Dynamic pricing rule and R&D

This article models the intertemporal behaviour of a firm that sets product prices and simultaneously invests in R&D. The model shows that the dynamic pricing rule follows the evolution of the production cost and is independent of the evolution of the product quality. Thus, process innovation, which reduces production cost, is the main determinant of a firm's pricing policy over time. Moreover, the firm invests more in process innovation over time at the expense of product innovation. Hence, the model explains the decrease in the cost of production and in the price of technological products throughout their life cycle.Dynamic pricing, R&D, optimal control

The Entry Of International Banks In China

With the remarkable degree of openness of China’s economy, an increasing number of foreign banks are rushing into this country. Two main theories prevail in current studies on the motivations of foreign banks to enter a new country, namely, customer-driven or market opportunity driven. Using the event study methodology, this paper analyses the value effect on foreign banks of the “entering the Chinese market” event. The results show that compared to customer-driven factors, the new opportunities of the Chinese market better explain this value effect. Our results provide a reference for foreign banks on operating strategies in China and enable a better understanding of the choice of destination and motivations for foreign banks to enter China.

Les déterminants de la politique de tarification dynamique sur un marché biface

Cet article caractérise les déterminants de la politique de tarification d’une firme qui opère sur un marché biface ou two-sided. Le marché d’application est celui des éditeurs de logiciels clients-serveurs Internet. Pour étudier cette question, nous mobilisons certains éléments des littératures relatives à la diffusion de nouveaux produits et aux marchés bifaces. Nous obtenons des résultats analytiques et réalisons des simulations numériques des politiques de tarification. Nous obtenons deux résultats principaux. (1) Pour une classe importante de fonctions de demande, l’impact sur la politique de tarification de l’externalité intermarché est aussi important que celui de l’externalité intramarché. (2) Une politique de tarification alternative pour laquelle le prix du logiciel client est nul ne dégrade que très peu le profit intertemporel.This paper characterizes the determinants of the pricing policy of a firm that operates on a two-sided market. The application market is client-server software on the Internet. To study the research question, we draw some elements of the literatures on new product diffusion and on two-sided markets. We obtain analytical results and give simulations of dynamic pricing policies. We obtain two main results. (1) For an important class of demand functions, the impact on the pricing policy of the intermarket externality is as important as the intra market externality. (2) An alternative pricing policy for which the software client is free  has very little impact on the intertemporal profit

Better Product Quality May Lead to Lower Product Price

ACL-2International audienceThis article analyzes the conditions under which better product quality implies higher or lower product price. In an optimal control framework, I make the following assumptions: The firm sets the dynamic pricing and product innovation policies; product innovation raises quality, which drives production cost, and consumers are sensitive to price and quality. I derive a rule of price-quality relationship that stresses the influence of quality on price through the effects of cost (positive), sales (negative), and markup (positive). This article shows that, while maximizing profit and despite a quality and cost increases, the firm may decrease product prices because of the possibility of generating more sales as a result of combining better quality with lower price. This sales effect solves the puzzle of a negative price-quality relationship. More generally, the sales effect mitigates the ability of price to convey information about quality

Dynamic pricing with reference price dependence

International audienceA firm that accounts for consumer behavior sets the selling price of a product considering the reference price of consumers. In the literature, a reference price is usually modeled as depending on past selling prices. That is, past selling prices implicitly constrain the current selling price of a product. In this article, the author explicitly measures this constraint with an optimal control framework. He works on the structural properties of a general demand function, which depends on both selling and reference prices. Analytical results prove the following claims. Adjusting reference prices effects increase the price elasticity of demand, the demand function becoming flatter. Thus, the reference price effect weakens the market power of the firm. Also, the reference price effect constitutes a main driver of the dynamics of the selling price. But contrary to intuition, selling price dynamics does not systematically imitate reference price dynamics

Les déterminants de la tarification dynamique

This thesis deals with pricing in a dynamic environment. Using an interdisciplinary approach, we present three research papers that focus on the determinants of dynamic pricing. In the first study, we characterize the intertemporal pricing policy of a firm that operates on a two-sided market. We show under wich conditions direct externalities have the same impact on pricing that indirect externalities. In the second work, we study the dynamic pricing of a firm that conducts innovation and process innovation. We show that process innovation is the primary determinant of the pricing policy. In the third work, we perform an empirical study and measure the dynamics of the reference price on the housing market for both sellers and buyers. Our results show in particular that the reference price adaptation is faster on a rising than on a declining market.Cette thèse traite de la tarification dans un cadre dynamique. En utilisant une approche interdisciplinaire, nous présentons trois travaux des recherche qui se focalisent sur les déterminants de la tarification dynamique. Dans le premier travail, nous caractérisons la politique de tarification intertemporelle d'une firme qui opère sur un marché biface. Nous dégageons les conditions pour que les externalités directes aient le même impact sur la tarification que les externalités indirectes. Dans le second travail, nous étudions la tarification dynamique d'une firme qui conduit des politiques d'innovation de produit et d'innovation de procédé. Nous montrons que l'innovation de procédé est le premier déterminant de la politique de tarification. Dans le troisième travail, nous réalisons une étude empirique et mesurons la dynamique du prix de référence sur le marché immobilier aussi bien pour le vendeur que pour l'acheteur. Nos résultats montrent en particulier que le prix de référence s'adapte deux fois plus vite sur un marché haussier que sur un marché baissier

Trends and challenges in commodity markets

ACL-4International audienceEditoria

Population distribution, effective area and economic growth

ACL-2International audienceThe usual measure for the factor land is the total area. But total area is a flawed measure because land is of unequal quality. To account for land quality, we use an alternative measure called effective area . Effective area is based on spatial population distribution which captures both natural conditions and human activity. Theoretically, effective area explains economic growth better than total area that biases the measure of total factor productivity (TFP) growth. Empirically on the basis of 40 years of panel data for the United States, an increase of 10% in effective area is associated with an economic growth of 5%, and the omission of effective area undervalues the growth of TFP by 8.1%