********************************************************************


                                                     Seminar

             Department of Systems Engineering and Engineering Management
                                  The Chinese University of Hong Kong

------------------------------------------------------------------------------------------

 

 

 

Title

:

Pre-order Information Release and Price Discount

 

 

 

 

Speaker

:

Prof. Leon Yang Zhu (Chu)

 

 

Information and Operations Management, Marshall School of Business

 

 

The University of Southern California

 

 

 

Date

:

Dec 7th, 2010 (Tuesday)

 

 

 

Time

:

10:30 am-11:30 am

 

 

 

Venue

:

Room 513

 

 

William M.W. Mong Engineering Building

 

 

(Engineering Building Complex Phase 2)

 

 

CUHK

 

 

 

------------------------------------------------------------------------------------------

Abstract:
 

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.


-------------------------------------------------------------------------------------------

Biography:
 

Leon Yang Zhu (Chu) is an assistant professor of Information and Operations Management at the University of Southern California's Marshall School of Business. His current research interests include contract and market mechanism design, game theory, and applied optimization. Leon's papers have been published in journals including the American Economic Review, the European Journal of Operational Research, the International Journal of Industrial Organization, the Journal of Economic Theory, Management Science, Operations Research, Operations Research Letters, Naval Research Logistics, and the Rand Journal of Economics.


************************* ALL ARE WELCOME ************************

 

 

 

Host

:

Prof. Sean X. Zhou

Tel

:

(852) 2609 8336

Email

:

zhoux@se.cuhk.edu.hk

 

 

 

Enquiries

:

Prof. Nan Chen or Prof. Sean X. Zhou

 

:

Department of Systems Engineering and Engineering Management

 

 

CUHK

Website

:

http://www.se.cuhk.edu.hk/~seem5201

Email

:

seem5201@se.cuhk.edu.hk

 

 

 

********************************************************************