Dynamic Price Adjustment Research Articles

Resources Price Adjustment in Cloud Computing for Load Balancing and Fairness Between Users and Suppliers

Resource price adjustment is a challenging issue when building a cloud computing system. For this purpose, we present an approach that adopts a market-driven price adjustment model as an economic incentive model and ensures the balance between supply and demand. We show how this model may be adapted and applied to an infrastructure as a service (IaaS) in cloud computing. We place ourselves in the context of the virtual machines market. To achieve competitive equilibrium, prices are adjusted according to a tâtonnement-like process. The prices are computed by a third party, the auctioneer. However, this process requires several assumptions to ensure the existence and stability of competitive equilibrium, not all of which are verified by cloud computing systems. The atomicity and convexity of preferences are not guaranteed by cloud computing systems. These questions will be the subject of our empirical study. We find empirically that the change in the sign of excess demand, indicating the existence of equilibrium, occurs between two similar prices. The experimental results show that the proposed dynamic price adjustment approach is more profitable than fixed-price pricing, allowing dynamic suppliers to become important market agents.

Towards net zero: Comprehensive approach for voluntary carbon trading among microgrids

In the context of growing focus over climate changes and promoting sustainability across a various range of fields, microgrids can play a significant role in global decarbonization endeavors, contributing to carbon neutrality and ultimately attaining net-zero emissions in the energy sector. The objective of this paper is to address the integration of voluntary carbon trading within microgrid communities, in the perspective to mitigate greenhouse gas (GHG) emissions and boost the integration of renewable energy sources (RES). Introducing five modular algorithms managing key aspects of carbon trading, the study engineers a comprehensive framework aiming to optimally orchestrate the Voluntary Carbon Market (VCM) within microgrids. Particularly, the developed algorithms address aspects such as market enrollment decision, optimal energy dispatch, managing the market transactions, sellers-buyers matching as well as the dynamic adjustment of carbon credit prices and emission taxes. The framework has been rigorously tested across three distinct scenarios. Results show that the developed VCM, with adequate configurations, has the potential to incentivize microgrids to curtail their GHG emissions, encourage the integration of more RES into their generation mix, and rewards the more proactive microgrids with substantial financial incentives.

Non-cooperative and Nash-bargaining game of a two-parallel maritime supply chain considering government subsidy and forwarder's CSR strategy: A dynamic perspective

In recent years, sustainable and environmental issues have increasingly raised concerns of the government and enterprises. Motivated by the environmental regulations of IMO and shippers' green preferences, new energy vessels (NEV) have been developed, and there are still many traditional fuel vessels (TFV) providing maritime transport services. Considering the reality of the shipping market, a two-parallel maritime supply chain (MSC) involving a NEV carrier, a TFV carrier, and a freight forwarder with corporate social responsibility (CSR) has been constituted. The government may encourage the NEV carrier to make green innovation (GI) by providing subsidies. Most existing research on supply chain decisions considered different supply chain power structures or coordination issues and assumed that enterprises are entirely rational. However, in practice, bargaining games between stakeholders are common. Consequently, non-cooperative game (NCG), two types of Nash-bargaining game, i.e. horizontal Nash-bargaining game (HNBG) and vertical Nash-bargaining game (VNBG) are formulated in this paper. Based on bounded rationality, we investigate the dynamic price and GI adjustment strategies of MSC participants under government subsidy (GS) and freight forwarder's CSR (FCSR) with three game patterns. Furthermore, the impacts of adjustment parameters, GS, and FCSR on equilibrium strategies and expected profits are also explored. Setting NCG as the benchmark case, we uncovered that both HNBG and VNBG help improve the NEV carrier's equilibrium green innovation level (GIL), and HNBG (VNBG) raises (lowers) equilibrium prices of two carriers (freight prices and selling prices). In addition, HNBG (VNBG) can stabilize the adjustment of GI (freight prices and selling prices). For all MSC participants, excessive adjustment strategies harm robust revenues. We also found that GS and FCSR have different impacts on the dynamic decision-makings. When adjustment parameters are in their stable regions, GS always benefits the NEV carrier and the freight forwarder. But the impact of GS on the TFV's revenues may be related to the intensity of FCSR. Moreover, the effect of FCSR on stakeholders' expected profits depends on the choice of game pattern. Finally, we revealed that the TFV carrier's CSR-sharing behavior helps improve the stability of the MSC dynamic decisions and promotes the mutual benefit of MSC participants.

Heuristic Rules for the Dynamic Pricing Problem

This paper is devoted to the development of heuristics for the dynamic pricing problem. A discrete time model of dynamic pricing on the fixed time horizon is proposed. It is applicable to products that satisfy two properties: 1) product value expires at a certain predetermined date, and 2) consumers demand at most a single unit of the product. This type of demand structure allows deriving a simple system of recursive equations for optimal prices using dynamic programming techniques. Optimal pricing policy is expressed as a function of time to expiration and inventory levels of unsold products. An analytical solution to this problem was obtained for special cases, while for the general case, a numerical algorithm has been developed. Qualitative characteristics of the optimal pricing policy are established, and their implications for dynamics of inventories and prices are discussed. Based on these observations, a simple heuristic rule for dynamic price adjustments is proposed. Performance of this heuristic is evaluated against the optimal dynamic and fixed-price policies using Monte-Carlo experiments. Results demonstrate high efficiency of the proposed heuristic strategy and its even simpler derivatives. Heuristics’ adaptability and ease of implementation should make it suitable and attractive for small and medium businesses.

Self-Adaptive Agents in a Dynamic Pricing Duopoly: Competition, Collusion, and Risk Considerations

In many online markets, we observe fierce competition and highly dynamic price adjustments. Competitors frequently adjust their prices to respond to changing market situations caused by competitors’ price adjustments. In this paper, we examine price response strategies within an infinite horizon duopoly where the competitor’s strategy has to be learned. The goal is to derive knowledge about the opponent’s pricing strategy in a self-adaptive way and to balance exploration and exploitation. Our models are based on anticipated price reaction probabilities and efficient dynamic programming techniques. We show that our approach works when played against unknown strategies. Further, we analyze the mutual interplay of our self-learning strategies as well as their tendencies to form a cartel when motivated accordingly. Moreover, we propose two extensions of our model to integrate risk aversion. Finally, we demonstrate the effectiveness of parallelization techniques to speed up the computation of strategies as well as their simulation.

DYNAMIC PRICING STRATEGIES IN SALES MANAGEMENT OF DISCRETE PRODUCTS WITH A LIMITED LIFETIME

The paper is devoted to the development of a dynamic pricing strategy for the sale of goods with a limited shelf life. The case of sales of discrete goods to heterogeneous consumers who have at most a unit demand for sold goods and independent identically distributed estimates of its consumer value is considered. Such a structure of demand makes it possible to describe the optimal pricing strategy using a simple system of recursive equations, for which, in some cases, an analytical solution can be found. For the general case, a numerical algorithm has been developed for finding the optimal solution in the form of a feedback loop with time and the remaining stocks of unsold products as state variables. It is shown that optimal prices are non-increasing functions of both of these factors. These two properties, combined with the random nature of product sales, determine the rather complex dynamics of observed prices, examples of which are given in the paper. In particular, it is shown that although, on average, prices can be expected to decrease towards the end of the sales period, in some cases prices can increase and generally change quite chaotically. The proposed strategy is compared with the policy of fixed prices, the optimization of which under the conditions of the model is also a non-trivial task. The results of the comparison indicate the high economic efficiency of the dynamic price adjustment strategy, especially in cases when the product sold nears the end of its lifetime. It is shown that the general process of product sales can be represented as a controlled Markov process. This makes it possible to calculate any numerical characteristics of seller’s expected financial results depending on the model parameters. Based on the analysis of the results of numerical simulation, simple heuristics for sales management under conditions of incomplete information are also proposed.

The Welfare Effects of Dynamic Pricing: Evidence From Airline Markets

Airfares fluctuate due to demand shocks and intertemporal variation in willingness to pay. I estimate a model of dynamic airline pricing accounting for both sources of price adjustments using flight‐level data. I use the model estimates to evaluate the welfare effects of dynamic airline pricing. Relative to uniform pricing, dynamic pricing benefits early‐arriving, leisure consumers at the expense of late‐arriving, business travelers. Although dynamic pricing ensures seat availability for business travelers, these consumers are then charged higher prices. When aggregated over markets, welfare is higher under dynamic pricing than under uniform pricing. The direction of the welfare effect at the market level depends on whether dynamic price adjustments are mainly driven by demand shocks or by changes in the overall demand elasticity.

Parking and Ride Induction Methods for Drivers in Commuting Scenes

Parking and ride is a very effective method to improve the traffic condition of commuter channels, and it is necessary to develop effective parking guidance strategies. In this study, considering the travel time, walking distance, parking cruise time, parking fee, and personal attributes of drivers, a probability model of parking and ride selection in commuter scenarios was proposed, and a dynamic price adjustment method based on the equilibrium of parking occupancy in the region was constructed. The parking price was adjusted by determining the target occupancy, thus affecting the parking choice behavior to guide the commuter to park. The example analysis showed that this method adjusted the selection probability of the parking lot by using the dynamic price adjustment method from the perspective of regional parking occupancy equilibrium, solved the model by symmetric duality algorithm and formulated a reasonable parking replacement induction scheme to achieve the goal of occupancy equilibrium. Compared with parking guidance under static pricing, it can avoid the crowding of commuter vehicles into the city center effectively to reduce the congestion of commuter channels.

Dynamic modeling and real-time management of a system of EV fast-charging stations

Demand for electric vehicles (EVs), and thus EV charging, has steadily increased over the last decade. Studies suggest that fast-charging facilities are crucial for the EV market. However, there is limited fast-charging infrastructure in most parts of the world to support EV travel, especially long-distance trips. The goal of this study is to develop a stochastic dynamic simulation modeling framework of a regional system of EV fast-charging stations for real-time management and strategic planning (i.e., capacity allocation) purposes. To model EV user behavior, specifically fast-charging station choices, the framework incorporates a multinomial logit station choice model that considers station charging prices, expected wait times, and detour distances. To capture the dynamics of supply and demand at each EV fast-charging station, the framework incorporates a multi-server queueing model in the simulation. The study assumes that multiple fast-charging stations are managed by a single entity (public or private) and that the demand for these stations are interrelated (through the station choice model). To manage the system of stations, this study proposes and tests dynamic demand-responsive price adjustment (DDRPA) schemes based on station queue lengths. The study applies the modeling framework to a system of EV fast-charging stations in Southern California. The computational results indicate that DDRPA strategies are an effective mechanism to balance charging demand across fast-charging stations. Specifically, compared to the no DDRPA scheme case, the quadratic DDRPA scheme reduces average wait time by 26%, increases charging station revenue (and user costs) by 5.8%, while, most importantly, increasing social welfare by 2.7% in the base scenario. Moreover, the study also illustrates that the modeling framework can evaluate the allocation of EV fast-charging station capacity, to identify stations that require additional chargers and areas that would benefit from additional fast-charging stations.

Dynamic Adjustment Model of the Water Rights Trading Price Based on Water Resource Scarcity Value Analysis.

The formation of the water rights trading price is an important part of the water rights trading system. In order to continuously and dynamically reflect the social–economic development changes and water resource scarcity, herein, we discuss the dynamic adjustment of the water rights trading price from the perspective of water resource scarcity value analysis. First, we constructed the water resource scarcity evaluation index system from the four dimensions of the water resource natural endowment, the water resource supply, the water resource demand, and the water environment, and then we constructed the water resource scarcity index calculation model of the transferor, the transferee, and the comprehensive water resource scarcity index calculation model of both parties of the trading. Second, by analyzing the 30 comparable water rights trading cases in China since 2016, we established the response function of the water rights trading price to the water resource scarcity index, and then we analyzed the impact mechanism of the water resource scarcity index on the water rights trading price. Third, based on the two factors of “the water resource scarcity value” and “the capital time value,” we constructed a dynamic price adjustment model of water rights trading for different adjustment factors, so as to adjust the water rights trading price scientifically. Finally, we took the water rights trading in Helan County (Helan) of Ningxia Hui Autonomous Region (Ningxia) as an example. The research shows that: (1) During the trading period of water rights in Helan, the water resource scarcity index rises, and the water rights trading price should be increased year-by-year. Additionally, there are certain differences in the water rights trading price changes with the adjustment of different elements. Among them, considering the adjustment of “the water resource scarcity value” element, the water rights trading price of Helan should be increased from 1.0940 to 2.8574 CNY/m³ during the water rights trading period; (2) there are differences in the water rights trading cost under different payment modes, among which the annual payment mode increased the most, i.e., from 2.7350 × 108 to 7.4500 × 108 CNY. This study suggests exerting a regulating effect of the water scarcity value on the water rights trading price, so as to promote the construction of a more equitable and long-term water rights trading market.

Predicting the direction of dynamic price adjustment in the Hong Kong hotel industry

This study analysed dynamic pricing data of Hong Kong hotels within the last-minute 1-week booking window to determine patterns and direction of room rate changes and their association with hotel characteristics regarding tangible attributes, reputational variables and contextual factors. Findings show that room rates are more likely to increase than decrease or stay constant, and that, holding demand and market conditions constant, the likelihood of price increases (decreases), based on standard binomial probit regression, is positively (negatively) associated with size (tangible attribute), chain affiliation and star rating (reputational attributes), and seller density and location accessibility (contextual factors). These results confirm the importance of differentiation in pricing hotel rooms and indicate how hotel customers and revenue managers can combine these characteristics with predicted demand to anticipate the direction of room rate change in the last-minute booking window as the booking horizon approaches check-in.

Wholesale fuel price adjustment in Poland: examination of competitive performance

Motivation: Import parity pricing, potentially provoking parallel pricing, and asymmetric price transmission are both considered as the fac-tors that can distort competitiveness and foster collusive behavior on the fuel markets. Aim: The study encompass an analysis of usual ‘rocket and feathers’ reactions in response to common drivers of the gasoline wholesale price and comparative analysis of individual players’ pricing paths in order to examine competitive performance of the market. To account for an im-plied IPP pricing mechanism, a set of common wholesale price determi-nants was expanded. Results: We revealed a significant short-run asymme-tries in a transmission of all downstream price determinants and shown that the foreign exchange rate is a main driver underlying a positive asymmetry in the wholesale prices’ paths. We compared dynamic price adjustment paths for the major players and revealed the common patterns. That suggest a strong possibility of parallel pricing.

Price adjustment in the London housing market

Recent research into the dynamic adjustment of prices within the London housing market is extended via the application of a novel two-step procedure. Combining the non-parametric analysis of the ranking distributions of the levels and changes in house prices with the application of a cross-sectional convergence technique results in the detection of a three-tier system in which highly significant convergence clubs are identified within borough-level data. These findings contrast with both the divergence apparent when considering all boroughs and the failure of previous research to identify convergent groupings. The novelty of the empirical methods is supplemented by a discussion of various theoretical factors such as gentrification, displaced demand, immigration, foreign investment and criminal activity in relation to the findings obtained.

Last-minute hotel-booking and frequency of dynamic price adjustments of hotel rooms in a cosmopolitan tourism city

Although the Internet has contributed to lowering the cost of adjusting hotel room rates on Internet-enabled distribution channels and promoted last-minute hotel booking, research on the frequency of dynamic price adjustments of hotel rooms remains scarce. Using panel data techniques involving count data models, this study examined online pricing data of hotels in a cosmopolitan tourism city to identify supply-side factors and location attributes that can be used in conjunction with the established demand-based pricing strategy to explain the frequency of adjusting room rates. After controlling for spatial locations and demand, results indicated that the frequency of room rate change is also related to seller density, hotel size, star rating, and consumer heterogeneity reflected in different booking days. Practically, the findings have revealed subtle differences in the implementation of demand-based dynamic pricing that can be used by practitioners and consumers for strategic decision-making.

Asset markets with insider trading disclosure rule and reselling constraint: An experimental analysis,

We investigate the impact of compulsory insider-trading disclosure and its combination with a mandatory holding rule on price predictability and asset mispricing. We modify the dynamic price-adjustment model to account for insiders’ private information. Our results show that insiders produce weakly-characterized price signals that induce a less than proportional price adjustment to the changes in the dividend value, in both markets with disclosure rule and holding requirement, in comparison with unregulated markets. A shift in insiders’ strategies from information-motivated to liquidity-motivated trading appears to fuel the impairment of price predictability in regulated markets. The exacerbation of asset mispricing in markets with holding restriction is characterized by a growth in the speculative transactions and loss-making trading proposals.

The investigation and analysis of the current situation of medical service price cognition of China with grey relational analysis theory

Purpose Through a questionnaire survey, the purpose of this paper is to understand and analyse the cognitions of medical service price of medical workers in various regions of China, and discuss the policy suggestions on the price dynamic adjustment of medical service. Design/methodology/approach The authors conducted a questionnaire survey on the cognition of medical service price medical workers in various regions of China, and then the grey relational analysis theory is used to analyse the data obtained from the questionnaire survey. Findings The investigation and analysis shows some cognitions of hospital workers on the price of medical services in various regions in China, the authors analyse the results of grey relational analysis and come up with suggestions for relevant departments. Research limitations/implications Although a plenty of research on the current situation of medical service price cognition of China is discussed in the paper, it is not complete; thus, a large amount of information needs to be consulted further. The data obtained from the questionnaire are less used and the utilisation rate is lower, which may result in one-sided results and need further investigation. Practical implications Through the investigation and analysis, the authors can determine about the implementation of medical service prices in various parts of China from the perspective of hospital workers to a certain degree, and try to explore the relevant policy recommendations for the dynamic adjustment of medical service prices. Social implications The price of medical services refers to the fees for registration, diagnosis, inspection, surgery, nursing and medicine. In a narrow sense, the price of medical services refers to the standard of charge for medical services except drugs. This paper mainly refers to the narrow sense. As one of the important means and methods for the government to control the medical service market, medical service price is also an important basis for the economic source of medical institutions. The adjustment of medical service price is related to the interests of all aspects of society. Originality/value Medical service price is an important basis for the economic source of medical institutions, the adjustment of medical service price is related to the interests of all aspects of society and it is a hot issue of social concern. Through the investigation and analysis, the authors use grey relational analysis to know about the medical service prices in various parts of China from the perspective of hospital workers to a certain degree, and try to explore the relevant policy recommendations for the dynamic adjustment of medical service prices.

Simulation-based dynamic adjustments of prices and subsidies for transportation PPP projects based on stakeholders’ satisfaction

Public–private partnership (PPP) has been well acknowledged by many as an innovative approach to the procurement of public projects. In their long-term concession periods, various uncertain factors lead to the difficulties in implementing the concession contracts. Historical projects have proven that unexpected changes of projects will inevitably result in the adjustment of prices of the private sector and subsidies from the public sector. Therefore, a dynamic price and subsidy adjustment model is desired, to balance the satisfaction of all involved stakeholders (i.e., public sector, private sector, and general public). In the present study, a system dynamics model, which balances the tripartite satisfaction in PPPs, was established. A PPP bridge case study was conducted to demonstrate that the proposed model is applicable and can function for future PPP projects. Model validation, sensitivity analysis, model application, and result analysis were included as well. Further recommendations and conclusions were made to help practitioners to improve the model implementation in transportation PPP projects to increase the likelihood of achieving tripartite satisfaction. This research also sheds light on the price and subsidy adjustments for other types of PPP projects.

Dynamic pricing mechanisms for the airline industry: a definitional framework

The phrase “dynamic pricing” has entered the airline revenue management lexicon in recent years with the emergence of new distribution capabilities that could allow airlines to adjust ticket prices more frequently. Yet each airline, vendor, and academic has a unique (and often incongruous) view of what dynamic pricing encompasses. To date, there has not been a definition of dynamic pricing proposed in the literature that clearly delineates how these mechanisms are different from traditional airline pricing and revenue management. In this paper, we propose a definitional framework for dynamic pricing for the airline industry. After providing a general definition of dynamic pricing, we describe three mechanisms for price selection—assortment optimization, dynamic price adjustment, and continuous pricing. Depending on the implementation and the information available to the airline at the time of pricing, each of these mechanisms could be used to adjust prices relatively infrequently or, at the limit, on a transaction-by-transaction basis. We close by linking recent technological developments in airline pricing, revenue management, and distribution to the three mechanisms introduced in the framework.

Research on the medical service pricing policy in China′s ongoing healthcare reform

Objective To analyze the medical service pricing policy of 30 provinces and autonomous regions in China and recommend on problems and challenges, for reference of medical service pricing reform in the future. Methods Literature review and policy analysis were used for summary and performance appraisal of medical service pricing of China. Results Most of the areas surveyed followed the step-by-step approach to gradually adjust pricing, while a few areas completed it in a one-time adjustment manner. 2015 witnessed most areas, up to 20 (66.67%), in price adjustment; their price adjustments focused on price reduction of large-scale medical equipment inspection fees and some medical tests. On the other hand, prices of diagnosis, nursing care, and treatment which are labor-intensive were increased. Conclusions Specifications of medical services are improving, yet there exist great gaps in the convergence of medical insurance. It is advisable to expedite the convergence of the new version specifications, to achieve value regression and dynamic price adjustment of medical services. Key words: Ongoing healthcare reform; Medical service; Price; Adjustment; Policy research

Price adjustment for traditional Chinese medicine procedures: Based on a standardized value parity model.

Traditional Chinese medicine (TCM) is an important part of China's medical system. Due to the prolonged low price of TCM procedures and the lack of an effective mechanism for dynamic price adjustment, the development of TCM has markedly lagged behind Western medicine. The World Health Organization (WHO) has emphasized the need to enhance the development of alternative and traditional medicine when creating national health care systems. The establishment of scientific and appropriate mechanisms to adjust the price of medical procedures in TCM is crucial to promoting the development of TCM. This study has examined incorporating value indicators and data on basic manpower expended, time spent, technical difficulty, and the degree of risk in the latest standards for the price of medical procedures in China, and this study also offers a price adjustment model with the relative price ratio as a key index. This study examined 144 TCM procedures and found that prices of TCM procedures were mainly based on the value of medical care provided; on average, medical care provided accounted for 89% of the price. Current price levels were generally low and the current price accounted for 56% of the standardized value of a procedure, on average. Current price levels accounted for a markedly lower standardized value of acupuncture, moxibustion, special treatment with TCM, and comprehensive TCM procedures. This study selected a total of 79 procedures and adjusted them by priority. The relationship between the price of TCM procedures and the suggested price was significantly optimized (p < 0.01). This study suggests that adjustment of the price of medical procedures based on a standardized value parity model is a scientific and suitable method of price adjustment that can serve as a reference for other provinces and municipalities in China and other countries and regions that mainly have fee-for-service (FFS) medical care.