In this paper, greening, pricing, and advertising policies in a supply chain will be examined with government intervention. The supply chain has two members. First, a manufacturer seeking to determine the wholesale price and the greening level and second, a retailer that has to determine the advertising cost and the retail price. The government is trying to encourage the manufacturer to green t...

We consider the problem of an electric-power marketer offering a fixed-price forward contract to provide electricity that it purchases from a potentially volatile and unpredictable fledgling spot energy market. One option for the risk-averse marketer who wants to hedge against the spot-price volatility is to engage in cross hedging to reduce the contract’s profit variance, and to determine the ...

  In this paper asymmetric price transmission mechanism and nonlinear adjustment between producer and retail prices of milk were examined in Zanjan Province of Iran. For this purpose, a Two-Regime Threshold Vector Error Correction Model (TVECM) and a Sup-LM Test developed by Hansen and Seo (2002) were employed for checking presence of a threshold effect. Application of unit root tests indicated...

This paper reviews both theoretical and empirical studies of financial transmission rights (FTRs) in the major U.S. wholesale power markets and provides a simple illustrative two-stage model to study the competitive behaviors of electricity generators (wholesale power sellers) and load serving entities (LSEs)(wholesale power buyers) and the welfare effects of FTRs in the restructuring U.S. whol...

An article on the front page of the Wall Street Journal on October 6, 2006, thrust into the public media the otherwise esoteric controversy concerning the use of average wholesale price (AWP) as the primary basis for reimbursements to pharmacies for pharmaceuticals in the United States. Although used widely for nearly 40 years, AWP had been criticized prior to this investigative report as unrel...

We study a supply chain comprised of a retailer who sources a product from a manufacturer. The retailer has superior information about the market demand, and the manufacturer must build the capacity and set the wholesale price prior to observing demand realization. We explore the level of information the retailer can share with the manufacturer by means of cheap talk. We first analyze a case in...

A small number of retailers are determining more and more how consumer products are made and sold in the US. As widely reported in the trade press, these dominant retailers are dictating their terms to the manufacturers while other retailers do not enjoy the same leverage. In this study, we make the distinction between a dominant and a weak retailer, and investigate the dominant retailer/manufa...