Loyalty discounts

This paper considers the use of loyalty inducing discounts in vertical supply chains. An upstream manufacturer and a competitive fringe sell differentiated products to a retailer who has private information about the level of stochastic demand. We provide a comparison of market outcomes when the manufacturer uses two-part tariffs (2PT), all-unit quantity discounts (AU), and market share discounts (MS). We show that retailer's risk attitude affects manufacturer's preferences over these three pricing schemes. When the retailer is risk-neutral, it bears all the risk and all three schemes lead to the same outcome. When the retailer is risk-averse, 2PT performs the worst from manufacturer s perspective but it leads to the highest total surplus. For a wide range of parameter values (but not for all) the manufacturer prefers MS to AU. By limiting the retailer's product substitution possibilities MS makes the demand for manufacturer s product more inelastic. This reduces the amount (share of total profits) the manufacturer needs to leave to the retailer for the latter to participate in the scheme.This study is funded from the Valencian Economic Research Institute (IVIE) and the European Commission

Active Purchasing for Health Insurance Exchanges

Examines the extent to which exchanges could be active purchasers that contract selectively with carriers, set stricter criteria, or negotiate discounts to leverage high-quality, affordable coverage, and not simply provide the broadest array of plans

Limited Options to Manage Specialty Drug Spending

Outlines rising trends in costs of and spending on specialty drugs; health plans' efforts to curb specialty drug spending, including patient cost sharing and utilization management; and efforts to integrate medical and pharmaceutical coverage

Fairs for e-commerce: the benefits of aggregating buyers and sellers

In recent years, many new and interesting models of successful online business have been developed. Many of these are based on the competition between users, such as online auctions, where the product price is not fixed and tends to rise. Other models, including group-buying, are based on cooperation between users, characterized by a dynamic price of the product that tends to go down. There is not yet a business model in which both sellers and buyers are grouped in order to negotiate on a specific product or service. The present study investigates a new extension of the group-buying model, called fair, which allows aggregation of demand and supply for price optimization, in a cooperative manner. Additionally, our system also aggregates products and destinations for shipping optimization. We introduced the following new relevant input parameters in order to implement a double-side aggregation: (a) price-quantity curves provided by the seller; (b) waiting time, that is, the longer buyers wait, the greater discount they get; (c) payment time, which determines if the buyer pays before, during or after receiving the product; (d) the distance between the place where products are available and the place of shipment, provided in advance by the buyer or dynamically suggested by the system. To analyze the proposed model we implemented a system prototype and a simulator that allow to study effects of changing some input parameters. We analyzed the dynamic price model in fairs having one single seller and a combination of selected sellers. The results are very encouraging and motivate further investigation on this topic

Retailing under resale price maintenance: economies of scale and scope, and firm strategic response, in the inter-war British retail pharmacy sector

The article examines the impact of resale price maintenance (RPM) on market structure, productivity, and competitive advantage in British retail pharmacy. In contrast to influential studies, but consistent with contemporary and recent work, it is shown that the major multiples were able to ameliorate the negative growth impacts of RPM. Higher profit margins ‒ principally from larger manufacturer discounts and backward integration – were used to fund initiatives aimed at boosting aggregate sales and economies of scale and scope. These relationships are explored using a recently discovered national establishment-level survey of retail pharmacists’ costs and margins, together with internal data for Boots Ltd

Library purchasing consortia: achieving value for money and shaping the emerging electronic marketplace

Drawing on a current study, funded by the British Library Research and Innovation Centre, the context of higher education libraries is discussed, including funding and costs and recent major official reports on education and libraries. Future trends and imperatives are outlined. Models of library purchasing consortia are presented. The operation of the Southern Universities Purchasing Consortium’s Libraries Project Group is examined in detail. The lessons and benefits of consortium membership are discussed. The future influence of purchasing consortia, particularly on the regional library and on electronic publishing are examined