scholarly journals Monopoly Profit Maximization: Success and Economic Principles

2015 ◽  
Vol 2015 ◽  
pp. 1-10 ◽  
Author(s):  
Korbinian von Blanckenburg ◽  
Milena Neubert
Keyword(s):  
Demand Function ◽  
Profit Maximization ◽  
Search Strategies ◽  
Pricing Strategies ◽  
Full Information ◽  
Trial And Error ◽  
Production Decisions ◽  
Monopoly Profit ◽  
Classroom Experiment

This paper presents a classroom experiment on pricing strategies available to monopolists. Each student makes production decisions as a monopolist during the experiment, learning from his/her own experiences what it means to be a price searcher. Full information is provided on cost conditions, while the demand function remains unknown to the participants. Given a sufficient number of periods, students will in principle be able to maximise their profits by applying a simple trial and error strategy. However, one of the objectives of the experiment is to demonstrate to students that search strategies based on economic principles are more efficient.

scholarly journals Pricing Strategy Under Monopoly Conditions: An Experiment for the Classroom

1994 ◽  
Vol 26 (1) ◽  
pp. 287-298 ◽  
Author(s):  
Robert G. Nelson ◽  
Richard O. Beil
Keyword(s):  
Search Strategies ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Full Information ◽  
Trial And Error ◽  
Classroom Experiment ◽  
Profit Maximizing

AbstractThis classroom experiment allows students to explore pricing strategies available to the monopolist. Students are given full information about their costs but know nothing about demand except that it is simulated by the instructor. They submit their price-asked and quantity-offered records on one day and receive the quantity-sold response from the instructor on the next day, continuing this routine until they discover the profit-maximizing price and quantity. One of the objectives is to demonstrate that search strategies based on economic principles (MC=MR) can be more efficient than trial-and-error.

scholarly journals The Analysis of Blocking Behavior and Pricing: The Case of Airbnb

2020 ◽  
pp. 1-28
Author(s):  
Yifeng Peng
Keyword(s):  
Empirical Analysis ◽  
Rapid Growth ◽  
Profit Maximization ◽  
Sharing Economy ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Product Pricing ◽  
Starting Point ◽  
The Future ◽  
Resources Sharing

Over the years, as people's lives have improved, our need for transportation and accommodation has increased, driving the rapid growth of the sharing economy. Some well-known network sharing platforms, such as Uber, Drip and Airbnb, provide a large number of convenient options for users with transactional needs, make more use of idle tourism, accommodation and other resources. Sharing economy platforms continue to improve the content and format of their products, but at the same time, the future of sharing platforms and the difficulty of competition is a concern as more platform companies become involved and prices become more transparent. Under this circumstance, optimizing product pricing has become an urgent need for many sharing economy platforms. In this paper, we take Airbnb as the starting point and conduct an empirical analysis of the blocking behavior of homeowners based on proprietary data to explore the factors that affect their product supply. We find that price, number of beds, and listing type all have a significant impact on blocking houses. After that, we conducted further research on price factors and developed a model aiming at profit maximization to obtain the best pricing range for the region and provide suggestions for pricing strategies. Keywords: Sharing Economy, Blocking behavior, Pricing Strategy, Airbnb

scholarly journals The Impact of Price Comparison Service on Pricing Strategy in a Dual-Channel Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-13 ◽  
Author(s):  
Qi Xu ◽  
Zheng Liu ◽  
Bin Shen
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Profit Maximization ◽  
Pricing Strategy ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Price Comparison ◽  
Dual Channel ◽  
Dual Channel Supply Chain ◽  
The Impact

Recently, price comparison service (PCS) websites are more and more popular due to its features in facilitating transparent price and promoting rational purchase decision. Motivated by the industrial practices, in this study, we examine the pricing strategies of retailers and supplier in a dual-channel supply chain influenced by the signals of PCS. We categorize and discuss three situations according to the signal availability of PCS, under which the optimal pricing strategies are derived. Finally, we conduct a numerical study and find that in fact the retailers and supplier are all more willing to avoid the existence of PCS with the objective of profit maximization. When both of retailers are affected by the PCS, the supplier is more willing to reduce the availability of price information. Important managerial insights are discussed.

Competitive Strategy in the Nonprofit Sector

2013 ◽  
pp. 353-370
Author(s):  
Sharon Oster
Keyword(s):  
Competitive Advantage ◽  
Competitive Strategy ◽  
Nonprofit Sector ◽  
Profit Maximization ◽  
Pricing Strategies ◽  
Earned Income ◽  
For Profit ◽  
Revenue Sources ◽  
Entry Models ◽  
The Difference

This paper explores the uses of the field of competitive strategy in the nonprofit sector. It begins with a discussion of the central differences between nonprofit and for profit organizations. Most fundamentally, nonprofits emphasize mission fulfillment rather than strict profit maximization. Nonprofits are also distinguished from for-profits by their reliance on donations as well as earned income. Both the difference in objective function and the use of multiple revenue sources affect the dynamic strategies of nonprofits. This paper explores exit and entry patterns we expect to see in the nonprofit sector, pricing strategies, levels of differentiation, and the usual sources of competitive advantage in the sector. It also illustrates the ways in which the classic tools from strategy like Hotelling and the Bresnahan-Reiss entry models are informative in the nonprofit sector.

scholarly journals Optimal Channel Choice of Firms with New and Remanufactured Products in the Contexts of E-Commerce and Carbon Tax Policy

2019 ◽  
Vol 11 (19) ◽  
pp. 5407
Author(s):  
Cao ◽  
Xu ◽  
Wang
Keyword(s):  
Tax Policy ◽  
Carbon Tax ◽  
Profit Maximization ◽  
Optimization Theory ◽  
Total Carbon ◽  
Pricing Strategies ◽  
Channel Choice ◽  
Product Pricing ◽  
Negative Effect ◽  
Positive Effect

: This paper is motivated by the dilemma faced by firms who sell new and remanufactured products offline that need to consider whether to enter e-commerce platforms considering that more and more consumers are shopping online on e-commerce platforms rather than shopping offline. Our paper aims to help firms with new and remanufactured products make a channel choice and determine product pricing strategies in the contexts of e-commerce and carbon tax policy. Our paper uses optimization theory, game theory, utility functions and profit-maximization models to investigate the optimal channel choice of whether a firm should enter an e-commerce platform; it also investigates the optimal prices of new and remanufactured products and referral fees in two cases—the firm does not enter the platform (N) and the firm enters the platform (Y). Some insights are presented as follows: We found that the firm should enter the platform if the annual service fee is relatively low, otherwise, the firm should not enter the platform. Interestingly, in the case of a firm with an offline store with relatively large operational costs or hassle costs, the firm is more reluctant to enter the platform. In the extension, we considered some consumers who only purchase offline products, and found that the firm considering these consumers is more likely to choose not to enter the platform. Moreover, we argue that the carbon tax policy has a positive effect on product prices but a negative effect on referral fees charged by the platform, and the choice of Y hurts the environment due to a relatively high total carbon emission.

Demand for Attendance

2012 ◽  
pp. 200-224 ◽  
Author(s):  
Richard C. K. Burdekin
Keyword(s):  
Demand Function ◽  
Profit Maximization ◽  
Ticket Pricing ◽  
Ownership Structures ◽  
Demand Elasticities ◽  
Data Limitations ◽  
Revenue Streams ◽  
Multiple Categories

This article explores several additional concerns about the estimation of an attendance demand function. In particular, it highlights that there are multiple prices and multiple categories of consumer with potentially different demand elasticities to consider in the set of those in attendance at a specific game. It also emphasizes that price is likely to be endogenous when a longer run perspective is taken. The possible effect of changes in team ownership structures in accounting for departures from profit maximization and the complications to the price-attendance relationship posed by such ancillary factors as customer-based discrimination are elaborated. Overall profit maximization and inelastic ticket pricing are by no means incompatible. Inelastic ticket pricing can itself still be consistent with long-term profit maximization or maximization across other revenue streams, such as television fees or concessions earnings. Data limitations seem unlikely to allow any irrefutable measures of price and attendance relationships.

Carbon Emission Reduction and Pricing Strategies of Supply Chain under Various Demand Forecasting Scenarios

2017 ◽  
Vol 34 (01) ◽  
pp. 1740005 ◽  
Author(s):  
Juanjuan Qin ◽  
Liguo Ren ◽  
Liangjie Xia
Keyword(s):  
Supply Chain ◽  
Numerical Analysis ◽  
Information Sharing ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Demand Forecasting ◽  
Pricing Strategies ◽  
Full Information ◽  
Low Carbon ◽  
Carbon Emission Reduction

This study incorporates consumer’s low carbon awareness (CLA) and demand forecasting into supply chains that adopt the cap-and-trade system. Three demand forecasting scenarios are discussed, namely, information sharing, full information sharing, and retailer-only forecasting. Strategies for pricing and reduction of equilibrium of carbon emission are derived. We also compare the decisions and profits in the three cases and present numerical analysis.

Online hotel demand model and own-price elasticities: An empirical application in a mature resort destination

2018 ◽  
Vol 25 (5) ◽  
pp. 670-694 ◽  
Author(s):  
Aldric Vives ◽  
Marta Jacob ◽  
Eugeni Aguiló
Keyword(s):  
Demand Function ◽  
Pricing Strategies ◽  
Demand Model ◽  
Price Elasticities ◽  
Mass Tourism ◽  
Long Run ◽  
Short Run ◽  
High Season ◽  
The Common ◽  
Resort Hotels

Pricing is a basic strategic tool in hotel revenue management (RM). This study proposes a particular demand function model for resort hotels for measuring their own-price elasticities, along with the different seasonal demands, and across the booking horizons. The model is applied to the online transient demand for two hotels in Majorca – a well-known, mature mass tourism destination – in order to estimate and compare different elasticities, which could be used by RM departments to correctly manage prices in the short run and establish optimum pricing strategies (over the medium and long run). The results show that the two hotels display completely different own-price elasticities during high season, while during low season, demand is quite inelastic at both hotels; secondly, common price variations among seasons or hotels may sometimes be an erroneous pricing strategy, such as the common early booking strategy. The model is easily adaptable to different hotels.

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