This paper explores the short-run price-inventory dynamics in the presence of different shocks. Classical competitive storage model states that inventory decision considers both current and future market condition, and thus interacts with spot and expected future spot prices. We study competitive storage holding in an equilibrium framework, focusing on the dynamic response of price and inventor...

Several information goods, such as movie distribution rights or newspapers, are sold either at spot prices, or through forward subscription buying. Our paper considers a firm that offers an information good through spot buying, or through forward buying at a reduced price, or a combination of the two. We propose a consumer decision-making model that captures the market reaction to such an offer...

In this paper we propose a jump-diffusion type model which recovers the main characteristics of electricity spot price dynamics in the Nordic market, including seasonality, mean-reversion and spiky behavior. We show how the calibration of the market price of risk to actively traded futures contracts allows for efficient valuation of Nord Pool's Asian-style options written on the spot electricit...

Computational spot markets enable users to bid on servers, and then continuously allocates them to the highest bidder: if a user is “out bid” for a server, the market revokes it and re-allocates it to the new highest bidder. Spot markets are common when trading commodities to balance real-time supply and demand—cloud platforms use them to sell their idle capacity, which varies over time. Howeve...

Using data from employer-provided health insurance and Medicare Part D, we investigate whether healthcare utilization responds to the dynamic incentives created by the nonlinear nature of health insurance contracts. We exploit the fact that, because annual coverage usually resets every January, individuals who join a plan later in the year face the same initial ("spot") price of healthcare but ...

This article focuses on the empirical modeling of advance purchasing and the effects of price on purchasing behavior. Because pricing strategies are typically more complex than simply setting a single price point, the authors consider multiple aspects of price: (a) use of multiple price tiers, (b) face value of tickets, and (c) discounts resulting in week-to-week variations in price. They show ...

I propose a market based on a single load-following product in which each supplier bids to serve its desired share of the Colombia regulated load. Thus, a supplier that wins a 10% share at auction has an obligation to serve 10% of the actual regulated load in every hour of the commitment period. The supplier is paid the MOR clearing price for every MWh of energy supplied. Deviations between the...

The emergence of B2B spot markets has greatly facilitated spot trading and impacted supply chain structures as well as the way commercial transactions take place between firms in many industries. While providing new opportunities, the B2B spot market also exposes participants to a price risk. This new business landscape raises some important questions on how the supplier and manufacturer should...

Not only the amount of product demanded, but also the price of the product have a strong impact on a manufacturer’s revenue. In this paper we consider a continuous-time inventory model where the spot price of the product stochastically fluctuates according to a Brownian motion. Should information on the spot price be available, the manufacturer would wish to buy the product on the spot market w...

Infrastructure-as-a-Service providers are offering their unused resources in the form of variable-priced virtual machines (VMs), known as “spot instances”, at prices significantly lower than their standard fixed-priced resources. To lease spot instances, users specify a maximum price they are willing to pay per hour and VMs will run only when the current price is lower than the user’s bid. This...