Retail Price Research Articles

To allow or not to allow tipping: tipping strategy choice for service platforms under competition

To provide consumers with a channel to interact directly with service retailers, some service platforms have allowed consumers to incentivize service retailers for better service via tipping. There are pros and cons of allowing and not allowing tipping in terms of service levels and costs, which can affect consumer utility and platform profitability. By developing a game-theoretic model, we analyze the tipping strategy choices of platforms under competition. We find that when the service ability of service retailers is high, platforms with service retailer pricing should allow tipping, whereas for at least one platform with platform pricing, they should allow it only when the commission rate is also high. Interestingly, if consumers are concerned about service levels in addition to service prices during tipping, for platforms with platform pricing, only one platform should allow tipping when the service ability is medium. However, when the service ability is low or when the sensitiveness of the service level to tips exceeds the threshold, neither platform should allow tipping, regardless of pricing models. Finally, an all-win outcome for service platforms, service retailers, and consumers may be achieved only when platforms adopt different pricing models.

Nearly uniform prices of fresh produce products in US retail chains and implications

AbstractThis study provides evidence that retail prices of US fresh produce (fruits and vegetables) and fresh meat products are similar across stores within the same chain even though unique characteristics of fresh produce products might lend to more localization in pricing. The results show the median price difference of fresh produce is 5% within‐chain stores compared to 20% between‐chain stores. Furthermore, the results show no significant differences in fresh produce prices between‐chain stores that serve areas of differing food access nor significant differences in chain prices between Metropolitan Statistical Areas with implications to federal nutrition programs.

Recycling, pricing decisions, and coordination in the dual-channel closed-loop supply chain: A dynamic perspective

As the “Internet+” mode promotes transforming and upgrading the traditional recycling industry, dual-channel recycling has become the focus of commercial activities. Based on such background, this paper constructs the differential game models of the dual-channel closed-loop supply chain (DCCLSC) system in the complete non-cooperation (DN), incomplete cooperation (D), and complete cooperation (C) scenarios by applying game theory. The novelty is that recycling and pricing decision problems are investigated for the DCCLSC system from a dynamic perspective. A cost sharing-transfer payment contract is designed to realize the perfect coordination of the DCCLSC system. Moreover, the extended models with government intervention and inventory management are proposed. Finally, the numerical examples are used to verify the feasibility and validity of the addressed results. The results show that 1) online retail price is higher than offline retail price when μ>μN; 2) The retail price in the DN model is always lower than the D model, and their comparative relationship with the C model is closely related to the ratio of recoverability rate; 3) The recoverability rate and the profit of DCCLSC system are highest in the C model; 4) Competition and government intervention can create a win-win situation with improving environmental and economic benefits.

For-profit or for-CSR: decisions of power batteries recovery in the supply chain

Abstract Accepted by: M. Zied Babai The importance of recovering retired batteries from new energy vehicles (NEVs) has garnered widespread attention in both scholarly literature and practical applications. This paper discusses the decisions of battery recovery in a supply chain consisting of a supplier and a manufacturer. Utilizing the Stackelberg game, we construct relevant models and compare the equilibrium solutions in two decision-making modes, for-profit and for-CSR (corporate social responsibility). We shows that the firms’ pursuit of CSR contributes to increasing collection prices. However, if environmental damage is severe, the firms’ pursuit of CSR leads to high retail prices, which is detrimental to the sale of NEVs. Furthermore, although not all members’ collection amounts increase when considering CSR, the overall collection effect will be better. Meanwhile, we find that both the supplier and the manufacturer have incentives to practice CSR because their pursuit of CSR leads to high profits. Finally, this paper has verified all the above conclusions using theoretical data.

Optimal government subsidy strategy for fresh agricultural products supply chain under adverse weather: a two-stage dynamic game model

ABSTRACT To investigate the effects of various government subsidies on the decision of agricultural products supply chain under adverse weather, this paper depicts the random profit function of adverse weather affecting the output of fresh agricultural products. Then, both the centralised and decentralised decision-making models are set with various government subsidies, i.e. no subsidy, output subsidy, procurement subsidy, one-time subsidy to company and one-time subsidy to farmer. Through comparative analysis and numerical analysis, we explore the effects of adverse weather and different government subsidies on the supply chain decisions including planting effort, procurement price and retail price.

Closed-loop Supply Chain Model Analysis of Home Appliances based on Promotional Effort and Recycling Effort

Nowadays, a large number of home appliances have entered the node of renewal, if they can be properly disposed of and utilised, used home appliances can also be converted into renewable resources to achieve the economic cycle, and at the same time, green living and circular economy are increasingly accepted by the public. Recycling of used home appliances has both economic and social benefits. At the same time, promotional efforts invested in the market for home appliances have an obvious effect on increasing their market demand. Therefore, it is necessary to study the closed-loop supply chain of home appliances based on promotion and recycling efforts. In this paper, we use literature analysis, mathematical analysis and Stackelberg game analysis to construct a closed-loop supply chain model for home appliances based on promotional and recycling efforts after determining who is the promoter among manufacturers and retailers, and then compare and analyse the decisions and benefits of the supply chain members, taking into account their centralised and decentralised decision-making. The results of this paper show that: (1) when home appliance manufacturers, retailers and third-party recyclers of used home appliances make decentralised decisions, there is a double marginal effect, i.e., the supply chain members only consider their own benefits while ignoring the benefits of the supply chain as a whole, which results in the failure of this closed-loop supply chain system of home appliances to be coordinated. (2) When the retailer's promotional effort is greater, both the retail price and the retailer's profit are lower. (3) The greater the recycling effort of the third-party recycler of used home appliance products, the higher its recycling price, i.e., the consequent increase in recycling costs, leading to a decrease in its profit.

Domestic and international impacts of rice export restrictions: The recent case of indian non-basmati rice

This study examines the impact of India's export restrictions on domestic retail rice prices using a dynamic panel GARCH model. The findings suggest that export restrictions are not a sufficient condition to lower domestic prices. Export restrictions are associated with lower retail price volatility in the East Zone. Moreover, the international price transmission to a sample of Asian and African economies shows that all countries are vulnerable, but the degree and kinds of vulnerability differ. Rice exporters appear to be the most susceptible as domestic prices increase in these countries. Rice importers are also vulnerable because of price increases, but the increases are less than in countries where the private sector decides on import quantities.

Dampak Penghapusan Pupuk Subsidi Bagi Petani Kelapa Sawit Swadaya Setelah Disahkannya Peraturan Menteri Pertanian No 10 Tahun 2022 tentang Tata Cara Penetapan Alokasi Dan Harga Eceran Tertinggi Pupuk Bersubsidi Sektor Pertanian

Palm oil or crude palm oil (CPO) is one of Indonesia's leading export commodities. The high level of exports is not accompanied by the provision of subsidized fertilizer for independent community farmers. Through the Ministry of Agriculture (Kementan) it has decided to remove subsidized fertilizer for oil palm plantations. With the elimination of fertilizer subsidies for oil palm farming, it makes it difficult for farmers to meet their fertilizer needs. The policy of eliminating subsidized fertilizer assistance has a direct impact on the productivity of oil palm farmers. The problems studied are limited to: What impact will there be after the ratification of the Minister of Agriculture Regulation No. 10 of 2022 concerning Procedures for Determining the Allocation and Highest Retail Prices for Subsidized Fertilizers in the Agricultural Sector related to the elimination of fertilizer subsidies for oil palm plantations? and How to overcome the problem of no subsidized fertilizer for oil palm farmers? The research method used is the Empirical Juridical method. The research results show that there are many impacts that can occur with the elimination of subsidized fertilizers by the government, especially for oil palm plants. Fluctuating CPO prices tend to make farmers unable to predict their income and set aside to purchase non-subsidized fertilizer which is unaffordable. Then the countermeasure initiated by the government is to use organic fertilizer, but it can take a long time to process organic fertilizer and the results can only be seen one year later. This is different from chemical fertilizers where the results can be seen immediately in a matter of months.

Business Leadership in E-Commerce in the USA: The Impact of Blockchain Technology

Due to the evolution of digital finance and the active development of cryptocurrencies, blockchain is no longer just a tool for cryptocurrency extraction or database management but a technology that has a wider range of benefits for every trader who wants to conduct transactions using electronic payment instruments (cost improvement, effective tracking and traceability, verifiable record-keeping, transparency, etc.). The impact of blockchain technology on e-commerce can be viewed through the prism of unprecedented technological capabilities, legal and regulatory issues, customer data analysis, the design of communication channels along the supply chain, and trust and security. The article investigates the effect and the direction of the impact made by changes in digital blockchain technologies on retail prices in US e-commerce during 2014-2023 based on the VECM error correction model (software package – Eviews 12). The stability of the time series of the studied variables was confirmed by the Phillips-Perron test, and the Granger causality test showed the absence of a causal relationship between the studied factors in both directions. Instead, the Johansen Juselius Joint Integration Test showed a long-term balance between the studied variables (this is what allows using the VECM model). The results of the delay test of the studied model by two criteria (AIC and SC) showed that the optimal number of delays for the studied variables is 2. When conducting validity tests of the VECM model (joint integration test, LM test, heterogeneity test, unit root test, etc.), it was found that the model does not suffer from the problem of heterogeneity or self-correlation and meets the stability conditions. The study results indicate a positive impact of changes caused by blockchain technology on e-commerce in the long run (changes in digital blockchain technology explain 44% of retail e-commerce changes), with no short-term effect. Any shock in retail e-commerce will quickly affect changes in digital blockchain technology and vice versa (from the first period).

Differential price pass‐through in organic and conventional fresh fruit and vegetable markets

AbstractOrganic food production growth has remained relatively slow compared to organic retail sales growth in the United States. This paper questions whether the conduct of downstream agents plays any role in explaining the difference. Mainly, we shed light on structural differences between organic and conventional fresh fruit and vegetable markets by examining differential price pass‐through rates. We estimate a rolling‐window retail pricing model using retail and wholesale price data from five metropolitan statistical areas with terminal markets in the United States. We find that pass‐through rates are 10 to 15 percentage points lower in the organic market, and the differences are statistically significant. We also find that the gap between pass‐through rates narrows as the organic market share increases. Our results suggest the organic market is significantly less competitive than the conventional market. The implication is that farmers may have less incentive to convert to organic farming as they may not capture the full retail price premium consumers pay.

DISTRIBUSI DAN MARGIN PEMASARAN PRODUK OLAHAN OPAK SINGKONG DI KOTA KENDARI

Marketing is a crucial aspect of the agribusiness system. One potential agroindustry in Kendari City is cassava chips processing. Sampling was conducted using the snowball sampling method, identifying, selecting, and sampling respondents totaling 30 individuals, with the majority being cassava chip entrepreneurs who are housewives. These retail traders prefer direct marketing channels to reach more consumers and facilitate easier purchase of cassava chip products without having to buy directly from the production site. For marketing efficiency, results found for marketing channel I were 0.15%, while for channel II it was 7.26%. This approach also benefits retailers who obtain cassava chip products without going through wholesalers. In practice, there will be cost and revenue calculations incurred by both producers and marketing institutions involved, resulting in different outcomes and creating marketing margins. The larger the marketing margin, the less efficient the marketing activities become. This research aims to determine the distribution of marketing, the size of marketing margins, and the proportion of the price received by cassava chip producers (producer's share) from the retail price. The findings of this research are expected to provide benefits and increase income for the marketing institutions involved in promoting cassava chip products in Kendari City.

Egg Marketing at Veal Yun Market, Svay Rieng Province, Cambodia

Eggs are a basic food item that helps maintain the health of the human body by providing vital vitamins, minerals, and other nutrients. Cambodia has produced eggs at an average annual growth of 2.24%. This study aims to study the demand and supply of eggs in Veal Yun market, and to understand the marketing chain of chicken and duck egg markets. This study is conducted at Veal Yun market, Svay Rieng town, Svay Rieng province by selecting all stalls which sell chicken eggs and duck eggs. The primary and secondary data are collected by using questionnaire, and all data are analysed in Ms. Excel. The result found that the longest period of selling egg of sellers are 10 years old, and an average of about 2.5 years. Purchasing an egg cost at least 450 Riel each egg, with an average cost of 496 Riel per egg and a maximum cost of around 550 riel per egg. The seller sold on average 15,000 eggs/month, while the quantity of eggs they buy-in on average comes to over 22,000 eggs/month. The price of eggs retail and wholesale in minimum, average, and maximum per egg is non-significant different from 500-550 Riel. In conclusion, the research result suggests a dynamic relationship between egg supply and demand in the market. As expected, a seller's sales quantity is likely influenced by their experience and customer base, along with the pricing strategy.

Complexity of a two-stage R&D game within a cluster supply chain considering vertical R&D spillovers, effective information, and government subsidies

In the research on spillover effects in supply chain game models, most studies are based on complete rationality or consider horizontal spillovers between enterprises, while neglecting vertical spillovers between upstream and downstream enterprises in the supply chain R&D game with bounded rationality. This paper creatively proposes a two-stage cluster supply chain game model that includes vertical R&D spillovers, effective information, and government R&D subsidies. In the product development stage, the supplier and manufacturer use rational estimation and GD mechanisms to conduct R&D simultaneously, taking R&D efforts as a decision variable. In the Stackelberg-Bertrand stage, the supplier and manufacturer successively determine the wholesale price and retail price. Results show that: first, the more effective information the R&D enterprise has, the more conducive it is to the stability of R&D efforts; second, under certain circumstances, R&D subsidies and vertical spillovers may lead to instability in R&D process, while higher R&D costs are conducive to the stable balance of R&D in the supply chain.

Two-stage distributionally robust offering and pricing strategy for a price-maker virtual power plant

This paper presents a two-stage distributionally robust approach for offering and pricing strategy of a virtual power plant (VPP) acting as a price-maker in the day-ahead market. The model incorporates uncertainties related to distributed photovoltaic (PV) output, real-time market price and charging stations demand. In the first stage, the VPP determines its day-ahead market bids/offers as a price maker and releases the retail price to the charging stations based on the worst case of probability distribution realizations. In the second stage, the VPP optimizes energy storage operations and the power transactions in the real-time market to maximize its revenue according to the optimal first stage decisions. To efficiently solve the two-stage model, a customized column-and-constraint generation algorithm (C&CG) is designed that decomposes non-convex subproblems into several small-scale linear programming problems that are independent of each other. The effectiveness of the proposed strategy is validated through case studies conducted with the IEEE 33-bus system.

Does the internet bring food prices closer together? Exploring search engine query data in Iran

AbstractModern communication technologies make information more easily and quickly accessible, leading to more transparent and competitive markets. Based on a theoretical model, this paper provides new empirical evidence on the potential impact of online search intensity on asymmetric cost pass‐through. Prices often move as ‘rockets and feathers’: they rise quickly in response to cost increases and they fall slowly in response to cost reductions. A panel threshold error correction model is applied to weekly producer and retail prices of chicken and mutton in Iran. The results suggest that the volume of online searches is associated with a more complete and less asymmetric cost pass‐through from farmgate to retail prices. Thus, online platforms and search engines have the potential to increase competition by bringing prices closer together and reducing profit margins.

Norfloxacin adsorption by torrefied coco peat biochar as a novel adsorbent in a circular economy framework

The current study reported torrefied coco-peat biochar treated at 200 °C, as a novel adsorbent exhibiting phenomenal norfloxacin (NFX) adsorption efficiency. The CHNS analysis confirmed the carbon abundance in the biochar (36.45%), however, XRF analysis indicated a significant presence of K2O (27.73%) and chlorine (7.49%). The XRD and Raman spectral analysis confirmed the amorphous structure of the biochar. Multilayer topology was evident in the SEM micrograph of biochar contributing to its large effective surface area. Additionally, the mesoporous structure of the adsorbent was verified by BET. The adsorption mechanism was predicted to be non-ionic since the zeta potential of both adsorbent and adsorbate was found negative. The process parameters were optimized at 30 °C, pH 6.9, dosage 7 g/L, antibiotic load 494.25 mg/L, and time of 89 min for a maximum of 99.52% adsorption of NFX using Central Composite Design, Analysis of Variance, and Response Surface Methodology. The adsorption process was exothermic, and spontaneous obeying the pseudo-second-order kinetics, while the bulk process was confined to surface adsorption. Isotherm study of NFX adsorption revealed the process to be a favorable, monolayer, and homogeneous adsorption. The NFX molecules were desorbed with an efficiency of 89.19% using 80% ethanol and upon recrystallization, 87.76% of the initial NFX was recovered as crude crystal. Moreover, the NFX removal efficiency was consistent across various water systems, tap water (99.02%), seawater (99.56%), river water (98.92%), pond water (98.26%), and distilled water (99.17%). The techno-economic analysis identified bulk expense as the biochar preparation ($0.82/kg) and the process will be profitable having recovered NFX sold at $6/kg instead of the present retail price ($71/kg). Thus, the study successfully demonstrated a zero-waste, self-sustainable, and revenue-generating water treatment process implementing the circular economy framework.

Optimal channel selection considering price competition and information sharing under demand uncertainty

PurposeThe rapid development of the Internet has led to an increasingly significant role for E-commerce business. This study examines how the green supply chain (GSC) operates on the E-commerce online channel (resell mode and agency mode) and the traditional offline channel with information sharing under demand uncertainty.Design/methodology/approachThis study builds a multistage game model that considers the manufacturer selling green products through different channels. On the traditional offline channel, the competing retailers decide whether to share demand signals. Regarding the resale mode of E-commerce online channel, just E-tailer 1 determines whether to share information and decides the retail price. In the agency mode, the manufacturer decides the retail price directly, and E-tailer 2 sets the platform rate.FindingsThis study reveals that information accuracy is conducive to information value and profits on both channels. Interestingly, the platform fee rate in agency mode will inhibit the effect of a positive demand signal. Information sharing will cause double marginal effects, and price competition behavior will mitigate such effects. Additionally, when the platform fee rate is low, the manufacturer will select the E-commerce online channel for operation, but the retailers' profit is the highest in the traditional channel.Originality/valueThis research explores the interplay between different channel structures and information sharing in a GSC, considering price competition and demand uncertainty. Besides, we also considered what behaviors and factors will amplify or transfer the effect of double marginalization.

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.

Freshness-keeping efforts and value-added service choice in fresh food supply chain

This study investigates a two-tier fresh food supply chain consisting of one supplier and one fresh food e-retailer. Freshness-keeping efforts can be provided by either the supplier or fresh food e-retailer, while the latter also offers value-added service. Two leadership scenarios—the e-retailer-led (i.e., the e-retailer decides service level before the supplier decides wholesale price) and the supplier-led (i.e., the e-retailer decides service level together with retail price after the supplier decides wholesale price)—are examined. Combining the leadership scenarios and the freshness-keeping strategy produces four typical models. By analyzing the equilibrium, we have the following findings. First, in both freshness-keeping strategies, postponing service level decisions (supplier-led scenarios) leads to higher freshness-keeping efforts and service levels, resulting in higher profits for the supplier and e-retailer. Furthermore, under the same leadership scenarios, both supplier and e-retailer experience increased profits when the e-retailer undertakes freshness-keeping efforts. Finally, in the absence of freshness-keeping efforts, timely service level decision leads to lower wholesale prices, allowing the retailer to obtain more incredible discounts from the manufacturer. However, the significant increase in demand still leads to a substantial improvement in the latter's profits.

Screening Through Investment: Evidence from the Chinese Automobile Industry

This paper proposes a competition theory to explain the role of automobile dealers’ investment in a vertical contract with manufacturers. Dealer contracts specify manufacturer-suggested retail prices and elements of dealer quality. Dealer quality investments require minimum financial capital where manufacturers impose these limits on dealers. The required dealer investment screens for qualified dealers and incentivizes the desired dealer quality. The prediction is that promotional services, prices, and gross returns are greater for high-quality brands than that for standard-quality brands. To test the theory, we collected data on auto dealers in China in June 2015 for an empirical analysis. Our findings support these predictions: Dealer investment (registered capital) is positively correlated with brand average product prices. In addition, the registered capital is higher when the aggregate demand is greater since high demand increases returns, which induces dealers to increase their investment.