discounting and divergence of opinion the objective of this paper is to adopt a general equilibrium model and determine the socially efficient discount factor risk free rate and discount rate when there are heterogeneous anticipations about the growth of the economy as well as heterogeneous time preference rates among others we tackle the following questions is the socially efficient discount factor an arithmetic average of the individual subjectively anticipated discount factors more generally can the arrow debreu prices the risk free rates the subjectively expected socially efficient discount factors and discount rates be obtained as an average of the individual subjectively anticipated ones can beliefs dispersion be analyzed as a sort of additional risk or uncertainty leading to possibly lower discount rates is it socially efficient when diversity of opinion is taken into account to reduce the discount rate per year for more distant horizons if so what is the trajectory of the decline

heterogeneous patience bargaining power and investment in future public goods in many environmental contexts including climate change mitigation agents face investment opportunities that have shared but greatly delayed benefits efficient levels of aggregate investment therefore require collective action but they are also highly sensitive to the choice of discount rate motivated by empirical evidence that suggests discount rates vary considerably this paper investigates the impact of heterogeneity in discount rates on sharing of investment costs an application of the canonical bargaining model shows that the larger share of the costs gradually shifts from impatient to patient agents as the time horizon increases

world poverty and the role of agricultural technology direct and indirect effects agricultural technology can help reduce poverty through direct and indirect effects direct effects are gains for the adopters while indirect effects are gains derived from adoption by others leading to lower food prices employment creation and growth linkage effects conceptualising and measuring these effects is highly complex yet is needed for each region if technology is to be used as an effective instrument for poverty reduction we propose a methodology for doing this in the context of computable general equilibrium modelling and apply it to archetype models for africa asia and latin america results show that the dominant effect of technology on poverty is through direct effects in africa indirect agricultural employment effects in asia and linkage effects through the rest of the economy in latin america in each case increasing the poverty reduction effect through the targeting of technology across crops and through complementary rural development programmes is also explored

long forward and zero coupon rates can never fall in frictionless markets having no arbitrage the asymptotic zero coupon rate never falls the same is true of the long forward rate the long par coupon rate can rise and fall due to forward rate movements at short maturities this article relates the three types of interest rates and formalizes and proves the impossibility results for falling asymptotic rates these results can be tested in a parametric term structure specification that is rich enough to identify a time series of long rates the results show that it is not possible to specify arbitrarily the long forward or zero coupon rate process copyright 1996 by university of chicago press

reducing child malnutrition how far does income growth take us how rapidly will child malnutrition respond to income growth this article explores that question using household survey data from 12 countries as well as data on malnutrition rates in a cross section of countries since the 1970s both forms of analysis yield similar results increases in income at the household and national levels imply similar rates of reduction in malnutrition using these estimates and better than historical income growth rates the article finds that the millennium development goal of halving the prevalence of underweight children by 2015 is unlikely to be met through income growth alone what is needed to accelerate reductions in malnutrition is a balanced strategy of income growth and investment in more direct interventions

stochastic diffusion models with advertising and word of mouth effects abstract this paper presents a stochastic diffusion model which incorporates advertising word of mouth effects the model defines a 3 variate stochastic process based on explicit assumptions regarding consumer behavior and consumers response to advertising the model generalizes a wide variety of advertising models and in addition includes several classes of consumers interaction effects between these consumers and of course a stochastic framework that may be used for assessing the risk implications of advertising policies and for empirical analyses purposes

dynamic control of a monopolist s product and process innovation with reference quality our main purpose is to investigate the dynamic control problem of a monopolist s product and process innovation under reference quality the main features of this article are i a monopolist deal

learning experimentation and the optimal output decisions of a competitive firm this paper considers the effect of learning from experience on the output decisions of a perfectly competitive firm faced with the demand uncertainty specifically a bayesian framework for expectations formation and demand forecasting by a perfectly competitive firm is presented focusing the analysis on the determination of optimal sequential output decisions it is shown that through output experimentation the experimenting firm will select a non myopic sequential policy and will tend to overproduce the exact magnitude of the overproduction and the economic value of experimentation are contingent upon model parameters and the length of the planning horizon

alternative supply chain production sales policies for new product diffusion an agent based modeling and simulation approach abstract applying agent based modeling and simulation abms methodology this paper analyzes the impact of alternative production sales policies on the diffusion of a new generic product and the generated npv of profit the key features of the abms model that captures the marketplace as a complex adaptive system are i supply chain capacity is constrained ii consumers new product adoption decisions are influenced by marketing activities as well as positive and negative word of mouth wom between consumers iii interactions among consumers taking place in the context of their social network are captured at the individual level and iv the new product adoption process is adaptive conducting over 1 million simulation experiments we determined the best production sales policies under various parameter combinations based on the npv of profit generated over the diffusion process the key findings are as follows 1 on average the build up policy with delayed marketing is the preferred policy in the case of only positive wom as well as the case of positive and negative wom this policy provides the highest expected npv of profit on average and it also performs very smoothly with respect to changes in build up periods 2 it is critical to consider the significant impact of negative word of mouth in choosing production sales policies neglecting the effect of negative word of mouth can lead to poor policy recommendations incorrect conclusions concerning the impact of operational parameters on the policy choice and suboptimal choice of build up periods

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

dynamic optimal control of process product innovation with learning by doing abstract in this paper we present a dynamic optimal control model of process product innovation with learning by doing and extend the model of chenavaz 2012 to an even more general model in which the firm s cost functions of product and process innovation depend on both the innovation investments and the knowledge accumulations of product and process innovation furthermore in our paper the product price the investments of product and process innovation are decision variables the product quality production cost the change rates of knowledge accumulations of product and process innovation are state variables the main objective of this paper is to analyze the relationships between these variables and investigate the model s optimal conditions and characteristics further we solve the model with some numerical examples and sensitivity analysis is conducted to study the effect of changing the parameters and coefficients on the objective function value

forecasting and inventory management of short life cycle products in this paper we provide an integrated framework for forecasting and inventory management of short life cycle products the literature on forecasting and inventory management does not adequately address issues relating to short life cycle products we first propose a growth model that can be used to obtain accurate monthly forecasts for the entire life cycle of the product the model avoids limiting data requirements of traditional methods instead it extracts relevant information from past product histories and utilizes the information on total life cycle sales and the peak sales timing using disguised demand data from a personal computer pc manufacturer we validate the model next we model the inventory management problem for the short life cycle environment the uncertainty in demand is modeled through the uncertainty in the realized values of the parameters of the forecasting model the high cost of terminal inventory shortages and rapidly changing procurement costs are all included in the model extensions to the basic model are also developed using optimal control theory we derive a solution that provides valuable information on procurement cutoff time and terminal service levels a detailed example explains the characteristics of the policy and its relevance in decision making many of the issues covered in the models were brought to our attention while implementing a forecasting model at a pc manufacturer the benchmark monthly forecasts and the associated inventory levels provide information that can be very helpful in planning and controlling marketing sales and production

managing demand and sales dynamics in new product diffusion under supply constraint the bass diffusion model is a well known parametric approach to estimating new product demand trajectory over time this paper generalizes the bass model by allowing for a supply constraint in the presence of a supply constraint potential customers who are not able to obtain the new product join the waiting queue generating backorders and potentially reversing their adoption decision resulting in lost sales consequently they do not generate the positive word of mouth that is typically assumed in the bass model leading to significant changes in the new product diffusion dynamics we study how a firm should manage its supply processes in a new product diffusion environment with backorders and lost sales we consider a make to stock production environment and use optimal control theory to establish that it is never optimal to delay demand fulfillment this result is interesting because immediate fulfillment may accelerate the diffusion process and thereby result in a greater loss of customers in the future using this result we derive closed form expressions for the resulting demand and sales dynamics over the product life cycle we then use these expressions to investigate how the firm should determine the size of its capacity and the time to market its new product we show that delaying a product launch to build up an initial inventory may be optimal and can be used as a substitute for capacity also the optimal time to market and capacity increase with the coefficients of innovation and imitation in the adoption population we compare our optimal capacity and time to market policies with those resulting from exogeneous demand forecasts in order to quantify the value of endogenizing demand

aggregation of heterogeneous time preferences we examine an economy whose consumers have different discount factors for utility possibly not exponential we characterize the properties of efficient allocations of resources and of the shadow prices that would decentralize such allocations we show in particular that the representative agent has a decreasing discount rate when as is usually posited all of a group s members have a constant discount rate and decreasing absolute risk aversion preferences we also identify conditions that lead the representative agent to have a rate of impatience that decreases with gross domestic product per capita

the impact of domestic and global trade liberalisation on five southern african countries we compare the impact of alternative domestic and global trade liberalisation scenarios on five economies in southern africa the study applies a computable general equilibrium model that employs standardised 12 sector social accounting matrices for malawi mozambique tanzania zambia and zimbabwe the approach incorporates stylised features such as own household consumption and marketing margins that are of particular importance when a majority of agricultural producers are not sufficiently integrated into formal markets and thus rely on own production to meet their daily diets hence improved infrastructure implies lower marketing costs and better market integration which translates to increased production opportunities the comparison of the results across all five countries reveals that common policy measures have different impacts depending on the underlying economic structures

bayes solution to dynamic inventory models under unknown demand distribution this paper considers the periodic review inventory problem for which one or more parameters of the demand distribution are unknown with a known prior distribution chosen from the natural conjugate

quality and the diffusion of innovations in this paper we solve the problem of optimal control of products diffusion by quality in a context of monopolistic competition to do so we introduce a dynamic demand function leaning on two hypotheses first price acts a signal of quality second demand is more sensitive to quality than to price using the maximum principle of pontryagin we then characterize the optimal dynamic trajectory of quality and its qualitative properties

why the far distant future should be discounted at its lowest possible rate abstract a critical feature of the distant future is currently unresolvable uncertainty about what will then be the appropriate rate of return on capital to use for discounting this paper shows that there is a well defined sense in which the lowest possible interest rate should be used for discounting the far distant future part of any investment project some implications are discussed for evaluating long term environmental projects or activities like measures to mitigate the possible effects of global climate change

dynamic optimal control models in advertising recent developments this paper presents a review of recent developments that have taken place in the area of dynamic optimal control models in advertising subsequent to the comprehensive survey of the literature by sethi in 1977 the basic problem underlying these models is that of determining optimal advertising expenditures and possibly other variables of interest over time for a firm or a group of competing firms under consideration this optimization is done subject to some dynamics that define how these variables translate into sales and in turn into profits the purpose of this update is twofold on the one hand new contributions in the areas already treated in the earlier survey are reviewed on the other hand new trends in the advertising literature since 1977 such as quality as an additional marketing instrument cumulative sales models pulsing advertising and advertising as a part of corporate models of the firm are discussed the models covered in this update are organized under six headings models with ca

timing and quality decisions for entrepreneurial product development abstract an entrepreneur is developing a new product and each period must decide whether to enter the market or to continue development we formulate a model of this decision for ventures facing diminishing returns to product quality and for which funding availability product development success and market competition growth are uncertain we characterize the profit maximizing time to stop product development and enter the market and then show how this stopping time is affected by changes in the business environment by further focussing our modeling assumptions we are able to translate our time based criteria into product quality terms we propose that management set a target quality level that the product must meet in order for the venture to maximize profit we also demonstrate that management should decrease this target and hence the quality of the final product over time and adjust it to respond to changes in the business context

economic growth and low incomes in agriculture during most of the 20th century the u s farm economy generated low average incomes and a higher incidence of poverty than in the nonfarm population when president johnson s war on poverty was being waged in the 1960s one of the key areas of concentration was rural poverty spurred by estimates for example that 15 of nonfarm families but 31 of farm families were poor in addition this notwithstanding the use of a basic poverty line of 3 100 for nonfarm but only 2 200 for nonfarm families see bryant yet by 1990 farm poverty was reduced below that of the nonfarm population and the issue largely disappeared from the agenda of economists as well as politics how did this happen this paper analyzes data on low incomes among u s farm households since 1950 and investigates the reasons for improvement i focus on market integration in the process of economic growth it would seem at first glance almost tautological that economic growth would be helpful in reducing poverty this would appear to be especially true in the worldwide context where 72 of the world s poor people live in rural areas according to a world bank estimate world bank p 22 however many of the groups protesting the world trade organization wto last december in seattle and the world bank last april in washington believe that liberal trade and market oriented policies aimed at economic growth have had the effect of increasing inequality and worsening the economic situation of the poor little evidence of this was provided however and the most convincing assessments i have seen reassert the more

agricultural economics and distributional effects the paper examines the main issues surrounding distributional effects in the domains of natural resource management and land policies agricultural technology and research policies agricultural market and trade policies and consumer oriented policies including standards subsidies and labeling agriculture is drifting into an ever more drastic bifurcation at a global level and within many countries correcting that bifurcation will require large investments in rural areas and rural people in institutions and in information and biological technologies accessible by the poor in the world s smallholder sector large and growing national and international inequalities related to agriculture and rural areas threaten peace growth and sustainable development

a diffusion model incorporating product benefits price income and information we start by assuming that a major benefit of many new durable products such as dishwashers and microwave ovens is time savings others such as vcrs also enhance the value of our leisure time using a household production framework we demonstrate that a utility maximizing individual will have a reservation price for the product which is a function of the product benefits and his wage rate by assuming that the wage rate has an extreme value distribution across the population we are able to derive for the aggregate process an income price dependent logistic adoption equation we then allow for the possibility that certain eligible consumers may delay their purchase of the product because they are unaware that it exists are suspicious of its quality or expect its price to fall unawareness uncertainty and hope for further price declines are assumed to decrease with the increase in the number of previous adopters the resulting diffusion model has the property that the product life cycle phenomenon can be explained jointly or separately by the income price process and the awareness uncertainty expectations process using data on household income on durable penetration within different income classes and on first purchase sales the aggregate diffusion model and its premises are tested and supported it is found that both the income price and awareness uncertainty expectations processes are at work however the dependence of the awareness uncertainty expectations delay process on the number of previous adopters e g word of mouth type effect exists only in certain product categories and is usually relatively weak it is demonstrated that if the word of mouth type effects are weak a price skimming strategy is optimal for a monopolist and also is likely to be implemented by oligopolists the sales forecasting implications of the model also are pursued

innovation diffusion in the presence of supply restrictions innovation diffusion models are developed to represent the spread of a new product from its manufacturers to its ultimate users in the marketplace however the growth of a new product can be retarded by supply restrictions such as the unavailability of the product due to limitations on the production capacity or difficulties encountered in setting up distribution systems in the presence of supply restrictions diffusion models must be developed to capture the dynamics of supply restrictions and to allow management to evaluate the impact of such supply restrictions on the growth of a new product in the market place based on the bass innovation diffusion model the objective of this paper is to suggest a parsimonious diffusion model that integrates the demand side dynamics with the supply side restrictions the sensitivity of innovation diffusion patterns in the presence of supply restrictions is examined an application examining the diffusion of new telephones in israel is documented to illustrate the usefulness of the proposed model

the income earned by women impacts on welfare outcomes abstract this paper provides an updated review of the evidence on income pooling across household members income pooling is one of the main predictions of the unitary model of the household new studies come to much the same conclusion as do past studies income pooling and the unitary model are rejected the paper then looks beyond the mere rejection of the unitary model and explores some of the issues that arise first what is the progress in testing the restrictions imposed by non unitary models of the household second what are the implications of rejection of the unitary model for policy and program design finally what are some of the challenges faced by programs and policies that internalize the rejection of income pooling in terms of impact evaluation

true world income distribution 1988 and 1993 first calculation based on household surveys alone the paper derives world income or expenditure distribution of individuals for two years 1988 and 1993 it is the first paper to calculate world distribution for individuals based entirely on household survey data from 91 countries and adjusted for differences in purchasing power parity between the countries measured by the gini index inequality increased from an already very high 63 in 1988 to 66 in 1993 the increase was driven more by rising differences in mean incomes between the countries than by rising inequalities within countries the most important contributors were rising urban rural differences in china and slow growth of rural incomes in south asia compared to several large developed market economies

a piecewise diffusion model of new product demands the bass model bm is a widely used framework in marketing for the study of new product sales growth its usefulness as a demand model has also been recognized in production inventory and capacity planning settings the bm postulates that the cumulative number of adopters of a new product in a large population approximately follows a deterministic trajectory whose growth rate is governed by two parameters that capture i an individual consumer s intrinsic interest in the product and ii a positive force of influence on other consumers from existing adopters a finite population purebirth process re formulation of the bm called the stochastic bass model sbm was proposed recently by the author in a previous paper and it was shown that if the size of the population in the sbm is taken to infinity then the sbm and the bm agree in probability in the limit thus the sbm expands the bm in the sense that for any given population size it is a well defined model in this paper we exploit this expansion and introduce a further extension of the sbm in which demands of a product in successive time periods are governed by a history dependent family of sbms one for each period with different population sizes a sampling theory for this extension which we call the piecewise diffusion model pdm is also developed we then apply the theory to a typical product example demonstrating that the pdm is a remarkably accurate and versatile framework that allows us to better understand the underlying dynamics of new product demands over time joint movement of price and advertising levels in particular is shown to have a significant influence on whether or not consumers are ready to participate in product purchase subject classifications marketing new products buyer behavior pricing probability diffusion inventory production stochastic nonstationary demand area of review manufacturing service and supply chain operations history received august 2003 revision received september 2004 accepted july 2005

heterogeneous patience and the term structure of real interest rates heterogeneous time preference has a profound impact on the wealth distribution and therefore on equilibrium asset prices i identify two distinct effects on interest rates an averaging effect due to jensen s inequality and a general equilibrium consumption timing effect the averaging effect decreases and the timing effect increases real interest rates and both effects induce an inverse term structure more fundamentally the model shows that asset prices need to be interpreted with caution evidence apparently pointing to non standard preferences may simply be the result of heterogeneity

optimal production sales policies and entry time for successive generations of new products abstract this paper explores the optimal initial inventory at launch sales plan and introduction time for a new generation of a product we propose a multi generation demand model that accounts for supply constraints a mathematical model of the supply restricted multi generation diffusion problem is then developed and the optimal sales policy is derived closed form analytical expressions as well as numerical experiments are used to investigate the effect of consumers backlogging cost of production capacity unit profit margin for the products market expansion by the new generation and cannibalization of older generations through consideration of supply restrictions and lost sales we are able to generalize previous findings on market entry policy by showing that there is a continuous range of optimal introduction times we show that the inter dependence between production capacity and initial inventory varies based on the introduction time of the new generation we also provide an application of the proposed model in the case of sony s playstation 3 game console the results suggest that the company introduced the product too late and overproduced inventory which as supported by empirical evidence had a negative impact on the product s performance limitations and considerations for the application of the model are also discussed

trial awareness advertising decisions a control problem with phase diagrams with non stationary boundaries abstract the paper presents a solution to a diffusion process in which advertising has two goals awareness creation and trial inducement it is shown that the advertising time paths can be either monotonic or single peaked the solution technique involves phase diagrams where the boundaries are non stationary general discussion of such techniques is provided the paper proves the existence of a stationary equilibrium to which the paths converge furthermore this two state variables two control variables equilibrium point is conditionally stable

new product diffusion decisions under supply constraints two recent papers on managing new product diffusion decisions under production constraints reach somewhat contradictory conclusions ho et al ho t h s savin c terwiesch 2002 managing demand and sales dynamics in new product diffusion under supply constraint management sci 48 2 187 206 show that it is never optimal to refuse to satisfy any customers when the firm has inventory of the product on the other hand in a very similar model kumar and swaminathan kumar s j m swaminathan 2003 diffusion of innovations under supply constraints oper res 51 6 866 879 show that production constraints may in fact lead a firm to reject customers orders even when the firm has the inventory to satisfy them to slow down new product diffusion we provide a counterexample to the results of ho et al 2002 and show that in their and kumar and swaminathan s 2003 models it may be optimal to deny customers a product in inventory we provide a generalization of both models that includes the ability to dynamically price the product and also allows capacity and production costs to vary over time we show that the unintuitive but optimal behavior of denying customers products that are in inventory disappears when the firm can dynamically set prices this paper was accepted by candace a yano operations and supply chain management

diffusion of innovations under supply constraints in this paper we present a canonical setting that illustrates the need for explicitly modeling interactions between manufacturing and marketing sales decisions in a firm we consider a firm that sells an innovative product with a given market potential the firm may not be able to meet demand due to capacity constraints for such firms we present a new model of demand modified from the original model of bass to capture the effect of unmet past demand on future demand we use this model to find production and sales plans that maximize profit during the lifetime of the product in a firm with a fixed production capacity we conduct an extensive numerical study to establish that the trivial myopic sales plan that sells the maximal amount possible at each time instant is not necessarily optimal we show that a heuristic build up policy in which the firm does not sell at all for a period of time and builds up enough inventory to never lose sales once it begins selling is a robust approximation to the optimal policy specializing to a lost sales setting we prove that the optimal sales plan is indeed of the build up type we explicitly characterize the optimal build up period and analytically derive the optimal initial inventory and roll out delay finally we show that the insights obtained in the fixed capacity case continue to hold when the firm is able to dynamically change capacity

processed food trade and developing countries protection and trade liberalization abstract exports of processed foods from developing countries have expanded rapidly in recent times contributing to their economic development recent published research has shown that the export policies and agricultural resource endowment of the developing country offer significant explanations for this export growth but what if developing countries further lowered their tariff barriers against imports what impact would such policy changes have on processed food exports from developing countries alternatively what if processed food trade barriers are lowered in developed countries and if trade in manufactured goods were to be further liberalised what might be the impacts on the processed food sectors of developing countries an applied general equilibrium model is used to shed light on these questions through simulations of trade policy alternatives most developing regions examined had a positive effective protection rate for processed foods in the base year this effective protection was lowered when such countries reduced their agricultural tariffs when tariff cuts were extended to manufactured goods effective protection of food processing in most developing regions increased somewhat but was still less than base period protection for the developing countries it would appear that comprehensive trade policy reforms taken by themselves are about as significant as those of the developed world in terms of contributing to growth in processed food exports from developing countries such reforms allow those developing countries with a comparative advantage in food production to expand exports and to take advantage of increased access to other developing countries with a less favourable agricultural resource endowment as well as to developed country markets

prices product qualities and asymmetric information the competitive case recent developments in the economics of information emphasize the informational content of prices we examine the degree to which prices convey information on product quality to uninformed agents under perfect competition we show that a rational expectations equilibrium may not exist when an equilibrium does exist the information on quality conveyed by prices depends on the shape of the average cost curves and the relative numbers of informed and uniformed agents

production planning of style goods with high setup costs and forecast revisions in this paper we study a problem common to a wide variety of manufacturing companies of determining the production schedule of style goods such as clothing and consumer durables under capacity constraints demand for items is stochastic and occurs in the last season of the planning horizon demand estimates are revised in each period we exploit the problem s two level hierarchical structure which is characterized by families and items production changeover costs from one family to another are high compared to other costs however changeover costs between items in the same family are negligible we first formulate this problem as a difficult to solve stochastic mixed integer programming problem then exploiting the problem s hierarchical structure we formulate a deterministic mixed integer programming problem and solve it by means of an algorithm that provides an approximate solution a lower bound is obtained by applying generalized linear programming to the approximate problem we illustrate the procedure using the disguised data of a consumer electronics company the computational results demonstrate the effectiveness of the proposed approach in a practical setting

a reply to new product diffusion decisions under supply constraints in our prior work on product diffusions in presence of a capacity constraint we postulated that a firm operating in such an environment should always attempt to fulfill as much of the present demand as is possible with the capacity constraint in other words the firm would never have demand backlogged while accumulating inventory in this note we derive a sufficient condition for the optimality of such fulfillment policy this paper was accepted by candace a yano operations management

a stochastic sequencing problem for style goods with forecast revisions and hierarchical structure this paper addresses the problem of simultaneously determining a production sequence and production volumes of style goods style goods have one selling season per year during the rest of the year manufacturers of style goods build up the inventory while continuously reestimating the demand in the final selling season in this problem products have a two stage hierarchy items and families the production of a family is assumed to be nonpreemptive exploiting the hierarchical structure we formulate the problem as a two stage stochastic sequencing problem the stochastic aggregate sequencing problem and the stochastic disaggregation problem to solve the stochastic aggregate sequencing problem a simple heuristic solution procedure is developed that accounts for the forecast revisions and provides a lower bound on the optimal value the heuristic is tested using the disguised data obtained from a consumer electronics company the computational results demonstrate the applicability of the proposed procedure

planning operations before market launch for balancing time to market and risks in pharmaceutical supply chains abstract shorter product life cycles and the resulting increase in new product introductions boost the importance of product launch operations in the pharmaceutical sector product launch operations are of particular importance as companies seek to reduce time to market to better exploit patent protection large volumes of product need to be ready to fill the downstream supply chain immediately at market launch building up the required inventory is however connected to several risks in addition to the risk associated with the lack of demand information for a new product there are several risks unique to the pharmaceutical sector after approval by central authorities such as the fda or ema a new drug still needs to receive market authorization which is in most cases granted by some local authorities in europe for example by more than 30 national and regional bodies the duration of these different market authorization processes as well as their outcomes e g price and reimbursement levels requirements of label or leaflet changes are highly uncertain we develop a two stage stochastic model to support market launch preparation decisions it trades off the costs of accepting these risks for example by risk packaging before authorization against the lost revenue caused by risk averse operations the model is applied to a case based on an empirical study our approach results in significant savings compared to current practices we hereby provide an example of how quantitative methodology can provide valuable decision support for product launch operations even when complex regulatory affairs need to be considered

bringing income distribution in from the cold the title of this presidential address is chosen to highlight the way in which the subject of income distribution has in the past been marginalised for much of this century it has been very much out in the cold there are signs that in the 1990s it is being welcomed back and i shall be referring to recent research but i would like to use this occasion to give further impetus to the re incorporation of income distribution into the main body of economic analysis this abstract was borrowed from another version of this item

optimizing product launches in the presence of strategic consumers a technology firm launches newer generations of a given product over time at any moment the firm decides whether to release a new version of the product that captures the current technology level at the expense of a fixed launch cost consumers are forward looking and purchase newer models only when it maximizes their own future discounted surpluses we start by assuming that consumers have a common valuation for the product and consider two product launch settings in the first setting the firm does not announce future release technologies and the equilibrium of the game is to release new versions cyclically with a constant level of technology improvement that is optimal for the firm in the second setting the firm is able to precommit to a schedule of technology releases and the optimal policy generally consists of alternating minor and major technology launch cycles we verify that the difference in profits between the commitment and no commitment scenarios can be significant varying from 4 to 12

oligopoly models for optimal advertising when production costs obey a learning curve business policy questions frequently involve competitive encounters among several different firms oligopoly theory in economics was devised to answer similar questions but its results so far are largely confined to cases of monopoly one firm duopoly two firms and many firms wheat farmers the cases with n firms where 3 n 10 are of great interest to business policy but are rarely treated in the economics literature because of their extreme difficulty the natural mathematical model for studying such questions is the theory of differential games originally devised by r isaacs isaacs r 1975 differential games robert e krieger publishing co huntington new york originally published by john wiley sons new york 1965 for pursuer evader games later it was extended by j case case j h 1979 economics and the competitive process new york university press new york to nonzero sum differential games for application to questions of economic competition the problem of characterizing an optimal advertising policy over time is an important question in the field of marketing it is especially important during the period of the introduction of a new product and it is also during this time that the production learning curve phenomenon is most pronounced in this paper we study oligopoly models which combine elements of bass s demand growth model bass f m 1969 a new product growth model for consumer durables management sci 15 january 215 227 the vidale wolfe vidale m l h b wolfe 1957 an operations research study of sales response to advertising oper res 5 370 381 and ozga ozga s 1960 imperfect markets through lack of knowledge quart j econom 74 29 52 advertising models with linear or quadratic costs and the production learning curve hirschmann w p 1964 profit from the learning curve harvard bus rev 42 january february 125 139 the boston consulting group 1972 perspectives on experience the boston consulting group boston in the monopoly case n 1 the optimal advertising function is derived by applying green s theorem in the duopoly n 2 and triopoly n 3 cases we use discrete differential game models and find nash equilibrium solutions in each of these models the form of the optimal policy is easy to find but because of the complicated nature of the resulting differential equations closed form solutions for the optimal state and control trajectories are impossible to find hence we use a computer to compute these optimal trajectories and plot them for various parameter settings because 13n parameters must be chosen to define a model with n players a complete search of the parameter space is clearly impossible we content ourselves in this paper with presenting computer plots of four different interesting encounters of the triopoly model our methods can be extended to work just as well for competitive encounters among n players where 1 n 10 we believe that in this paper we have opened up the way to studying oligopoly theory with a small number of participants and under widely varying conditions although the lack of closed form solutions may disappoint some readers we feel that the easy availability of graphical solutions is a more than adequate substitute

economic growth convergence and agricultural economics after nearly two centuries of lagging behind the industrial countries growth in many developing countries has surged since the early 1990s this outperformance has major implications for almost all areas of agricultural economics and if continued will likely do so into the future this article aims to identify the key ways in which the changes in rich and poor country growth rates matter for agricultural economists as a basis for formulating better research agendas a key impact arises through sharp increases in demand for agricultural resources as demand for livestock products increases this changing structure of food demand has important implications for nutrition studies and policies with the emergence of a double burden of malnutrition on the supply side growth in developing countries tends to increase domestic food supply which is also boosted by increases in research and development spending growth in developing countries both stimulates and benefits from increases in infrastructure investment evaluation of which requires new analytical tools negative impacts include the contribution of increased demand for livestock products to global greenhouse gas emissions in terms of trade policy growth in developing country is tending to lead to convergence of agricultural policies with the pattern of assistance seen in today s developed countries raising concerns about the future need to deal with collective action problems particularly those that increase the volatility of world prices

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