dynamic pricing of perishable assets under competition we study dynamic price competition in an oligopolistic market with a mix of substitutable and complementary perishable assets each firm has a fixed initial stock of items and competes in setting prices to sell them over a finite sales horizon customers sequentially arrive at the market make a purchase choice and then leave immediately with some likelihood of no purchase the purchase likelihood depends on the time of purchase product attributes and current prices the demand structure includes time variant linear and multinomial logit demand models as special cases assuming deterministic customer arrival rates we show that any equilibrium strategy has a simple structure involving a finite set of shadow prices measuring capacity externalities that firms exert on each other equilibrium prices can be solved from a one shot price competition game under the current time demand structure taking into account capacity externalities through the time invariant shadow prices the former reflects the transient demand side at every moment and the latter captures the aggregate supply constraints over the sales horizon this simple structure sheds light on dynamic revenue management problems under competition which helps capture the essence of the problems under demand uncertainty we show that the equilibrium solutions from the deterministic game provide precommitted and contingent heuristic policies that are asymptotic equilibria for its stochastic counterpart when demand and supply are sufficiently large this paper was accepted by yossi aviv operations management

is health care a necessity or a luxury pooled estimates of income elasticity from us state level data this paper provides new evidence on the income elasticity of health care by combining stationarity and cointegration tests of health care expenditure and incomes with estimates of the cointegrating relationship between them a recently updated dataset of health care expenditures and disposable personal income for the us states for the years 1966 1998 is used the principal findings are that health care expenditures and incomes at the state level are non stationary and cointegrated dynamic ols cointegrating regressions of the pooled state time series estimate the income elasticity of health care at 0 817 to 0 844 well below unity confirming that health care expenditure even at the aggregate level is a necessity good

human resource planning in japanese multinationals a model for u s firms the efficient operation of a multinational corporation is contingent upon the availability of numerous technology capital know how and people in this paper the argument is made that human power is a key ingredient to the successful operation of a multinational without which all the other aforementioned resources could not be effectively and efficiently utilized or transferred from corporate headquarters to the various subsidiaries in the world hence there is a need for multinationals to devote more attention to human resource planning which is viewed as part of the overall planning and control process in a firm the paper compares and contrasts the human resource development programs between a sample of u s and japanese multinationals and discusses the implications for u s multinationals

the impact of dynamic price variability on revenue maximization abstract the objective of this article is to analyze the effect of dynamic price variability on revenue maximization while dynamic pricing is a common practice in tourism this is the first comprehensive study on the relationship between price variability and revenue maximization within the framework provided by the literature on intertemporal price discrimination price fairness inventory controls and organizational culture this research proposes and applies a new hedonic revenue model on a sample of 21 687 observations the findings suggest that higher dynamic price variability leads to higher hotel revenues strategic room unavailability and review rating also exert a clear positive revenue impact overall the benefits from charging different prices for the same service intertemporal price discrimination and limiting the number of units available before the demand is known inventory control outweigh the potential negative effects of price unfairness and organizational culture the paper concludes by providing actionable levers for hospitality managers

market power in a gis based hedonic price model of local farmland markets buyers of farmland are usually interested in parcels for sale that are close to their own farms with a limited number of parcels for sale this may lead to market power in local farmland markets the objective of this paper is to investigate whether market power affects farmland prices hedonic price models are adapted to allow for local market power of either sellers or buyers a distinction is made between rural and urban farmland markets the results provide evidence of market power effects in rural farmland markets however for farmland in urban areas market prices are dominated by speculation effects

the transfer of japanese style management to american subsidiaries constraints and competencies this paper first reviews the theories of the transfer of japanese management practices overseas the paper then outlines a contingency theoretical model that specifies the factors which are hypothesized to impact the transfer of japanese style hrm practices to overseas subsidiaries qualitative data from a field study of ten japanese subsidiaries in the u s five in the service industry and five in manufacturing are used to illustrate the concepts presented in the theoretical discussion

partner contributions as predictors of equity share in international joint ventures the type of expertise that a company contributes to a joint venture may affect the amount of equity that it owns this research observes the ownership patterns associated with four common combinations of partner expertise in international joint ventures the results rank company assets with respect to the contributor s ability to negotiate majority ownership in the original joint venture contract and that company s tendency to buy up equity from the partner later on

strategic and tactical price decisions in hotel revenue management abstract dynamic pricing techniques allow using a number of variables in a tactical way compared to standard catalogue prices this study merges in a conceptual model the relevance of the tactical and the strategic dimension of these variables classified according to their tangible reputational or contextual nature to empirically validate the hypotheses a database of 21 596 price observations was retrieved from booking com the study presents a hedonic price function using the shapley owen decomposition of the r squared to elicit the importance of each group of factors further a hierarchical cluster analysis measures the presence of heterogeneity across operators the results show that online reputation is gaining importance over the traditional star rating despite the tangible variables remain of paramount importance the findings suggest the relevant role of contextual variables in short run price variations the players operating in the tourism and hospitality industries should integrate these findings when designing pricing strategies

business groups in a market economy abstract the purpose of this paper is to examine the nature and significance of the interfirm relationship called the business group first the nature of the japanese business group is discussed it is then pointed out that the business group is not a phenomenon unique to japan and an effort is made to explain the significance of the business group in the context of a market economy using the williamsonian approach to questions of internal organization and the market finally the relationship between the input output relationship of the firms and their group affiliation is tested

low cost airlines and online price dispersion abstract this paper presents a new form of online pricing tactic where airlines post at the same time and for the same flight fares in different currencies that violate the law of one price unexpectedly for an online market price dispersion may be accompanied by a hidden discount that tends to persist in the period preceding a flight s departure the econometric analysis reveals that airlines post dispersive fares in less competitive routes with more heterogeneous demand furthermore temporal persistence of intra firm fare dispersion suggests that it is an equilibrium phenomenon engendered by the airlines need to manage stochastic demand conditions for a specific flight

managing foreign subsidiaries agents of headquarters or an interdependent network in this study two different theoretical perspectives are used to develop sets of hypotheses regarding the mechanisms used to manage foreign subsidiaries of multinational corporations first agency theory serves as the basis for a model that predicts the use of monitoring mechanisms and incentive compensation then it is argued that these mechanisms are insufficient for managing subsidiaries characterized by high levels of intra firm international interdependence the management of which is critical to many of today s complex global firms a second set of hypotheses is argued linking international interdependence to several social control mechanisms primary and secondary data from u s based multinational corporations were used to test both sets of hypotheses the results indicate that agency theory although a useful foundation for studies of control within mncs is limited in its ability to explain fully the phenomenon of foreign subsidiary control however the model based on intra firm interdependence had much greater predictive ability copyright 2000 john wiley sons ltd

relationship between spatial agglomeration and hotel prices evidence from business and tourism consumers abstract in this paper we examine the relationship between number of local competitors and both the average and the dispersion of retail prices in urban hotels using a dataset from the metropolitan area of madrid spain by controlling for hotel characteristics and spatial factors we obtained results for each of the days in one week in line with predictions derived from the traditional monopolistic approach empirical results consistently indicate that a greater density of competitors implies a lower average and less dispersion of local prices moreover we found evidence which supports the idea that the effect of local agglomeration on average prices is particularly weaker at weekends this in turn indirectly suggests that within the metropolitan area there is a greater degree of substitution in hotel locations for tourism consumers than for business consumers

social knowledge as a control system a proposition and evidence from the japanese fdi behavior building upon the concept of clans this paper introduces the value of social knowledge as a control mechanism available for an mnc to manage its foreign subsidiaries social knowledge is defined as one s ability to understand and predict others general patterns of behavior the hypotheses are empirically tested with japanese fdi data into four host countries the united states singapore taiwan and korea the results offer broad support for the proposition that for mncs with social knowledge the need to resort to ownership for control purposes is reduced

u s state level carbon dioxide emissions does it affect health care expenditure abstract this paper is the first to provide an empirical analysis of the short run and long run effects of carbon dioxide co2 emissions on health care spending across u s states accounting for the possibility of non linearity in the data and the relationship among the variables the analysis estimated various statistical models to demonstrate that co2 emissions led to increases in health care expenditures across u s states between 1966 and 2009 using quantile regressions the analysis displayed that the effect of co2 emissions was stronger at the upper end of the conditional distribution of health care expenditures results indicate the effect of co2 emissions on health care was relatively stronger for states that spend higher amounts in health care expenditures the primary policy message of the paper is that there can be tangible health related benefits associated with policies that aim to reduce carbon emissions across u s states

when quality signals talk evidence from the turin hotel industry abstract this study analyzes the relationship between quality signals and price setting through the application of hedonic price functions the model proposals also include variables relating to land use policies and tourism development strategies a simultaneous equation model endogenously estimates quality signals this method is appropriate for analyzing emerging urban destinations as characterized by the presence of an expanding hotel industry the results are based on a dataset of 145 hotels in turin italy the empirical findings reveal that reputation based quality signals help explain tariff levels price proposals also include a premium for quality assured hotels defining some limits of the current hotel classification system the empirical evidence has significant marketing implications for the hospitality industry s competitiveness since the results clarify the impact of quality signals on price level

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

the determinants of expatriate staffing by japanese multinationals in asia control learning and vertical business groups we empirically examine the determinants of the decision whether or not to appoint an expatriate as the managing director of overseas affiliates for a sample of 844 japanese manufacturing affiliates operating in asia in 1995 confirmation is found for hypotheses derived both from a control and coordination perspective on expatriation and from a knowledge creation and learning perspective strategic dependence of the parent on the affiliate increases the propensity to appoint expatriates whereas localisation of the affiliate reduces it organisational experience in the country both by the affiliate and by the firm increases the probability that host country nationals will be appointed inter firm relationships within vertical keiretsu groups impact on expatriation policies through inter organisational knowledge exchange in host countries and the mitigation of localisation requirements owing to intra group transactions

estimating bargaining power in the market for existing homes although bargaining is common in markets for heterogeneous goods it has largely been ignored in the hedonic literature in a break from that tradition we establish sufficient conditions that permit one to identify the effect of buyer and seller bargaining on hedonic models our model is estimated using a previously overlooked feature of the american housing survey that permits us to observe characteristics of both buyers and sellers results suggest that household wealth gender and other demographic traits influence bargaining power in addition variation in bargaining power arising from the presence of school age children accounts for anomalous seasonal patterns reported in various widely cited indices of quality adjusted house prices

evidence on the determinants of canadian provincial government health expenditures 1965 1991 abstract real per capita provincial government expenditures on health care over the period 1965 1991 are examined using pooled time series cross section regression analysis key determinants of real per capita provincial government expenditures on health care over the period 1965 1991 are real provincial per capita income the proportion of the provincial population over age 65 and real provincial per capita federal transfer revenues established program financing had a negative and significant impact on real per capita provincial government health expenditures in newfoundland and quebec an income elasticity of 0 77 implies that health care is not a luxury good

when demand drops and prices rise tourist packages in the balearic islands during the economic crisis abstract the aim of this paper is to analyse the effects of the crisis on the prices of package holidays to the balearic islands sold by a sample of british and german tour operators three alternative price indexes are calculated the results show that tour operators have reacted by using market strategies other than pricing aimed at boosting their revenue even though they do not push up the number of tourists thus protecting the tour operators financial yield

prices prices and prices a study in the airline sector abstract this article creates and empirically analyzes a dynamic pricing framework the model includes the main theories on prices in the literature and dynamically analyzes how companies change their pricing policies according to different circumstances through the use of regressions the article shows the relative long and short term impact on pricing equations strategic versus operational matters and on production conditions versus demand perspectives in the setting of operational prices in addition it highlights how the proportions of these pricing perspectives change in the airline sector according to the effect of the environment on the configuration of the strategy determined by monthly and hourly seasonality and also according to the nature of this competitive strategy determined by the characteristics of the company and the destination airport the results confirm our framework and show how firms combine the different perspectives in their pricing strategies

being better vs being different differentiation competition and pricing strategies in the spanish hotel industry we study the effects of vertical and horizontal differentiation on pricing policy in a large sample of hotels in spain we show that hotels with more stars i e vertically differentiated offer smaller discounts over listed prices in addition to charging higher prices similarly hotels that belong to a branded chain i e horizontal differentiation also charge higher prices and provide smaller discounts we show how the degree of local competition moderates the effect of differentiation on pricing policy but only for vertical differentiation differentiation indeed protects hotels from the pressure to reduce prices as competition increases but being better seems to be more effective than just being different

from individual skills to organizational capability in japan two contrasting conceptualizations of skills lead one to attribute different roles to inter firm networks if skills are regarded as a public good then inter firm networks are like clubs that police the scope for firms to benefit from skills without paying for their acquisition by contrast if skills are regarded as a distinct and hard to imitate asset then inter firm networks provide an essential non market mechanism for spreading it the problem in the former conceptualization is market failure due to the ease of spill over of knowledge while the counterpart problem in the latter conceptualization is the difficulty of diffusing tacit knowledge by market mechanisms this paper describes toyota motor corporation s supplier development programmes in the wider industrial context of japan it concludes that of the two perspectives the knowledge as a distinctive asset perspective is more appropriate in understanding the rationale behind the elaborate mechanisms for developing suppliers in the long term

combined effects of capacity and time on fares insights from the yield management of a low cost airline abstract based on two strands of theoretical research this paper provides new evidence on how fares are jointly affected by in flight seat availability and purchasing date as capacity based theories predict it emerges that fares monotonically and substantially increase with flight occupancy after controlling for capacity utilization our analysis also supports time based theories indicating a u shaped temporal profile over a two month booking period as well as a sharp increase in fares in the two weeks prior to departure