can be solved in a polynomial number of Newton iterations. In experiments, our reformulation is solved in seconds rather than days by commercial software. For nested-logit (NL) demand models, we show that the profit is concave in the demands (market shares) when all the price-sensitivity parameters are sufficiently close. The closed-form expressions for the Hessian of the profit that we derive can be used with general-purpose nonlinear solvers. For the special (unconstrained) case already considered in the literature, we devise an algorithm that requires no assumptions on the problem parameters. The class of generalized extreme value (GEV) models includes the NL as well as the cross-nested logit (CNL) model. There is generally no closed form expression for the profit in terms of the demands. We nevertheless how the gradient and Hessian can be computed for use with general-purpose solvers. We show that the objective of a transformed problem is nearly concave when all the price sensitivities are close. For the unconstrained case, we develop a simple and surprisingly efficient first-order method. Our experiments suggest that it always finds a global optimum, for any model parameters. We apply the method to mixed logit (MMNL) models, by showing that they can be approximated with CNL models. With an appropriate sequence of parameter scalings, we conjecture that the solution found is also globally optimal.

Revenue Management and Pricing Analytics

Author : Guillermo Gallego
Publisher : Springer
ISBN 13 : 1493996061
Total Pages : 336 pages
Book Rating : 4.4/5 (939 download)

DOWNLOAD NOW!

Book Synopsis Revenue Management and Pricing Analytics by : Guillermo Gallego

Download or read book Revenue Management and Pricing Analytics written by Guillermo Gallego and published by Springer. This book was released on 2019-08-14 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: “There is no strategic investment that has a higher return than investing in good pricing, and the text by Gallego and Topaloghu provides the best technical treatment of pricing strategy and tactics available.” Preston McAfee, the J. Stanley Johnson Professor, California Institute of Technology and Chief Economist and Corp VP, Microsoft. “The book by Gallego and Topaloglu provides a fresh, up-to-date and in depth treatment of revenue management and pricing. It fills an important gap as it covers not only traditional revenue management topics also new and important topics such as revenue management under customer choice as well as pricing under competition and online learning. The book can be used for different audiences that range from advanced undergraduate students to masters and PhD students. It provides an in-depth treatment covering recent state of the art topics in an interesting and innovative way. I highly recommend it." Professor Georgia Perakis, the William F. Pounds Professor of Operations Research and Operations Management at the Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts. “This book is an important and timely addition to the pricing analytics literature by two authors who have made major contributions to the field. It covers traditional revenue management as well as assortment optimization and dynamic pricing. The comprehensive treatment of choice models in each application is particularly welcome. It is mathematically rigorous but accessible to students at the advanced undergraduate or graduate levels with a rich set of exercises at the end of each chapter. This book is highly recommended for Masters or PhD level courses on the topic and is a necessity for researchers with an interest in the field.” Robert L. Phillips, Director of Pricing Research at Amazon “At last, a serious and comprehensive treatment of modern revenue management and assortment optimization integrated with choice modeling. In this book, Gallego and Topaloglu provide the underlying model derivations together with a wide range of applications and examples; all of these facets will better equip students for handling real-world problems. For mathematically inclined researchers and practitioners, it will doubtless prove to be thought-provoking and an invaluable reference.” Richard Ratliff, Research Scientist at Sabre “This book, written by two of the leading researchers in the area, brings together in one place most of the recent research on revenue management and pricing analytics. New industries (ride sharing, cloud computing, restaurants) and new developments in the airline and hotel industries make this book very timely and relevant, and will serve as a critical reference for researchers.” Professor Kalyan Talluri, the Munjal Chair in Global Business and Operations, Imperial College, London, UK.

Modeling, Dynamics, Optimization and Bioeconomics IV

Author : Alberto Pinto
Publisher : Springer Nature
ISBN 13 : 3030781631
Total Pages : 448 pages
Book Rating : 4.0/5 (37 download)

DOWNLOAD NOW!

Book Synopsis Modeling, Dynamics, Optimization and Bioeconomics IV by : Alberto Pinto

Download or read book Modeling, Dynamics, Optimization and Bioeconomics IV written by Alberto Pinto and published by Springer Nature. This book was released on 2021-09-29 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book, following the three published volumes of the book, provides the main purpose to collect research papers and review papers to provide an overview of the main issues, results, and open questions in the cutting-edge research on the fields of modeling, optimization, and dynamics and their applications to biology, economy, energy, industry, physics, psychology and finance. Assuming the scientific relevance of the presenting innovative applications as well as merging issues in these areas, the purpose of this book is to collect papers of the world experts in mathematics, economics, and other applied sciences that is seminal to the future research developments. The majority of the papers presented in this book is authored by the participants in The Joint Meeting 6th International Conference on Dynamics, Games, and Science – DGSVI – JOLATE and in the 21st ICABR Conference. The scientific scope of the conferences is focused on the fields of modeling, optimization, and dynamics and their applications to biology, economy, energy, industry, physics, psychology, and finance. Assuming the scientific relevance of the presenting innovative applications as well as merging issues in these areas, the purpose of the conference is to bring together some of the world experts in mathematics, economics, and other applied sciences that reinforce ongoing projects and establish future works and collaborations.

Operations Research and Enterprise Systems

Author : Greg H. Parlier
Publisher : Springer
ISBN 13 : 3030160351
Total Pages : 245 pages
Book Rating : 4.0/5 (31 download)

DOWNLOAD NOW!

Book Synopsis Operations Research and Enterprise Systems by : Greg H. Parlier

Download or read book Operations Research and Enterprise Systems written by Greg H. Parlier and published by Springer. This book was released on 2019-03-14 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book constitutes revised selected papers from the 7th International Conference on Operations Research and Enterprise Systems, ICORES 2018, held in Funchal, Madeira, Portugal, in January 2018. The 12 papers presented in this volume were carefully reviewed and selected from a total of 59 submissions. They are organized in topical sections named: methodologies and technologies; and applications.

Business Intelligence and Information Technology

Author : Aboul Ella Hassanien
Publisher : Springer Nature
ISBN 13 : 9819934168
Total Pages : 818 pages
Book Rating : 4.8/5 (199 download)

DOWNLOAD NOW!

Book Synopsis Business Intelligence and Information Technology by : Aboul Ella Hassanien

Download or read book Business Intelligence and Information Technology written by Aboul Ella Hassanien and published by Springer Nature. This book was released on 2023-07-03 with total page 818 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book constitutes the refereed proceedings of the 2022 International Conference on Business Intelligence and Information Technology (BIIT 2022) held in Harbin, China, during December 17–18, 2022. BIIT 2022 is organized by the School of Computer and Information Engineering, Harbin University of Commerce, and supported by Scientific Research Group in Egypt (SRGE), Egypt. The papers cover current research in electronic commerce technology and application, business intelligence and decision making, digital economy, accounting informatization, intelligent information processing, image processing and multimedia technology, signal detection and processing, communication engineering and technology, information security, automatic control technique, data mining, software development, and design, blockchain technology, big data technology, and artificial intelligence technology.

Applied Analytics through Case Studies Using SAS and R

Author : Deepti Gupta
Publisher : Apress
ISBN 13 : 1484235258
Total Pages : 415 pages
Book Rating : 4.4/5 (842 download)

DOWNLOAD NOW!

Book Synopsis Applied Analytics through Case Studies Using SAS and R by : Deepti Gupta

Download or read book Applied Analytics through Case Studies Using SAS and R written by Deepti Gupta and published by Apress. This book was released on 2018-08-03 with total page 415 pages. Available in PDF, EPUB and Kindle. Book excerpt: Examine business problems and use a practical analytical approach to solve them by implementing predictive models and machine learning techniques using SAS and the R analytical language. This book is ideal for those who are well-versed in writing code and have a basic understanding of statistics, but have limited experience in implementing predictive models and machine learning techniques for analyzing real world data. The most challenging part of solving industrial business problems is the practical and hands-on knowledge of building and deploying advanced predictive models and machine learning algorithms. Applied Analytics through Case Studies Using SAS and R is your answer to solving these business problems by sharpening your analytical skills. What You'll Learn Understand analytics and basic data concepts Use an analytical approach to solve Industrial business problems Build predictive model with machine learning techniques Create and apply analytical strategies Who This Book Is For Data scientists, developers, statisticians, engineers, and research students with a great theoretical understanding of data and statistics who would like to enhance their skills by getting practical exposure in data modeling.

Web and Internet Economics

Author : Nikhil R. Devanur
Publisher : Springer
ISBN 13 : 3319719246
Total Pages : 417 pages
Book Rating : 4.3/5 (197 download)

DOWNLOAD NOW!

Book Synopsis Web and Internet Economics by : Nikhil R. Devanur

Download or read book Web and Internet Economics written by Nikhil R. Devanur and published by Springer. This book was released on 2017-11-24 with total page 417 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book constitutes the thoroughly refereed proceedings of the 13th International Conference on Web and Internet Economics, WINE 2017, held in Bangalore, India, in December 2017. The 28 full and 6 short papers presented were carefully reviewed and selected from 89 submissions. The papers reflect the work of researchers in theoretical computer science, artificial intelligence, and microeconomics who have joined forces to tackle problems at the intersection of computation, game theory and economics.

Multi-Product Dynamic Pricing with Reference Effects Under Logit Demand

Author : Mengzi Amy Guo
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

DOWNLOAD NOW!

Book Synopsis Multi-Product Dynamic Pricing with Reference Effects Under Logit Demand by : Mengzi Amy Guo

Download or read book Multi-Product Dynamic Pricing with Reference Effects Under Logit Demand written by Mengzi Amy Guo and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider an infinite-horizon multi-product dynamic pricing problem with reference effects in a monopolistic setting, where the reference price is an exponentially weighted average of historical prices. In each period, the demand follows the multinomial logit (MNL) model, where the utility depends on both the current price and the reference price, and consumers can have product-differentiated sensitivities to the price and the reference price. We conduct thorough analyses of the myopic pricing policy, including its solution, long-run convergence behavior, and performance guarantee compared to the long-term discounted revenue of the optimal pricing policy. Furthermore, we establish the structural properties of the optimal pricing policy. When consumers are loss-neutral towards all products, we explicitly characterize the optimal pricing policy if it converges to a steady state, and based on our characterization we show that the steady state price can be computed efficiently by a binary search. Interestingly, we find that such a convergence behavior of the optimal pricing policy heavily relies on the upper bound of the admissible price range, and a low price upper bound facilitates the policy to converge. In contrast, when consumers are gain-seeking towards all products, we prove that the optimal pricing policy admits no steady state regardless of the price range. Nevertheless, if consumers are only gain-seeking towards certain but not all products, the optimal pricing policy can potentially be convergent. In addition, our numerical experiments show that loss-aversion over all products does not rule out price fluctuations. This finding is at odds with the classic belief on loss-averse consumers and hence, highlights the significance of accounting for cross-product effects through the MNL demand.

Optimal Pricing of Correlated Product Options Under the Paired Combinatorial Logit Model

Author : Hongmin Li
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Optimal Pricing of Correlated Product Options Under the Paired Combinatorial Logit Model by : Hongmin Li

Download or read book Optimal Pricing of Correlated Product Options Under the Paired Combinatorial Logit Model written by Hongmin Li and published by . This book was released on 2016 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we study price optimization with price-demand relationships captured by the paired combinatorial logit (PCL) model which overcomes restrictions of the well-studied multinomial logit (MNL) and nested logit (NL) models. The PCL model allows for choice-correlation and, like the NL model, includes the MNL model as a special case. Compared to the NL models, the PCL model does not restrict the sequence of the choice structure and allows for different covariances among all pairs of choices. This additional flexibility in structure enables a more accurate representation of some choice settings and broadens its empirical applications. Hence, it is of both theoretical and practical interests to extend the normative studies on the MNL and NL models to the PCL model and examine the pricing problem under this model. Due to cross-nesting of choice alternatives, the pricing problem under the PCL model poses a greater challenge than the MNL and NL models. However, using the concept of P-matrix, we are able to identify conditions for a unique optimal price solution and develop an efficient and theoretically sound approach for finding the optimal prices. We show that the analysis and solution approach are generalizable to other GEV family models with cross-nested alternatives.

Sequential Multi-Product Price Competition in Supply Chain Networks

Author : Awi Federgruen
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Sequential Multi-Product Price Competition in Supply Chain Networks by : Awi Federgruen

Download or read book Sequential Multi-Product Price Competition in Supply Chain Networks written by Awi Federgruen and published by . This book was released on 2015 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze a general model in which, at each echelon of the supply process, an arbitrary number of firms compete, offering one or multiple products to some or all of the firms at the next echelon, with firms at the most downstream echelon selling to the end consumer. At each echelon, the offered products are differentiated and the firms belonging to this echelon engage in price competition. The model assumes a general set of piece-wise linear consumer demand functions for all products (potentially) brought to the consumer market, where each product's demand volume may depend on the retail prices charged for all products; consumers' preferences over the various product/retailer combinations are general and asymmetric. Similarly the cost rates incurred by the firms at the most upstream echelon are general as well.We initially study a two-echelon sequential oligopoly with competing suppliers, each selling multiple products through a pool of multiple competing retailers. We characterize the equilibrium behavior under linear price-only contracts. In the second stage, given wholesale prices selected in the first stage, all retailers simultaneously decide on their retail prices to maximize their total profits among all products of all suppliers they choose to do business with. In the first stage, the suppliers anticipate the retailers' responses and all suppliers simultaneously maximize their total profits from all channels by selecting the wholesale prices. We show that in this two-stage competition model, a subgame perfect Nash equilibrium always exists. Multiple subgame perfect equilibria may arise but, if so, all equilibria are equivalent in the sense of generating unique demands and profits for all firms. We subsequently generalize our results to supply chain models with an arbitrary set of echelons, and show how all equilibrium performance measures can be computed with an efficient recursive scheme. Moreover, we establish how changes in the structure of the supply chain network, or changes in the model parameters, in particular, exogenous cost rates, or intercept values in the demand functions, impact on the system-wide equilibrium. These comparative statics results allow for the quantification of cost pass-through effects and the measurement and characterization of the brand value of different retailers and suppliers.

Multi-Product Pricing Under the Multinomial Logit Model with Local Network Effects

Author : Mohan Gopalakrishnan
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

DOWNLOAD NOW!

Book Synopsis Multi-Product Pricing Under the Multinomial Logit Model with Local Network Effects by : Mohan Gopalakrishnan

Download or read book Multi-Product Pricing Under the Multinomial Logit Model with Local Network Effects written by Mohan Gopalakrishnan and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Motivated by direct interactions with practitioners and real-world data, we study a monopoly firm selling multiple substitute products to customers characterized by their different social network degrees. Under the multinomial logit model framework, we assume that the utility a customer with a larger network degree derives from the seller's products is subject to more impact from her neighbors and describe the customers' choice behavior by a Bayesian Nash game. We show that a unique equilibrium exists as long as these network effects are not too large. Furthermore, we study how the seller should optimally set the prices of the products in this setting. Under the homogeneous product-related parameter assumption, we show that if the seller optimally price-discriminates all customers based on their network degrees, the products' markups are the same for each customer type. Building on this, we characterize the sufficient and necessary condition for the concavity of the pricing problem, and show that when the problem is not concave, we can convert it to a single-dimensional search and solve it efficiently. We provide several further insights about the structure of optimal prices, both theoretically and numerically. Furthermore, we show that we can simultaneously relax the multinomial logit model and homogeneous product-related parameter assumptions and allow customer in- and out-degrees to be arbitrarily distributed whilemaintaining most of our conclusions robust.

Multi-Product Price and Assortment Competition

Author : Awi Federgruen
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Multi-Product Price and Assortment Competition by : Awi Federgruen

Download or read book Multi-Product Price and Assortment Competition written by Awi Federgruen and published by . This book was released on 2014 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: We address a generic price competition model in an industry with an arbitrary number of competitors, each offering all or a subset of a given line of N products. The products are substitutes in the sense that the demand volume of each product weakly increases whenever the price of another product increases. The cost structure is linear, with arbitrary cost rates.Our demand model is the unique regular extension of a set of demand functions that are affine in a limited polyhedral subset of the price space. A set of demand functions is regular if it satisfies the following conditions: under any given price vector, when some product is priced out of the market, i.e., has zero demand, any increase of its price has no impact on the demand volumes. Depending on the set of prices selected by the competing firms, a different product assortment is offered on the market.We characterize the equilibrium prices, product assortment and sales volumes in the price competition model, under this demand model. Under minimal conditions, we show that a pure Nash equilibrium always exists; while multiple price equilibria may arise, they are equivalent in the sense of generating an identical product assortment and sales volumes.

The Economic Theory of Product Differentiation

Author : John Beath
Publisher : Cambridge University Press
ISBN 13 : 9780521335522
Total Pages : 220 pages
Book Rating : 4.3/5 (355 download)

DOWNLOAD NOW!

Book Synopsis The Economic Theory of Product Differentiation by : John Beath

Download or read book The Economic Theory of Product Differentiation written by John Beath and published by Cambridge University Press. This book was released on 1991-02-22 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: There are few industries in modern market economies that do not manufacture differentiated products. This book provides a systematic explanation and analysis of the widespread prevalence of this important category of products. The authors concentrate on models in which product selection is endogenous. In the first four chapters they consider models that try to predict the level of product differentiation that would emerge in situations of market equilibrium. These market equilibria with differentiated products are characterised and then compared with social welfare optima. Particular attention is paid to the distinction between horizontal and vertical differentiation as well as to the related issues of product quality and durability. This book brings together the most important theoretical contributions to these topics in a succinct and coherent manner. One of its major strengths is the way in which it carefully sets out the basic intuition behind the formal results. It will be useful to advanced undergraduate and graduate students taking courses in industrial economics and microeconomic theory.

Price Competition in Sequential Multi-Product Oligopolies

Author : Awi Federgruen
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Price Competition in Sequential Multi-Product Oligopolies by : Awi Federgruen

Download or read book Price Competition in Sequential Multi-Product Oligopolies written by Awi Federgruen and published by . This book was released on 2014 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze a general model in which, at each echelon of the supply process, an arbitrary number of firms compete, offering one or multiple products to some or all of the firms at the next or possibly subsequent echelons or directly to the end consumer. At each echelon, the offered products are differentiated and the firms belonging to this echelon engage in price competition. The model assumes a general set of piece-wise linear consumer demand functions for all products (potentially) brought to the consumer market, where each product's demand volume may depend on the retail prices charged for all products; consumers' preferences over the various product/retailer combinations are general and asymmetric. Similarly the cost rates incurred by the firms at the most upstream echelon are general as well. We initially study a two-echelon sequential oligopoly with competing suppliers, each selling multiple products indirectly through a pool of multiple competing retailers or directly to end consumers. In some cases, a supplier may choose to sell some or all of its products simultaneously via its direct sales channel and indirectly via some or all of the retailers. We characterize the equilibrium behavior under linear price-only contracts. In the second stage, given wholesale prices and prices of direct sales channels selected in the first stage, all retailers simultaneously decide on their retail prices to maximize their total profits among all products of all suppliers they choose to do business with. In the first stage, the suppliers anticipate the retailers' responses and all suppliers simultaneously maximize their total pro ts from all channels direct or indirect channels by selecting the wholesale prices and direct sales channel prices. We show that in this two-stage competition model, a subgame perfect Nash equilibrium always exists. Multiple subgame perfect equilibria may arise but, if so, all equilibria are equivalent in the sense of generating unique demands and profits for all firms. We subsequently generalize our results to supply chain models with an arbitrary set of echelons, and show how all equilibrium performance measures can be computed with an efficient recursive scheme. The model may, also be used to evaluate the impact of various structural changes in the supply chain network.