Price and inventory decisions are key levers of profit for firms. A manager needs to understand the impacts of pricing, ordering and stocking decisions not only on today's operations but also on future demand. In this dissertation we investigate these intertwining decisions by incorporating inter-temporal effects of pricing decisions through reference prices. We introduce three significant extensions to reference price models to provide more meaningful insight into pricing, inventory and ordering decisions. We first present a threshold reference model. The threshold model incorporates zones of insensitivity around expected price that moderate the reference impacts on demand. This provides a rigourous model that is flexible enough to handle different pricing strategies such as single everyday low pricing (EDLP), high-low pricing (HiLo) and other general price cycles. We develop two solution approaches and provide computational results. We next introduce a reference model with stochastic demand. There is considerable previous research supporting the consideration of variability in pricing and inventory decisions and this is especially true in the context of inter-temporal demand interactions based on pricing decisions. We find that the introduction of stochastic elements can actually increase or decrease the length of the price cycle for some consumers in a reference model depending on the parameters of the model. This extends the stochastic demand model and bridges to reference models for improved managerial insight. The final model presented is the dynamic lot sizing model. When prices and production decisions or order quantities are determined simultaneously the interactions need to be considered to optimize profits. The reference model incorporates the inter-temporal price effects to provide a clearer picture of the optimal decision. The inclusion of reference effects does change the optimal decision. / Thesis / Doctor of Philosophy (PhD)

In the decades that followed World War II, tuition at American colleges was well within the financial reach of most families. Since 1980, however, it has grown more expensive to attend both public and private colleges, as tuition has surged at a rate that has far outpaced inflation. At the same time, the economic and lifestyle disparities between those who earn four-year degrees and those who do not have reached record levels. As a result, students have to go to college in order to have a realistic shot at prosperity, but must borrow significantly in order to afford the cost of attendance. Colleges are aware that whenever the subject of increased tuition comes up, be it a proposed increase or an official one, it is a threat to their image and is likely to be viewed as offensive by students, who are already straining from the high cost of college. Thus, colleges employ a range of image restoration theory strategies at all phases of the conflict management life cycle, in order to restore, repair, and protect their images. While the rhetorical strategies taken by colleges may be given a great deal of thought by college spokespersons, they are not always strategically appropriate. This thesis uses mental accounting to extend image restoration theory, and offers rhetorical strategies that colleges may consider in order to minimize the threat to their images posed by increased tuition. / Master of Arts / For American families, sending their children to college is a far greater financial strain than it was a generation or two ago. Across the United States, college tuition has surged in recent decades, a trend that shows few signs of abating in the future. As a result, current and future college students and their families view the news of a tuition increase, or a potential increase, unfavorably. Colleges are aware of the threat that they face when the subject of tuition increases comes up, so they employ a range of rhetorical strategies to reduce the threat. This master’s thesis classifies the rhetoric used by college spokespersons at the top-20 ranked American public universities when they talked about planned or potential tuition increases for three academic years. It then evaluates the appropriateness of these rhetorical choices, evaluating them based upon established marketing scholarship in order to determine if they are likely to make students view the news of a planned or proposed tuition increase news seem more fair.

This thesis consists of four essays in economics related to the pharmaceutical market. The first essay, Pharmaceutical Pricing in a Regulated Market, compares the pricing of new pharmaceuticals in the Swedish market where prices are regulated, with the results of Lu and Comanor who studied the pricing of new pharmaceuticals in the US market. The results indicate that price regulation discourages the use of penetration strategies and decreases price competition between brand name drugs. The second essay, Innovativeness and Market Shares in the Pharmaceutical Industry, analyzes the pharmaceutical market in a model of horizontal and vertical product differentiation. The implications from the model are tested on data from the Swedish pharmaceutical market. Vertically differentiated drugs are found to gain larger market shares, command higher prices, and be less sensitive to substitutes than drugs that are only horizontally differentiated. The third essay, Generic entry before and after reference prices, examines the effect of the reference pricing system on generic entry in markets where brand name pharmaceuticals lose patent protection. The main result is that savings due to increased competition in markets affected by the reference pricing system may have been outbalanced by higher prices due to less competition in markets where the reference pricing system led to deterred entry. The fourth essay, Innovative Drugs and the Increase in Pharmaceutical Expenditures, seeks to establish the most important factors behind the growth in pharmaceutical expenditures. One important conjecture is that the change in the drug price index has little impact on the rate at which pharmaceutical expenditures grow. Instead, the introduction of new innovative drugs seems to be the most important driving force of the growth in pharmaceutical expenditures. / Diss. (sammanfattning) Stockholm : Handelshögsk., 2001