SIMS (Strategic Information Management System) is a large scale DSS for telecommunications industry. Its goal is developing pricing strategy. SIMS is developed based upon the huge volume of CDR (Call Data Record). Its two main functions are CBA (Call Behavior Analysis) and DB simulation. Once decision-makers fully analyze the call behavior pattern, they can make any assumption for their pricing...

This paper demonstrates that quality-contingent pricing is a useful mechanism for mitigating the negative effects of quality uncertainty in e-commerce and information technology services. Under contingency pricing of an information good or service, the firm pre-announces a rebate for poor performance. Consumers determine performance probabilities using publicly available historical performance ...

We develop a numerical method for pricing multidimensional vanilla options in the Black-Scholes framework. In low dimensions, we improve an adaptive integration algorithm proposed by two of the authors by introducing a new splitting strategy based on a geometrical criterion. In higher dimensions, this new algorithm is used as a control variate after a dimension reduction based on principal comp...

This paper analyzes optimal pricing for information goods under incomplete information, when both unlimited-usage (fixed-fee) pricing and usage-based pricing are feasible. For a general set of customer characteristics, it is shown that in the presence of contract administration costs, offering fixed-fee pricing in addition to a non-linear usage-based pricing scheme is always profitimproving, an...

We develop a numerical method for pricing multidimensional vanilla options in the Black-Scholes framework. In low dimensions, we improve an adaptive integration algorithm proposed by two of the authors by introducing a new splitting strategy based on a geometrical criterion. In higher dimensions, this new algorithm is used as a control variate after a dimension reduction based on principal comp...

This article evaluates a firm’s service cost structure and the associated cost allocation methodology and its impact on pricing strategy, which manifests in revenues or market share, profitability, and customer satisfaction. We discuss a cost allocation methodology which will be useful in conjunction with other marketing tools in development of a pricing structure for a firm’s services against ...

We analyze the Nash equilibria of a standard Bertrand model. We show that in addition to the marginal-cost pricing equilibrium there is a possibility for mixed-strategy equilibria yielding positive profit levels. We characterize these equilibria and find that having unbounded revenues is the necessary and sufficient condition for their existence. Hence, we demonstrate that under realistic assum...

This paper focuses on the pricing of guarantees for principal-protected funds under the constant proportion portfolio insurance (CPPI) strategy and investigates how the CPPI parameters may affect guarantee prices. In addition, it assesses the fairness of the guarantee fees charged to the current principal-protected funds in China. Our research indicates that some of the funds are charged higher...

In this expository paper we illustrate the generality of game theoretic probability protocols of Shafer and Vovk (2001) in finite-horizon discrete games. By restricting ourselves to finite-horizon discrete games, we can explicitly describe how discrete distributions with finite support and the discrete pricing formulas, such as the Cox-Ross-Rubinstein formula, are naturally derived from game-th...

In this expository paper we illustrate the generality of game theoretic probability protocols of Shafer and Vovk (2001) in finite-horizon discrete games. By restricting ourselves to finite-horizon discrete games, we can explicitly describe how discrete distributions with finite support and the discrete pricing formulas, such as the Cox-Ross-Rubinstein formula, are naturally derived from game-th...