Optimal strategic pricing of reproducible consumer products
Article Abstract:
The strategic pricing of goods that can be acquired through purchase or reproduction is examined. The adverse effects of copy piracy must be included in pricing decisions. Optimal price trajectories are derived for the period of monopoly, using a control theory methodology and a dual diffusion model that describes sales and copying. Results suggest that skimming pricing strategies are usually optimal in the absence of copy protection. Copy protection is not warranted unless the copy protection technology does not raise production costs, and unless sales diffuse faster than copying.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1988
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Environment, market share, and market power
Article Abstract:
The effect of market share on profits was studied by testing a model of how market share affects total revenue and total cost. The results indicated that no additional market power benefits were derived by organizations with high market shares unless they operated in environments with a limited amount of buyer power. Price and cost were primarily influenced by environmental factors and variations in market share. A steady increase in market share was not always related to increasing profits.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1990
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An approach for developing an optimal discount pricing policy
Article Abstract:
How and why a seller has to formulate a discount pricing format are examined in situations in which the pricing structure does not affect consumer demand. The case shown is suited for the seller who has a product that does not equal a main component of the purchaser's final product. The case is also ideal for situations where product demand is assumed or where the product price is just one of many elements considered when making a buying decision.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1984
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