product cannibalization and the role of prices the role of brand prices in contributing to product cannibalization is examined price elasticities and reference price theory are used to provide a theoretical foundation and empirical test for the impact of a firm s cheap brand on one of its expensive brands results are consistent with the conclusion that the market share of the company s premium brand was cannibalized by a growth in sales of its cheap brand

revenue management with strategic customers last minute selling and opaque selling companies in a variety of industries e g airlines hotels theaters often use last minute sales to dispose of unsold capacity although this may generate incremental revenues in the short term

causality testing of the popularity function an empirical investigation for the federal republic of germany 1971 1982 relying on allensbach and infratest data it is asked if there is a relation between the perception of the general economic situation and the voting intention modern time series techniques are employed box jenkins analysis and granger causality tests the test results as well as ex post predictions show that voting intentions are strongly influenced by the perceived economic situation thus the null hypothesis of no relationship between the variables can not only be rejected by using classical econometric methods as is done in previous studies but also by employing modern time series procedures

timing of product allocation using probabilistic selling to enhance inventory management this paper examines probabilistic selling ps as an inventory management mechanism paying special attention to the impact of the timing of product assignment to buyers of probabilistic goods in practice sellers tend to offer probabilistic products only after major demand uncertainty has been resolved by deferring product assignments a firm is able to obtain more information about demand for each specific product before deciding which product to assign to consumers however our analysis demonstrates that ps can be an effective inventory management mechanism even if the firm allocates products before knowing which product will be more popular and thus scarcer interestingly we show that it can be more profitable for the firm to allocate products to consumers before rather than after learning the true demand for a product because although early allocation imposes higher inventory costs as a result of larger required inventory levels it also enables the firm to charge higher prices our results also reveal that when introducing probabilistic goods the firm should order less inventory relative to the case where probabilistic goods are not offered if costs are very low but more inventory otherwise finally we show that ps as an inventory management mechanism can create a win win situation both improving profit and increasing social welfare this paper was accepted by j miguel villas boas marketing

single period multiproduct inventory models with substitution we study a single period multiproduct inventory problem with substitution and proportional costs and revenues we consider n products and n demand classes with full downward substitution i e excess demand for class i can be satisfied using product j for i j we first discuss a two stage profit maximization formulation for the multiproduct substitution problem we show that a greedy allocation policy is optimal we use this to write the expected profits and its first partials explicitly this in turn enables us to prove additional properties of the profit function and several interesting properties of the optimal solution in a limited computational study using two products we illustrate the benefits of solving for the optimal quantities when substitution is considered at the ordering stage over similar computations without considering substitution while ordering specifically we show that the benefits are higher with high demand variability low substitution cost low profit margins or low price to cost ratio high salvage values and similarity of products in terms of prices and costs

capacity investment under postponement strategies market competition and demand uncertainty we consider duopoly models where firms make decisions on capacity production and price under demand uncertainty capacity and price decisions are made respectively ex ante and ex post demand realizations the interplay between the timings of demand realization and production decision endows firms with different capabilities flexible firms can postpone production decisions until the actual demand curve is observed but inflexible firms cannot under general demand structures and cost functions we characterize the equilibrium for a symmetric duopoly and establish the strategic equivalence of price and quantity competitions when firms are flexible we investigate the stochastic order properties of capacity and profit and show that they both increase for a flexible firm when the market is more volatile we find that flexibility allows a firm to increase investment in capacity and earn a higher profit while benefiting customers by keeping the price in a narrower range strategic equivalence implies that

animal spirits in the foreign exchange market it is traditionally assumed in finance models that the fundamental value of an asset is known with certainty in this paper we depart from that assumption we propose a simple model of the exchange rate in which agents have biased and unbiased beliefs about the fundamental rate we show that such a model produces waves of optimism and pessimism unrelated to the underlying fundamental value in addition the model shows that in a world characterized by the existence of heterogeneous beliefs about the fundamental exchange rate movements can be remarkably complex even if only fundamentalist traders operate in the market

pricing and the news vendor problem a review with extensions in the newsvendor problem a decision maker facing random demand for a perishable product decides how much of it to stock for a single selling period this simple problem with its intuitively appealing solution is a crucial building block of stochastic inventory theory which comprises a vast literature focusing on operational efficiency typically in this literature market parameters such as demand and selling price are exogenous however incorporating these factors into the mode l can provide an excellent vehicle for examining how operational problems interact with marketing issues to influence decision making at the firm level in this paper we examine an extension of the newsvendor problem in which stocking quantity and selling price are set simultaneously we provide a comprehensive review that synthesizes existing results for the single period problem and develop additional results to enrich the existing knowledge base we also review and develop insight into a dynamic inventory extension of this problem and motivate the applicability of such models

a dynamic structural model for stock return volatility and trading volume an examination is made of an adaptive beliefs model that is able to roughly reproduce the following features seen in the data 1 the autocorrelation functions of the volatility of returns and trading volume are positive with slowly decaying tails 2 the cross correlation function of volatility is approximately zero for squared returns with past and future volumes and is positive for squared returns with current volumes 3 abrupt changes in prices and returns occur that are hard to attach to news the last feature is obtained because the law of large numbers can fail in the large economy limit

measuring the frictional costs of online transactions the case of a name your own price channel we study the offers submitted by consumers to a large name your own price nyop online retailer a distinctive feature of this retailer is that it allows consumers to repeatedly submit offers on one and the same product while consumers could identify the threshold price the minimum price for which the retailer is willing to sell by incrementing their offer in small steps in each consecutive round such a strategy would require them to go through many additional online transactions we define frictional cost as the disutility that the consumer experiences when conducting an online transaction such as submitting an offer thus in our setting consumers trade off a direct financial value lower price for frictional costs based on a consumer choice model capturing this trade off we use the observed consumer behavior to reconstruct the frictional cost parameters for the consumers in our sample we show that perhaps contrary to the general wisdom frictional costs in electronic markets are substantial with median values ranging from eur 3 54 for a portable digital music player mp3 to eur 6 08 for a personal digital assistant pda we find that consumers who have gathered experience with the nyop channel in previous transactions exhibit lower frictional costs than consumers who use the channel for the first time surprisingly sociodemographic variables do not help to explain the variation in frictional costs

the political viability of rule based monetary policy we have estimated two models explaining political support for the president as a function of economic performance one model reflects the assumption characterizing most of the literature that voters indiscriminately punish inflation and unemployment without regard to the tradeoffs between them the other represents a more demanding conception of voter sophistication about macroeconomic possibilities and about control of the money supply while the data do not unambiguously designate a best model of behavior the sophisticated voter hypothesis performs as well as the naive voter hypothesis in the context of our study clearly this result is subject to the usual econometric caveats including possible misspecification of the model multicollinearity among independent variables etc however there is no particular reason to believe that these problems should favor one model as opposed to the other thus while we cannot conclude that voters really think in terms of rates of growth of velocity and natural output we can question the conventional wisdom that consistent rule based monetary policies may not be politically viable

probabilistic selling in quality differentiated markets probabilistic selling the sale of synthetic products consisting of a lottery between two distinct goods has been extensively analyzed in horizontal markets in this research we investigate probabilistic selling in quality differentiated markets this is an important new dimension of inquiry because of the widespread prevalence of quality differentiated markets as well as significant differences in the preference structure across these markets in fact this latter consideration casts doubt as to whether probabilistic selling will even emerge in quality differentiated markets we find that probabilistic selling emerges in quality differentiated markets as a way to profitably dispose excess capacity moreover probabilistic selling remains viable even under endogenous quality choice in addition in markets where sellers employ strong quality differentiation the introduction of an intermediate probabilistic good actually causes closer quality levels in a product line and enhances consumer welfare in contrast in markets where sellers employ weak quality differentiation the introduction of an intermediate probabilistic good increases quality separation and degrades consumer welfare overall we view our contribution as one of characterizing the optimality implementation and policy implications of probabilistic selling in quality differentiated markets this paper was accepted by pradeep chintagunta marketing

resource flexibility with responsive pricing this article studies two types of flexibility used by firms to better respond to uncertain market conditions resource flexibility and responsive pricing we consider a situation in which a single flexible resource can be used to satisfy two distinct demand classes while the resource capacity must be decided based on uncertain demand functions the resource allocation as well as the pricing decision are made based on the realized demand functions we characterize the effects of two key drivers of flexibility demand variability and demand correlation assuming normally distributed demand curve intercepts demand variability creates opportunity costs and with fixed prices decreases the firm s profit we show that with the additional flexibility gained from responsive pricing the firm can maximize the benefits of favorable demand conditions and mitigate the effects of poor demand conditions ultimately profiting from variability positive demand correlation on the other hand remains undesirable under responsive pricing the optimal capacity of the flexible resource is always increasing in both demand variability and demand correlation this contrasts with the scenarios based on fixed prices highlighting the crucial difference that responsive pricing makes in the management of flexible resources we further quantify the value of flexibility for the firm and its customers by considering as a benchmark a firm relying on two dedicated resources the value of flexibility is most significant if the demand levels are highly variable and negatively correlated in such cases the firm benefits from demand variability due to responsive pricing while facing limited demand risk due to resource flexibility finally we endogenize the input price of the flexible resource by considering the pricing decision of the resource supplier

capacitated multi item inventory systems with random and seasonally fluctuating demands implications for postponement strategies we address multi item inventory systems with random and seasonally fluctuating and possibly correlated demands the items are produced in two stages each with its own lead time in the first stage a common intermediate product is manufactured the production volumes in the first stage are bounded by given capacity limits we develop an accurate lower bound and close to optimal heuristic strategies of simple structure the gap between them evaluated in an extensive numerical study is on average only 0 45 we use the model to investigate the benefits of various delayed product differentiation postponement strategies as well as other strategic questions including i the benefits of flexible versus dedicated production facilities ii the trade off between capacity and inventory investments and iii the trade off between capacity investments and service levels

nonlinear expectations in speculative markets evidence from the ecb survey of professional forecasters chartist and fundamentalist models have proven to be capable of replicating stylized facts on speculative markets in general this is achieved by specifying nonlinear interactions of otherwise linear asset price expectations of the respective trader groups this paper investigates whether or not regressive and extrapolative expectations themselves exhibit significant nonlinear dynamics the empirical results are based on a new data set from the european central bank survey of professional forecasters on oil price expectations in particular we find that forecasters form destabilizing expectations in the neighborhood of the fundamental value whereas expectations tend to be stabilizing in the presence of substantial oil price misalignment

the foreign exchange market a random walk with a dragging anchor this paper explores some anomalies in the foreign exchange market it is hard to find evidence of either short term overshooting or of longer term reversion to an equilibrium the forward exchange rate contains virtually no information on future spot rates discussions with practitioners indicate that longer term speculation based on fundamentals is strictly limited and survey data and other evidence suggest that expectations and speculation are based on a variety of models the interplay between speculation based on fundamentals and on a random walk or chartist approach influences the outcome this endorses the prior model of j a frankel and k a froot copyright 1988 by the london school of economics and political science

revenue sharing and vertical control in the video rental industry revenue sharing contracts in which retailers pay a royalty on sales to their suppliers are now widely used in the video rental industry we show that revenue sharing is valuable in vertically separated industries in which demand is either stochastic unpredictable or variable e g systematically declining downstream inventory is chosen before demand is realized and downstream firms engage in intrabrand competition unlike two part tariffs revenue sharing achieves the first best outcome by softening retail price competition without distorting retailers inventory decisions our theories are also consistent with trends in prices and availability following retailers adoption of revenue sharing contracts

joint bidding in the name your own price channel a strategic analysis in this paper we study the name your own price nyop channel we examine theoretically and empirically whether asking consumers to place a joint bid for multiple items rather than bid one item at a time as practiced today can increase nyop retailers profits relatedly we also examine whether allowing consumers to self select whether to place a joint bid or itemwise bids increases retailers profits and consumers surplus we construct a dynamic model that incorporates both demand uncertainty and supply uncertainty to address these issues our theoretical analysis identifies the conditions under which joint bidding can increase both nyop retailers profits and consumers surplus we find that some consumers might bid more for the very same items when they place joint bids the increase in bid amount is related to the fact that joint bidding reduces the chance of mismatch between nyop retailers costs and consumer bids we conducted a laboratory study to assess the descriptive validity of some of the

who benefits from transshipment exogenous vs endogenous wholesale prices this paper studies how transshipments affect manufacturers and retailers considering both exogenous and endogenous wholesale prices for a distribution system where a single manufacturer sells to multiple identical cost retailers we consider both the manufacturer being a price taker and the manufacturer being a price setter in a single period setup under multivariate normal demand distribution in the case of the manufacturer being a price taker we provide several analytical results regarding the effects of key parameters on order quantities and profits in the case of the manufacturer being a price setter we characterize the stackelberg game that arises and provide several insights into how the game dynamics are affected by transshipments specifically we find that risk pooling makes retailers order quantities less sensitive to the wholesale price set by the manufacturer hence in general the manufacturer benefits from retailers transshipments by charging a higher wholesale price while retailers are often worse off the paper captures the effect of demand correlation and the effect of the number of retailers throughout and it illustrates the findings by a numerical example we also provide an interactive web page for numerical experiments

a new view of political accountability for economic performance most political support models imply that in evaluating economic performance voters use a standard that would provide poor predictions of the future and leave the economy vulnerable to manipulation by vote hungry politicians drawing on macroeconomic theory we develop a simple standard of evaluation which encompasses a concern not only for current economic outcomes but also for accurately assessed future consequences of current policies we find that political support for the president can be explained as well by models that assume that voters use this sophisticated standard as by models that assume voter naivete our analysis questions the wisdom of measures typically used to assess voter evaluation of economic performance in a variety of theoretical contexts the results also help to explain the absence of convincing evidence that governments exploit voter ignorance in manipulating the economy

diversification under yield randomness in inventory models abstract in this paper we consider the case of random yield and diversification in two different inventory models it is assumed that two sources suppliers exist who ship an amount which is a random function of the amount requisitioned since they may charge different prices and their reliability in terms of the variance of the yield random variable may be different diversification may be more desirable than using a single supplier we analyze this problem for both the eoq model and the newsboy model analytic results for the optimal order quantities and the minimum cost are obtained for the eoq model convexity of the objective function is also discussed we develop the necessary conditions for the newsboy model and propose an approximate solution technique the concavity of the expected profit function is shown numerical examples are provided for both models

expectations driven distortions in the foreign exchange market this paper explores the phenomenon of lasting deviations of the exchange rate from its fundamental value in the foreign exchange market motivated by empirical observations a chartists fundamentalists model is developed in which boundedly rational agents repeatedly choose between technical and fundamental trading rules to determine their speculative investment positions crucial for the dynamics is how the traders perceive the fundamental exchange rate this perception process is based on psychological evidence simulations give rise to bubbles but simultaneously display quite realistic exchange rate dynamics unit roots in the exchange rates fat tails for returns and volatility clustering

heterogeneity in exchange rate expectations evidence on the chartist fundamentalist approach abstract this paper examines heterogeneity in exchange rate expectations whereas agents heterogeneity is key in modern exchange rate models evidence on determinants of heterogeneity is weak thus far our sample covering expectations from about 300 forecasters over 15 years shows remarkable time variation in dispersion determinants of dispersion are consistent with the chartist fundamentalist approach misalignments of the exchange rate and exchange rate changes explain heterogeneity the risk premium influences heterogeneity as well but possible impacts from macroeconomic variables and exchange rate s volatility are dominated by the other determinants

the strategic perils of delayed differentiation the value of delayed differentiation also known as postponement for a monopolist has been extensively studied in the operations literature we analyze the case of imperfectly competitive markets with demand uncertainty wherein the choice of supply chain configuration i e early or delayed differentiation is endogenous to the competing firms we characterize firms choices in equilibrium and analyze the effects of these choices on quantities sold profits consumer surplus and welfare we demonstrate that purely strategic considerations not previously identified in the literature play a pivotal role in determining the value of delayed differentiation in the face of either entry threats or competition these strategic effects can significantly diminish the value of delayed differentiation in fact under plausible conditions these effects dominate the traditional risk pooling benefits associated with delayed differentiation in which case early differentiation is the dominant strategy for firms even under cost parity with delayed differentiation we extend the main model to study the effects of alternate market structures asymmetric markets and inventory holdback our results in particular that for a broad range of parameter values early differentiation is a dominant strategy even under cost parity with delayed differentiation are robust to these relaxations

demand uncertainty and price maintenance markdowns as destructive competition this paper offers a new theory of destructive competition the authors compare minimum resale price maintenance to retail market clearing in a model with a monopolistic manufacturer selling to competitive retailers in both the resale price maintenance and flexible price games retailers must order inventories before the realization of demand uncertainty the authors find that manufacturer profits and equilibrium inventories are higher under resale price maintenance than under market clearing surprisingly consumer surplus can also be higher in which case unfettered retail competition can legitimately be called destructive copyright 1997 by american economic association

the use of technical analysis in the foreign exchange market abstract technica or chartist analysis of financial markets involves providing forecasts or trading advice on the basis of largely visual inspection of past prices without regard to any underlying economic or fundamental analysis this paper reports the results of a questionnaire survey conducted on behalf of the bank of england among chief foreign exchange dealers based in london in november 1988 amongst other findings it is revealed that at least 90 per cent of respondents place some weight on this form of non fundamental analysis when forming views at one or more time horizons there is also a skew towards reliance on technical as opposed to fundamentalist analysis at shorter horizons which becomes steadily reversed as the length of horizon considered is increased a very high proportion of chief dealers view technical and fundamental analysis as complementary forms of analysis and a substantial proportion suggest that technical advice may be self fulfilling jel f31

foreign exchange rate expectations micro survey data this paper analyzes the panel data of biweekly surveys on the yen dollar exchange rate expectations of forty four institutions for two years and contains four major findings first market participants are heterogeneous that is significant individual effects exist in their expectation formation second the individual effects have a characteristic of wishful expectations exporters expect yen depreciation and importers expect yen appreciation relative to others third many violate the rational expectations hypothesis fourth forecasts with long horizons show less yen appreciation than those with short horizons cross equation constraints implied by the consistency of the forecast term structure are strongly rejected in the data copyright 1990 by american economic association

partial repeat bidding in the name your own price channel this paper presents an initial examination of an emerging business model the name your own price nyop channel as popularized by priceline com focusing on how to optimally structure such market interactions i ask whether it is more profitable to restrict individuals to a single bid as is currently done by priceline or conversely to allow consumers to continue bidding if the previous offer was rejected i find that both market structures yield the same expected profit in practice a single bid policy may not be perfectly enforceable especially in the internet environment because a sophisticated user can circumvent such a policy by camouflaging one s identity or otherwise manipulating the bidding procedure thus priceline s single bid restriction is likely to result in partial repeat bidding the case in which some consumers are limited to a single bid while other sophisticated users may rebid i ask whether such surreptitious bidding is detrimental to the nyop firm and find that profits are lower than if such opportunistic behavior were absent surprisingly i find that the impact of the number of repeat bidders on profits is not monotonic thus if it is prohibitively costly or logistically infeasible for the nyop firm to eliminate surreptitious rebidding behavior the firm may in fact benefit from encouraging rather than discouraging users to rebid the direction that increases profits depends on the percentage of sophisticated bidders

learning with misspecification in an artificial currency market abstract agents evolve their forecast rules over time via a modified genetic algorithm in a simple artificial currency market these forecast rules can be nonlinearly misspecified when the misspecification is suppressed learning tends to be complete when it is not suppressed learning can generate persistent exchange rate dynamics

sell probabilistic goods a behavioral explanation for opaque selling probabilistic or opaque selling whereby a seller hides the exact identity of a product until after the buyer makes a payment has been used in practice and received considerable attention in the literature under what conditions and why is probabilistic selling attractive to firms the extant literature has offered the following explanations to price discriminate heterogeneous consumers to reduce supply demand mismatches and to soften price competition in this paper we provide a new explanation to exploit consumer bounded rationality in the sense of anecdotal reasoning we build a simple model where the firm is a monopoly consumers are homogeneous and there is no demand uncertainty or capacity constraint this model allows us to isolate the impact of consumer bounded rationality on the adoption of opaque selling we find that although it is never optimal to use opaque selling when consumers have rational expectations it can be optimal when consumers are boundedly rational we show that opaque selling may soften price competition and increase the industry profits as a result of consumer bounded rationality our findings underscore the importance of consumer bounded rationality and show that opaque selling might be even more attractive than previously thought

a note on probability distributions with increasing generalized failure rates distributions with an increasing generalized failure rate igfr have useful applications in pricing and supply chain contracting problems we provide alternative characterizations of the igfr property that lead to simplify verifying whether the igfr condition holds we also relate the limit of the generalized failure rate and the moments of a distribution

price versus production postponement capacity and competition this article presents a comparative analysis of possible postponement strategies in a two stage decision model where firms make three decisions capacity investment production inventory quantity and price typically investments are made while the demand curve is uncertain the strategies differ in the timing of the operational decisions relative to the realization of uncertainty we show how competition uncertainty and the timing of operational decisions influence the strategic investment decision of the firm and its value in contrast to production postponement price postponement makes the investment and production inventory decisions relatively insensitive to uncertainty this suggests that managers can make optimal capacity decisions by deterministic reasoning if they have some price flexibility under price postponement additional postponement of production has relatively small incremental value therefore it may be worthwhile to consider flexible ex post pricing before production postponement reengineering while more postponement increases firm value it is counterintuitive that this also makes the optimal capacity decision more sensitive to uncertainty we highlight the different impact of more timely information which leads to higher investment and inventories and of reduced demand uncertainty which decreases investment and inventories our analysis suggests appropriateness conditions for simple make to stock and make to order strategies we also present technical sufficiency and uniqueness conditions under price postponement these results extend to oligopolistic and perfect competition for which pure equilibria are derived interestingly the relative value of operational postponement techniques seems to increase as the industry becomes more competitive

capturing the risk pooling effect through demand reshape the risk pooling effect has been documented to benefit inventory systems by reducing the need for safety stock and consequently lowering costs such as inventory holding and shortage penalty in this paper we propose a new approach called demand reshape to take advantage of the risk pooling effect it is demonstrated that a company can improve its profit by encouraging some of its customers who intended to purchase one product to switch to another the effectiveness of this approach is evaluated in various scenarios and found to be very promising

risk pooling through physical probabilistic selling abstract this paper investigates the impacts of a new type of probabilistic selling p s where the retailer orders specific products and package some as a discounted physical probabilistic product ppp rather than merely a virtual choice we call this p s strategy as physical probabilistic selling p p s the price gap between the specific products and the probabilistic product results in demand reshape i e some customers who originally buy specific products will switch to buying the probabilistic product which decreases aggregate demand uncertainty however the price discount decreases the profit margin considering this trade off we develop a three product newsvendor model to address the question of how to set the price for the ppp and make inventory allocation decisions we prove that there are two effects under p p s namely the risk pooling effect due to demand reshape and the risk diversification effect due to inventory flexibility with demand uncertainty p p s can improve the retailer s profit at lower inventory levels with proper demand reshape induced by the optimal price discount p p s is more profitable with smaller product differentiation higher customer price sensitivity higher demand uncertainty and lower package cost with supply uncertainty we demonstrate through numerical studies that p p s is a viable strategy to combat asymmetrical supply risk that yields higher profits and service levels

political accountability for price stability and unemployment in a multi party system with coalition governments a model of party popularity for multi party systems is presented and applied to the netherlands main conclusions are first inflation and unemployment and their interaction affect the popularity of parties second it is important to take into account that voters may reckon with a trade off between these variables third it is wrong to handle a coalition government as a homogeneous entity

component commonality with service level requirements this paper extends recent results of baker et al baker k r m j magazine h l w nuttle 1986 the effect of commonality on safety stocks in a simple inventory model management sci 32 982 988 in understanding the impact of component commonality on stocking levels under service level constraints a model is formulated for an arbitrary number of products with general joint demand distribution the results obtained are not all intuitive while utilizing commonality is beneficial nothing general can be said about the resulting change in the components stock levels when the cost structure is of a particular simple form though some interesting general patterns do emerge we also discuss the case of using a service level measure where rationing of common components might be required and characterize the implied rationing rule

rationality causality and the relation between economic conditions and the popularity of parties an empirical investigation for the federal republic of germany 1971 1982 abstract two questions are discussed using german popularity data from 1971 to 1982 it is asked whether it is true that using time series methods no relation can be found between economic variables and the popularity of parties taking ex post predictions strong evidence is presented that such a relation exists even if usual granger causality tests cannot detect it but is this relation compatible with rational expectations of the electorate this is at best partly the case as the anticipated part of the unemployment rate has a significant impact on the popularities of the two major german parties

posted pricing vs bargaining in sequential selling process we study the role of bargaining in a firm s sequential selling process the seller firm under consideration sequentially sells a fixed amount of stock to a random arrival stream of potential buyers who are heterogeneous in product valuation based on the stock level and the time to the end of the selling season the seller may dynamically choose either to post a take it or leave it price or to engage in bargaining with an arriving buyer we introduce a stochastic order called the scaled pricing order for the buyer s valuation distribution the scaled pricing order measures the average portion of trade surplus that the seller can obtain by posting a price for distributions with increasing length biased hazard rate checking the property of increasing decreasing scaled pricing order boils down to verifying the concavity convexity of the mills ratio we fully characterize the family of distributions that are invariant in the scaled pricing order which includes uniform and exponential distributions

economic outcomes and voting behaviour in a multi party system an application to the netherlands this paper is an empirical study to the effects of economic outcomes on party choice for the netherlands in the first part of the paper we employ a multinomial logit model to examine the links between voters characteristics and party choice the results suggest that there are long run movements in party choice which are unlikely be the result of changing economic outcomes in the second part we use time series analysis to determine the effects of economic conditions on short run and medium run movements in votes shares the estimations results provide support for the responsibility hypothesis and for the predictions of the partisan voter model that left wing right wing parties benefit suffer from favourable economic growth prospects