Profit criteria involving risk in price setting of virtual products

Chernonog, Tatyana; Avinadav, Tal

doi:10.1016/j.ejor.2013.12.004

Cited by 28 publications

(17 citation statements)

References 31 publications

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“…Introducing the sales-effort investment as a decision variable of the retailer results in an equilibrium that is sensitive to the retailer's utility function. This result differs from that of Chernonog and Avinadav (2014), in which equilibrium was obtained exactly as in a deterministic case for any utility function. Second, we consider bi-criteria decision making in a two-echelon supply chain.…”

Section: A N U S C R I P Tcontrasting

confidence: 73%

“…Second, we consider bi-criteria decision making in a two-echelon supply chain. In Chernonog and Avinadav (2014), in contrast, bi-criteria analysis is carried out for only one decision maker without a game approach.…”

Section: A N U S C R I P Tmentioning

confidence: 99%

“…Recently, Chernonog and Avinadav (2014) investigated the pricing of virtual products under a wholesale price contract. Their work was based on the premise that the stochastic nature of demand exposes the supply chain members to financial risk, and that each party adopts profit criteria that reflect his or her attitude towards this risk.…”

Section: A N U S C R I P Tmentioning

confidence: 99%

“…The authors showed that, when stochastic demand follows a multiplicative form, the pricing decisions that maximize the expected profit also maximize all the investigated profit criteria-and, in fact, any utility A C C E P T E D M A N U S C R I P T function of the profit. We expand the two-echelon supply chain model of Chernonog and Avinadav (2014) in two directions. First, we consider the effect of the retailer's sales-effort investment on the model.…”

Section: A N U S C R I P Tmentioning

confidence: 99%

See 3 more Smart Citations

Pricing and sales-effort investment under bi-criteria in a supply chain of virtual products involving risk

Chernonog

Avinadav

Ben-Zvi

2015

European Journal of Operational Research

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Section: A N U S C R I P Tcontrasting

confidence: 73%

Section: A N U S C R I P Tmentioning

confidence: 99%

Section: A N U S C R I P Tmentioning

confidence: 99%

Section: A N U S C R I P Tmentioning

confidence: 99%

See 2 more Smart Citations

Pricing and sales-effort investment under bi-criteria in a supply chain of virtual products involving risk

Chernonog

Avinadav

Ben-Zvi

2015

European Journal of Operational Research

Self Cite

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“…Li et al analyze the profit distribution mechanism in cooperation mode and shows that the optimal direct channel price and optimal retailer channel price are not influenced whether retailer and manufacturer cooperate or not, but influenced by risk aversion of two parties within certain conditions, manufacturer and retailer will achieve Pareto optimal if they choose cooperation [2]. Chernonog et al seek to maximize each of three criteria: expected profit, the likelihood of achieving a profit target, and the profit for a given percentile [3]. Wang et al find that the optimal prices of dual-channel, the added value and the expected profit decreased with the increasing risk-averse value and demand variance under decentralized decisions [4].…”

Section: Introductionmentioning

confidence: 99%

Collaborative Optimal Pricing Model of Dual-Channel Supply Chain

Zheng¹,

Xu²

2015

TOCSJ

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Dual-channel not only provides reasonable products but also a large quantity of opportunities, where the members' attitude towards risk has a major impact on channel optimization. In this paper, risks are classified as general risk and interruption risk. As for general risk, combined with risk-aversion attitude, mean-variance method is used to build optimal pricing model and expected utility model based on independent decision-making and collaborative decision-making mode. Besides, online channel substitution effect factor and ratio factor that manufacturer bears promotional cost for retailers are considered. For interruption risk, combined with risk-aversion attitude, optimal pricing model and expected utility model based on independent decision-making mode. Finally, through numerical analysis, it is proved that dualchannel collaborative pricing enables to avoid risks effectively, and the channel member with higher degree of risk aversion tends to take collaborative pricing strategy.

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Joint Investment and Pricing Decisions in a Mobile Game Supply Chain Considering Risk Attitudes

Qu,

Zhang,

et al. 2024

Manage Decis Econ

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This paper studies the joint decision‐making problem of investment and pricing in a mobile game supply chain with a game developer and a distribution platform with different risk attitudes. The investment here involves the mobile game's quality investment during the development process and promotion investment during the operation process. First, the mean–variance utility theory is used to describe the risk attitudes of the supply chain participants. On this basis, considering the mobile game's individualized operational characteristics with respect to production and sales, the supply chain's and its participants' decision‐making models are established with the expected utility as an objective function. Second, the supply chain collaboration is modeled as a Stackelberg game. This paper obtains the optimal decisions of the participants and reveals the effects of the participants' risk attitudes on the optimal quality investment, promotion investment, and pricing policy. Finally, this paper further reveals the relationship between participants' risk attitudes and their expected profits. It is found that participants' risk attitudes will change the relationship between the expected profits under centralized decision‐making and those under decentralized decision‐making. These characteristics remain valid when a different demand format is employed or the supply chain members play a Nash game.

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Profit criteria involving risk in price setting of virtual products

Cited by 28 publications

References 31 publications

Pricing and sales-effort investment under bi-criteria in a supply chain of virtual products involving risk

Pricing and sales-effort investment under bi-criteria in a supply chain of virtual products involving risk

Collaborative Optimal Pricing Model of Dual-Channel Supply Chain

Joint Investment and Pricing Decisions in a Mobile Game Supply Chain Considering Risk Attitudes

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