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1
Barsky, Robert B., Christopher L. House, and Miles S. Kimball. "Sticky-Price Models and Durable Goods." American Economic Review 97, no. 3 (May 1, 2007): 984–98. http://dx.doi.org/10.1257/aer.97.3.984.
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The inclusion of a durable goods sector in sticky-price models has strong and unexpected implications. Even if most prices are flexible, a small durable goods sector with sticky prices may be sufficient to make aggregate output react to monetary policy as though most prices were sticky. In contrast, flexibly priced durables with sufficiently long service lives can undo the implications of standard sticky price models. In a limiting case, flexibly priced durables cause monetary policy to have no effect on aggregate output. Our analysis suggests that durable goods prices are the most relevant data for calibrating price rigidity. (JEL E21, E23, E31, E52)
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Tripathi, Avinash, and Neeraj Pandey. "Does impact of price endings differ for the non-green and green products? Role of product categories and price levels." Journal of Consumer Marketing 35, no. 2 (March 19, 2018): 143–56. http://dx.doi.org/10.1108/jcm-06-2016-1838.
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Purpose The discount image associated with odd-ending prices has led to its extensive use by retailers. The purpose of this study is to assess the impacts and applications of nine-ending vs round-ending prices on the purchase of green and non-green products at different price levels and under different purchase motivations. Design/methodology/approach Three experiments are conducted. The first experiment is a 2 (price ending: nine-ending vs round-ending) × 2 (product appeal: green vs non-green) between-subjects study; the second experiment is a 2 (price ending: nine-ending vs round-ending) × 2 (price level: low price vs high price) × 2 (product appeal: green vs non-green) between-subjects study; and the third experiment examined buyers’ preferences of price endings regarding the purchase of green products having either utility (utilitarian) or pleasure (hedonic) motivation. Findings This research highlights that consumers prefer zero-ending prices for green products and pleasure motivation products, but they prefer odd endings for low-priced and utilitarian products. These results support the increased reception of round-ending prices. Accordingly, this study contributes to the literature by providing a boundary condition for odd-ending prices. Specifically, the study finds that the effect of nine-ending prices becomes weaker as the price of the product increases. Practical implications The findings of this study have practical implications for managers, as the results indicate that pricing green products and high-quality perception products using round digits and pricing low-priced and utility perception products using odd digits will increase consumers’ purchase intentions. Moreover, pricing the products using round-ending prices will reduce the perception of low quality and deter brand loyalty emanating from a low-priced/discount image of a product. Originality/value This research contributes to theoretical and practical aspects of behavioural pricing literature. This research uncovers the buyers’ distinct preferences for zero-ending prices and odd-ending prices when purchasing different products based on different motivations and varied price levels. This is the first research of its kind to explore and compare the impact of psychological pricing on green products. The study also resolves a contradiction in past literature regarding the use of nine-ending prices by providing boundary conditions.
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Chang, Ming-Hsu, and Wen-Bin Chiou. "Psychophysical Methods in Study of Consumers' Perceived Price Change for Food Products." Psychological Reports 100, no. 2 (April 2007): 643–52. http://dx.doi.org/10.2466/pr0.100.2.643-652.
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When adjusting product prices, marketers wish information concerning consumers' price perceptions. The present study aimed to develop an optimal pricing framework for food products by applying Weber's Law and Stevens' Power Law in psychophysics. The first phase attempted to measure the differential thresholds when magnitudes of prices were raised and lowered. The second phase was conducted to establish the psychophysical function representing perceived changes. Analysis showed consumers' differential thresholds were positively correlated with the initial price, consistent with Weber's Law. Further, participants' perceived change differed for increased and decreased prices. Products were perceived as cheaper only when medium-and low-priced products dropped dramatically in price. However, small reductions for the high-priced products were perceived as cheaper. Regardless of price changes, participants perceived products were more expensive when prices dropped by a small amount.
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Bangalee, Varsha, and Fatima Suleman. "Has the increase in the availability of generic drugs lowered the price of cardiovascular drugs in South Africa?" Health SA Gesondheid 21 (October 11, 2016): 60–66. http://dx.doi.org/10.4102/hsag.v21i0.935.
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Background: This research focuses on pharmaceutical competition in South Africa where concurrent pricing legislation is being implemented without monitoring the consequences on generic drug competition and usage.Objective: To examine the relationship between originator drug prices and the number of generic brands within the cardiovascular class of drugs and to compare South African prices with international reference prices.Method: Data on private sector drug prices was sourced from the South African Medicine Price Registry. The relationship between the median proportional price and the number of brands in the therapeutic class was analysed using correlation analysis. International reference prices were obtained from the Management Sciences for Health International Drug Price Indicator Guide (2012 edition).Results: A weak correlation between originator and generic drug prices and the number of available brands was observed, the exception being diuretic drugs. The median prices per strength of the originator generic were still higher than the most expensive generic version manufactured by any other company, the exception being telmisartan. Comparison of price ratios between the originator drug, lowest priced generic and international reference price values revealed that the originator drug prices had a median price ratio of 20.99 (interquartile range 7.31—53.46) and the lowest priced generics had a median price ratio of 4.28 (interquartile range 2.10—8.47).Conclusion: Increased generic competition is not a predictor of lower drug prices. The study also concludes that the current South African pharmaceutical policies have not yet achieved the lowest prices for drugs when compared internationally.
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Bulfone, Liliana. "High prices for generics in Australia — more competition might help." Australian Health Review 33, no. 2 (2009): 200. http://dx.doi.org/10.1071/ah090200.
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It is commonly believed that dispensed prices of medicines in Australia are substantially lower than those in other developed countries, particularly the US. This article reports the results of an analysis comparing dispensed prices for the most commonly prescribed and the highest cost items in Australia with dispensed prices in the US. Although a large majority of items are less expensive in Australia than in the US, Australian prices are higher for a substantial number of products, particularly generic drugs. This article examines various policies affecting the pricing of generics in Australia. It is postulated that the main cause for higher prices for a substantial number of generic products is the lack of price competition. This results from government policy which ensures that a price reduction by one company is communicated immediately to all competitors in that market along with an invitation to match the reduced price. The dominant strategy for all suppliers is to only reduce their price in response to a reduction in price by a competitor. The result is a lack of differentiation in pricing across brands of a medicine on the Schedule of Pharmaceutical Benefits. The government could improve the structure of the generics market and encourage greater competition by ceasing to disclose competitor firms? offers to other competitors. The government could conduct pricing reviews of each generic product relatively infrequently (eg, only once annually or every 18 months). At the time of the pricing review, the government would request confidential offers on price for a generic from all players in the market. Brands should then all be listed under the Pharmaceutical Benefits Scheme (PBS) at the offered price. Prices offered by the individual supplier would apply until the next pricing review. The PBS would continue to subsidise up to the price of the lowest priced brand, with brand premiums applying to all brands priced higher than the benchmark price. Such an approach would provide opportunity for players in the market to capture market share by being the lowest priced brand.
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Busaba, Walid Y., Zheng Liu, and Felipe Restrepo. "Do Underwriters Price Up IPOs to Prevent Withdrawal?" Journal of Financial and Quantitative Analysis 55, no. 6 (August 9, 2019): 2005–36. http://dx.doi.org/10.1017/s0022109019000553.
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We examine whether underwriters price up weakly demanded initial public offerings (IPOs) to prevent withdrawal. Our empirical strategy exploits a discontinuity in the distribution of IPO prices around the low boundary of the filing range. Offerings with a high ex ante withdrawal probability that are priced at this boundary are likely priced up to meet issuers’ reservation prices. We compare the aftermarket returns of these IPOs to the returns of other weakly demanded offerings where issuers’ reservation prices were likely not binding, and we identify a negative 8.4-percentage-point differential attributable to the aggressive pricing inherent in setting the price at the low boundary when withdrawal risk is high.
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Wang, Qiming. "Evolution of integer price clustering of IPOs in the aftermarket." Nankai Business Review International 5, no. 4 (October 28, 2014): 365–81. http://dx.doi.org/10.1108/nbri-01-2014-0008.
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Purpose – The purpose of this paper is to, using a large sample of NASDAQ initial public offerings (IPOs), examine the evolution of integer price clustering of IPOs in the aftermarket trading. Design/methodology/approach – Consistent with Harris’s (1991) costly negotiation hypothesis, clustering on integer prices is a positive function of price level and various stock valuation uncertainty proxies, and it is a negative function of trading activities for IPOs and seasoned stocks. Findings – It was found that, after controlling for price level, daily return volatility, number of trades, trading volume, number of market makers and the effect of price support, the integer price frequency of IPOs converge to that of seasoned stocks immediately, and whether IPOs have integer offer prices does not affect their integer price clustering in the aftermarket trading after the effect of price support is controlled for. Originality/value – These results suggest that the IPO pricing process significantly reduce the differences between integer priced IPOs and non-integer priced IPOs in pre-offering valuation uncertainty.
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Prager, Elena. "Healthcare Demand under Simple Prices: Evidence from Tiered Hospital Networks." American Economic Journal: Applied Economics 12, no. 4 (October 1, 2020): 196–223. http://dx.doi.org/10.1257/app.20180422.
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This paper shows that consumers respond to prices for complex healthcare when they can easily assess out-of-pocket prices. Healthcare cost containment efforts increasingly incentivize price shopping despite a dearth of evidence that this steers consumers toward lower-priced care for major medical services. I show that consumers shift toward lower-priced hospitals in the highly simplified price information environment of insurance plans with tiered hospital networks. Consumers observe a single predictable, well-defined price that applies to a broad range of services within each of at most three hospital tiers. Within three years, expected partial-equilibrium savings reach 8–17 percent of baseline spending. (JEL G22, H75, I11, I13)
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Pokrivčák, J., and M. Rajčaniová. "Crude oil price variability and its impact on ethanol prices." Agricultural Economics (Zemědělská ekonomika) 57, No. 8 (August 23, 2011): 394–403. http://dx.doi.org/10.17221/42/2010-agricecon.
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The world annual biofuel production has exceeded 100 billion litres in 2009. The development of the biofuel production is partly influenced by the government support programs and partly by the development of oil prices. The main purpose of this paper is to analyze the statistical relationship between ethanol, gasoline and crude oil prices. We aim to check the correlation among these variables and to analyze the strength and direction of a possible linear relationship among the variables. We are interested in analyzing how each variable is related to another, so we evaluate the inter-relationship among the variables in the Vector Autoregression (VAR) and the Impulse Response Function (IRF). In order to achieve our goal, we first collected weekly data for each variable from January, 2000 to October, 2009. The results provide evidence of the cointegration relationship between oil and gasoline prices, but no cointegration between ethanol, gasoline and ethanol, oil prices. As a result, we used a VAR model on first differences. After running the Impulse Response Function, we found out that the impact of the oil price shock on the other variables is considerable larger than vice versa. The largest impact of oil price shock was observed on the price of gasoline.
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Lintunen, Jussi, and Lauri Vilmi. "Optimal Emission Prices Over the Business Cycles." Environmental and Resource Economics 80, no. 1 (August 2, 2021): 135–67. http://dx.doi.org/10.1007/s10640-021-00581-x.
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AbstractWe prove that under the most typical circumstances optimal emission prices are procyclical, i.e., prices should be lower during recessions. The procyclicality is more likely when emissions propagate very slowly into environmental damage. A prime example of such process is $$\hbox {CO}_2$$ CO 2 emissions. We show that carbon prices should be closely linked to the fluctuations of the marginal utility of consumption, which implies relatively modest magnitude of carbon price fluctuations. Our findings imply that climate policies should focus on setting the carbon price to the optimal growth path level and give carbon price fluctuations only a secondary role. Opposite to the carbon price, the cyclicality of optimal emissions depends on the production technology in the energy sector, and may become countercyclical in future if the technology mix becomes less fossil dependent.
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Curry, David J., and Peter C. Riesz. "Prices and Price/Quality Relationships: A Longitudinal Analysis." Journal of Marketing 52, no. 1 (January 1988): 36–51. http://dx.doi.org/10.1177/002224298805200104.
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Though price and quality are recognized as important tactical and strategic variables for a marketing manager, few empirical data are available on the behavior of price or the correspondence between price and quality over time. The authors report results for three hypotheses derived from product life cycle theory, dynamic pricing policy, and economic information theory about price trends, price convergence, and the correspondence between price and quality among brands in 62 durable product forms. Results strongly confirm the hypotheses that prices converge as well as decrease in real terms. The decline in price variation apparently results from a narrowing of prices by all relevant competitors. Brands entering or exiting a category counterbalance one another and are nearly as likely to be priced below as above a category mean. Reduced correspondence between price and quality levels over time suggests that as pricing flexibility declines, competition may occur in the form of promotional expenditures rather than relative quality improvements. Implications of these findings for marketing strategy and consumer welfare are discussed.
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Schmit, Todd M., Leslie Verteramo, and William G. Tomek. "Implications of Growing Biofuel Demands on Northeast Livestock Feed Costs." Agricultural and Resource Economics Review 38, no. 2 (October 2009): 200–212. http://dx.doi.org/10.1017/s1068280500003208.
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The relationship between complete-feed prices and ingredient prices is estimated in order to analyze the effect of higher commodity prices on feed costs, with particular attention paid to the substitutability of corn distillers dried grains with solubles (DDGS). Using the historical price correlation between corn and DDGS, each $1 per ton increase in the price of corn increases feed costs between $0.45 and $0.59 per ton across livestock sectors. Marginal feed costs based on lower forecasted price correlations are reduced between $0.05 to $0.12 per ton across livestock sectors, but only for the dairy ration is the reduction statistically significant. Overall, DDGS cost savings are relatively limited and insufficient to offset the impact of other higher-priced feedstocks.
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Pope, Rulon D., and Robert G. Chambers. "Price Aggregation When Price-Taking Firms' Prices Vary." Review of Economic Studies 56, no. 2 (April 1989): 297. http://dx.doi.org/10.2307/2297463.
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Razzakova, C. M., and L. E. Ziganshina. "Medicine prices in 2017 and 2018 as a reflection of the effectiveness of government measures to ensure access to medicines." Kazan medical journal 101, no. 2 (April 13, 2020): 256–63. http://dx.doi.org/10.17816/kmj2020-256.
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Aim. To conduct a comparative analysis of medicine prices in 2017 and 2018 years in Kazan (The Republic of Tatarstan, The Russian Federation) to assess the effectiveness of government measures to ensure the accessibility of medicines.
Methods. We conducted a comparative analysis of medicine prices according to methodology developed by Health Action International and World Health Organization (WHO/HAI). The analysis included 30 medicines at a preselected dosage form. We studied the accessibility and prices of original brands and lowest priced generic of each medicine in the public and private pharmacies of Kazan in 2017 and 2018, and analyzed the procurement prices of the same medicines in inpatient hospitals. Medicine prices were compared with international reference prices (The Management Sciences for Health (MSH) reference prices) and expressed as median price ratio (MPR).
Results. Prices for originator and generic medicines in the public and private sectors tended to decrease in 2018 compared to 2017, but statistically significant price reduction occurred only for generic medicines in the private sector. For example, the median price ratio for originator products changed from 6.86 to 2.97 in the public sector and from 11.1 to 5.36 in the private sector in 2018 compared to 2017, but the changes were not statistically significant (p 0.05). Prices for generics medicines in the public sector did not change in the studied years and remained at the level of international reference prices (the median price ratio were 1.3 in 2017 and 1.27 in 2018). In the private sector, we found a twofold decrease in the prices of generics medicines in 2018 compared to 2017 [the median price ratio decreased from 3.25 to 1.44 (p 0.05)]. Procurement prices for generics medicines in public hospitals in 2017 and 2018 years did not show statistically significant changes with the median price ratio equal to 1.34 and 0.8, respectively.
Conclusion. Government price control measures of medicines contributed to maintaining the price of generic medicines at the reference prices level in the public sector and to halving the price of generic medicines in the private sector in 2018 compared to 2017.
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Wang, Cheng, Hailei Zou, and Juncheng Yin. "Fourier Transform of Lookback Option Price." ISRN Applied Mathematics 2011 (November 30, 2011): 1–7. http://dx.doi.org/10.5402/2011/518172.
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The Fourier transform of the damped price of Lookback option under B-S model is presented. Thus, the Lookback option across a range of strikes can be simultaneously priced via FFT algorithm. FFT algorithm is more efficient than both Monte Carlo simulation method and the integral of the usual pricing formula. In addition, by FFT algorithm, investors can easily capture the sensitivity of option prices when the strike prices vary as to make reasonable investment decisions.
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Melching, Konstantin, and Tristan Nguyen. "On the Impact of Dividend Payments on Stock Prices - an Empirical Analysis of the German Stock Market." Studies in Business and Economics 16, no. 1 (April 1, 2021): 255–69. http://dx.doi.org/10.2478/sbe-2021-0020.
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Abstract This paper examines the relation between dividend payments and stock prices of all firms in the German prime standard DAX 30 in the time period from 2012 to 2019. The irrelevance theory introduced by Miller and Modigliani states that dividend payments must not have an impact on stock prices in a perfect market. In contrast, the signaling theory and the dividend puzzle indicate that dividend payments are likely to have a profound impact on the stock price. According to our findings the ex-dividend decrease of stock prices was significantly smaller than the dividend payment. Nevertheless, the results support the impact of the dividend payment on the share price. Firstly, the existence of the ex-dividend markdown is a proof that dividend payments cause share price losses. Secondly, the study explains in particular that high dividend payments result in high share prices over the examined period. Thirdly, our analysis demonstrates a positive correlation between the dividend and the stock price development according to the signaling theory. Considering the above- mentioned results, we can conclude that the share price of a company is highly affected by the decision making of the company regarding the dividend policy.
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Wang, Wen-Ching, Yu-Ju Chang, and Hsueh-Ching Wang. "An Application of the Spatial Autocorrelation Method on the Change of Real Estate Prices in Taitung City." ISPRS International Journal of Geo-Information 8, no. 6 (May 29, 2019): 249. http://dx.doi.org/10.3390/ijgi8060249.
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The main purpose of this paper is to use regression models to explore the factors affecting housing prices as well as apply spatial aggregation to explore the changes of urban space prices. This study collected data in Taitung City from the year 2013 to 2017, including 3533 real estate transaction price records. The hedonic price method, spatial lag model and spatial error model were used to conduct global spatial self-correlation tests to explore the performance of house price variables and space price aggregation. We compare the three models by R² and Akaike Information Criterion (AIC) to determine the spatial self-correlation ability performance, and explore the spatial distribution of prices and the changes of price regions from the regional local indicators of spatial association spatial distribution map. Actual analysis results show an improvement in the ability to interpret real estate prices through the feature price mode from the R² value assessment, the spatial delay model and the spatial error model. Performance from the AIC values show that the difference of the spatial delay model is smaller than that of the feature price model and the spatial model, demonstrating a better performance from the space delay model and the spatial error model compared to the feature price model; improving upon the estimation bias caused by spatial self-correlation. For variables affecting house pricing, research results show that Moran’s I is more than 0 in real estate price analysis over the years, all of which show spatial positive correlation. From the LISA analysis of the spatial aggregation phenomenon, we see real estate prices rise in spaces surrounded by high-priced real estate contrast with the scope of space surrounded by low-cost real estate shifting in boundary over the years due to changes in the location and attributes of real estate trading transactions. Through the analysis of space price aggregation characteristics, we are able to observe the trajectory of urban development.
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Carvalho, Carlos, Jae Won Lee, and Woong Yong Park. "Sectoral Price Facts in a Sticky-Price Model." American Economic Journal: Macroeconomics 13, no. 1 (January 1, 2021): 216–56. http://dx.doi.org/10.1257/mac.20190205.
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We develop a multisector sticky-price DSGE model that can endogenously deliver differential responses of prices to aggregate and sectoral shocks. Input-output production linkages and a (standard) monetary policy rule contribute to a slow response of prices to aggregate shocks. In turn, labor market segmentation at the sectoral level induces within-sector strategic substitutability in price-setting decisions, which helps the model deliver a fast response of prices to sector-specific shocks. We estimate the model using aggregate and sectoral price and quantity data for the United States and find that it accounts well for a range of sectoral price facts. (JEL E12, E21, E31, E32, E43, E52)
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Caskey, Judson, John S. Hughes, and Jun Liu. "Strategic Informed Trades, Diversification, and Expected Returns." Accounting Review 90, no. 5 (January 1, 2015): 1811–37. http://dx.doi.org/10.2308/accr-51026.
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ABSTRACT We examine how strategic trade affects expected returns in a large economy. In our model, both a monopolist (strategic) informed trader and uninformed traders consider the impact of their demands on prices. In contrast to settings with price-taking traders, private information never eliminates a priced risk, and can lead to higher risk premiums. Also unlike settings with price-taking informed traders, risk premiums decrease in response to an increase in liquidity-motivated trades in diversified portfolios. These differing effects arise because a privately informed strategic trader conceals her trades by taking small positions relative to the magnitude of noise trades. Although prices partially reveal her information and reduce uncertainty, a concomitant decrease in her risk absorption dominates and leads to higher risk premiums. Similar to settings with price-taking traders, private information affects expected returns only via factor loadings and risk premiums on existing payoff risks—it introduces no new priced risks, and factor loadings (betas) explain all cross-sectional differences in expected returns.
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Han, J. H., and B. Ahn. "Multiple-regime price transmission between wheat and wheat flour prices in Korea." Agricultural Economics (Zemědělská ekonomika) 61, No. 12 (June 6, 2016): 552–63. http://dx.doi.org/10.17221/47/2015-agricecon.
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Cui, Nana, Hengyu Gu, Tiyan Shen, and Changchun Feng. "The Impact of Micro-Level Influencing Factors on Home Value: A Housing Price-Rent Comparison." Sustainability 10, no. 12 (November 22, 2018): 4343. http://dx.doi.org/10.3390/su10124343.
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The housing sales market in China has flourished and gained considerable interest, while the housing rental market has lagged behind and been ignored over the past two decades. With the acceleration of urbanization, the housing rental demand is rising rapidly. Exploring and comparing the influencing factors on housing sale prices and rental prices has significance for sustainable urban planning and management. Using house purchase transaction and rent transaction data in 2017, as well as the average housing price and rent data in 2016 in Beijing, China, this paper compares the spatial distribution and it employs the hedonic price model and quantile regression model to quantify the average and distributional effects of micro-level influencing factors on housing prices and housing rents. Results show that housing prices and housing rents both have a decentralized distribution with multiple centers, but rents of residential communities with high housing prices may not necessarily be high. Both homeowners and renters prefer properties with good structural, locational, and neighborhood characteristics, as well as a good school attendance zone, whereas they still differ in terms of preferences. Homeowners prefer a higher-quality living environment. Renters are more concerned with proximity to an employment center and public transit convenience. Moreover, the price premium of school quality for homeowners exceeds the premium for renters. Higher-priced homeowners or renters differ in the preferences from lower-priced homeowners or renters. Higher-priced homeowners and higher-priced renters are more willing to live in property with a larger number of bedrooms, proximity to a major employment center, park, or school, as well as a location in a school attendance zone with higher school quality.
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Boshoff, Willem H., and Johannes Paha. "List Price Collusion." Journal of Industry, Competition and Trade 21, no. 3 (April 20, 2021): 393–409. http://dx.doi.org/10.1007/s10842-021-00360-w.
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AbstractFirms sometimes collude by agreeing on increases in list prices. Yet, the efficacy of such list price collusion is subject to discussion as colluding firms might, in principle, deviate secretly from the elevated prices by granting their customers discounts. This article reviews cases of list price collusion in the USA and Europe, and it presents a theory of harm suggesting that a combination of anchoring, orientation on reference points, and loss aversion may render list price collusion effective in raising transaction prices—even if firms set transaction prices in a non-coordinated fashion.
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Dastagiri, M. B., and L. Bhavigna. "The Theory of Agricultural Price Bubble & Price Crash in Global Economy." Applied Economics and Finance 6, no. 5 (August 21, 2019): 168. http://dx.doi.org/10.11114/aef.v6i5.4464.
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Agricultural prices play greater role in living Economics. Since many decades’ farmers faced declining agricultural prices and low prices in developing countries. Therefore, in these countries agricultural price policies are under closer appraisal. Government and policy makers worry about inflation. Economic precision is required in determining prices. This understanding led to conception of the study. The specific objectives are to review various agricultural price theories, research evidences and construct the theory of agricultural price bubble and crash and their effect on macro economy and suggest measures to improve. The study reviews various agricultural price theories, concepts, policies, research gaps and do meta-analysis and formulated the theory of Agricultural prices bubble and price crash. Since 1950, many development economists and practitioners prophesy in developing countries is that low agricultural commodities prices discourage poverty alleviation. Many countries are unable to make successful pricing policies due to there is not enough operative methodological and theoretical support for decision-making. According to the economic theory of cooperativism, the entities come closer to the pecking order theory. Unexpected changes and changes in regulations can have significant impact on the profitability of farming activities. “Demand channel" is the crucial factor in elucidation of commodity price growth. Future prices moments in agriculture have fat-tailed distributions and display quick and unpredicted price jumps. World Trade Organization study highlights the importance of strengthening multilateral disciplines on both import and export trade interventions to food price fluctuations to reduce beggar-thy-neighbor unilateral trade policy. The theory of NAFTA regionalism did not lead to regionalization and not increasing share of intraregional international trade. In EU countries land rents in modern agriculture causing upward trend in agricultural land prices. Information friction, agricultural supports, agricultural price & trade policies, agricultural price transmission are responsible price fluctuations. In economic theory, asymmetric price transmission has been the subject of considerable attention in agricultural gaps. Selection of forecasting models are based on chaos theory. Chaos in agricultural wholesale price data provides a good theoretical basis for selecting forecasting models. This theory can be applied to agricultural prices forecasting. Novelties in agricultural products fluctuations research offer scientific basis in planning of agricultural production.
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Tan, Yanwen, and Huasheng Zeng. "Price transmission, reserve regulation and price volatility." China Agricultural Economic Review 11, no. 2 (May 7, 2019): 355–72. http://dx.doi.org/10.1108/caer-04-2017-0062.
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Purpose The purpose of this paper is to examine whether Chinese pork reserve regulation policy fulfills its function in stabilizing market prices and simultaneously to theoretically and empirically analyze the causes leading to the failure of Chinese Government’s intervention in the market, especially in the context of asymmetric pork and hog price information transmission. Design/methodology/approach A modified Reserve-Cobweb model based on the competitive storage model developed by Muth in 1961 is employed to examine the transmission effect of hog and pork prices under the setting of Chinese Government’s pork reserve regulation policy, using the data on Chinese hog and pork prices from June 2009 to June 2015. Findings While the Reserve-Cobweb model provides theoretical insights, suggesting that the implementation of the government’s reserve policy tool to control price volatility actually leads to increased price volatility, the empirical results indicate that the policy induces hypercorrection and impels greater price volatility, especially in the context of existence of asymmetric price information transmission. Social implications The Chinese Government should reduce excessive pork price intervention and instead allow the market to play its role in the hog and pork markets. Originality/value This paper develops a modified Reserve-Cobweb model based on the price transmission effect on different links within the agricultural products supply chain, which is used to empirically validate the existence of asymmetric price information transmission between pork and hog price in China.
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Holland, Dawn, Ray Barrell, Aurélie Delannoy, Tatiana Fic, Ian Hurst, Ali Orazgani, and Paweł Paluchowski. "World Overview and European Sovereign Debt." National Institute Economic Review 215 (January 2011): F10—F15. http://dx.doi.org/10.1177/0027950111401130.
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Short-tem inflationary pressures have risen on a global scale in recent months and, given the source of the impulse is commodity markets, this dampens the prospects for growth in 2011 in most countries. Global food prices have been under pressure since July 2010, reflecting poor harvests in many parts of the world. Metals prices have also risen rapidly, while non-food agricultural price inflation accelerated towards the end of the year. We expect average food and other agricultural prices in 2011 to be more than 25 per cent higher than they were in 2010, while metals prices are expected to be more than 30 per cent above last year's average level, as shown in figure 1. The price of oil exhibited moderate inflation through September 2010, but rose sharply in the final quarter of the year. The rise in the price of oil may be a reflection of demand pressures from countries such as China and India, as well as the recovery in demand from advanced economies, while the weakness of the US dollar and an expected tightening of regulation following recent oil spills may also be adding to price pressures. The price of Brent crude currently stands at over $98 per barrel, roughly $19 per barrel higher than was priced into futures markets three months ago. Barrell, Delannoy and Holland discuss the macroeconomic implications of the recent rise in the oil price elsewhere in this Review. If sustained we expect this to reduce growth in the OECD by about ½ per cent this year. The impact on oil-intensive emerging economies such as China and India may be slightly greater, while oil exporters gain from the high price.
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Putro, Wirawan Seto. "ANALISIS PENGARUH PERSEPSI HARGA TERHADAP PERILAKU PEMBELIAN PRODUK KEBUTUHAN SEHARI-HARI (STUDI PADA INDO GROSIR JALAN MAGELANG)." Journal Competency of Business 3, no. 2 (December 2, 2019): 80–96. http://dx.doi.org/10.47200/jcob.v3i2.671.
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This empirical research is intended to determine the relationship between consumer perceptions of the role of negative prices (Value Consciousness, Price Consciousness, Coupon Proneness, Sale Proneness, and Price Mavenism) with the role of positive prices (Price Quality Schema and Prestige Sensitivity). In this study the data were obtained through distributing questionnaires to 250 respondents, namely consumers who were making a purchase or those who had made a purchase at Indogrosir Jalan Magelang Yogyakarta. Based on the results of data analysis with SEM analysis with the AMOS program showed that there was an influence of negative variables. role price on positive role price, there is a negative role price influence on Value Consciousness in the role of negative prices, there is a negative role price influence on Price Mavenism on the role of negative prices, there is a negative influence role price on Price Consciousness on the role of negative prices, there is a negative role effect price on Sale Proneness on the role of negative prices, there is a negative influence on the role price on Coupon Proneness on the role of negative prices, there is a positive influence on the role price on Price quality schema on the role of negative prices and there is a positive influence on the role price against Prestige sensitivity.
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MITOV, GEORGI K., SVETLOZAR T. RACHEV, YOUNG SHIN KIM, and FRANK J. FABOZZI. "BARRIER OPTION PRICING BY BRANCHING PROCESSES." International Journal of Theoretical and Applied Finance 12, no. 07 (November 2009): 1055–73. http://dx.doi.org/10.1142/s0219024909005555.
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This paper examines the pricing of barrier options when the price of the underlying asset is modeled by a branching process in a random environment (BPRE). We derive an analytical formula for the price of an up-and-out call option, one form of a barrier option. Calibration of the model parameters is performed using market prices of standard call options. Our results show that the prices of barrier options that are priced with the BPRE model deviate significantly from those modeled assuming a lognormal process, despite the fact that for standard options, the corresponding differences between the two models are relatively small.
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Ang, James S., Gwoduan David Jou, and Tsong-Yue Lai. "Alternative Formulas to Compute Implied Standard Deviation." Review of Pacific Basin Financial Markets and Policies 12, no. 02 (June 2009): 159–76. http://dx.doi.org/10.1142/s0219091509001599.
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We assume that the call option's value is correctly priced by Black and Scholes' option pricing model in this paper. This paper derives an exact closed-form solution for implied standard deviation under the condition that the underlying asset price equals the present value of the exercise price. The exact closed-form solution provides the true implied standard deviation and has no estimate error. This paper also develops three alternative formulas to estimate the implied standard deviation if this condition is violated. Application of the Taylor expansion on a single call option value derives the first formula. The accuracy of this formula depends on the deviation between the underlying asset price and the present value of the exercise price. Use of the Taylor formula on two call option prices with different exercise prices is used to develop the second formula, which can be used even though the underlying asset price deviates significantly from the present value of the exercise price. Extension of the second formula's approach to third options value derives the third formula. A merit of the third formula is to circumvent a required parameter used in the second formula. Simulations demonstrate that the implied standard deviations calculated by the second and third formulas provide accurate estimates of the true implied standard deviations.
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Kirikkaleli, Dervis, and Ibrahim Darbaz. "The Causal Linkage between Energy Price and Food Price." Energies 14, no. 14 (July 11, 2021): 4182. http://dx.doi.org/10.3390/en14144182.
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This paper aims to reveal the causal relationship between energy prices and food prices and whether this relationship is similar in the food sub-groups forming the food price index used. As food prices more than doubled during the 2008 economic crisis, this relationship has received considerable attention from researchers. Many researches have been conducted to determine the causes and consequences of the 2008 food price crisis. Researches are mainly focused on crude oil and bio-energy in terms of “energy”. This research is not only differentiated by the data used but also by the methodology employed. The study attempts to add new findings to the empirical food price literature by utilizing relatively newly developed methods, namely Toda–Yamamoto causality, Fourier Toda–Yamamoto causality, and spectral BC causality tests. The spectral BC causality test clearly reveals that there is bidirectional causality between the energy price index and food price indexes (grains, other food, and oils) at different frequencies.
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Makarov, Igor, and Antoinette Schoar. "Price Discovery in Cryptocurrency Markets." AEA Papers and Proceedings 109 (May 1, 2019): 97–99. http://dx.doi.org/10.1257/pandp.20191020.
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We ask which markets drive bitcoin prices and how price discovery happens across different exchanges. Does the greater exuberance for cryptocurrencies outside the United States affect prices only on local markets or does it impact price formation on global cryptocurrency markets? We document significant heterogeneity in which price formation happens across exchanges and time. When markets are more integrated, shocks to prices on all exchanges contribute to price discovery. However, when markets become segmented, those exchanges that have large arbitrage spreads relative to the US price, i.e. where investors are more exuberant become much less important for price discovery.
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Wright, Jesse T., Raymond L. Placid, and Marcus T. Allen. "Price Gouging In A Hurricane: Do Free Market Forces Circumvent Price Controls?" Journal of Business & Economics Research (JBER) 16, no. 2 (November 1, 2019): 19–30. http://dx.doi.org/10.19030/jber.v16i2.10319.
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This study analyzes gasoline prices in Florida and Georgia before and after Hurricane Irma, a major weather event that affected both states in 2017. The analysis reveals that gasoline prices in both states increased and stabilized well in advance of state of emergency declarations that triggered the states’ price gouging laws. Price gouging laws thus appear to be inconsequential. Free market forces determine prices unhindered by government price controls during hurricane emergencies.
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Venkatesh, R., and Vijay Mahajaim. "A Probabilistic Approach to Pricing a Bundle of Products or Services." Journal of Marketing Research 30, no. 4 (November 1993): 494–508. http://dx.doi.org/10.1177/002224379303000408.
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The authors propose a probabilistic approach to optimally price a bundle of products or services that maximizes seller's profits. Their focus is on situations in which consumer decision making is on the basis of multiple criteria. For model development and empirical investigation they consider a season ticket bundle for a series of entertainment performances such as sports games and music/dance concerts. In this case, they assume consumer purchase decisions to be a function of two independent resource dimensions, namely, available time to attend performances and reservation price per performance. Using this information, the model suggests the optimal prices of the bundle and/or components (individual performances), and corresponding maximum profits under three alternative strategies: (a) pure components (each performance is priced and offered separately), (b) pure bundling (the performances are priced and offered only as a bundle), and (c) mixed bundling (both the bundle and the individual performances are priced and offered separately). They apply their model to price a planned series of music/dance performances. Results indicate that a mixed bundling strategy is more profitable than pure components or pure bundling strategies provided the relative prices of the bundle and components are carefully chosen. Limitations and possible extensions of the model are discussed.
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Yu, Zonghuo, Dengfeng Wang, Mike Bastin, and Xiaojuan Tang. "To be Richer, to be More Miserly? How Purchase Purpose and Affluence Moderate Price Perception." Social Behavior and Personality: an international journal 37, no. 5 (August 1, 2009): 683–86. http://dx.doi.org/10.2224/sbp.2009.37.5.683.
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This study was aimed at examining how purchase purpose and affluence influence price perception. A total of 84 participants were involved in a 2x2 experiment, the results of which showed that in the case of a primed very affluent condition, participants priced items which they bought for themselves higher than when they bought the same items for their friends. However, in the primed average wealth condition, the price of the goods which participants marked for themselves was similar to prices of items bought for their friends. These findings give an important insight into the relationship between affluence and purchase purpose and the influence of these on price perception.
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Jaber, Mazen, and Kylie Jaber. "Cause-related marketing and the effect of 99-ending pricing." Journal of Consumer Marketing 37, no. 3 (January 16, 2020): 237–46. http://dx.doi.org/10.1108/jcm-12-2018-2993.
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Purpose Cause-related marketing (CRM) campaigns have become common features of the marketplace. CRM often involves a for-profit business agreeing to contribute a specified amount to a cause when the business’s customers engage in revenue-generating exchanges. Despite the central role that price is likely to play in a consumer’s decision to purchase or not to purchase an offer associated with a CRM campaign, to the best of the authors’ knowledge, very few have examined price framing effects in a CRM context. This paper aims to explore the effect of rightmost digits manipulation in prices on participation intentions for CRM campaigns. Design/methodology/approach In Study 1, 241 college students participated in an online experiment for class credit. The experiment used a 3 (price level: low, medium and high) × 2 (price ending: 99 ending and no ending) between-subjects design. The dependent variable was participation intention, and several moderators and mediators were considered. PROCESS was used to test the moderated mediation. In Study 2, 351 subjects participated in an online experiment with a design similar to the earlier study. In Study 2, however, new mediators were added and the moderated mediation was tested using SPSS PROCESS macro. Findings This research shows that price ending impacts the effectiveness of CRM as a tactic on consumers’ purchase intentions. Consistent with the authors’ prediction, this study shows that consumers exposed to a 99-ending CRM offer are more likely to participate in the offer compared to consumers exposed to a no-ending priced offer. Offer attractiveness, elaboration and corporate social responsibility were also shown to have a strong effect on participation intentions. Practical implications This research indicates that for moderately priced products, 99-ending prices led to an increased influence on consumer purchase intentions; on the other hand, no-ending/even-ending prices were more effective for high-priced products. Thus, the use of the right digit effect by managers in a CRM context as way of increasing consumers’ participation likelihood is likely to be more successful for moderately priced offers. Originality/value This research extends previous work on CRM and right digit effect in pricing. This study’s findings, in both Studies 1 and 2, demonstrate that the effectiveness of CRM campaigns on consumer choice is dependent on the offer price ending. Consumers exposed to the no-ending priced CRM offers tend to be affected less by CRM campaigns compared to consumers exposed to 99-ending offers, who perceive the offer as more attractive.
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Xue, Huidan, Chenguang Li, Liming Wang, and Wen-Hao Su. "Spatial Price Transmission and Price Dynamics of Global Butter Export Market under Economic Shocks." Sustainability 13, no. 16 (August 19, 2021): 9297. http://dx.doi.org/10.3390/su13169297.
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Recently, the world has experienced striking economic and policy changes, and subsequent uncertainties have impacts on dairy trade price fluctuations. The Global Vector Autoregressive (GVAR) methodology was established in this paper to better understand international butter export prices transmission, the feedback between the economic context changes and price fluctuations, and the link between the global butter market, energy market, and other commodity markets. We assessed which key factors are typically associated with butter export price movements with regards to shocks to crude oil price, palm oil price, farm-gate raw milk price, exchange rates, and consumer price index (CPI) for food of the EU, New Zealand, the U.S., and the rest of world (RoW), respectively. Using generalized impulse response functions, this study found that decreases in farm-gate raw milk price could be swiftly transmitted to butter export prices of not only a home country but other foreign countries. However, palm oil price and crude oil price merely affects global butter export prices. We also found that U.S. dollar depreciations against the Euro will cause a decline in U.S. butter export price. It is concluded that butter export markets are not well-integrated, yet butter export prices of New Zealand and the U.S. are highly linked.
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Eckert, Christine. "Different Channel – Different Price? INVESTIGATING THE PRACTICE OF MULTI-CHANNEL PRICE DIFFERENTIATION." GfK Marketing Intelligence Review 3, no. 2 (November 1, 2011): 50–53. http://dx.doi.org/10.2478/gfkmir-2014-0048.
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Abstract Price differentiation has long been recognized as a strategy that companies can use to increase profits when consumers’ tastes and valuations of a good price vary. Companies engaging in price differentiation have the opportunity to increase profits considerably compared to those which use a uniform pricing strategy. Accordingly, it should be beneficial for companies to exploit the possibility of charging different prices in online and offline channels as they offer different shopping benefits and are differently valued by consumers. nevertheless, it can be observed that some multi-channel retailers prefer to charge uniform prices in online and offline channels. They argue for consistent prices across distribution channels to maintain a strong brand - and because varying prices may lead to customers’ confusion, anger, irritation and perceptions of price unfairness.
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Rajendran, K. N., and Gerard J. Tellis. "Contextual and Temporal Components of Reference Price." Journal of Marketing 58, no. 1 (January 1994): 22–34. http://dx.doi.org/10.1177/002224299405800102.
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An emerging consensus in marketing is that consumers respond to price relative to some standard or reference price. Most researchers modeling brand choice have reasoned that this standard is based on past prices of the brand. The authors argue that consumers do use reference prices, but one that is also based on context—other prices in the store—rather than on past prices alone. An analysis of households’ brand choices in two subcategories and over three cities supports this premise. Within context, the lowest price seems to be an important cue for reference price, whereas within time, a brand's own past prices seem to be the most important cue. Households’ use of a contextual reference price also varies predictably across some consumer characteristics. Though their model can be applied to other categories, the findings have important managerial implications: Managerial focus on temporal reference prices could lead to an everyday high price, whereas focus on contextual reference prices could lead to an everyday low price. Only the inclusion of both contextual and temporal reference prices justifies variable pricing.
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Kopytets, Nataliia. "Analysis of the price situation in the cattle meat market." Ekonomika APK 313, no. 11 (November 27, 2020): 52–59. http://dx.doi.org/10.32317/2221-1055.202011052.
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The purpose of the article is to investigate the current price situation in the cattle meat market, taking into account the peculiarities of the beef price chain “production – processing –trade – consumer”. Research methods. The following methods have been used in the research process: abstract and logical, system analysis – for generalize theoretical positions, formulating conclusions; comparative analysis – for compare indicators and identify trends in their change over time; statistical – for assessing the cattle meat market; tabular – for visual representation of the research results; monographic – for detailing the price situation in the beef market; graphic – for identify and illustrate the trends of the research economic phenomena. Research results. An analysis of the price situation in the cattle meat market with details of individual species priced in dif-ferent areas of the country. Trends and regularities of dynamics of prices for cattle and products of processing in wholesale and retail trade are estimated. There is a clear tendency of annual increase in prices for cattle meat market in Ukraine during 2017-2020. It was found that the increase in purchase prices for young cattle causes an increase in wholesale and retail prices for various types of meat. It is justified that the price is important to all cattle meat market participants. The level of prices affects the efficiency of both individual producers and the development of the economy of any country. Prices clearly reflect the processes of production, exchange, distribution and consumption. Scientific novelty. It is specified that under the conditions of low purchasing power of most of the population of Ukraine, the actual retail prices for beef and veal within the trade network are quite high and do not contribute to the growth of demand for this type of meat. Practical significance. The research results can be useful for all participants in the food chain “production – processing – distribution – consumption” of the cattle market. Tabl.: 1. Figs.: 1. Refs.: 23.
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Klepacz, Matthew. "Price Setting and Volatility: Evidence from Oil Price Volatility Shocks." International Finance Discussion Paper 2021, no. 1315 (April 30, 2021): 1–70. http://dx.doi.org/10.17016/ifdp.2021.1316.
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How do changes in aggregate volatility alter the impulse response of output to monetary policy? To analyze this question, I study whether individual prices in Producer Price Index micro data are more likely to change and to move in the same direction when aggregate volatility is high, which would increase aggregate price exibility and reduce the effectiveness of monetary policy. Taking advantage of plausibly exogenous oil price volatility shocks and heterogeneity in oil usage across industries, I find that price changes are more dispersed and less frequent, implying that prices are less likely to move in the same direction when aggregate volatility is high. This contrasts with findings in the literature about idiosyncratic volatility. I use a state-dependent pricing model to interpret my findings. Random menu costs are necessary for the model to match the positive empirical relationship between oil price volatility and price change dispersion. This is the case because random menu costs reduce the extent to which firms with prices far from their optimum all act in a coordinated fashion when volatility increases. The model implies that increases in aggregate volatility do not substantially reduce the ability of monetary policy to stimulate output.
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Humble, Carrie. "The price of a prince." Equine Health 2012, no. 6 (July 3, 2012): 45–46. http://dx.doi.org/10.12968/eqhe.2012.1.6.45.
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Jankovics, Peter. "LONG -TERM CHANGES OF MAIN INPUT -OUTPUT PRICES IN THE HUNGARIAN BROILER SECTOR." Annals of the Polish Association of Agricultural and Agribusiness Economists XX, no. 1 (April 4, 2018): 50–57. http://dx.doi.org/10.5604/01.3001.0011.7228.
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The article presents changes of the main input-output prices in the Hungarian broiler industry over a period of 30 years, and associated correlations. For the processing of long-term data, a linear regression function, correlation and regression analysis were used. The cereal prices correlate and their changes also correspond with a change in compound feed prices. A close correlation can be found between cereal price and broiler price, whilst the correlation shown between the compound feed price and broiler price is very close. During the examined period, the feed prices increased at a higher rate than the broiler price. It was also established that the current feed and energy price significantly affect day-old chick prices which corresponds with an increase in price of the broiler. Furthermore, a close relation can be found between energy and feed compound prices.
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Sun, You Fa, Xiao Xiao Liang, Xu Chong Guo, and Cai Yan Liu. "Algorithm of Call Auction Price." Applied Mechanics and Materials 20-23 (January 2010): 981–86. http://dx.doi.org/10.4028/www.scientific.net/amm.20-23.981.
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Algorithm of call auction price is designed according to the determining principles popular in international stock markets. Basing on the algorithm, the roots of good characteristics of call auction are oriented in these principles. Theoretical analysis shows that: 1) by implementing principles of maximum volume, minimum residual, market pressures and reference prices, the candidate transaction price set of call auction is gradually narrowing, which indicates that the algorithm has good convergence; 2) principle of reference prices guarantees the uniqueness of final transaction price; 3) principles of minimum residual and market pressures contribute to reducing price volatility; 4) principles of market pressures and reference prices help to enhance the quality of price discovery.
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Yan, Yunxian, Lu Tian, and Yuejie Zhang. "Is Chinese or American maize price effective for trading and policy-making reference?" China Agricultural Economic Review 6, no. 3 (August 26, 2014): 470–84. http://dx.doi.org/10.1108/caer-05-2013-0080.
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Purpose – The purpose of this paper is to discover an effective maize price for trading and policy-making reference by assessing the price transmission of the US spot and futures maize prices to Chinese counterparts. Design/methodology/approach – The authors apply a systematic, quantitative method to analyze the integration between US and Chinese maize markets. Based on the residuals of the variables through error correction model, the directed acyclic graph (DAG) among six price variables is conducted. With consideration of the dependence on and direction of six price variables, the variance decomposition of each variable is calculated. Findings – This paper shows that the vertical price transmission passes from wholesale price to farm-gate price. The horizontal price transmission ranges from spot price to futures price at the domestic market and from the American spot price to domestic spot price, from the American spot price to domestic futures price and from the American futures price to domestic futures price. The American maize spot and futures prices, and in particular the spot price, have greater effects on domestic maize prices contemporaneously. It also indicates that the American spot price is the leader price in the long run at both maize markets. Originality/value – This paper contributes by using the DAG method in this paper. It also contributes by helping policy makers and market participants find the leading prices and offers insight into ways of gaining power of price setting in the maize market.
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Vanhuele, Marc, and Xavier Drèze. "Measuring the Price Knowledge Shoppers Bring to the Store." Journal of Marketing 66, no. 4 (October 2002): 72–85. http://dx.doi.org/10.1509/jmkg.66.4.72.18516.
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Reference price research suggests that consumers memorize and recall price information when selecting brands for frequently purchased products. Previous price-knowledge surveys, however, indicate that memory for prices is lower than expected. In this study, the authors show that these price-knowledge surveys provide imperfect estimates of price knowledge, because they focus only on recall and short-term memory. The authors propose, instead, to use a combination of price recall, price recognition, and deal recognition to measure the degree to which consumers use auditory verbal, visual Arabic, or analogue magnitude representations to memorize prices. The authors show how the combination of these three measures provides a much richer understanding of consumers' knowledge of prices. The results suggest that the price knowledge involved in reference prices may often not be accessible to recall but shows up in price recognition and deal recognition. In addition, the authors identify consumer and product characteristics that explain the variations in price knowledge. They find, for example, that frequent promotions increase consumers' ability to remember regular prices and that store switchers do not possess better price knowledge than other shoppers.
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Tolbert, Sylvia Long, Chiranjeev Kohli, and Rajneesh Suri. "Who pays the price for loyalty? The role of self-consciousness." Journal of Product & Brand Management 23, no. 4/5 (August 18, 2014): 362–71. http://dx.doi.org/10.1108/jpbm-08-2013-0375.
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Purpose – This paper aims to study the role of self-consciousness from the point of view of firm loyalty. Firms increasingly vie to gain, and then maintain, loyal consumers. A firm’s assumption that such consumers will be willing to pay premium prices, however, contradicts consumers’ rational motivations to seek low prices. This research suggests that consumers’ self-consciousness and the nature of their loyalty toward a firm help resolve this apparent contradiction. The results show that when past purchases reflect an exclusive relationship with a retailer, participants with high public self-consciousness valued relatively low-price offers, whereas those with high private self-consciousness expressed high-value perceptions for higher priced offers. However, when past purchases were divided between retail partners, self-consciousness showed no impact on value perceptions. Design/methodology/approach – Firms increasingly vie to gain, and then maintain, loyal consumers. A firm’s assumption that such consumers will be willing to pay premium prices, however, contradicts consumers’ rational motivations to seek low prices. This research suggests that consumers’ self-consciousness and the nature of their loyalty toward a firm help resolve this apparent contradiction. The results show that when past purchases reflect an exclusive relationship with a retailer, participants with high public self-consciousness valued relatively low-price offers, whereas those with high private self-consciousness expressed high-value perceptions for higher priced offers. However, when past purchases were divided between retail partners, self-consciousness showed no impact on value perceptions. Findings – Analysis reveals that consumers’ evaluations and search behaviors are influenced by characteristics of the medium (retail vs e-tail), but this effect is moderated by both gender and price knowledge. Females prefer a brick and mortar environment and are likely to seek information at such retailers even when similar products are available online. However, males evaluate online offers better than identical store offers and are less inclined to engage in channel transition. Finally, evaluations of online offers are positively related to price knowledge, whereas a reverse pattern of results is obtained for retail offers. Originality/value – The findings shed light on how consumers evaluate identical online vs retail price offers, and their associated search intentions. These findings have practical implications for merchants who adopt a dual presence.
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Godman, Brian, Steven Simoens, Amanj Kurdi, Gisbert Selke, John Yfantopoulos, Andrew Hill, Jolanta Gulbinovic, et al. "Variation in the prices of oncology medicines across Europe and the implications for the future." Generics and Biosimilars Initiative Journal 10, no. 2 (June 15, 2021): 72–82. http://dx.doi.org/10.5639/gabij.2021.1002.008.
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Introduction/Objectives: Health authorities are facing increasing challenges to the sustainability of their healthcare systems because of the growing expenditures on medicines, including new, high-priced oncology medicines, and changes in disease prevalence in their ageing populations. Medicine prices in European countries are greatly affected by the ability to negotiate reasonable prices. Concerns have been expressed that prices of patented medicines do not fall sufficiently after the introduction of lower-cost generic oncology medicines. The objective of this study was to examine the associations over time in selected European countries between the prices of oral oncology medicines, population size, and gross domestic product (GDP) before and after the introduction of generic versions. Evidence of periodic reassessments of the price, value, and place in treatment of these medicines was also looked for. The goal of this review was to stimulate debate about possible improvements in approaches to reimbursement negotiations. Methodology: Analysis was performed of reimbursed prices of three oral oncology medicines (imatinib, erlotinib and fludarabine) between 2013 and 2017 across Europe. Correlations were explored between GDP, population size, and prices. Findings were compared with previous research regarding prices of generic oral oncology medicines. Results: The prices of imatinib, erlotinib and fludarabine varied among European countries, and there was limited price erosion over time in the absence of generics. There appeared to be no correlation between population size and price, but higher prices of on-patent oral cancer medicines were seen among countries with higher GDP per capita. Conclusion: Limited price erosion for patented medicines contributed to increases in oncology medicine budgets across the region. There was also a concerning lack of evidence re-assessments of the price, value, and place in treatment of patented oncology medicines following the loss of patent protection of standard medicines. The use of such proactive re-assessments in negotiating tactics might positively impact global expenditures for oncology medicines.
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Kilian, Lutz. "The Economic Effects of Energy Price Shocks." Journal of Economic Literature 46, no. 4 (November 1, 2008): 871–909. http://dx.doi.org/10.1257/jel.46.4.871.
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Large fluctuations in energy prices have been a distinguishing characteristic of the U.S. economy since the 1970s. Turmoil in the Middle East, rising energy prices in the United States, and evidence of global warming recently have reignited interest in the link between energy prices and economic performance. This paper addresses a number of the key issues in this debate: What are energy price shocks and where do they come from? How responsive is energy demand to changes in energy prices? How do consumer's expenditure patterns evolve in response to energy price shocks? How do energy price shocks affect U.S. real output, inflation, and stock prices? Why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions? Why has there been a surge in the price of oil in recent years? Why has this new energy price shock not caused a recession so far? Have the effects of energy price shocks waned since the 1980s and, if so, why? As the paper demonstrates, it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions.
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Dong, Xiaoxia, Colin Brown, Scott Waldron, and Jing Zhang. "Asymmetric price transmission in the Chinese pork and pig market." British Food Journal 120, no. 1 (January 2, 2018): 120–32. http://dx.doi.org/10.1108/bfj-02-2017-0056.
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Purpose The purpose of this paper is to analyze price transmission in the Chinese pork market between 1994 and 2016 and examine any incidence and causes of asymmetric price transmission. Design/methodology/approach The approach uses threshold autoregressive models, asymmetric error correction models and autoregressive moving average models to examine the price transmission using monthly pig and pork prices from 1994 to 2016. Findings While a symmetric price transmission between pork and pig prices was identified for the period between June 1994 and June 2007, an asymmetric price transmission response between pork and pig prices was found for the period July 2007 to June 2016. Key factors behind the asymmetric price transmission include the chicken price and China’s provisional purchasing and stockpiling policy which is having a counter-productive impact on prices. Originality/value The paper contributes to the literature by examining price transmission in two different periods: 1994 to 2007 where prices are lower and more stable; and 2007 to 2016 where prices are higher and volatile. The paper examines the impact of production and market policies on price transmission in the Chinese pork and pig market, with several policy implications.
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Stühmeier, Torben. "Price Disclosure Rules and Consumer Price Comparison." B.E. Journal of Economic Analysis & Policy 15, no. 2 (April 1, 2015): 815–35. http://dx.doi.org/10.1515/bejeap-2014-0053.
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Abstract Search frictions are regarded as a major impediment to active competition in many markets. In some markets, such as financial and retail gasoline, governments and consumer protection agencies call for compulsory price reporting. Consumers could then more easily compare the firms’ offers. We show that for a given level of price comparison, mandatory price reporting indeed generally benefits consumers. Such regulation, however, feeds back into firms’ strategies, resulting in lower levels of price comparison in equilibrium. This effect may dominate so that the regulation leads to higher expected market prices.
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NGUYỄN MINH, ĐỨC. "Price Transmission in the Value Chain of Hard Clam in Vietnam." Journal of Asian Business and Economic Studies 219 (January 1, 2014): 127–43. http://dx.doi.org/10.24311/jabes/2014.219.1.06.
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Using data collected from 2007-2010, this study identifies price linkages and then forecasts vertical price transmission elasticities between markets (farm, wholesale, retail and export) in the value chain of hard clam (Meratrix lyrata) in Vietnam. After doing necessary tests to make sure that all price data are stationary, Seemingly Unrelated Regression (SUR) and Error Correction Model (ECM) are employed to examine short-time and long-time effects of hard clam price in one market on the other market in its value chain. The seemingly unrelated regression results show that hard clam prices seem not depend on seasons. Farm price of hard clam is transmitted completely to wholesale price while the price in retail market causes negative effect on farm price in the short run. Wholesale price of hard clam is transmitted to both prices in farm and retail markets. The export price of hard clam is estimated not to be affected in the short run by prices in other markets except retail price in domestic markets. Error correction models confirm the independence of hard clam price on annual seasons. The transmission elasticities of prices between the markets are also identified based on model estimation.