optimal dynamic pricing of inventories with stochastic demand over finite horizons in many industries managers face the problem of selling a given stock of items by a deadline we investigate the problem of dynamically pricing such inventories when demand is price sensitive and stochastic and the firm s objective is to maximize expected revenues examples that fit this framework include retailers selling fashion and seasonal goods and the travel and leisure industry which markets space such as seats on airline flights cabins on vacation cruises and rooms in hotels that become worthless if not sold by a specific time we formulate this problem using intensity control and obtain structural monotonicity results for the optimal intensity resp price as a function of the stock level and the length of the horizon for a particular exponential family of demand functions we find the optimal pricing policy in closed form for general demand functions we find an upper bound on the expected revenue based on analyzing the deterministic version of the problem and use this bound to prove that simple fixed price policies are asymptotically optimal as the volume of expected sales tends to infinity finally we extend our results to the case where demand is compound poisson only a finite number of prices is allowed the demand rate is time varying holding costs are incurred and cash flows are discounted the initial stock is a decision variable and reordering overbooking and random cancellations are allowed

institutional determinants of labor reallocation in transition the transition process differed in the countries of the former soviet union fsu and those of central and eastern europe cee in terms of reallocation of labor real wage employment and output adjustment we sift through the theoretical and empirical literature to find an explanation for these diverging adjustment trajectories and conclude that they can be explained by the fact that the cee countries adopted social policies that upheld wages at the bottom of the distribution forcing the old sector to restructure or collapse while the fsu countries allowed wages to free fall not forcing the hand of the old sector

the gender earnings differential in the russian transition economy using data from the russia longitudinal monitoring survey rlms the first nationally representative household survey in the russian federation the author examines the gender earnings differentia

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

optimal dynamic pricing of perishable products with stochastic demand and a finite set of prices abstract consider a continuous time inventory problem in which a retailer sets the price on a fixed number of a perishable asset that must be sold prior to the time at which it perishes the retailer can dynamically adjust the price between any of a finite number of allowable prices demand for the product is poisson with an intensity that is inversely related to the price the optimal policy is piecewise constant the maximum expected revenue is nondecreasing and concave in both the remaining inventory and the time to go for a given inventory level the optimal price declines as the time at which the products perish approaches at any given time the optimal price is nonincreasing in the number of items remaining unsold these results are extended to i the case in which the prices and corresponding demand intensities depend on the time to go and ii the case in which the retailer can restock to meet demand at a unit cost after the initial inventory has been sold

the structure of the female male wage differential is it who you are what you do or where you work the efficacy of policies to narrow the malelfemale wage differential depends partly on the size of the portion s of the gap targeted previous research finds no between sex wage gap within occupations within employer job cell this is the first study to disentangle segregation by occupation from that based on employer or on job cell in five industries controlling for other forms of segregation occupational segregation produces a gap of 11 percent manufacturing to 26 percent services the wage gaps from establishment and job cell segregation are about 6 percent each since comparable worth acts on the occupation and job cell components it has a potentially large impact

retail pricing and clearance sales sellers of new products are faced with having to guess demand conditions to set price appropriately but sellers are able to adjustprice over time and to learn from past mistakes additionally it is not necessary that all goods be sold with certainty it is sometimes better to set a high price and to risk no sale this process is modeledto explain retail pricing behavior and the time distribution of transactions prices start high and fall as a function of time on theshelf the initial price and rate of decline can be predicted and depends on thinness of the market the proportion of customers who are window shoppers and other observable characteristics copyright 1986 by american economic association

analysis of deterministic lp based booking limit and bid price controls for revenue management we study the performance of two popular and widely used heuristics for revenue management known as the booking limit and bid price controls in contrast to a recent result in the literature where frequent re solvings of a certain heuristic are shown to significantly reduce revenue loss we show that the asymptotic revenue loss of either booking limit or bid price control cannot be reduced regardless of the choice of re solving times and the frequency of re solving moreover we also show that further variations within the policy classes such as nested instead of partition booking limit or certainty equivalent instead of additive bid price are simply indistinguishable in terms of their order of revenue loss under frequent re solvings this negative result highlights the limitation of re solving deterministic linear programs when the solution is interpreted as either a booking limit or a bid price finally we briefly discuss how to modify the traditional booking limit control to make it more responsive

strategic and operational decisions in restaurant revenue management abstract the paper addresses restaurant revenue management from both a strategic and an operational point of view strategic decisions in restaurants are mainly related to defining the most profitable combination of tables that will constitute the restaurant we propose new formulations of the so called tables mix problem by taking into account several features of the real setting we compare the proposed models in a computational study showing that restaurants with the capacity of managing tables as renewable resources and of combining different sized tables can improve expected revenue performances operational decisions are mainly concerned with the more profitable assignment of tables to customers indeed the parties mix problem consists of deciding on accepting or denying a booking request from different groups of customers with the aim of maximizing the total expected revenue a dynamic formulation of the parties mix problem is presented together with a linear programming approximation whose solutions can be used to define capacity control policies based on booking limits and bid prices computational results compare the proposed policies and show that they lead to higher revenues than the traditional strategies used to support decision makers

a new bid price approach to dynamic resource allocation in network revenue management abstract firms selling perishable products use a variety of techniques to maximize revenue through the dynamic control of their inventories one of the most powerful and simple approaches to address this issue consists of assigning threshold values bid prices to each resource and to accept requests whenever their revenue exceeds the sum of the bid prices associated with its constituent resources in this context we propose a new customer choice based mathematical program to estimate time dependent bid prices in contrast with most approaches from the current literature ours is characterized by its flexibility indeed it can easily embed technical and practical constraints that occur in most central reservation systems crs to solve the model we develop a column generation algorithm in which the np hard subproblem is addressed via an efficient heuristic procedure our computational results illustrate the performance of the method through comparisons with alternative proposals

revenue management for operations with urgent orders this article is motivated by the case of a company manufacturing industrial equipment that faces two types of demand on the one hand there are the so called regular orders for installations or refurbishing of existing facilities these orders have a relatively long lead time on the other hand there are urgent orders mostly related to spare parts when a facility has a breakdown the delay in such case is much shorter but higher margins can be obtained we study the order acceptance problem for a firm that serves two classes of demand over an infinite horizon the firm has to decide whether to accept a regular order or equivalently how much capacity to set aside for urgent orders in order to maximize its profit we formulate this problem as a multi dimensional markovian decision process mdp we propose a family of approximate formulations to reduce the dimension of the state space via aggregation we show how our approach can be used to compute bounds on the profit associated with the optimal order acceptance policy finally we show that the value of revenue management is commensurate with the operational flexibility of the firm

evaluating china s natural gas supply security based on ecological network analysis abstract growing role of natural gas as an effective policy choice has kindled the discussions surrounding the security of its supplies in the policy circles of the chinese government this study tries to evaluate china s natural gas supply security and employs a system oriented modelling approach namely ecological network analysis ena to integrate all the critical compartments of china s natural gas supply system several ena indicators are constructed which disclose that domestic natural gas production contributes significantly to china s natural gas supply system in comparison with all the external natural gas suppliers in addition the variations in a system stability indicator suggest that diversification of external natural gas suppliers has a positive influence on china s natural gas supply security furthermore the results revealed that china s natural gas supply security policy is orchestrated on following features 1 to increase the investment in the upstream natural gas production sector to boost its domestic production in order to reduce its import requirements and 2 to diversify the external natural gas supplies by sources and routes to reduce the level of the economic and supply disruption related risks

demand uncertainty and sales a study of fashion and markdown pricing the theory of clearance sales is expanded and applied to explain why markups markdowns and the frequency of sales of merchandise sold by department stores have increased dramatically in recent years and why they differ across merchandise groups tha major theme of the paper is that the growing role of fashion and product variety is an important reason for these increases and for the differences between merchandise groups the growing importance of fashion is illustrated by documenting the declining use of whites and the increasing use of colors and prints estimates of the effects of imports and technological and demographic changes on markups and markdowns are presented copyright 1988 by american economic association

integration of pricing and capacity allocation for perishable products abstract for years pricing and capacity allocation decisions in most revenue management models have been carried out independently this article presents a comprehensive model to integrate these two decisions for perishable products we assume that the supplier sells the same products to different micro markets at distinct prices throughout the sales season the supplier faces decisions as to which micro markets or customer classes should be served and at what prices we show that i at any time a customer class is active being served if and only if the price offered is over a threshold level but the optimal price may not be the highest one of the supplier s choice ii when the price decision is made in conjunction with inventory it is similar to the procedure shown in pure pricing models i e the optimal price comes from a subset of prices that forms a maximum increasing concave envelope iii because of dynamic changes in the optimal prices the nested price structure does not necessarily hold in general and needs to be redefined and iv the optimal pricing and capacity control policy is based on a sequence of threshold points that incorporate inventory price and demand intensity numerical examples are provided

language and the estimates of the gender wage gap in this paper we link the estimates of the gender wage gap with the gender sensitivity of the language spoken in a given country we find that nations with more gender neutral languages tend to be characterized by lower estimates of gwg the results are robust to a number of sensitivity checks

dynamic pricing and ordering decisions by a monopolist this paper considers the relationship between pricing and ordering decisions for a monopolistic retailer facing a known demand function where over the inventory cycle the product may exhibit i physical decay or deterioration of inventory called wastage and ii decrease in market value called value drop associated with each unit of inventory on hand the retailer is allowed to continuously vary the selling price of the product over the cycle we introduce a notion of instantaneous margin and use it to derive profit maximizing conditions for the retailer the model explains the markdown of retail goods subject to decay it also provides guidance in determining when price changes during the cycle are worthwhile due to product aging how often such changes should be made and how such changes affect ordering intervals and quantities

what determines china s crude oil importing trade patterns empirical evidences from 55 countries between 1992 and 2015 abstract this study develops a conceptual framework that synthesizes the supply demand price and openness of crude oil trade along with a list of traditional economic political and geographical factors to investigate the determinants of crude oil imports in emerging markets we test the framework using china s crude oil imports from 55 countries for the period from 1992 to 2015 using both static and dynamic panel data models we find that china s crude oil import is associated with exporting country s supply demand and price as well as its bilateral trade relationships these factors were found to affect china s import of crude oil from the middle east however only bilateral trade relationships affect its imports of crude oil from the asia pacific furthermore we do not find substantial evidence in this research to indicate that china s direct investment increases crude oil imports from those countries this article is part of a virtual special issue entitled comparing sustainable energy policies in northeast asia toward the harmonized public private partnership

new evidence on sex segregation and sex differences in wages from matched employee employer data we use new matched employer employee data to estimate the contributions of sex segregation and wage differences by sex within occupation industry establishment and occupation establishment cells to the overall sex gap in wages in contrast to earlier data used to study this question our data cover all industries and occupations across all regions of the united states we find that segregation of women into lower paying occupations industries establishments and occupations within establishments accounts for a sizable fraction of the sex gap in wages nonetheless approximately one half of the sex gap in wages remains attributable to the individual s sex

optimal inventory policies when purchase price and demand are stochastic in this paper we consider the problem of a firm that faces a stochastic poisson demand and must replenish from a market in which prices fluctuate such as a commodity market we describe the price evolution as a continuous stochastic process and we focus on commonly used processes suggested by the financial literature such as the geometric brownian motion and the ornstein uhlenbeck process it is well known that under variable purchase price a price dependent base stock policy is optimal using the single unit decomposition approach we explicitly characterize the optimal base stock level using a series of threshold prices we show that the base stock level is first increasing and then decreasing in the current purchase price we provide a procedure for calculating the thresholds which yields closed form solutions when price follows a geometric brownian motion and implicit solutions under the ornstein uhlenbeck price model in addition our numerical study shows that the optimal policy performs much better than inventory policies that ignore future price evolution because it tends to place larger orders when prices are expected to increase

perishable asset revenue management with markovian time dependent demand intensities many industries face the problem of selling a fixed stock of items over a finite horizon these industries include airlines selling seats before planes depart hotels renting rooms before midnight theaters selling seats before curtain time and retailers selling seasonal items with long procurement lead times given a sunk investment in seats rooms or winter coats the objective for these industries is to maximize revenues in excess of salvage value when demand is price sensitive and stochastic pricing is an effective tool to maximize expected revenues in this paper we address the problem of deciding the optimal timing of price changes within a given menu of allowable possibly time dependent price paths each of which is associated with a general poisson process with markovian time dependent predictable intensities we show that a set of variational inequalities characterize the value functions and the optimal possibly random time changes in addition we develop an efficient algorithm to compute the optimal value functions and the optimal pricing policy

transformation of optimization problems in revenue management queueing system and supply chain management abstract for revenue optimization problems in the literature on revenue management supply chain management and queueing systems some assumptions such as concavity of revenue functions or increasing generalized failure rate are often needed to ensure the problems to be analytically tractable we show that these assumptions are not necessary for this we present and study a parametric revenue maximization problem to unify some problems in the literature without the usual assumptions we transform the problem into an equivalent one where the revenue function is increasing continuous and concave we then apply the transformation method to a continuous time revenue management problem and conclude that the monotone results are robust to demand function and allowable price set also we apply the transformation method to study a parametric cost minimization problem we further apply our method to two optimal control problems in queueing systems and an inventory control problem in a supply chain with price only contract

clearance pricing and inventory policies for retail chains clearance pricing and end of season inventory management are challenging and important problems in retailing sales rates depend upon price seasonal effects and the remaining assortment of items available to customers there is little time to react to observed sales and pricing errors result in either loss of potential revenue or excess inventory to be liquidated this paper develops optimal clearance prices and inventory management policies that take into account the impact of reduced assortment and seasonal changes on sales rates versions of these policies have been tested and implemented at three major retail chains and these applications are summarized and discussed

optimal starting times for end of season sales and optimal stopping times for promotional fares many industries face the problem of selling a fixed stock of items over a finite horizon these industries include airlines selling seats before planes depart hotels renting rooms before midnight theaters selling seats before curtain time and retailers selling seasonal goods such as air conditioners or winter coats before the end of the season given a fixed number of seats rooms or coats the objective for these industries is to maximize revenues in excess of salvage value when demand is price sensitive and stochastic pricing is an effective tool to maximize revenues in this paper we address the problem of deciding the optimal timing of a single price change from a given initial price to either a given lower or higher second price under mild conditions we show that it is optimal to decrease resp to increase the initial price as soon as the time to go falls below resp above a time threshold that depends on the number of yet unsold items

revenue management under a general discrete choice model of consumer behavior customer choice behavior such as buy up and buy down is an important phenomenon in a wide range of revenue management contexts yet most revenue management methodologies ignore this phenomenon or at best approximate it in a heuristic way in this paper we provide an exact and quite general analysis of this problem specifically we analyze a single leg reserve management problem in which the buyers choice behavior is modeled explicitly the choice model is very general simply specifying the probability of purchase for each fare product as a function of the set of fare products offered the control problem is to decide which subset of fare products to offer at each point in time we show that the optimal policy for this problem has a quite simple form namely it consists of identifying an ordered family of efficient subsets s 1 s m and at each point in time opening one of these sets s k where the optimal index k is increasing in the remaining capacity x and decreasing in the remaining time that is the more capacity or less time available the further the optimal set is along this sequence we also show that the optimal policy is a nested allocation policy if and only if the sequence of efficient sets is nested that is s 1 s 2 s m moreover we give a characterization of when nesting by fare order is optimal we also develop an estimation procedure for this setting based on the expectation maximization em method that jointly estimates arrival rates and choice model parameters when no purchase outcomes are unobservable numerical results are given to illustrate both the model and estimation procedure

women s wages in women s work a u s canada comparison of the roles of unions and public goods sector jobs in this paper we investigate the mechanism by which the femaleness of occupations has a negative effect on women s wages we relate us canada differences in labor market institutions the returns to skills and other dimensions of the wage structure such as occupational rents to corresponding differences in the rewards to female jobs our analysis which uses us data from the cps org for 1988 and canadian data from the 1988 lmas uncovers intriguing us canada differences in the effect of occupational gender composition on women s wages the estimated effect for canadian women is generally small and not statistically significant while estimates for american women are relatively large and comparable to the evidence in previous studies relating these differences to cross country variation in other wage determinants reveals that higher rates of unionization and the higher occupation wage effects for certain public good sector jobs such as educational services work to the advantage of canadian women we also find that the relatively higher pay of integrated jobs in the united states helps account for the larger negative effect of gender composition on women s wages in this country dans cet article nous etudions le mecanisme par lequel le taux de feminite des occupations peut avoir un effect negatif sur les salaires des femmes nous utilisons une comparaison internationale etats unis canada pour relier les differences institutionnelles du marche du travail les differences dans les rendements des qualifications et dans d autres dimensions de la structure salariale comme les rentes occupationnelles a des differences dans la remuneration des emplois a predominance feminine notre analyse qui utilise les donnees americaines provenant des cps org pour 1988 et les donnees canadiennes provenant de l enquete sur l activite aussi pour 1988 demontre l existence de differences interessantes entre les etats unis et le canada quant a l effet du taux de feminite des occupa this abstract was borrowed from another version of this item

an analysis of bid price controls for network revenue management bid prices are becoming an increasingly popular method for controlling the sale of inventoryin revenue management applications in this form of control threshold or bid prices are set for the resources or units of inventory seats on flight legs hotel rooms on specific dates etc and a product a seat in a fare class on an itinerary or room for a sequence of dates is sold only if the offered fare exceeds the sum of the threshold prices of all the resources needed to supply the product this approach is appealing on intuitive and practical grounds but the theory underlying it is not well developed moreover the extent to which bid price controls represent optimal or near optimal policies is not well understood using a general model of the demand process we show that bid price control is not optimal in general and analyze why bid price schemes can fail to produce correct accept deny decisions however we prove that when leg capacities and sales volumes are large bid price controls are asymptotically optimal provided the right bid prices are used we also provide analytical upper bounds on the optimal revenue in addition we analyze properties of the asymptotically optimal bid prices for example we show they are constant over time even when demand is nonstationary and that they may not be unique

mathematical programming for network revenue management revisited mathematical programming models for airline seat inventory control provide booking limits and bid prices for all itineraries and fare classes e l williamson airline network seat inventory control methodologies and revenue impacts ph d thesis massachusetts institute of technology cambridge ma 1992 finds that simple deterministic approximation methods based on average demand often outperform more advanced probabilistic heuristics we argue that this phenomenon is due to a booking process that includes nesting of the fare classes which is ignored in the modeling phase the differences in the performance between these approximations are studied using a stochastic programming model that includes the deterministic model as a special case our study carefully examines the trade off between computation time and the aggregation level of demand uncertainty with examples of a multi leg flight and a single hub network

simultaneous capacity and price control based on fuzzy controllers abstract analyzing the basic conditions of modern service and production processes the strengthened competition constraints and unpredictable demand fluctuations are obvious to cause an intense pressure to on the one hand reduce costs through an efficient process control and on the other hand optimize revenue through an adequate capacity and price control demand sided revenue optimization the objective of this article is to identify the revenue potential of a rule based implementation of revenue management as a method for simultaneous capacity and price control first the general conduction of this integrated method is described based on the available literature second the limitations and constraints in the use of the underlying model especially in terms of the applicability in practice and the impreciseness of information are illustrated third a solution concept is established that is able to cope with these limitations one crucial part will be the use of a fuzzy expert controller to handle the rule based approach after the description of the general use of fuzzy expert controllers an application for cases of fixed prices based on an example of the waste incineration industry is illustrated

competitive strategies for two firms with asymmetric production cost structures we model joint production marketing strategies for two firms with asymmetric production cost structures in competition the first firm called the production smoother faces a convex production cost and a linear inventory holding cost the second firm called the order taker faces a linear production cost and holds no inventory each firm is assumed to vary continuously over time both its production rate and its price in view of an unstable surge pattern of demand the underlying theoretical motivation is to investigate the temporal nature of the equilibrium policies of two competing firms one operating at or near capacity the production smoother and one operating significantly below capacity the order taker we characterize and compare the equilibrium strategies of the two competing firms among our results we show that if the duopolistic production smoother finds it optimal to hold inventory then he will begin the season by building up inventory continue by drawing down inventory until i

systematic peak load pricing congestion premia and demand diverting empirical evidence abstract this paper finds empirical support to systematic peak load pricing in airlines higher fares in ex ante known congested periods it estimates a congestion premia and supports the main empirical prediction in gale and holmes gale i holmes t 1993 advance purchase discounts and monopoly allocation of capacity american economic review 83 135 146 less discount seats on peak flights

a price directed approach to stochastic inventory routing we consider a new approach to stochastic inventory routing that approximates the future costs of current actions using optimal dual prices of a linear program we obtain two such linear programs by formulating the control problem as a markov decision process and then replacing the optimal value function with the sum of single customer inventory value functions the resulting approximation yields statewise lower bounds on optimal infinite horizon discounted costs we present a linear program that takes into account inventory dynamics and economics in allocating transportation costs for stochastic inventory routing on test instances we find that these allocations do not introduce any error in the value function approximations relative to the best approximations that can be achieved without them also unlike other approaches we do not restrict the set of allowable vehicle itineraries in any way instead we develop an efficient algorithm to both generate and eliminate itineraries during solution of the linear programs and control policy in simulation experiments the price directed policy outperforms other policies from the literature

cargo capacity management with allotments and spot market demand we consider a problem faced by an airline that operates a number of parallel flights to transport cargo between a particular origin to destination pair the airline can sell its cargo capacity either through allotment contracts or on the spot market where customers exhibit choice behavior between different flights the goal is to simultaneously select allotment contracts among available bids and find a booking control policy for the spot market to maximize the sum of the profit from the allotments and the total expected profit from the spot market we formulate the booking control problem on the spot market as a dynamic program and construct approximations to its value functions which can be used to estimate the total expected profit from the spot market we show that our value function approximations provide upper bounds on the optimal total expected profit from the spot market and they allow us to solve the allotment selection problem through a sequence of linear mixed integer programs with a special structure furthermore the value function approximations are useful for constructing a booking control policy for the spot market with desirable monotonic properties computational experiments show that the proposed approach can be scaled to realistic problems and provides well performing allotment allocation and booking control decisions

optimal pricing strategies for new products in dynamic oligopolies this paper deals with the determination of optimal pricing policies for firms in oligopolistic markets the problem is studied as a differential game and optimal pricing policies are established as nash open loop controls cost learning effects are assumed such that unit costs are decreasing with cumulative output discounting of future profits is also taken into consideration initially the problem is addressed in a general framework and we proceed to study some specific cases that are related to models presented in recent literature three basic classes of sales dynamics are analyzed competition with price effects only competition with price as well as adoption effects and competition with adoption effects only in some cases it turns out that results which hold for the monopoly case carry over to the multi firm case in the sense that the qualitative structure of optimal pricing strategies is the same in the monopoly and the oligopoly cases however due to competitive interdependencies differences certainly exist in the levels as well as the rates of change of optimal prices

women in transition changes in gender wage differentials in eastern europe and the former soviet union under state socialism women fared relatively well in the labor market female male wage differentials were similar to those in the west and female labor force participation rates were among the h

why are products sold on sale explanations of pricing regularities this paper reports on interesting changes in markdown pricing practices over time and differences in the pricing within a product line the price discrimination and the uncertainty hypotheses appear to better explain the data than the peak load hypothesis fashion has become more important over time and appears to explain the greater seasonal variation in retail apparel prices in recent years differences in uncertainty also explains differences in the pricing of different types of men s dress shirts

fairness efficiency and flexibility in organ allocation for kidney transplantation we propose a scalable data driven method for designing national policies for the allocation of deceased donor kidneys to patients on a waiting list in a fair and efficient way we focus on policies that have the same form as the one currently used in the united states in particular we consider policies that are based on a point system that ranks patients according to some priority criteria e g waiting time medical urgency etc or a combination thereof rather than making specific assumptions about fairness principles or priority criteria our method offers the designer the flexibility to select his desired criteria and fairness constraints from a broad class of allowable constraints the method then designs a point system that is based on the selected priority criteria and approximately maximizes medical efficiency i e life year gains from transplant while simultaneously enforcing selected fairness constraints among the several case studies we present employing our method one case study designs a point system that has the same form uses the same criteria and satisfies the same fairness constraints as the point system that was recently proposed by u s policy makers in addition the point system we design delivers an 8 increase in extra life year gains we evaluate the performance of all policies under consideration using the same statistical and simulation tools and data as the u s policy makers use other case studies perform a sensitivity analysis for instance demonstrating that the increase in extra life year gains by relaxing certain fairness constraints can be as high as 30 and also pursue the design of policies targeted specifically at remedying criticisms leveled at the recent point system proposed by u s policy makers

the overseas acquisitions and equity oil shares of chinese national oil companies a threat to the west but a boost to china s energy security abstract this paper argues that both china and the western countries need to de politicize china s global quest for energy security the western politicians need to recognize that their rhetoric in relation to china s efforts to secure energy supplies overseas has done nothing but intensify china s fear that they might seek to deny china s access to the oil it needs for the development china needs to reconsider its stance of distrusting global oil markets and to recognize that the reliance on aggressive acquisitions of overseas oil fields and equity oil production has been of little help in strengthening its energy security given that china s energy security depends increasingly and deeply on the stability of global oil markets and reliable and growing oil supplies to the market china shares with other major oil importing countries profound common interests in maintaining and strengthening the stability of global oil markets and reducing the chance of potential disruptions to oil supply and the resulting damaging oil price shocks

gender segregation and wage gap an east west comparison this paper discusses the implication of recent results on the structure of gender wage gaps in transition economies for the literature on gender segregation differences in employment rates of low wage women driven by initial transition policies may be responsible for different wage penalties to predominantly female occupations new evidence presented here also suggests that the introduction of western type anti discrimination policies has had little immediate effect on the structure of female male wage differences jel j3 j7 p3

optimal pricing for information goods with piracy and saturation effect we analyze the pricing decision of a firm selling a product for which there is a significant and continuous saturation effect over time and that can be pirated assuming that the firm uses a skimming strategy we solve three profit maximization models given demand that is linearly decreasing in price few prices can be used over the life of the product the effects of both piracy and saturation are combined in the first model in the second model the firm can invest in technology or copyright enforcement to reduce piracy the third model describes the case in which piracy leads to increased awareness of the product and increased demand numerical sensitivity analysis and examples are used to illustrate the results the results indicate that under strong piracy and saturation effects a skimming strategy is suboptimal

a taxonomy and research overview of perishable asset revenue management yield management overbooking and pricing this paper proposes the term perishable asset revenue management to denote the field that combines the areas of yield management overbooking and pricing for perishable assets after summarizing the characteristics common to problems in this field the paper discusses the objectives and constraints faced by decision makers then it offers a comprehensive taxonomy with 14 different elements and reviews the research that has been done related to each element finally it suggests some important areas of future research that can help bridge the gap between theory and application

repeated auctions with budgets in ad exchanges approximations and design ad exchanges are emerging internet markets where advertisers may purchase display ad placements in real time and based on specific viewer information directly from publishers via a simple auction mechanism advertisers join these markets with a prespecified budget and participate in multiple second price auctions over the length of a campaign this paper studies the competitive landscape that arises in ad exchanges and the implications for publishers decisions the presence of budgets introduces dynamic interactions among advertisers that need to be taken into account when attempting to characterize the bidding landscape or the impact of changes in the auction design to this end we introduce the notion of a fluid mean field equilibrium fmfe that is behaviorally appealing and computationally tractable and in some important cases it yields a closed form characterization we establish that an fmfe approximates well the rational behavior of advertisers in these markets we then show how this framework may be used to provide sharp prescriptions for key auction design decisions that publishers face in these markets in particular we show that ignoring budgets a common practice in this literature can result in significant profit losses for the publisher when setting the reserve price this paper was accepted by dimitris bertsimas optimization

note the role of returns policies in pricing and inventory decisions for catalogue goods manufacturers often use returns policies to encourage retailers to stock and price items more aggressively we focus on the effect that such policies have on both a retailer s and a manufacturer s profits when the retailer must commit prior to the selling season to both a stocking quantity and a price at which to sell an item such a commitment is often necessary for retailers who sell primarily through catalogues

airline seat allocation with multiple nested fare classes this paper addresses the problem of determining optimal booking policies for multiple fare classes that share the same seating pool on one leg of an airline flight when seats are booked in a nested fashion and when lower fare classes book before higher ones we show that a fixed limit booking policy that maximizes expected revenue can be characterized by a simple set of conditions on the subdifferential of the expected revenue function these conditions are appropriate for either the discrete or continuous demand cases these conditions are further simplified to a set of conditions that relate the probability distributions of demand for the various fare classes to their respective fares the latter conditions are guaranteed to have a solution when the joint probability distribution of demand is continuous characterization of the problem as a series of monotone optimal stopping problems proves optimality of the fixed limit policy over all admissible policies a comparison is made of the optimal solutions

a multiproduct dynamic pricing problem and its applications to network yield management a firm has inventories of a set of components that are used to produce a set of products there is a finite horizon over which the firm can sell its products demand for each product is a stochastic point process with an intensity that is a function of the vector of prices for the products and the time at which these prices are offered the problem is to price the finished products so as to maximize total expected revenue over the finite sales horizon an upper bound on the optimal expected revenue is established by analyzing a deterministic version of the problem the solution to the deterministic problem suggests two heuristics for the stochastic problem that are shown to be asymptotically optimal as the expected sales volume tends to infinity several applications of the model to network yield management are given numerical examples illustrate both the range of problems that can be modeled under this framework and the effectiveness of the proposed heuristics the results provide several fundamental insights into the performance of yield management systems

discrete order admission atp model with joint effect of margin and order size in a mto environment abstract swarming demands and seasonality periodically induce a stringent capacity problem in the made to order mto b2b environment desirable order admission is a tactic with minimal application cost for handling this problem a real time order admission problem with limited major customer population and batch size demand with heterogeneous distributions is modeled as a dynamic and stochastic knapsack problem the optimality of the markovian deterministic reward threshold policy is verified optimal policy basic policy and the capacity rationing method are compared in the designed experiment the numerical results suggest great potential for increasing profit using the optimal order admission policy for mto businesses

the transition in east germany when is a ten point fall in the gender wage gap bad news the gender wage gap in east germany has narrowed by 10 percentage points in transition but women have experienced much more severe employment difficulties than men using the german socio economic panel for 1990 94 i show that on balance women have lost relative to men almost half the relative wage gain is due to exits from employment of the low skilled who are disproportionately women the female employment decline is not primarily voluntary more than half the gender gap in the hazard rate from employment reflects a general fall in demand for low skilled workers reduced child care plays no role

improved bid prices for choice based network revenue management one of the latest developments in network revenue management rm is the incorporation of customer purchase behavior via discrete choice models many authors presented control policies for the booking process that are expressed in terms of which combination of products to offer at a given point in time and given resource inventories however in many implemented rm systems most notably in the hotel industry bid price control is being used and this entails the problem that the recommended combination of products as identified by these policies might not be representable through bid price control if demand were independent from available product alternatives an optimal choice of bid prices is to use the marginal value of capacity for each resource in the network but under dependent demand this is not necessarily the case in fact it seems that these bid prices are typically not restrictive enough and result in buy down effects we propose 1 a simple and fast heuristic that iteratively improves on an initial guess for the bid price vector this first guess could be for example dynamic estimates of the marginal value of capacity moreover 2 we demonstrate that using these dynamic marginal capacity values directly as bid prices can lead to significant revenue loss as compared to using our heuristic to improve them finally 3 we investigate numerically how much revenue performance is lost due to the confinement to product combinations that can be represented by a bid price the heuristic is not restricted to a particular choice model and can be combined with any method that provides us with estimates of the marginal values of capacity in our numerical experiments we test the heuristic on some popular networks examples taken from peer literature we use a multinomial logit choice model which allows customers from different segments to have products in common that they consider to purchase in most problem instances our heuristic policy results in significant revenue gains over some currently available alternatives at low computational cost

comments on pricing research in marketing the state of the art rao s paper provides an account of recent research published in the marketing literature on the subject of pricing the paper contains an impressive bibliographic survey however the formal model proposed by the author as a framework for classifying and assessing the advances and needs in this area of marketing science is rather limited a major shortcoming of this model which appears to epitomize the marketing literature on pricing is the treatment of prices and quantities as unidimensional in other words the model implicitly assumes that purchases of the product under consideration can be characterized by a scalar quantity denoting the number of units purchased while the pricing of any such purchase is determined by a uniform unit price this restriction severely limits the pricing strategies and product types that can be addressed within such a framework for example it excludes two part tariffs and important classes of products involving metered usage service contracts etc in spite of these deficiencies i found the paper very educational its primary value is in highlighting the main research directions of pricing in the marketing literature and in conveying the importance of various pricing issues from the perspective of a leading marketing scientist taking rao s survey as a reference point i will attempt in the remainder of this discussion to examine the marketing perspective on pricing versus the approach prevailing in the economics literature dealing with pricing issues in particular i will try to identify some strengths and weaknesses of these approaches and to suggest possibilities for cross fertilization between the two disciplines with a few possible exceptions it is fair to say that the marketing literature on pricing typically focuses on developing pricing strategies for the firm and therefore treats prices as control variables the economics literature on the other hand approaches pricing from the perspective of industrial organization theory its primary objectives are to

yield optimization of display advertising with ad exchange it is clear from the growing role of ad exchanges in the real time sale of advertising slots that web publishers are considering a new alternative to their more traditional reservation based ad contracts to make this choice the publisher must trade off in real time the short term revenue from ad exchange with the long term benefits of delivering good spots to the reservation ads in this paper we formalize this combined optimization problem as a multiobjective stochastic control problem and derive an efficient policy for online ad allocation in settings with general joint distribution over placement quality and exchange prices we prove the asymptotic optimality of this policy in terms of any arbitrary trade off between the quality of delivered reservation ads and revenue from the exchange and we show that our policy approximates any pareto optimal point on the quality versus revenue curve experimental results on data derived from real publisher inventory confirm that there are significant benefits

dynamic pricing with loss averse consumers and peak end anchoring we study the dynamic pricing implications of a new behaviorally motivated reference price mechanism based on the peak end memory mode this model suggests that consumers anchor on a reference price that is a weighted average of the lowest and most recent prices loss averse consumers are more sensitive to perceived losses than gains relative to this reference price we find that a range of constant pricing policies is optimal for the corresponding dynamic pricing problem this range is wider the more consumers anchor on lowest prices and it persists when buyers are loss neutral in contrast with previous literature in a transient regime the optimal pricing policy is monotone and converges to a steady state price which is lower the more extreme and salient the low price anchor is our results suggest that behavioral regularities such as peak end anchoring and loss aversion limit the benefits of varying prices and caution that the adverse effects of deep discounts on the firm s optimal prices and profits might be more enduring than previous models predict

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines