Pricing Policy Research Articles

The Impact of Natural Disturbances on the Central European Timber Market—An Analytical Study

Central European countries are strategic wood exporters in the European and international wood trade. In the context of wood exporters, Czechia, Germany, Poland, Slovenia, and Austria are the important countries providing the development and stability of the forestry and wood sector. The share of these countries’ exports in total EU exports represents more than 52% of the volume of wood exported over 5 years. After the Netherlands, the five mentioned countries recorded the highest increase in roundwood production of all EU and EFTA countries in the years 2000–2022 (from 46% (AT)–126% (CZ)), and the European average is 26%. The last decade has been characterised by a significant destabilisation of the Central European timber market as a result of natural disturbances linked to climate change, which also threatens the long-term competitiveness and preservation of this sector in the economic systems of national economies. The article provides an analytical insight into the historical development of natural calamities and their macroeconomic consequences in Central European countries. The data forecast an unfavourable development of the timber market in Europe caused by the ongoing calamity situation, the pricing policy of the timber trade, the oversaturation of the market with lower-quality calamity timber, insufficient processing capacities for primary processing of wood and its use in secondary processing, and, last but not least, the limited stock of timber in the coming years in selected Central European countries (due to an extreme increase in harvesting plans within the last 5 years, with consequences that will be felt in the coming decade). For the continued economic function of forests and the availability of wood supply for future generations, the current evolution of calamities in forest ecosystems is critical, and long-term strategic measures based on empirical data are necessary. The information presented in this paper can serve as a tool for the objectification of strategic decisions in the development of forestry policies in selected countries.

FairPlay: A Multi-Sided Fair Dynamic Pricing Policy for Hotels

In recent years, popular touristic destinations face overtourism. Local communities suffer from its consequences in several ways. Among others, overpricing and profiteering harms local societies and economies deeply. In this paper we focus on the problem of determining fair hotel room prices. Specifically, we put forward a dynamic pricing policy where the price of a room depends not only on the demand of the hotel it belongs to but also on the demand of: (i) similar rooms in the area and (ii) their hotels. To this purpose, we model our setting as a cooperative game and exploit an appropriate game theoretic solution concept that promotes fairness both on the customers' and the providers' side. Our simulation results involving price adjustments across real-world hotels datasets, confirm that ours is a fair dynamic pricing policy, avoiding both over- and under-pricing hotel rooms.

Does Support Price Policy Drive Yield Rate? An Econometric Investigation of Wheat and Sugarcane Crops in Pakistan

The governments of developing economies incentivize the cultivators of their most strategic crops by offering them minimum support price for their yield. This study aims at identifying distinctively the short-run dynamics and the long-run causal linkage of support price and yield rates for two major food crops of the country; wheat and sugarcane. Employing advance time-series econometric estimators of Error Correction Model (ECM) and Fully Modified OLS (FMOLS) cointegration regression, results indicate the valid existence of hypothesized relationship over both short and longer time horizons. Each year, the short-term divergence of two crop yields from their long-run equilibrium paths turns out to be corrected with high speed of adjustment. The long-run association between two variables is also found evident with decent magnitude and high degree of statistical significance. These findings favour the use of support prices as a long-term policy tool for encouraging cultivation of wheat and sugarcane crops in country. However, the overall welfare consequences of such a policy should never be over-rated in a society like Pakistan which is largely characterized by horrific levels of corruption and innumerable administrative bottlenecks.

Renewable energy input strategy considering different electricity price regulation policies

This paper examines the impact of the electricity price cap regulation and different policies on renewable energy inputs, electricity prices, demands, and the profits of power firm. Specifically, we compare the impact of the peak-trough electricity price policy (PP policy) and the uniform electricity price policy (UP policy) based on electricity price cap regulation. The findings are as follows: (1) Regardless of the cap, the UP policy consistently results in no lower renewable energy input level and total electricity demand compared to the PP policy. However, power firm earns higher profit in the PP policy. (2) During peak period, the electricity price in the PP policy is not lower than in the UP policy, but the electricity demand is lower. Conversely, during the trough period, the electricity price in the PP policy is lower, and the electricity demand is higher than in the UP policy. (3) When the firm is subject to the electricity price cap regulation, increasing the cap leads to higher electricity prices, renewable energy input levels, total demands, and firm profits. In the absence of the cap regulation, factors of cross-price competition and renewable energy preference increase all equilibrium solutions, while the renewable energy input cost factor has the opposite effect. In the field of renewable energy input, there is no literature considering the impact of the electricity price cap regulation, while our study considers the input behavior of power firm to renewable energy through electricity price cap regulation and different pricing policies. The findings provide substantial theoretical and practical insights for power firm and government in decision-making processes.

Study of Product and Price Management in Marketing Moringa Tea

U.D. Wuna Barakati is the only Moringa tea producer in Muna Regency. To respond to the increasing competition in the Moringa leaf processed beverage business, this company should completely implement a complete marketing mix strategy and appropriate marketing of its Moringa tea product. However, in the meantime, it seems to have relatively neglected the product mix and price mix strategies. This research examines product and price management in marketing Moringa tea at U.D. Wuna Barakati. Product management refers to implementing a product mix strategy, while price management refers to implementing a price mix strategy. The product mix is assessed from its level but is limited to three levels: Core Benefit Products, Basic Products, and Augmented Products. In contrast, the price mix is evaluated on the basis of the approach used to determine it. Primary data was collected using observation, questionnaires, and in-depth interviews, while secondary data was collected through documentary studies. The data was analyzed descriptively and qualitatively through three main steps: data reduction, data presentation, verification, and conclusion. The research results show that, in general, product mix and price mix strategies are applied to marketing Moringa tea at UD. Wuna Barakti is relatively good. However, several things do not support the competitiveness of the business and need to be improved simultaneously, namely: (a) single product variant, (b) low monthly sales value, (c) prices at the consumer level are relatively high, and (d) the issue of one price policy.

Optimizing City-Scale Demolition Waste Supply Chain Under Different Carbon Policies.

In order to establish a green, low-carbon circular development economic system, imperative goals include achieving carbon peaking and carbon neutrality. This research delves into the resource utilization of city-scale demolition waste (C&DW), aligning with environmental protection needs and sustainable development principles. The paper introduces a unique closed-loop supply chain (CLSC) model tailored for C&DW and employs a distinctive mixed integer nonlinear programming (MINLP) model for optimization. Guangzhou serves as a case study for thorough analysis, verification, and practical application of the proposed model, especially under diverse scenarios of carbon price (CP) and carbon trading (CT) policies. The key conclusions drawn from this study include the following: (1) The cost of carbon emissions is intricately influenced by both carbon emissions and carbon price, with the latter effectively regulating the carbon emissions during C&DW recycling. (2) The implementation of a CT policy, with a fixed carbon price, contributes to a further reduction in the cost of C&DW recycling treatment. (3) Under equivalent conditions, the CT policy demonstrates the potential to decrease costs and enhance the economic benefits within the building environmental protection product market. The research outcomes not only contribute to the advancement of management theory in the C&DW recycling supply chain (SC) but also provide a robust theoretical foundation for governmental initiatives aimed at introducing effective C&DW recycling management policies.

The Effect of Fund Transfer Pricing on Brazilian Bank Branch Performance

Financial institutions have implemented fund transfer pricing in response to demands from regulatory bodies to better manage their risk and as part of their cash-pooling strategies. For banks, implementing a fund transfer price causes a redistribution of income between the various bank branches depending upon the determined transfer price and the volume of resources demanded or offered by each branch. In this context, this study's objective is to examine the effect of the potential implementation of fund transfer pricing on the performance of Brazilian bank branches. This study examines and runs a linear regression of 21 years of monthly banking statistics (2000-2020), lists the most relevant factors contributing to interbranch transfer volume, and demonstrates how an interbranch transfer volume analysis determines the fund transfer price effect in the performance of bank branches. Contrary to the expectations of prior studies, the total volume of interbranch transfers between Brazilian bank branches for the period examined is not zero, which means that, on average, bank branches generate resources that are allocated to other parts of the bank that are not bank branches. This study finds evidence that branches short of funds may be financing their income with resources from branches with excess funds and that implementing funds transfer pricing does not have a null effect in Brazilian bank branches. On average, the branches' incomes increase. While implementing a price for the transfer of funds leads to an increase in the bank branches' average income, it is not necessarily the case that a greater number of bank branches will register an increase in their income. This evidence is important because it demonstrates that a bank's strategy regarding the supply or demand of interbranch resources should inform decisions on whether or not to implement a fund transfer pricing policy.

CONCEPTUAL METAPHORS IN VINAMILK COMMERCIALS IN VIETNAM

The aim of the study is to discover conceptual metaphors in thirteen Vinamilk television commercials in 2023. The method of identification of metaphor of MIP (2007) is applied to generate potential conceptual metaphors. Two types of target domains relating to the products and target customers are cued while fourteen source domains are interpreted through thirteen tables of mapping of conceptual metaphors in these TV commercials. The generation of these conceptual metaphors reflect the typical features of conceptual metaphors in advertising discourses and four vital marketing strategies and price policy of Vinamilk at present.

Dynamic Pricing and Route Guidance: A Multi-Agent System for Effective Parking and Traffic Management

In a city center that is usually flooded with traffic, finding a parking space is a challenge for most commuters. Searching for parking generates additional urban traffic, increases energy consumption and vehicle emissions, and wastes time. This study examines how parking systems can be used as an effective tool for reducing traffic congestion. It proposes a new, smart approach to parking using real-time dynamic pricing and route guidance in a multi-agent system to better align supply and demand, thereby reducing both congestion and the amount of time spend by drivers searching for parking. To examine the effects of dynamic parking pricing on road traffic, we conducted a multi-agent open-source framework to simulate spatiotemporal distributions of daily individual activity. By extending MATSim, we were able to model parking usage more realistically. We developed several micro-simulation scenarios to evaluate strategy performance for both on-street and off-street parking in the city center of Tunis, Tunisia. The results show that dynamic pricing policies can be used to plan and manage parking areas more efficiently, minimizing the dispersion of parking occupancy lots. Variations in parking prices were shown to increase parking lot vacancies and reduce traffic congestion. Moreover, the system can also generate increased revenue for government and private-sector parking authorities while improving driver satisfaction. Finally, the parking dynamic pricing strategy promises a convenient mobility experience, while increasing efficiency and reducing the negative externalities of urban transportation.

Perishable food supply chain contract with asymmetric freshness information

Food suppliers and retailers are grappling with challenging pricing and operational policies due to the deterioration of product quality over time. This problem is exacerbated by the food supplier’s intentions to provide false information about the freshness of the food. A principal-agent model optimisation for food retailer pricing is constructed to anticipate asymmetric freshness information from the food supplier. This study introduces novel modelling by incorporating a quality deterioration function with information asymmetry in case the food supplier attempts to conceal information about the freshness of the food. Retailers should charge non-discriminatory and low wholesale prices to encourage food suppliers to report their less fresh food. Overall, the supplier’s benefits are decreased when they decide not to share information regarding food freshness. However, the supplier remains profitable when the retailer believes in the less fresh food condition based on the contract design.

Analisis Pemilihan Supplier Bahan Baku Tas Gitar dengan Metode Fuzzy Analytical Hierarchy Process (FAHP) di PT. True Indonesia

The use of high-quality raw materials will affect the quality of products produced by a company. Companies really need suppliers who can supply quality raw materials. This can be realized by selecting the most appropriate supplier so that the company can minimize problems that can occur regarding raw material suppliers. PT True Indonesia is a manufacturing company that produces music equipment bags. So far, the company has made decisions in choosing suppliers only with the intuition of the parts related to the procurement of these raw materials. The decision chosen by the company in determining this supplier is often not right. The problems experienced by the company are the quality of raw materials that do not meet the company's criteria and the supplier's delay in sending raw material orders. In this study, the Fuzzy Analytical Hierarchy Process (FAHP) method was used. There are 7 main criteria in choosing a polyester fabric supplier, namely quality, delivery, price, communication system, warranties and claim policies, performance history, and geographic location. From the calculations carried out, the best polyester fabric supplier ranking for PT True Indonesia in order, Tongxiang has a total value of 0,3395, Hantron has a total value of 0,3350, PT. Lambang Jaya has a total value of 0,3340, PT. Shinta Indah Jaya has a total value of 0,3174, and CV. Agung has a total value of 0.3116.

PERFORMANCE INVESTIGATION OF A 5 MW PHOTOVOLTAIC SYSTEM: ALFASHIR SUDAN

This study comprehensively analyzes the operational performance and economic feasibility of a 5MW grid-connected photovoltaic in Sudan over a two-year monitoring period. Leveraging the capabilities of PVSyst software, the actual plant performance was rigorously compared to simulation predictions. Results revealed a significant disparity between observed and simulated energy generation, prompting the exploration of potential areas for enhancement. Seasonal fluctuations in the performance ratio were evident, with peak values during some seasons, albeit not consistently aligning with simulation projections. Despite these challenges, the Plant made a notable impact by reducing CO2 emissions, highlighting the environmental benefits of solar energy. Financial analysis unveiled discrepancies between actual and simulated savings, underscoring the need for optimization and efficiency improvements. The equity payback period, influenced by electricity pricing policies, was estimated at 15 years, emphasizing its role in assessing project economics. The region's high radiation intensity and humidity levels emerged as significant factors affecting plant performance. Addressing these challenges is crucial for maximizing the PV plant's operational efficiency and viability. Our Recommendations include thoroughly examining control system functions during commissioning and improving operational accuracy.

Empirical Analysis of African Aubergine (Solanum gilo) – Marketing and Income Disparity among Traders in Owerri, Imo State, Nigeria

African Aubergine is an indigenous tropical crop cultivated in Nigeria. Agricultural marketing creates incentives that accelerate the promotion of further production and consumption of harvested produce. Therefore, this study analysed African Aubergine marketing and income disparity among traders in Owerri, Imo State, Nigeria. Primary data collected via multistage sampling from ninety-five (95) respondents was analysed using descriptive statistics, marketing margin and efficiency analysis, Ordinary Least Square regression and Gini Coefficient index. The results show that the mean age, years spent in school, household size, trading experience and quantity of bags sold were 37 years, 8 years, 7 people, 9 years and 8 bags per month, respectively. The estimated marketing margin and efficiency index were ₦1,250 and 0.36, respectively. The estimated coefficients of Ordinary Least Square regression (R2) were 0.773. Thus, the variables (marketing experience, cost price, quantity sold and marketing cost) in the regression model accounted for 77% of the variation in the marketing margin of African Aubergine traders in the study area. The estimated Gini Coefficient was 0.59, indicating a moderate level of income disparity (inequality) in the sales income of the respondents. Several marketing constraints were observed in the study area. Therefore, this study recommends improved credit access and market information dissemination, commodity cost subsidisation, storage technology adoption, market infrastructure development and interventions, commodity price control and policy modification that regulates market activities.

ASSET DIVERSIFICATION VERSUS CLIMATE ACTION

AbstractAsset pricing and climate policy are analyzed in a global economy where consumption goods are produced by both a green and a carbon‐intensive sector. Given that the economy is initially heavily dependent on carbon‐intensive capital, the desire to diversify assets complements the attempt to mitigate economic damages from climate change. In the longer run, however, a trade‐off between diversification and climate action emerges. We derive the optimal carbon price and the equilibrium risk‐free rate, and risk premia. Climate disasters significantly decrease the risk‐free rate but increase risk premia on financial assets, especially if no climate policy is implemented.

Does the South African Carbon Tax Incentivise Mines to Invest in Solar Photovoltaic?

The aim of this study was to evaluate the adequacy of South Africa’s carbon pricing policy in incentivising adoption of Solar photovoltaic in South African mines. A qualitative study was conducted to evaluate the adequacy of South Africa’s carbon tax policy design to encourage adoption of solar photovoltaic in mines. The study further establishes the carbon pricing level that will induce South African miners to invest in Solar photovoltaic through a net present value simulation. A review of South Africa’s Carbon Tax regime highlights that the policy shortcomings can be attributable to low carbon prices, excessive free emission allowances, and continued subsidy support of fossil fuels. Furthermore, the carbon price needs to exceed cost of abatement to encourage investment in decarbonisation measures. A net present value simulation finds that a carbon price of ZAR 668.62 per tonne of CO2 would need to be levied to incentivise mining entities to invest in solar photovoltaic. The study recommends higher carbon prices be levied for carbon for emissions to encourage mining entities to adopt solar photovoltaic renewable energy. The paper contributes to tax policy scholarship on designing a carbon pricing model for South Africa’s mining sector. Decarbonising the mining industry, a significant contributor of GHG emissions, will advance the decarbonisation efforts of South Africa.

Legal Regulations for Fair National Salt Pricing Policy in Indonesia

Legal Regulations for Fair National Salt Pricing Policy in Indonesia

Dynamic pricing using flexible heterogeneous sales response models

We combine nonparametric price response modeling and dynamic pricing. In particular, we model sales response for fast-moving consumer goods sold by a physical retailer using a Bayesian semiparametric approach and incorporate the price of the previous period as well as further time-dependent covariates. All nonlinear effects including the one-period lagged price dynamics are modeled via P-splines, and embedding the semiparametric model into a Hierarchical Bayesian framework enables the estimation of nonlinear heterogeneous (i.e., store-specific) immediate and lagged price effects. The nonlinear heterogeneous model specification is used for price optimization and allows the derivation of optimal price paths of brands for individual stores of retailers. In an empirical study, we demonstrate that our proposed model can provide higher expected profits compared to competing benchmark models, while at the same time not seriously suffering from boundary problems for optimized prices and sales quantities. Optimal price policies for brands are determined by a discrete dynamic programming algorithm.

Aggregating Distributed Energy Resources: Efficiency and Market Power

Problem definition: The rapid expansion of distributed energy resources (DERs) is one of the most significant changes to electricity systems around the world. Examples of DERs include solar panels, electric storage, thermal storage, and combined heat and power plants. Because of the small supply capacities of these DERs, it is impractical for them to participate directly in the wholesale electricity market. We study in this paper the question of how to integrate these DER supplies into the electricity market, with the objective of achieving full market efficiency. Methodology/results: We study four aggregation models, where there is an aggregator who, with the knowledge of DERs’ utility functions and generations, procures electricity from DERs, and sells them in the wholesale market. In the first aggregation model, a profit-maximizing aggregator announces a differential two-part pricing policy to the DER owners. We show that this model preserves full market efficiency, that is, the social welfare achieved by this model is the same as that when DERs participate directly in the wholesale market. In the second aggregation model, the profit-seeking aggregator is forced to impose a uniform two-part pricing policy to prosumers from the same location, and we numerically show that there can be large efficiency loss. In the third (fourth) aggregation model, a uniform (semiuniform) two-part pricing policy is applied to DER owners, whereas the aggregator becomes fully regulated but is guaranteed nonnegative (positive) profit. It is shown that these models again achieve full market efficiency. Furthermore, we show that DER aggregation also leads to a reduction in the market power of conventional generators. Managerial implications: DER aggregation via profit-seeking and/or regulated aggregators has been investigated by California Independent System Operator and New York Independent System Operator, among others, and the recent Federal Energy Regulatory Commission Order No. 2222 paved the way for aggregators to bid in the wholesale market. Our four aggregation models may shed light on how DERs should be included in the wholesale electricity market. Funding: This work was supported by the King Fahd University of Petroleum and Minerals [Grant INML2106] and the National Science Foundation [Grant 1832230]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2021.0539 .

Analysis of the Effect of Pricing Policy, Investment Decision Making, and Service Quality on Financial Performance in Financial Services Companies in West Java

This research investigates the intricate interplay between pricing policy, investment decision-making, service quality, and financial performance within financial services companies in West Java. Employing a quantitative research design, data was collected from 152 companies through a structured survey and analyzed using Structural Equation Modeling with Partial Least Squares (SEM-PLS). The measurement model confirmed the reliability and validity of the chosen indicators, while the structural model unveiled significant relationships. Results indicate that strategic pricing policies, informed investment decisions, and high service quality positively influence financial performance. The synergistic effect of integrating these elements contributes to a comprehensive understanding of the strategic dynamics in West Java's financial services sector.

Pharmacy Compounding Regulation in the German Pharmaceutical Market. Part 1. Basic Regulatory Provisions (Review)

SCIENTIFIC RELEVANCE. There is a need to move towards an appropriate system of quality assurance in pharmacy compounding. At the same time, the development of a Russian regulatory system for pharmacy compounding requires a broad understanding of international experience.AIM. This study aimed at analysing the basic principles of pharmacy compounding regulation in the Federal Republic of Germany in order to identify best practices and determine ways to improve the legal and regulatory framework for compounding pharmacies in the Russian Federation.DISCUSSION. According to German law, pharmacies may dispense compounded medicinal products on an oral request from a patient. The German regulatory framework provides a mechanism delineating medicinal products compounded by pharmacies and those manufactured by pharmaceutical companies. The geographical and quantitative restrictions combined with the neutral pricing policy for pharmacies facilitate the establishment of a highly effective pharmaceutical supply system. In practice, this system helps set uniform prices for medicinal products throughout Germany while preventing pharmacy chains from monopolising the pharmaceutical market. These regulations can be considered regulatory mechanisms operating at the regional (land) level. Moreover, it is of key importance that German legislation divides compounded medicinal products into stock and extemporaneous preparations.CONCLUSIONS. German pharmaceutical practice features a number of innovations that can be borrowed for Russian pharmaceutical practice. Russian pharmaceutical legislation may benefit from adopting the concept of a “request from an individual” for dispensing compounded medicinal products that do not contain prescription-only active pharmaceutical ingredients (APIs). In order to improve the efficiency of the use of pharmaceutical-quality raw materials, including APIs, it is necessary to identify cases in which regular pharmacies can receive or purchase compounded medicinal products from compounding pharmacies and cases in which compounding pharmacies can purchase APIs from other compounding pharmacies. The authors recommend considering the possibility of defining the role, functions, and powers of self-regulating professional pharmacy organisations at various levels of governance in this social sphere of activity. Furthermore, the authors recommend creating a Russian mechanism to mitigate the risks of stock shortages and/or limited supply of medicinal products that would be similar to the German “standard authorisation” system and would encompass compounding pharmacies and pharmaceutical companies.