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Fixed Price (fixed + price)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	75%

Selected Abstracts

A Framework for Estimating Benefits of Using Auctions in Revenue Management,

DECISION SCIENCES, Issue 3 2002
Tim Baker
ABSTRACT We develop a stochastic model to explore the benefits of incorporating auctions in revenue management. To the best of our knowledge the extant literature on modeling in revenue management has not considered auctions. We consider three models, namely, a traditional fixed price (non-auction) model, a pure auction model, and a hybrid auction model and evaluate their revenue performance under a variety of conditions. The hybrid approach outperforms the other two in all 24 scenarios and yields an average revenue increase of 16.1% over the next best. A surprise finding is that there is no significant difference between the performance of the fixed price and pure auction approaches. A sensitivity analysis reveals that the relative superiority of the hybrid revenue management strategy is reasonably robust. [source]

Economic analysis of small photovoltaic facilities and their regional differences

INTERNATIONAL JOURNAL OF ENERGY RESEARCH, Issue 3 2004
M. Varela
Abstract Small grid-connected photovoltaic (PV) facilities in Spain receive either a premium of 0.36, kWh,1 over the average price on the power market or a fixed price of 0.40, kWh,1. However, legislation on this matter (Royal Decree 2818/98) requires a periodic review of these figures. The basis of on-going revision of these prices has been their profitability. However, the economic success of such PV facilities is clearly affected by the amount of solar radiation at the site where they are located. Since Spain is between latitudes 44 and 36° in the northern hemisphere, the feasibility of these systems must be analysed for different regions. Two different models have been used to produce the required input data for such an analysis: a model that generates typical solar radiation years and temperatures taken from satellite images and an empirical model for the prediction of daily power produced by a grid-connected photovoltaic system. From the results of this regional economic analysis, it may be concluded that the existing prices are insufficient in and of themselves to make these small grid-connected systems profitable anywhere in Spain. To guarantee the economic feasibility of these PV installations in any given location, the fixed price paid for the electricity should be around 0.93, kWh,1. Nevertheless, if the Government were to double the current fixed price, in consideration of the slow increase in the PV market in recent years, this would mean that small grid-connected installations would become profitable in at least 77% of the Spanish territory. Copyright © 2004 John Wiley & Sons, Ltd. [source]

Pricing Access to a Monopoly Input

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2004
David S. Sibley
What price should downstream entrants pay a vertically integrated incumbent monopoly for use of its assets? Courts, legislators, and regulators have at times mandated that incumbent monopolies lease assets required for the production of a retail service to entrants in efforts to increase the competitiveness of retail markets. This paper compares two rules for pricing such monopoly inputs: marginal cost pricing (MCP) and generalized efficient component pricing rule (GECPR). The GECPR is not a fixed price, but is a rule that determines the input price to be paid by the entrant from the entrant's retail price. Comparing the retail market equilibrium under MCP and GECPR, the GECPR leads to lower equilibrium retail prices. If the incumbent is less efficient than the entrant, the GECPR also leads to lower production costs than does the MCP rule. If the incumbent is more efficient than the entrant, however, conditions may exist in which MCP leads to lower production costs than does the GECPR. The analysis is carried out assuming either Bertrand competition, quantity competition, or monopolistic competition between the incumbent and entrant in the downstream market. [source]