Revenue management under general discrete choice model of consumer behavior

Customer choice behavior, such as 'buy-up' and 'buy-down', is an importantphe-nomenon in a wide range of industries. Yet there are few models ormethodologies available to exploit this phenomenon within yield managementsystems. We make some progress on filling this void. Specifically, wedevelop a model of yield management in which the buyers' behavior ismodeled explicitly using a multi-nomial logit model of demand. Thecontrol problem is to decide which subset of fare classes to offer ateach point in time. The set of open fare classes then affects the purchaseprobabilities for each class. We formulate a dynamic program todetermine the optimal control policy and show that it reduces to a dynamicnested allocation policy. Thus, the optimal choice-based policy caneasily be implemented in reservation systems that use nested allocationcontrols. We also develop an estimation procedure for our model based onthe expectation-maximization (EM) method that jointly estimates arrivalrates and choice model parameters when no-purchase outcomes areunobservable. Numerical results show that this combined optimization-estimation approach may significantly improve revenue performancerelative to traditional leg-based models that do not account for choicebehavior.

Corporate criminal law and organization incentives: A managerial perspective

Corporate criminal liability puts a serious challenge to the economictheory of enforcement. Are corporate crimes different from other crimes?Are these crimes best deterred by punishing individuals, punishing corporations, or both? What is optimal structure of sanctions? Shouldcorporate liability be criminal or civil? This paper has two majorcontributions to the literature. First, it provides a common analyticalframework to most results presented and largely discussed in the field.In second place, by making use of the framework, we provide new insightsinto how corporations should be punished for the offenses committed bytheir employees.

Salience and consumer choice

We present a theory of context-dependent choice in which a consumer's attention is drawnto salient attributes of goods, such as quality or price. An attribute is salient for a good when itstands out among the good's attributes, relative to that attribute's average level in the choice set (orgenerally, the evoked set). Consumers attach disproportionately high weight to salient attributesand their choices are tilted toward goods with higher quality/price ratios. The model accounts fora variety of disparate evidence, including decoy effects, context-dependent willingness to pay, andlarge shifts in demand in response to price shocks.

Consumer choice in competitive location models: Formulations and heuristics

A new direction of research in Competitive Location theory incorporatestheories of Consumer Choice Behavior in its models. Following thisdirection, this paper studies the importance of consumer behavior withrespect to distance or transportation costs in the optimality oflocations obtained by traditional Competitive Location models. To dothis, it considers different ways of defining a key parameter in thebasic Maximum Capture model (MAXCAP). This parameter will reflectvarious ways of taking into account distance based on several ConsumerChoice Behavior theories. The optimal locations and the deviation indemand captured when the optimal locations of the other models are usedinstead of the true ones, are computed for each model. A metaheuristicbased on GRASP and Tabu search procedure is presented to solve all themodels. Computational experience and an application to 55-node networkare also presented.

What risks do people perceive in everyday life? A perspective gained from the experience sampling method (ESM)

The experiential sampling method (ESM) was used to collect data from 74 parttimestudents who described and assessed the risks involved in their current activitieswhen interrupted at random moments by text messages. The major categories ofperceived risk were short-term in nature and involved loss of time or materials relatedto work and physical damage (e.g., from transportation). Using techniques of multilevelanalysis, we demonstrate effects of gender, emotional state, and types of risk onassessments of risk. Specifically, females do not differ from males in assessing thepotential severity of risks but they see these as more likely to occur. Also, participantsassessed risks to be lower when in more positive self-reported emotional states. Wefurther demonstrate the potential of ESM by showing that risk assessments associatedwith current actions exceed those made retrospectively. We conclude by notingadvantages and disadvantages of ESM for collecting data about risk perceptions.

Organisational innovations and health care decentralisation: A perspective from Spain

Recent policy developments in public health care systems lead to a greater diversity in health care. Decentralisation, either geographically or at an institutional level, is the key force, because it encourages innovation and local initiatives in health care provision. The devolution of responsibilities allows for a sort of de-construction of the status quo by changing both organizational forms and service provision. The new organizations enjoy greater freedom in the way they pay their staff, and are judged according to their results. These organizations may retain financial surpluses, develop spin-off companies and commission a range of specialised services (such as Diagnostic and Treatment Centres in UK) from providers outside the institutional setting in order to have more access to capital markets. However this diversity may generate a feeling of lack of commitment to a national health service and ultimately a loss of social cohesion. By fiscal decentralisation to regional authorities or planned delegation of financial agreements to the providers, financial incentives are more explicit and may seem to place profit-making above a commitment to better health care. An evaluation of the myths and realities of the decentralization process is needed. Here, I offer an assessment pros and cons of the decentralization process of health care in Spain, drawing on the experience of regional reforms from the pioneering organisational innovations implemented in Catalonia in 1981, up to the observed dispersion of health care spending per capita among regions at present.

The science of monetary policy: A new Keynesian perspective

This paper reviews the recent literature on monetary policy rules. We exposit the monetary policy design problem within a simple baselinetheoretical framework. We then consider the implications of adding various real world complications. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. Wealso characterize the gains from making credible commitments to fightinflation. In contrast to conventional wisdom, we show that gains from commitment may emerge even in the central bank is not trying toinadvisedly push output above its natural level. We also consider theimplications of frictions such as imperfect information.

The pricing of academic journals: A two-sided market perspective

More and more academic journals adopt an open-access policy, by which articlesare accessible free of charge, while publication costs are recovered through authorfees. We study the consequences of this open access policy on a journal s qualitystandard. If the journal s objective was to maximize social welfare, open accesswould be optimal as long as the positive externalities generated by its diffusionexceed the marginal cost of distribution. However, we show that if an open accessjournal has a different objective (such as maximizing readers payoffs, the impactof the journal or its profit), it tends to choose a quality standard below the sociallyefficient level.

The role of Mexico in the first oil shortage: 1918-1922, an international perspective

In 1921 Mexico produced a quarter of world s petroleum, making the country the secondlargest producer in the world, but by 1930 it only accounted for 3 per cent of world sproduction. To date the discussion has mostly relied on events taking place in Mexico forexplaining the decline of the industry. Very little attention has been placed todevelopments in petroleum industry elsewhere, except Venezuela. Practically noattention has been paid to the reasons for the rise of oil output in Mexico. This neglectsthe massive changes taking place in the petroleum industry worldwide during the GreatWar years and its aftermath, and overall ignores the shortage of oil that occurred in theworld s markets between 1918-1921. These are crucial events in order to understand theearly rise of the Mexican oil industry and set the basis for a better understanding of thesubsequent sudden decline.

Image restoration in astronomy: a Bayesian perspective

When preparing an article on image restoration in astronomy, it is obvious that some topics have to be dropped to keep the work at reasonable length. We have decided to concentrate on image and noise models and on the algorithms to find the restoration. Topics like parameter estimation and stopping rules are also commented on. We start by describing the Bayesian paradigm and then proceed to study the noise and blur models used by the astronomical community. Then the prior models used to restore astronomical images are examined. We describe the algorithms used to find the restoration for the most common combinations of degradation and image models. Then we comment on important issues such as acceleration of algorithms, stopping rules, and parameter estimation. We also comment on the huge amount of information available to, and made available by, the astronomical community.

Why Italy and not Spain?: comparing two industrialization processes from a dissagregate time-series perspective

This study presents new evidence concerning the uneven processes of industrialization innineteenth century Spain and Italy based on a disaggregate analysis of the productivesectors from which the behaviour of the aggregate indices is comprised. The use of multivariate time-series analysis techniques can aid our understanding and characterization of these two processes of industrialization. The identification of those sectors with key rolesin leading industrial growth provides new evidence concerning the factors that governed thebehaviour of the aggregates in the two economies. In addition, the analysis of the existenceof interindustry linkages reveals the scale of the industrialization process, and wheresignificant differences exist, accounts for many of the divergences recorded in the historiography for the period 1850-1913.

Why Italy and not Spain?: comparing two industrialization processes from a dissagregate time-series perspective

This study presents new evidence concerning the uneven processes of industrialization innineteenth century Spain and Italy based on a disaggregate analysis of the productivesectors from which the behaviour of the aggregate indices is comprised. The use of multivariate time-series analysis techniques can aid our understanding and characterization of these two processes of industrialization. The identification of those sectors with key rolesin leading industrial growth provides new evidence concerning the factors that governed thebehaviour of the aggregates in the two economies. In addition, the analysis of the existenceof interindustry linkages reveals the scale of the industrialization process, and wheresignificant differences exist, accounts for many of the divergences recorded in the historiography for the period 1850-1913.

Dynamics of flow: a nonlinear perspective

The aims of this study are to consider the experience of flow from a nonlinear dynamics perspective. The processes and temporal nature of intrinsic motivation and flow, would suggest that flow experiences fluctuate over time in a dynamical fashion. Thus it can be argued that the potential for chaos is strong. The sample was composed of 20 employees (both full and part time) recruited from a number of different organizations and work backgrounds. The Experience Sampling Method (ESM) was used for data collection. Once obtained the temporal series, they were subjected to various analyses proper to the com- plexity theory (Visual Recurrence Analysis and Surrogate Data Analysis). Results showed that in 80% of the cases, flow presented a chaotic dynamic, in that, flow experiences delineated a complex dynamic whose patterns of change were not easy to predict. Implications of the study, its limitations and future research are discussed.

Consumer acceptance of high pressure processed beef-based chilled ready meals: The mediating role of food-related lifestyle factors

The aim of this research was to investigate the effects of high pressure processing (HPP) on consumer acceptance for chilled ready meals manufactured using a low-value beef cut. Three hundred consumers evaluated chilled ready meals subjected to 4 pressure treatments and a non-treated control monadically on a 9-point scale for liking for beef tenderness and juiciness, overall flavour, overall liking, and purchase intent. Data were also collected on consumers' food consumption patterns, their attitudes towards food by means of the reduced food-related lifestyle (FRL) instrument, and socio-demographics. The results indicated that a pressure treatment of 200 MPa was acceptable to most consumers. K-means cluster analysis identified 4 consumer groups with similar preferences, and the optimal pressure treatments acceptable to specific consumer groups were identified for those firms that would wish to target attitudinally differentiated consumer segments