In this article, we develop an integrated supplier–buyer inventory model with the assumption that the market demand is sensitive to the retail price and the supplier adopts a trade credit policy. The trade credit policy discussed in this paper is a ‘‘two-part’’ strategy: cash discount and delayed payment. That is, if the buyer pays within M1, the buyer receives a cash discount; otherwise, the f...

We consider a stylized dynamic pricing model in which a monopolist prices a product to a sequence of customers, who independently make purchasing decisions based on the price offered according to a logit choice model. The parameters of the logit model are unknown to the seller, whose objective is to determine a pricing policy that minimizes the regret, which is the expected difference between t...

This paper uses economic modeling to examine the controversial role that Group Purchasing Organizations (GPOs) play in the supply chains for healthcare products. Among the controversies, perhaps the most fundamental one is whether or not GPO-contracted prices are the lowest available. However, the fiercest controversy is around the " Contract Administration Fees (CAFs) " that GPOs charge to man...

Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open-market operations ineffective for achieving macroeconomic stabilization goals. We show that even were this the case, there remains a powerful argument for large-scale open market operations as a fiscal policy tool. As we also demonstrate,...

This note studies the optimal inspection policies in a supply chain in which a manufacturer purchases components from a supplier but has no direct control of component quality. The manufacturer uses an inspection policy and a damage cost sharing contract to encourage the supplier to improve the component quality. We find that all-or-none inspection policies are optimal for the manufacturer if t...

In response to the sharp drop in economic activity, employment, and earnings that took place around the Great Recession, governments around the world enacted substantial stimulus packages. The exact composition of these fiscal interventions varied greatly across countries, but a common ingredient was the disbursement of fiscal stimulus payments (or tax rebates) to households. Examples of this p...

This study evaluated users’ behaviors when performing inexpensive or expensive e-commerce purchases on familiar and unfamiliar Web sites. Users were more comfortable with making inexpensive than expensive purchases. They also felt more secure and that their privacy was better protected when shopping with a familiar Web site than an unfamiliar one, especially for expensive purchases. For inexpen...

We show that in a standard, technology shock-driven one-sector real business cycle model, the stabilization effects of government fiscal policy depend crucially on how labor hours enter the household’s period utility function and the associated labor-market behavior. In particular, when the household utility is logarithmic in both consumption and leisure, income taxes are destabilizing and gove...

This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent financial crisis, using an estimated New Keynesian model with a bank. A key dimension of policy in the crisis was massive government support for banks—that dimension has so far received little attention in the macroeconomics literature. We use the estimated model to analyze the effects of bank asset losses, ...

This paper studies optimal pricing policies for a family of substitute perishable products with demand correlation. Potential buyers arrive according to an exogenous stochastic Poisson process. At each demand epoch, the arriving customer observes the set of substitute products for which there is still inventory available together with their corresponding prices. Based on this information, the c...