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Seminar
Department of Systems Engineering and Engineering Management
The Chinese
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Title |
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Pre-order Information
Release and Price Discount |
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Speaker |
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Prof. Leon Yang Zhu ( |
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Information and Operations
Management, Marshall School of Business |
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The University of Southern
California |
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Date |
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Dec 7th, 2010 (Tuesday) |
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Time |
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10:30 am-11:30 am |
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Venue |
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Room 513 |
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William M.W. Mong Engineering Building |
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(Engineering Building Complex Phase 2) |
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CUHK |
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Abstract:
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In this paper, we investigate the integrated information
and pricing strategy for a seller who can take customer pre-orders before the
release of a product. The pre-order option enables the seller to sell a
product at an early stage when consumers are less certain about their
valuations. We find that the optimal pricing strategy may be highly dependent
on the amount of information available at pre-order, and that a small change
in the latter may cause a dramatic change in the proportion of consumers who
pre-order under optimal pricing. Furthermore, the seller's optimal
information strategy depends on a key measure, the normalized margin, which
is the ratio between the expected profit margin and the standard deviation of
consumer valuations. While the seller may want to release some (or zero)
information, depending on the normalized margin, the seller should never
release all information. Finally, under the optimal information and pricing
strategy, the benefit of pre-order is most pronounced when the normalized
margin is in a medium range. |
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Biography:
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Leon Yang Zhu (Chu) is an
assistant professor of Information and Operations Management at the |
************************* ALL ARE WELCOME ************************
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Host |
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Prof. Sean X. Zhou |
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Tel |
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(852) 2609 8336 |
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Email |
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zhoux@se.cuhk.edu.hk |
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Enquiries |
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Prof. Nan Chen or Prof. Sean X. Zhou |
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Department of Systems Engineering and Engineering
Management |
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CUHK |
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Website |
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Email |
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