<p>The dissertation consists of three chapters relating to pricing strategies. Chapter 1 studies coupons for prescription drugs and their impacts on consumer welfare, firm profits, and insurance payments. Chapter 2 examines consumer brand loyalty and learning in pharmaceutical demand and discusses implications for marketing and health care policy. Chapter 3 develops a framework for estimating demand and supply in an online market with many competing sellers and frequent price changes and proposes optimal pricing strategies for a large seller.</p><p>The first chapter studies an innovative price strategy in pharmaceuticals. Branded drug manufacturers have recently started to issue copay coupons as part of their strategy to compete with generics when their branded drugs are coming off patent. To explore the welfare implications of copay coupons, I estimate a model of demand and supply using pharmaceutical data on sales, prices, advertising, and copayments for cholesterol-lowering drugs and perform a counterfactual analysis where a branded manufacturer introduces coupons. The model allows flexible substitution patterns and consumer heterogeneity in price sensitivities and preferences for branded drugs. The counterfactuals quantify the effects of copay coupons for different assumptions about the take-up of coupons and the ability of the branded manufacturer to direct them to the most price-sensitive types of consumers. The results show that the agency problem between insurers and patients gives a branded manufacturer a strong incentive to issue copay coupons. Introducing copay coupons benefits the coupon issuer and consumers but raises insurance payments. In equilibrium, insurer spending can increase by as much as 25% even when just 5% of consumers have a coupon, with social welfare falling significantly.</p><p>Medicines for chronic conditions like high cholesterol, heart disease, and diabetes are repeatedly used for a long period of time. Consumer dynamics thus plays an important role in the demand for those drugs. In the second chapter, I estimate a demand model with brand loyalty and learning using micro-level data from cholesterol lowering drug markets in the United States. The estimates suggest high switching costs and strong learning effects at the molecule level in the markets. Switching costs raise the predicted probability of choosing the same drugs in a row and learning largely increases patient stickiness to a molecule in the long run. I discuss pricing implications of the estimation results for drug manufacturers, insurance companies, and policy makers. </p><p>The last chapter, coauthored with Dr. Andrew Sweeting and Dr. James W. Roberts, looks at pricing in a different context. We estimate a model of entry, exit and pricing decisions in an online market for event tickets where there are many competing sellers and prices change frequently. We use the estimates from our model to analyze the optimality of the pricing policy used by the largest seller (broker) in the market. We show that the broker's pricing policies substantially affect the prices set by his competitors. When we compare the broker's pricing policy with the prices that our model predicts are optimal we find that the broker sets approximately correct prices close to the game, when his pricing problem resembles a static one, but that he might be able to gain from using different pricing rules and updating prices more frequently further from the game.</p> / Dissertation

Chapter one focuses on optimal pricing in markets of consumption chains. These are markets in which one good is necessary for access to further consumption goods. I analyse optimal pricing for different market structures, focusing on the case of an integrated monopolist and the case of separate firms being in competition across markets, but not within markets. I then compare the outcomes of different market structures using basic welfare measures. I show that, compared to the first best allocation, the allocation implemented under the integrated monopolist tends to have significantly lower consumer surplus and larger producer surplus. Aggregate welfare is surprisingly not much smaller under the integrated firm when compared to a welfare maximising allocation. In some settings the integrated monopolist even implements a welfare maximising allocation. The paper explains and highlights how these results depend largely on which assumptions are made about the information available to consumers. The second chapter contributes towards the existing literatures on lobbying and on media bias by combining and extending features of both. It aims to analyse optimal slanting policies of interest or media groups and their effect on the distribution of public opinion and its evolution over time by introducing an intertemporal model of grassroots lobbying or media bias. I also allow for more general results than existing models by making fewer distributive assumptions and by allowing for further incentives of agents. In the chapter I combine demand and supply side models for bias. A main focus lies on how optimal slanting, the distribution of public opinion and its evolution over time depend on competition. The chapter aims to examine in which circumstances competition in the media market or the existence of multiple rival lobby groups can be detrimental. It shows how this can be the case because competition can create an incentive to split the public up and cater only to the own market. This can lead to a loss of the middle ground and increased dispersion of public opinion. The third chapter aims to extend the existing literature on the (in)efficiencies of voluntary contribution mechanisms for public goods. The existing body of research tries to analyse how group size affects the outcomes of such mechanisms asymptotically, while I also focus on results for given group sizes and the effect of the level of group heterogeneity in combination with group size. Agents are ex post heterogeneous in the existing literature; I also allow for them to be heterogeneous ex ante. This means that agents do not only have different valuations for the public good ex post, but different agents are also perceived differently by other agents ex ante. I show that a form of price discrimination can be used when agents are ex ante heterogeneous. Not using such price discrimination is shown to be costly in terms of efficiency in small groups. Small heterogeneous groups are outperformed by their homogeneous counterparts when price discrimination is not applied. However, this inefficiency in small groups can be eliminated by using price discrimination. The use of price discrimination becomes irrelevant in large groups and heterogeneous groups always outperform their homogeneous counterparts, whether price discrimination is used or not.

The purpose of this paper is to assess consumer behavior in the airline industry from a perspective beyond the effects of price discrimination. First the consequences of dynamic pricing will be assessed before looking at the role of social media and offline social influences, consumer satisfaction and airline equilibrium networks and their effects on consumer loyalty. Final implications on aviation revenue management will be drawn.

京都大学 / 新制・課程博士 / 博士(経済学) / 甲第23401号 / 経博第643号 / 新制||経||298(附属図書館) / 京都大学大学院経済学研究科経済学専攻 / (主査)准教授 菊谷 達弥, 教授 関口 格, 教授 文 世一 / 学位規則第4条第1項該当 / Doctor of Economics / Kyoto University / DGAM

The diploma thesis is focused on price discrimination of a selected company operating in an international environment. The work is divided into three main parts. The theoretical part of the thesis describes the key concepts and characteristics necessary to understand the issues related to the topic of the thesis. The analytical part of the work is focused on the description of the current state of the company in selected foreign markets. The proposal part of the work used the method of multiple regression analysis and also presents possible proposals and recommendations for price discrimination in individual foreign markets with regard to the purchasing power of individual countries.

This dissertation contains three essays on theoretical analysis of pricing and promotional strategies. Chapter 1 serves as a brief introduction that provides a motivation and an overview of the topics covered in the subsequent chapters. In Chapter 2, we study optimal couponing strategies in a differentiated duopoly with repeat purchase. Both firms can distribute defensive coupons alone, defensive and offensive coupons together, or mass media coupons. They can also determine how many coupons to offer. Allowing consumers to change their tastes for the firms' products over time, we find that the optimal couponing strategy for the firms is to only distribute coupons to all of the customers who buy from them. The effects of intertemporally constant preferences and consumer myopia on the profitability of the optimal couponing are investigated as well. Chapter 3 examines the profitability of behavior-based price discrimination (BBPD) by duopolists producing horizontally differentiated experience goods. We consider a three-stage game in which the firms first make price discrimination decisions followed by two-stage pricing decisions. The main findings are: (i) there are two subgame perfect Nash equilibria where both firms do not collect information about consumers' purchase histories so that neither firm price discriminates and where both firms collect consumer information to practice BBPD; and (ii) BBPD is more profitable than uniform pricing if sufficiently many consumers have a poor experience with the firms' products. The asymmetric case where one firm produces experience goods and the other search goods is also investigated. Chapter 4 provides a possible explanation of the fact that one ticket price is charged for all movies (regardless of their quality) in the motion-picture industry. Considering a model a la Hotelling in which moviegoers form their beliefs about movie quality through pricing schemes to which an exhibitor commits, we characterize the conditions under which committing to uniform pricing is more profitable than committing to variable pricing. The welfare consequences of a uniform pricing commitment and some extensions of the model are discussed as well. / Ph. D.

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No / Trade credit terms offer firms contractual solutions to informational asymmetries between buyers and sellers. The credit period permits buyers to reduce uncertainty concerning product quality prior to payment, while the seller can reduce uncertainty concerning buyer payment intentions by prescribing payment before/on delivery or through two¿part payment terms and other mechanisms. Variation in trade credit terms also offers firms price discriminating opportunities. This study, drawing on the responses of 700 large firms in the US, UK and Australia, explores trade credit terms through the twin objectives of reducing information asymmetries and discriminatory pricing. Support is found for both theories.

This thesis is motivated by the impacts of contemporary political and economic issues such as microeconomic reform and regulatory control on the Australian wheat industry. Firstly, the suggestion of whether the AWB (International) Ltd commands market power and secondly, that the objectives of the AWB Ltd have changed since semi-privatisation of the Australian Wheat Board under the Wheat Marketing Act, 1989. The AWB (International) Ltd’s ability to price discriminate is a key component to the retention of the single desk regulatory arrangement for the export of Australian wheat. Due to data restrictions the market power of the AWB (International) Ltd has not been determined within this thesis. To complement this traditional approach, a more novel proposal is developed to determine the effect of microeconomic reform on the Australian wheat industry. Conceptualising the change of the AWB Ltd’s objectives as a shift from revenue maximization to profit maximization, this study examines the impact of such a change on the pricing policies of a multi- market price-setting firm. More specifically, this study investigates, for two hypothetical objective functions, a risk averse firm’s price-setting behaviour in an “overseas” and a “domestic” market, given differing costs of supply, uncertain demand functions and differing price elasticities of demand in each market. The aim is to generate empirically testable hypotheses relating to the impact of a change of objectives on pricing behaviour.

This thesis aims to investigate the phenomenon popularly referred to as the pink tax, otherwise known as gender-based price discrimination in the Swedish hygiene product market. The subject is thoroughly researched in markets like the United States and the United Kingdom, where evidence has been found that a pink tax does exist. Thus, women tend to pay more for initially the same product than men, where seemingly, the only difference between the two is packaging and/or fragrance. The sample collection consists of five different product categories: razor blades, razors, shaving cream, deodorant, and soap. The samples have all been collected manually from 16 different locations, distributed at a 38 km radius between the area Skövde to Mariestad in Västra Götaland, Sweden.  Inspired by previous research, this study starts examining the market using a t-test. To further the investigation, two types of regression models are used. The findings support the possibility of a pink tax existing in the Swedish market. Where the largest and most stable regression showed a 4,1% difference in prices for female versus male products. Hence, women tend to pay 4,1% more for hygiene products and the research can conclude that prices are not statistically equal. From this result, we recommend the Swedish customer protection agency- Diskrimineringsombudmannen, to further work on the laws against price discrimination by clarification of guidelines and construction of a stricter legal environment to prevent gender-based price discrimination in the future.