AN ANALYSIS OF EQUILIBRIUM RELATIONSHIP BETWEEN PRICE ELASTICITY AND EXPENDITURE LEVEL: A CASE STUDY OF KOREAN MOBILE MARKET DATA

In most developing countries, telecommunications industry has been grown fast and still has more growth potential than in the developed countries. Clearly the telecommunications industry contributes to foster economic developments and also to narrow the communication gaps among countries. Among many components relating to the success of quick developments of telecommunication services, an appropriate and optimal pricing strategies is the most vital element. In this view point, this paper examines the optimal price discrimination strategy for firms in a monopolistically competitive market. The primary interest is the theoretical relationship between price elasticity and the average expenditure level of consumers. Our equilibrium analysis shows that the relationship can go either way (positive or negative) depending on the prevailing price level of the product in concern. As an empirical example, using a hierarchical Bayes model we find that heavy user of mobile service are substantially more elastic to the price of calls in Korea. A discussion of the optimal pricing scheme and market structure is in order.Price Discrimination, Price Elasticity, Price Sensitivity, Mobile Telecommunications, Hierarchical Bayes Model

FIRM-LEVEL HEDONIC ANALYSIS OF U.S. PRODUCED SURIMI: IMPLICATIONS FOR PROCESSORS AND RESOURCE MANAGERS

Firm-level data on U.S. produced surimi, the only seafood product that is graded on the objective measurement of several quality characteristics, are used to estimate the effect of production variables (e.g., hours between harvest and processing) and policy variables (e.g., fishing seasons) on product characteristics. Transactions data are then used to estimate hedonic equations and derive implicit prices for each characteristic of surimi used to produce seafood analogs and traditional products in the U.S. and Japanese markets, respectively. Implicit prices are also estimated for surimi grade, production location (onshore, at-sea), and production date. Results indicate that several factors (including species) significantly affect surimi characteristics. Color and gel strength have the largest price impact, and market conditions alter the relative prices associated with improving certain characteristics. Overall results demonstrate that management decisions that affect fish quality—and, therefore, processed product quality and price—directly affect the wholesale value of the fishery.Resource /Energy Economics and Policy,

Willingness-to-Pay for Attribute Level and Variability: The Case of Mexican Millers’ Demand for Hard Red Winter Wheat

In-person interviews were carried out with Mexican millers who were administered a conjoint-type survey designed to incorporate uncertainty in attribute levels. Two methods were used to model millers’ risk preferences: a modified mean-variance approach and an explicit expected utility approach. Controlling for variability, Mexican millers are willing to pay premiums for increases in quality factors such as test weight, protein content, falling number, and dough strength/extensibility. We find millers are not particularly sensitive to changes in the variability of quality characteristics. Out-of-sample forecasts suggest the mean-variance model provides an accurate depiction of actual Mexican imports.mean-variance, Mexican wheat market, moment generating function, preference elicitation, wheat quality, Agribusiness, Farm Management, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Marketing, Production Economics, Risk and Uncertainty, C35, C42, Q13,

Design of a second life product family from the perspective of the remanufacturing agent

This thesis presents a method of solving a newly posed Second Life Product Family Design problem. This is unique in that the architecture of the product is not speci ed to be identical to one of the recaptured products, rather it is determined through optimization. The problem is framed using Conjoint Analysis and the Multi Nomial Logit Model, formatted with respect to components available for inclusion in the nal products and then solved using an implementation of Genetic Algorithms. The solution method is also encapsulated in a software module which can be disseminated to industrial users without a background in optimization or familiarity with Genetic Algorithms. A case study is performed to determine the e ectiveness of the proposed solution method, and analyze the in uences di erent market conditions and component similarities can have on the optimal design. It is concluded that the proposed method converges to an optimal Second Life Product Family Design

A Hedonic Pricing Model for German Wine

We develop a hedonic pricing model for German quality wine. Quality indicators for 4,141 wines are sensory awards received at the annual German wine competition and the legally required quality category as well as a set of control variables including regional origin, color, style, and their age at the time of judging. The data confirms that sensory quality awards have a significant and positive price impact. Moreover, we estimate significant relative differences between quality categories, growing regions and most of the control variables.wine, hedonic pricing models, reputation, Consumer/Household Economics, Demand and Price Analysis, Marketing,

Incentive-aligned Conjoint Analysis

Because most conjoint studies are conducted in hypothetical situations with no consumption consequences for the participants, the extent to which the studies are able to uncover "true" consumer preference structures is questionable. Experimental economics literature, with its emphasis on incentive alignment and hypothetical bias, suggests that more realistic incentivealigned studies will result in stronger out-of-sample predictive performance of actual purchase behaviors and provide better estimates of consumer preference structures than hypothetical studies. To test this hypothesis, the authors design an experiment with conventional (hypothetical) conditions and their parallel incentive-aligned counterparts. Using Chinese dinner specials as the context, the authors conducted a field experiment in a Chinese restaurant during dinnertime. The results provide strong evidence in favor of incentive-aligned choice conjoint analysis, in that incentive-aligned choice conjoint outperforms hypothetical choice conjoint in out-of-sample predictions (59% versus 26% for incentive-aligned choice conjoint and hypothetical choice conjoint, respectively for the top two choices). As expected, subjects in the incentive-aligned choice condition exhibit preference structures that are systematically different from the preference structures of subjects in the hypothetical condition. Most notably, the subjects in the incentive-aligned choice condition are more price sensitive and exhibit different heterogeneity patterns. To determine the robustness of these results, the authors conducted a second study that used snacks as the context and only considered the choice treatments. This study confirmed the results by again providing strong evidence in favor of incentive-aligned choice analysis in out-of-sample predictions (36% versus 16% for incentive-aligned choice conjoint and hypothetical choice conjoint, respectively for the top two choices). The results provide a strong motivation for conjoint practitioners to consider conducting their studies in realistic settings using incentive structures that require participants to æ–—ive with?their decisions.

Effects of Sales Promotions on Consumer Preferences and Brand Equity Perception: with specific reference to FMCG Products

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 20.1 billion. It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. newline Family income is one of the variables which should be considered while designing sales promotion schemes more specifically cash discount. There is significant difference between consumer preference of cash discount and free gift as sales promotion schemes. It is also very clear that consumers prefer cash discount as a sales promotion schemes compare to free gift as a sales promotion scheme. It is found that Consumer deal proneness differs according to marital status. Furthermore, it is also proved that married are more deal prone compare to Unmarried. Added to it Brand Equity perception differs according to employment categories. It is concluded that male prefers the newspaper and point of purchase material as a source to know sales promotion schemes over female. newline Overall, Sales promotion scheme on international brand, awareness spread out by word of mouth, Scheme is value added type with immediate benefit is preferred by the customer

A Decision Support System for Efficient Last-Mile Distribution of Fresh Fruits and Vegetables as Part of E-Grocery Operations

Efficient last-mile distribution of fresh fruits and vegetables is a major challenge within e-grocery operations. This work presents a decision support system to jointly investigate the impact of various service offers on customer preferences and logistics operations. Results from a conjoint analysis surveying 531 end consumer are incorporated within an agent-based simulation. Delivery days, fees, time windows and discounts as well as guaranteed remaining shelf life of products at delivery are considered. To model shelf life and schedule deliveries, food quality models and vehicle routing procedures are further integrated within the system. Based on an e-grocery provider operating in Vienna, Austria, computational experiments investigate the impact of the offered delivery service on fulfilled demand, order volume and customer utility. Results indicate the importance of incorporating shelf life data within e-grocery operations and various potentials of considering customer preferences in logistics decision support systems