This paper is based on observations that competing retailers have the option of either agreeing in advance to transship excess inventory to each other or seeing unsatisfied customers switch to the competitor for a substitute. A transshipment game and a substitution game between competing retailers is studied. After establishing the existence and uniqueness of a pure-strategy Nash Equilibrium in...

A recent strategy carried out by the aircraft industry to reduce the total cost of the new generation fighters has consisted in the development of a single airframe with different technical and operational specifications. This strategy has been designed to reduce costs in the Research, Design and Development phase with the ultimate objective of reducing the final unit price per aircraft. This i...

In estimating the cost-effectiveness of diagnostic procedures, it is helpful to treat diagnostic information as a commodity with a unit price. The amount of useful information provided by a test result can be measured in binary units (bits), and the unit price of the information produced by the test result can be expressed in dollars per bit in much the same way that the price of gold is given ...

Abstract We analyze device-funded and ad-funded platforms with differentiated ecosystems supporting apps provided under monopolistic competition. The incentives of a platform in investing app curation, introducing its own setting commissions on in-app purchases external are largely aligned those consumers, while this is not necessarily the case for platform. In particular, consumers gain from p...

We develop an analytical framework to investigate the competitive implications of dynamic pricing technologies (DPT), which enable precise inferring of consumers’ valuations for firms’ products and personalized pricing. These technologies enable first-degree price discrimination: firms charge different prices to different consumers, based on their willingness to pay. We first show that, even th...

The existing theoretical literature on mass customization maintains that customization reduces product differentiation and intensifies price competition. In contrast, operations management studies argue that customization serves primarily to differentiate a company from its competitors. Interactive involvement of the customer in product design creates an affective relationship with the firm, re...

Free riding, the behavior of attempting to benefit resources contributed by others while sharing their own values as minimum as possible, is one of the key problems in many P2P systems. Incentive mechanisms are proposed to solve the problem. In this paper, we introduce an all-pay auction model to study the resource distribution process in BitTorrent-like P2P system. Based on this model, the adv...