Price Quantity Research Articles

On pure-strategy Nash equilibria in price–quantity games

This paper examines the existence and characteristics of pure-strategy Nash equilibria in oligopoly models in which firms simultaneously set prices and quantities. Existence of a pure-strategy equilibrium is proved for a class of price–quantity games. If the demand function is continuous, then the equilibrium outcome is similar to that of a price-only model. With discontinuous demand and limited spillover, there are rationing equilibria in which combined production falls short of market demand. Moreover, there might again be an equilibrium reflecting the outcome of a price game. Competition in price and quantity thus yields Bertrand outcomes under a variety of market conditions.

Pricing strategy in the product and service market

Existing studies have mainly focused on pricing in either primary markets or aftermarkets. However, in practice, prices in primary markets and aftermarkets are closely correlated. This study examines the joint pricing strategy in both primary markets and aftermarkets based on customer utility and establishes a pricing model for profit-maximization firms. Our results show that overpricing in the aftermarket is caused by customer myopia, while the motivation of the firm to avoid customer myopia depends on its pricing strategy. A quantity–price contract in the aftermarket is designed to raise the firm’s profit.

Normative decomposition of the profit bridge into the impact of changes in marketing variables

A set of definitions and equations for measuring the impact of changes in quantity sold, price, variable costs, and mix between two time periods on the business’s profitability are provided. The recommended decomposition of the changes in profit is then compared with four other seemingly rational decompositions using hypothetical two-product firms. The comparisons demonstrate the importance of using a proper decomposition in constructing a measurement of the impacts of changes in quantity sold, price, variable costs, and mix on the profitability over other formulations and prior art. This normative decomposition of the profit bridge measuring the impact of changes in marketing activities is used as part of the intelligence mosaic in executive and investor decision-making.

An Empirical Model of Quantity Discounts with Large Choice Sets

We introduce a Generalized Nested Logit model of demand for bundles that can be estimated sequentially and virtually eliminates any challenge of dimensionality related to large choice sets. We use it to investigate quantity discounts for carbonated soft drinks by simulating a counterfactual with linear pricing. The prices of quantities up to 1L decrease by −31.5% while those of larger quantities increase by +14.8%. Purchased quantities decrease by −20.4%, associated added sugar by −23.8%, and industry profit by −20.5%. Consumer surplus however reduces only moderately, suggesting that linear pricing may be effective in limiting added sugar intake.

Value- and Ambiguity-Based Approach for Solving Intuitionistic Fuzzy Transportation Problem with Total Quantity Discounts and Incremental Quantity Discounts

The cost of goods per unit transported from the source to the destination is considered to be fixed regardless of the number of units transported. But, in reality, the cost is often not fixed. Quantity discount is often allowed for large shipments. Furthermore, the transportation cost and the price break quantities are not deterministic. In this study, we introduce the concept of Value- and Ambiguity-based approach for solving the intuitionistic fuzzy transportation problem with total quantity discounts and incremental quantity discounts. Here, the cost and quantity price breakpoints are represented by trapezoidal intuitionistic fuzzy numbers. The Values and Ambiguities are defined as the degree of acceptance and rejection for trapezoidal intuitionistic fuzzy numbers. The trapezoidal intuitionistic fuzzy transportation problem is converted to a parametric transportation problem based on their Value indices and Ambiguity indices. Then, for different Values of the parameter, the transformed problem is reduced to the linear programming problem. Then, the linear programming problem is solved by using the classical methods. The proposed method is demonstrated with a numerical example. In conclusion, the intuitionistic fuzzy transportation problem with total quantity discounts is compared with the intuitionistic fuzzy transportation problem with incremental quantity discounts.

Vietnamese Tea Exporting and Forecasting to 2030

This study aimed to determine the factors influencing Vietnamese tea export quantities, namely, the internal factors of national tea production, productivity, and cultivated areas, and the external factors of export price and world tea export quantity (excluding Vietnam). We employed a time-series linear model to estimate the magnitude as well as the sign of the aforementioned factors on Vietnam’s tea export quantity and two Box-Cox transformations called a simple back-transformed forecast and a bias-adjustment to forecast the growth rate of the Vietnamese tea export quantity until 2030. The results suggested that except for the total domestic tea production, all the proposed factors significantly affected the Vietnamese tea export quantity. The tea export quantity of other nations around the world had a significantly negative impact on Vietnamese tea that led to Vietnam’s tea exports dropping by 34 tons on average since the other countries exported 1,000 tons of tea. The forecasted outcome suggested an upward trend of Vietnamese tea exports up to 2030. In order to sustainably develop Vietnam’s tea industry, we recommend that the government should take supportive actions such as investing in in-depth tea processing to improve Vietnam’s tea export quality, focusing on post-harvest activities, investing in organic or high-value tea rather than conventional tea, continuing to accumulate land to support the growth of cultivated tea areas, and maintaining high productivity by using hybrid seeds.

Occupational Variation in Quantity–Quality Trade-off in a Brawn-Based Economy

The paper revisits the theory of the quantity–quality trade-off and demonstrates that the relationship between quantity and health of children is subject to occupational variation in physical energy requirements. It embeds, in a simple household optimisation model, a minimum consumption requirement that rises with physical work intensity of occupation. Occupational differences in minimum consumption requirement generates variation in child nutritional status – the shadow price of quantity, which in turn generates varying quantity–quality relationships. The model yields an equilibrium relationship between the number and nutritional status of children that is positive for households in strenuous occupations and ambiguous for other households. A numerical example using a calibrated model illustrates that these trade-offs are consistent with the phenomenon of intergenerational persistence of nutritional status. These new insights into the nature of the quantity-quality trade-off help reconcile some inconsistent empirical findings on such trade-offs.

Joint pricing and inventory decision under a probabilistic selling strategy

This study examines whether probabilistic selling could enhance inventory management considering market size uncertainty in a rather general setting. We propose to study the impact of probabilistic selling on the profit, price and order quantity within a newsvendor framework. By comparing probabilistic selling against traditional selling, we find that probabilistic selling could generally increase firm’s expected profit. Moreover, the firm will increase the price and the order quantity for the component product. The impact of various aspects, i.e. the demand variance, the unit cost and the degree of cannibalization, on the pricing and order decisions are investigated through numerical experiments.

Analysis of the Internal Control System for Merchandise Inventory at Alfamart Merapi, Tebeng Gardens, Bengkulu

The purpose of this study was to determine the internal control system for merchandise inventory at Alfamart Merapi Kebun Tebeng Bengkulu. The results showed that the internal control system for merchandise inventory at Alfamart Merapi Kebun Tebeng Bengkulu was compatible with Mulyadi's theory (2018: 488). In the organizational element, there is a schedule and committee involved in the stock opname. The authorization system and recording procedures are appropriate, where the monthly Stock Opname report is signed by the shop head and the daily Stock Opname is signed by the employee of the shift holder, the recording is based on the results of the monthly and daily (partial) Stock Opname reports calculated based on an invoice containing the type of goods, price of goods and quantity of goods. Healthy practice, there is conformity in the application of the internal control system for merchandise inventory, where invoices have been printed serial numbers and issued by DEPO Alfamart, Stock opname is carried out twice (monthly and daily) using the PDA system. In this element of healthy practice control there is an inconsistency with Mulyadi's theory (2018: 44), where the quantity and other inventory data listed in the 3rd and 2nd part of the physical count card are matched by the physical count card holder before the data is collected. listed in part 2 of the physical count card is recorded in the list of physical count results, because at Alfamart Kebun Tebeng, the quantity and inventory data are matched based on the invoice sent by DEPO

Estimating exporter's quality: Do importers agree on rankings?

AbstractA large and growing literature focuses on product quality differentiation and its positive and normative importance for international trade. In this literature, there are a number of approaches that attempt to extract a quality ‘signal’ from noisy price or price–quantity data (i.e., unit value and demand residual approach). I propose a simple test for the robustness of these approaches to quality inference: when purchasing goods from a common set of exporters, do two importers agree on which goods are high quality? Results from Spearman's rank correlation tests show that as we use import demand residuals to measure quality, quality estimates become progressively less consistent and worsen the agreement among importers. Such inconsistency cannot be explained by trade cost effects on exporters' quality suggested by Melitz (2003) and Alchian–Allen hypothesis (Hummels and Skiba, 2004). It is also uncorrelated to differences in the compositions of imports. However, demand residual approach produces strong quality ‘signal’ relative to the noise only in highly differentiated products. Further analyses confirm the role of the differences in consumers' preferences and tastes across importers in the distortion of quality signals.

Electromagnetic-Wave Fun Using Simple Take-Home Experiments [Education Corner

This article describes a set of simple experiments conducted at the University of Colorado (CU) Boulder and Technische Universit?t (TU) Wien, for teaching electromagnetic (EM) waves in the third year of undergraduate studies [electrical and computer engineering (ECEN) 3400 and ECEN 3410 at CU Boulder and wave propagation at TU Wien]. The experiments require simple household items and basic undergraduate circuit test equipment found in any electrical engineering department, namely, a function generator and oscilloscope. A subset of the experiments are packaged as take-home kits at TU Wien named Wave Propagation Season's Holiday Experiments and are gifted to the students in the last lecture before the winter holidays. The items are obtainable at a reasonable price in large quantities, such that the kits can be given away for free. At CU Boulder, the microwave oven leak detector experiment is held as a competition in which students win awards for the longest-detected range, lowest cost, and best quantitative readout. The experiments are designed to balance theory in EM waves and provide students with an appreciation of various types of waves across the EM spectrum as well as their similarities and unified mathematical description.

Optimal Operation Strategies under a Carbon Cap-and-Trade Mechanism: A Capital-Constrained Supply Chain Incorporating Risk Aversion

Many small and medium enterprises (SMEs) with capital constraints often have no access or find it costly to obtain a loan from a bank; the retailer tends to borrow money from other enterprises in the supply chain by trade credit financing. We consider an emission-dependent supply chain with one emission-dependent manufacturer and one capital-constrained retailer in need of financing to explore the optimal operational and environmental strategies of a low-carbon supply chain under trade credit financing. We use a Stackelberg game model to depict the low-carbon supply chain. We analyse the optimal carbon-emission reduction effort, wholesale price, and order quantity in the equilibrium state. The impacts of key parameters, such as the retailer’s internal working capital, the manufacturer’s risk-aversion degree, and the carbon-trading price on the supply chain operation, are analysed. The results show that the retailer’s capital constraint causes the carbon-emission reduction effort, wholesale price, and order quantity to improve synchronously. The supply chain achieves a win-win outcome for both the manufacturer and the retailer when the capital-constrained retailer is funded via trade credit from the manufacturer. The in-depth development of financing is beneficial to the manufacturer but is a disadvantage for the retailer. When the initial carbon-emission quota is low, the manufacturer benefits from a relatively lower carbon-trading price. Otherwise, a higher carbon-trading price is better for the manufacturer. The “carbon-trading price trap” ensures that the retailer’s profit is minimal. We further investigate the scenario in which the manufacturer is risk averse and find that the retailer will purchase fewer products and that the manufacturer will gain less profit to decrease the carbon-emission reduction effort. The manufacturer’s risk aversion is unfavourable to both the economic and environmental outcomes of the whole supply chain. This research provides strategic support for a low-carbon supply chain to carry out operational decisions in the context of enterprise capital constraint. To examine the theoretical results, the data used in the existing literature are further used to simulate the corresponding conclusions. Our research enriches the existing supply chain finance literature and provides decision support for the supply chain core enterprise.

Equilibrium Further Studied for Combined System of Cournot and Bertrand: A Differential Approach

In general, quantity competition and price competition exist simultaneously in a dynamic economy system. Whether it is quantity competition or price competition, when there are more than three companies in one market, the equilibrium points will become chaotic and are very difficult to be derived. This paper considers generally dynamic equilibrium points of combination of the Bertrand model and Cournot model. We analyze general equilibrium points of the Bertrand model and Cournot model, respectively. A general equilibrium point of the combination of the Cournot model and Bertrand model is further investigated in two cases. The theory of spatial agglomeration and intermediate value theorem are introduced. In addition, the stability of equilibrium points is further illustrated on celestial bodies motion. The results show that at least a general equilibrium point exists in combination of Cournot and Bertrand. Numerical simulations are given to support the research results.

Optimal Pricing and Carbon Emission Abatement Allocation Decisions in Supply Chains With Option Contract

With the continuous increase of carbon emissions and the deterioration of environment, governments have passed various laws and regulations to force enterprises to take carbon emission abatement measures. As one of the regulations, carbon tax plays an important and positive role in environmental protection. For enterprises, the allocation of carbon emission abatement is a common means to promote emission reduction. In this paper, under the uncertain market demand, the option contract is adopted to study the retailer's optimal retail price and order quantity, as well as the manufacturer's optimal ratio of total carbon emission abatement and production quantity under the carbon tax. In addition, We analyze the optimal decisions and expected profits of supply chain members with respect to the carbon tax, total carbon emission abatement and option prices by analytical and numerical study, and find that (1) when the carbon tax increases, the optimal ratio of total carbon emission abatement and the optimal retail price increase, while the optimal order and production quantity decrease, which is contrary to the situation of the total carbon emission abatement; (2) when the option prices increase, the optimal retail price increases while the ratio of total carbon emission abatement and the optimal order and production quantity decrease; (3) the expected profits of the manufacturer and retailer show the same trend with the increase of carbon tax and total carbon emission abatement, while have the opposite trend with the increase of option prices.

An Agent-Based Approach to the Newsvendor Problem with Price-Dependent Demand

This research presents an agent-based approach to finding near-optimal solutions to the newsvendor problem with price-dependent demand. The classical newsvendor problem is pursued where the decision of order quantity needs to be made in order to maximize expected profit. Here, the additional caveat of price-sensitive demand is included. This means that price (P) and order quantity (Q) are decision variables under the control of the newsvendor, with the intent of maximizing the expected value of the associated profit. The solution approach exploits an agent-based strategy, where an artificial agent traverses a grid-coordinate system of Price and Quantity values, where each unique Price and Quantity combination results in an expected profit. The agent-based approach consistently results in optimal solutions to a problem from the literature.

Two‐stage market‐based service restoration method in multi‐MGs distribution networks

The use of microgrids’ (MGs) surplus capacity is a valuable asset for distribution system operators (DSOs), which helps them to have better performance in an outage. In considering the private ownership of most MGs, it is necessary to provide proper mechanisms to compensate for the participation costs of MGs in service restoration programmes. In this study, a novel two-stage market-based framework is proposed to encourage MGs to share their surplus capacity during outages, in which the MGs will be paid proportionally to the amount of their exchanged energy with the distribution network. In the lower stage, MGs offer their hourly bids to the DSO in the form of price–quantity pairs, in which costs of their participation are calculated based on the AC optimal power flow equations. Thus, the operational constraints and power losses costs are incorporated. In the upper stage, for each hour, the DSO determines accepted bids considering technical and economic aspects. Some procedures are suggested to prevent MGs’ monopoly by offering overpriced bids. The advantages and validity of the proposed method are demonstrated in several numerical studies.

Electric Vehicles Aggregator Participation in Energy Markets Considering Uncertainty Travel Patterns

This research studies a general modeling to evaluate different scenarios of travel patterns and their impact on the daily cost negotiated in the Real Time and Day-Ahead market, using the GAMS methodology in a MILP model, evaluating also a characterization of the PQP market (price quantity probability). The purpose of this characterization is to determine the behavior of the electric energy market, considering also the deterioration of batteries and the negotiations of it in real time in situations of shortage and overload, optimizing in this way the effects of the analysis of the cost of the application of the battery on the different travel patterns, consequently triggering the emergence of the development of the local electric transport aggregator industry.

Determinants of Participation Decision in Cassava Marketing by Smallholder Farmers in Taita-Taveta and Kilifi Counties, Kenya

Cassava is an important food crop with high production potential in different agroecological zones across the world. Cassava is also a drought tolerant crop performing well in arid and semi-arid areas. Cassava has a great potential as both a food security and industrial crop. In addition, as a drought tolerant crop, it is fits very well as a climate smart crop in the face of climate change. However, the cassava industry and value chain in Kenya is still underdeveloped and therefore there are many cassava marketing opportunities that are yet to be exploited. This study analyses factors that influence smallholder farmers’ decision to participate in cassava marketing in Taita-Taveta and Kilifi Counties in Kenya. Data was collected using semi-structured questionnaires from a sample of 250 smallholder cassava farmers. Descriptive statistics were used to analyse the socio-economic characteristics of respondents while a binary Probit model was used to analyse the socio-economic factors that influence farmers’ participation decision in cassava marketing. The results of the binary Probit model show that, sex of the head of a household, access to extension services, price of cassava products and quantity harvested had a positive and significant influence on market participation decision while years of schooling, household size and farm size had a negative and significant influence on the market participation decision. Therefore, based on the findings, the study recommended policy interventions targeting organization and coordination of the cassava marketing system and provision of appropriate incentives to farmers to enhance market participation.

Power Markets with Information-Aware Self-scheduling Electric Vehicles

We consider multi-period (24-h day-ahead) multi-commodity (energy and regulation reserves) decentralized electricity transmission and distribution (T&D) market designs. Whereas conventional centralized generators with uniform price quantity offers are scheduled by a transmission system operator, low-voltage network-connected distributed energy resources (DERs) with complex preferences and requirements, such as electric vehicles (EVs), are allowed to self-schedule adapting to spatiotemporal marginal cost-based prices. We model the salient characteristics of interconnected T&D networks, and we consider self-scheduling DER responses under alternative distribution network information-aware or information-unaware market designs. Moreover, we consider a single (EV load aggregator) network information-aware scheduler market design. Our contribution is the characterization and comparative analysis—analytic as well as numerical—of equilibria, using game-theoretical approaches to prove existence and uniqueness, and the investigation of the role of information on self-scheduling and EV aggregator coordinated EV scheduling. Finally, we derive conclusions on the impact to social welfare and distributional equity of information-aware/information-unaware self-scheduling as well as single EV aggregator scheduling and implications that are relevant to market design and policy considerations.

The efficiency of the Market Performance of Egyptian Exports of Grapes

The objectives of the research were: 1 - to identify the production status of grapes and the development of the quantity of exports and export price per ton in Egypt and the world. 2 - Study the distribution of Egyptian exports of grapes to the countries of the world. 3- To evaluate the criteria for the competitive advantage of Egyptian grapes in its various foreign markets. 4 - to develop a vision for the means to promote Egyptian exports of grapes.