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Abstract. We consider a dynamic pricing problem in which a seller faces an unknown demand model that can change over time. The amount of change over a time horizon of [...]

Abstract. In this paper, we study a multisourcing supply network design problem, in which each retailer faces uncertain demand and can source products from more than one distribution center (DC). [...]

We investigate how a supplier can use a quantity discount schedule to influence the stocking decisions of a downstream buyer that faces a single period of stochastic demand. In contrast to much of the work that has been done on single-period supply contracts, we assume that there are no interactions between the supplier and the buyer after demand information is revealed and that the buyer has better information about the distribution of demand than does the supplier. We characterize the structure of the optimal discount schedule for both all-unit and incremental discounts and show that the supplier can earn larger profits with an all-unit discount. Keywords: Supply chain management, channel coordination, channels of distribution, asymmetric information, 1. Introduction In many industries, such as fashion apparel, popular toys, etc., the combination of long lead times and short product life cycles forces retailers to make procurement decisions while [...]

The paper tests Hotelling's prediction that scarcity rent for a non-renewable resource will rise at the rate of discount in a market equilibrium. We perform the test using data for old-growth timber, a resource that is effectively non-renewable. In contrast to previous studies, for this resource a measure of scarcity rent is directly observable in the form of stumpage price bids in timber auctions. We construct a model that allows for replanting and captures the institutional framework of the western U.S. timber market. The modified Hotelling rule that we derive is not rejected in several of our specifications.

Byline: Hung-En Sung (1) Abstract: The use of kickbacks and illicit payments to win foreign sales is eroding fair trade and undermining good governance around the world. While often seen as discrete acts by unscrupulous businesses, bribery in international trade is better seen as driven by push and pull forces larger than individual firms. Two hypotheses on the dynamics of transnational bribery are formulated and tested in this study. The demand-pull hypothesis views multinational corporations as victims of corruption in host countries and predicts a positive relationship between corruption in host countries and bribery by guest businesses. The supply-push hypothesis treats multinationals as proactive parties and proposes a positive relationship between pro-bribery conditions in exporting countries and the inclination of their multinationals to foreign bribery. Analysis of cross-national data yielded no support for the demand-pull hypothesis, but strong backing for the supply-push hypothesis. This finding validates the potential of effective bribery reduction through supply-side controls. Author Affiliation: (1) Department of Law, Police Science, and Criminal Justice Administration, John Jay College of Criminal Justice, 899 Tenth Ave, New York, NY, 10019, USA Article History: Registration Date: 24/02/2006 Received Date: 04/07/2003 Accepted Date: 22/02/2006 Online Date: 13/05/2006 Article note: Direct all correspondence to Hung-EnSung, The National Centeron Addiction and Sub-stance Abuseat Columbia University, 633 Third Avenue, 19th Floor, NewYork, NY 10017, USA.

A duopoly is modeled in which downstream firms acquire inputs through bilateral monopoly relations with upstream input suppliers. A strategic advantage associated with facing a relatively strong upstream firm in bargaining is identified, implying that the firm facing the stronger input supplier has an incentive to relocate toward its rival, while the rival has the opposite incentive.

Important characteristics of spatial agricultural production functions are derived by introducing a non-negative curvilinear spatial demand function for production input intensities. Given the usual neoclassical rationale assumptions of spatial demand [...]

System dynamics is a methodology useful for studying policy variables as they move towards equilibrium. A model of supply and demand using data from the British National Health Service illustrates the point.

In this paper we give a theoretical model of buyers' behaviour on a market for a perishable good where no prices are posted. We show that if buyers learn from their own previous experience there is a sharp division between those who learn to be loyal to certain sellers and those who continue to 'shop around'. This feature remains in more general models which are simulated and is consistent with empirical data from the Marseille fish market.

The authors present a statistical model intended to aid in assessing market demand and pricing decisions. Other models tend to result in overpricing, and the authors warn that models should be evaluated for inference value.

This paper constructs a growth model with the feature that the range of differentiated consumption goods and the range of specialized producer durables are both endogenously determined. I show that this feature allows the domestic investment rate to be closely associated with the domestic saving rate even when international financial markets are integrated. I also argue that this feature is important in explaining the observed cross-country diversity in growth performance and saving behavior.

I develop a simple example of a model in which agents have asymmetric information, and preferences that are represented by a nonadditive expected utility function. The a priori uninformed agent, after observing the equilibrium price, has conditional beliefs that remain nonadditive. Then, even when the equilibrium price function is fully revealing (i.e., one-to-one), it may be worthwhile for an a priori uninformed agent to buy 'redundant' private information if he is more confident in that information than in that revealed by the price system.

A seller of a nondurable good repeatedly faces a buyer who is privately informed about the position of his demand curve. The seller offers a price in each period. The buyer chooses a quantity given the price. The quantity demanded reveals information about the buyer. An equilibrium is characterized with the feature that buyer types separate completely in the first period. This equilibrium uniquely satisfies a modified refinement of the Cho-Kreps criterion. Despite the immediate separation, the buyer distorts his behavior throughout the game. The requirement to signal types can raise the utility of all types of informed players.

This paper reexamines Blanchard and Quah's (1989) aggregate supply/demand model interpretation of output shocks using data from ten countries. Although postwar data support their interpretation, the model is not supported [...]

An allocation model of the optimum location of producer service firms that face uncertain consumer demand was presented. The model assumes that scale economies are directly related to the level of contact requirements for service delivery. Evidence shows that producer service vendors tend to choose locations near their major clients, indicating that firms will optimize their location with respect to client demand. Furthermore, producer service specialists are willing to outsource as long as suppliers can meet certain quality, cost or response-time requirements.

The aggregate supply (AS) and aggregate demand (AD) functions are macroeconomic concepts that are fundamental to the analysis of price movements. As a rule, demand is lower when prices are higher and supply is higher when prices are higher. However, there are certain situations when these standard assumptions do not necessarily hold true. This occurs during periods of changing price and wage structures when paradoxical outcomes related to aggregation can occur.

The application of economist John Maynard Keynes model for aggregate supply and demand in an open-economy was analyzed using a simple formal presentation. The study aimed to gather significant information that would explain certain outputs. Results reveal that firms could receive aggregate profits and losses from their markets in an open-economy. Explicit modeling of the monetary sector is needed to formulate aggregate expenditures.

A Keynesian aggregate supply model using the aggregate demand expectations of producers has taken into account the time involved in production or the production period. This model shows that rational expectations fit the Keynesian model. The distinction that Keynes developed between long-term and short-term expectations can be illustrated by this model. Expectations that nominal wages may fall can lead to a drop in employment and output through the cash flow effect.

An analysis of the relationship of demand and supply dynamics in the motion picture industry with the distribution path of film revenues reveals the existence of a positive information feedback among film audiences that is reflected in the Bose-Einstein process. The examination also finds that the flexible supply adaptation of industry to such feedback generates higher returns. The Bose-Einstein process can give rise to information cascades, path dependent dynamics and superstars, which are all demonstrated by motion pictures.

The Generalized Method of Moments establishes the applicability of the risk-adjusted Hotelling model used to determine the optimal depletion of a finite resource. This particular model manipulates the standard delta by lambda over lambda equals rho equation to integrate initial, risk-free stocks, the homogenous capital-consumption good and the exhaustible supply in a two-period competitive economy. However, used in industry-level extraction costs, the results are imperfect and problem-laden. These problems are mainly due to inadequate data and other inherent limitations of the model used.

Studies that compute reserve costs in estimating reserve price elasticities are the most promising in estimating reserve elasticities in the US crude oil market. A reserve supply function yielding an oil reserve at 1.27 elasticity resulted from lining up reserves with costs. The reserve equations are quite general in nature since cost is a producer component and not the market's. These costs have also been based on a short time period, thus, further studies using the same method should be made on a longer time period to determine the effects of depletion and technical changes.

Rudiger Dornbusch's and Stanley Fischer's 'Macroeconomics' uses an aggregate demand/aggregate supply model which results in inconsistent and confusing measurements of the equilibrium levels of price and output. This is due to the combination of incompatible concepts typical in macroeconomic textbooks. The authors also fail to support Keynesian concepts in their use of the model and instead, present unjustified predictions of ready adjustment to natural rate.

Industrial dynamics models can be constructed within the context of living and planned supply chains. Such supply chains have been used successfully within the Cardiff Industrial Systems Dynamics Group Re-engineering Methodology. The success of the modeling methodology relies on the integration of the four inputs of industrial engineering, control engineering, simulation and business reengineering., Introduction The discipline of industrial dynamics (ID), alternatively known as system dynamics and management system dynamics, has already been around for some 40 years. Broadly speaking it is the application [...]

In this paper, I establish a link between static and dynamic models using a new set of results related to the Frisch demand function and a generalization of the Frisch decomposition of demand (which is an alternative to the familiar Slutsky decomposition). It was previously believed that estimates obtained from static models do not directly provide implications for life-cycle behavior. However, I develop a methodology for inferring intertemporal elasticities of substitution in a dynamic system from parameter estimates of an 'appropriate' static system. This methodology applies to general multi-constraint optimization problems where some constraints may be nonlinear.

The various methods for determining international oil prices are analyzed by studying the interaction of supply and demand curves. Considerations are made for the various factors which influence the oil market, particularly during the period before the second oil shock between 1945 and 1980 and the period after the second oil shock in the 1980s.

The demand for key strategic business services including advertisement and marketing, robotics, computer system, export advice, market research by manufacturers in Scotland and South East England has been analysed within the flexible firm paradigm for the years 1988 to 1990. Increasing service output is the primary reason for expansion of demand output and not restructuring strategies, as predicted by the flexible firm model.

A simple supply-demand structure of the US dairy industry is used to illustrate the potential role of nonlinear dynamics in causing market instability. The supply function relies on the nonlinear dynamics of the dairy herd, as estimated by J.P. Chavas and R. Klemme, while the demand function shows constant price elasticity. In the absence of any uncertainty, an inelastic demand is shown to contribute to market instability and chaos.

Economist Sir John Hicks, in an Aug 10, 1987 letter to fellow academic A.K. Dasgupta, comments on Alfred Marshall's theory of market prices. Marshall, in the second volume of his 'Principles of Economics' published in 1890, had claimed to explain how supply and demand could control market price. Hicks points out that Marshall's explanation wrongly takes for granted that no carry-over will exist for bargains sold at non-equilibrium prices.

A comparative study of two regression models that can account for trading-day variations in economic activity is conducted. Additive expressions assume that a given day's effect is independent of the current activity level while multiplicative expressions subjectively assign the impact of each day of the week. The two methods are applied to determine trading-day effects in meat demand. Multiplicative adjustment is found to be conceptually superior, although more complex, to additive adjustment.

The two-stage, hedonic price analysis is used to examine the demand and supply elements which affect pricing of cotton fiber attributes or characteristics. The original hedonic model is modified based on price and characteristic differences. The estimated system of relationships include 11 first-stage hedonic equations and 24 characteristic demand and 20 characteristic supply equations in the second stage.

The demand for and supply of pulpwood in the Finnish market is examined using the simultaneous-equations econometric approach. Timber supply from non-industrial private forest owners is calculated together with a three-impact demand function that includes capital,labor and wood. Results indicate stumpage price apparently has both a long-term and a short-term effect on pulpwood demand.

Supply shifts are shown to affect equilibrium prices and quantities of farm products in a primary agricultural market with oligopsonistic features. They also affect the profit of food processors purchasing the raw product. A crucial issue is the nature of the supply disturbance of the raw product. The effects of agricultural product supply shifts under oligopsony or imperfect competition are also found to be qualitatively different than those under perfect competition or monopsony.

The paper proves the existence of a symmetric equilibrium with multiproduct firms using a nested logit model of demand. The demand model is parameterized by two variables which characterize different dimensions of preference for variety. These reflect intragroup heterogeneity and intergroup heterogeneity, a group (or nest) being the set of products produced by a firm. There are then two dimensions to market performance; the total number of firms and the range of products produced per firm. It is shown that the market equilibrium involves an excessive number of firms, but each firm provides too few products.

In this paper we propose and estimate a system of producer output supply and input demand functions that generalizes the standard normalized quadratic form. The generalization adds either linear or quadratic splines in a time (or technical change) variable, yet retains the main attractive property of the normalized quadratic, which is that it can provide a local second order approximation while maintaining the correct curvature globally. However, the generalization has additional desirable approximation properties with respect to the splined variable, and thus permits a more flexible treatment of technical change than is provided by standard flexible functional forms.

This paper presents a monthly econometric model of petroleum refining supply in the United States. The model is derived using a multiproduct restricted cost function with adjustment cost. the Euler [...]

The apparent paradox over the decrease in productivity after 1880 and an increase in prosperity in the South Wales coal mining industry can be explained in terms of supply and demand. Increasing exports to foreign sources offset declining domestic industrial consumption and supported gradually increasing prices after 1888. Thus the reduction in productivity benefited miners and mine owners as prices increased since the market could accommodate the entire Welsh production.

The importance of requiring dimensional consistency in writing model equations is emphasized by citing the difficulties that arise due to inconsistency through the applicationof diffusion models integrating price to data on some products. Four dimensionally consistent model prescriptions that incorporate the effect of price are developed and applied for projecting the demand for color television in India.