The Role of Responsive Pricing in the Internet

The Internet continues to evolve as it reaches out to a wider user population. The recent introduction of user-friendly navigation and retrieval tools for the World Wide Web has triggered an unprecedented level of interest in the Internet among the media and the general public, as well as in the technical community. It seems inevitable that some changes or additions are needed in the control mechanisms used to allocate usage of Internet resources. In this paper, we argue that a feedback signal in the form of a variable price for network service is a workable tool to aid network operators in controlling Internet traffic. We suggest that these prices should vary dynamically based on the current utilization of network resources. We show how this responsive pricing puts control of network service back where it belongs: with the users.Internet, pricing, feedback, networks

Price Variation Antagonism and Firm Pricing Policies

Survey evidence suggests firms do not use pricing policies that vary prices in response to demand changes because they fear that such practices would antagonize consumers. We investigate this hypothesis using a dataset from a firm that has experimented with different pricing schemes. Each scheme is characterized by how much prices respond to demand variations. We find evidence that is consistent with the hypothesis that consumers take advantage of the opportunities offered by price changes and inconsistent with the hypothesis that consumers are antagonized by price changes caused by demand shocks.Consumer demand, responsive pricing, fairness, price rigidit

Price Variation Antagonism and Firm Pricing Policies

Pricing schemes that vary prices in response to demand shocks may antagonize consumers and reduce demand. At the same time, consumers may take advantage of the opportunities offered by price changes. Overall, the net impact of varying price on demand is ambiguous. We investigate the issue empirically, exploiting a unique dataset from a firm that has experimented with different pricing schemes. Each scheme is characterized by how much prices respond to demand variations. Holding average price and other variables constant, we find that demand is higher when prices vary more. The evidence suggests that the antagonism effect cannot be first order.Consumer demand, responsive pricing, fairness

Dynamic Pricing, Advanced Metering, and Demand Response in Electricity Markets

Presents an overview and analysis of the possible approaches to bringing an active demand side into electricity markets. Part of a series of research reports that examines energy issues facing California

Does Responsive Pricing Smooth Demand Shocks?

Using data from a unique pricing experiment, we investigate Vickrey’s conjecture that responsive pricing can be used to smooth both predictable and unpredictable demand shocks. Our evidence shows that increasing the responsiveness of price to demand conditions reduces the magnitude of deviations in capacity utilization rates from a pre-determined target level. A 10 percent increase in price variability leads to a decrease in the variability of capacity utilization rates between 2 and 6 percent. We discuss implications for the use of demand-side incentives to deal with congestible resources.Consumer demand, responsive pricing, capacity utilization, price variability

Mission-Market Tension in Managing Nonprofit Organizations

Private not-for-profit organizations combine characteristics of a public sector agency with those of a private, proprietary firm. In particular, nonprofits are required to address designated social missions while breaking even financially. This structure underlies the difficulty that nonprofit organizations face in making decisions with important resource implications. Specifically, choices that would achieve maximal mission impact may differ from choices that reward the organization in purely financial terms. As result, nonprofit managers face a variety of trade-offs between mission responsive and financially rewarding actions. This paper considers some of these tradeoffs by exploring how tensions between mission and market manifest themselves in a variety of nonprofit decision making applications. The analysis is based on a set of task forces assembled by the National Center on Nonprofit Enterprise in eight areas of nonprofit decision making. The paper suggests the development of metrics to reconcile mission goals with market incentives and research on appropriate nonprofit practices in areas such as pricing, employee compensation, outsourcing, collaboration, investment, fund raising and the undertaking of commercial ventures. Working Paper 06-2

THE FOOD SERVICE INDUSTRY: TRENDS AND CHANGING STRUCTURE IN THE NEW MILLENNIUM

By 2010, foodservice establishments are projected to capture 53 percent of consumers' food expenditures, whereas in 1980, foodservice captured less than 40 percent. The foodservice industry accounts for approximately 4 percent of the Gross Domestic Product and about 11 million jobs. It has been rapidly changing due to economic factors, technological advances, and labor matters.1 This overview covers many of the issues and trends affecting the different segments of the foodservice supply chain including the foodservice operators, distributors and food manufacturers. Changing customer demographics are a driving force in the evolution of the foodservice industry. As the baby boomers reach middle age, they do not seem to have time to cook and their children and grandchildren do not seem to have the interest, or talent. The U.S. population in 2000 had over double ($6,500) the per capita discretionary income that it had in 1975 ($3,109) 2 and, with a high value for recreation and pleasure they are pulled out of the kitchen and into the restaurants. An ever-shrinking world also brings variety to menus as cultures and cuisines converge, introducing new flavors and textures. A tight labor market has affected the foodservice industry from top to bottom leading to a derived demand for convenience products from manufacturers. At all links in the chain, companies are experiencing mergers and acquisitions. Operators, manufacturers, and distributors are all fighting for a share of the profits as competition continues to intensify. This review of the foodservice industry incorporates interviews with industry professionals, current information from leading foodservice associations, and predictions from the top industry research firms and consultants.Agribusiness, Industrial Organization,