• Journal of Distribution Science
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• v.13 no.11
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• pp.39-46
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• 2015

Purpose - In Korea, there has been a recent trend that shows housing prices have risen rapidly following the International Monetary Fund crisis. The rapid rise in housing prices is spreading recognition of this as a factor in housing price volatility. In addition, this raises the expectations of housing prices in the future. These expectations are based on the assumption that a relationship exists between the current housing prices and expected housing prices in the real estate industry. By performing an empirical analysis on the validity of the claim that an increase in current housing prices can be correlated with expected housing prices, this study examines whether a long-term equilibrium relationship exists between expected housing prices and existing housing prices. If such a relationship exists, the recovery of equilibrium from disequilibrium is analyzed to derive related implications. Research design, data, and methodology - The relationship between current housing prices and expected housing prices was analyzed empirically using the Vector Error Correction Model. This model was applied to the co-integration test, the long-term equilibrium equation among variables, and the causality test. The housing prices used in the analysis were based on the National Housing Price Trend Survey released by Kookmin Bank. Additionally, the Index of Industrial Product and the Consumer Price Index were also used and were obtained from the Bank of Korea ECOS. The monthly data analyzed were from January 1987 to May 2015. Results - First, a long-term equilibrium relationship was established as one co-integration between current housing price distribution and expected housing prices. Second, the sign of the long-term equilibrium relationship variable was consistent with the theoretical sign, with the elasticity of housing price distribution to expected housing price, the industrial production, and the consumer price volatility revealed as 1.600, 0.104,and 0.092, respectively. This implies that the long-term effect of expected housing price volatility on housing price distribution is more significant than that of the industrial production and consumer price volatility. Third, the sign of the coefficient of the error correction term coincided with the theoretical sign. The absolute value of the coefficient of the correction term in the industrial production equation was 0.006, significantly larger than the coefficients for the expected housing price and the consumer price equation. In case of divergence from the long-term equilibrium relationship, the state of equilibrium will be restored through changes in the interest rate. Fourth, housing-price volatility was found to be causal to expected housing price, and was shown to be bi-directionally causal to industrial production. Conclusions - Based on the finding of this study, it is required to relieve the association between current housing price distribution and expected housing price by using property taxes and the loan-to-value policy to stabilize the housing market. Further, the relationship between housing price distribution and expected housing price can be examined and tested using a sophisticated methodology and policy variables.

• Asia Marketing Journal
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• v.12 no.2
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• pp.135-154
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• 2010

This paper considers a duopoly where switching costs exist. The analysis proves that temporal price reductions can be pure strategy equilibrium where firms earn more profit than in a regular price strategy. Greater profits result from price discrimination in temporal price reductions. The equilibrium is contrasted with previous studies, which explain temporal price reductions as a result of mixed strategy. In a given model with an assumption about forming switching cost, firms can control their range of loyal consumers by properly setting their regular and promotional prices. The model shows that temporal price reduction tends to raise the regular price and decrease the range of loyal consumers.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.33 no.3
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• pp.137-145
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• 2010

The objective of this paper is to evaluate the equilibrium price between PSTN and VoIP telephony services in the case of non-linear utility function. Currently there are two types of wired phone services we are known PSTN (Public Switched Telephone Network) and VoIP (Voice over Internet Protocol). The PSTN telephony which provide high quality service and VoIP which provides relatively low quality service form a vertically differentiated oligopoly. Therefore, the evaluation of the equilibrium price between PSTN and VoIP services is very important to wired phone service providers. The equilibrium price depends on the state of the service cost function has been proved different value. This paper was evaluated each equilibrium price for the state of the linear cost function and non-linear cost function. Subsequently, this paper analyzed the demand of both services and the equilibrium profit which can maximize the profit of both service providers.

• Journal of the Korea Institute of Building Construction
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• v.8 no.6
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• pp.65-74
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• 2008

The aim is to get comprehensive view point for the price of apartment. Apartment construction cost is the sun of land cost and building cost. Land price reflects the value of location where building stands. When the gap between price and affordability is narrow enough, effective demand promote apartment construction. The today's trends of rising price, which began in apartment housing, spreads to real estates market and finally overall consumer price. Problem is that price is decided only by supplier's interest. Equilibrium-pricing is common process in housing market. However it is important to review hedonic price and the factor of housing services and focused on the affordability of demanders. AHP analysis was used to study real needs and preference of demanders and dealt with 200 interviewees with brief checklists. We found that social factor is more important than building cost or site development. Especially location of apartment is most important to affect environment quality and accessibility to facilities.

• Management Science and Financial Engineering
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• v.13 no.2
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• pp.99-116
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• 2007

This paper considers the value of location in a linear city model and examines the product differentiation equilibrium of duopoly providing different benefits to consumers. We show that if the value of location is small, symmetric location equilibrium occurs where two firms follow the maximal differentiation principle. However, as the value of location increases, asymmetric location equilibrium occurs where the low-value-location firm moves to the high-value-location firm and thus adjusted maximal differentiation principle holds. We also investigate two different price leadership model and demonstrate the relationship between the value of location and the role of price leadership. In particular, we show that when the location value is high, the price leadership by high-value-location firm will appear as a unique equilibrium.

• The Transactions of the Korean Institute of Electrical Engineers A
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• v.52 no.6
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• pp.340-346
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• 2003

This paper presents a game theory application for an analysis of uniform price auction in a simplified competitive electricity market and analyzes the properties of Nash equilibrium for various conditions. We have assumed that each generation firm submits his bid to a market in the form of a sealed bid and the market is operated as a uniform price auction. Two firms are supposed to be the players of the market, and we consider the maximum generation quantity constraint of one firm only. The system demand is assumed to have a linear relationship with market clearing prices and the bidding curve of each firm, representing the price at which he has a willingness to sell his generation quantity, is also assumed to have a linear function. In this paper, we analyze the effects of maximum generation quantity constraints on the Nash equilibrium of the uniform price auction. A simple numerical example with two generation firms is demonstrated to show the basic idea of the proposed methodology.

• Journal of the Korean Mathematical Society
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• v.33 no.1
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• pp.25-29
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• 1996

The Debreu-Gale-Nikaido theorem [2] is a potential tool to prove the existence of a market equilibrium price. Walras' law is of a quantitative nature (i.e. it measures the value of the total excess demand), and it is interesting to note that the existence result holds true under some qualitative assumptions. In fact, the Debreu-Gale-Nikaido theorem states that the continuity of the excess demand function and Walras' law has the following implication : For some price and corresponding value of the excess demand function, it is not possible to respond with a new price system such that the value at the new price of every element in the value of the demand function associated with the old price system is strictly positive.

• Journal of the Korean Operations Research and Management Science Society
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• v.11 no.2
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• pp.27-36
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• 1986

This paper deals with four types of multiple unit simultaneous auctions such as the discriminating. uniform-price, lowest accepted-price, and progressive auctions. These auctions have been studied by Vickrey, Ortega-Reichert, Herris and Raviv and so forth. In this paper, their studies are extended to the case with a reserve price and an entry fee, and then the equilibrium bidding strategy are presented. Further, those are analyzed with respect to the change of a reserve price, an entry fee, and the number of bidders and objects.

• KSII Transactions on Internet and Information Systems (TIIS)
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• v.15 no.1
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• pp.58-73
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• 2021

Cloud Service Providers (CSPs) enable their users to access Cloud computing and storage services from anywhere in quick and flexible manners through the Internet. With the basis of 'pay-as-you-go' model, it makes the interactions between CSPs and the users play a vital role in shaping the Cloud computing market. A pool of virtualized and dynamically scalable Cloud services that delivered on demand to the users is associated with guaranteed performance and cost-provisioning. It needed a costing scheme for determining suitable charges in order to secure lease pricing of the Cloud services. However, it is hard to meet the satisfied prices for both CSPs and users due to their conflicting needs. Furthermore, there is lack of Service Level Agreements (SLAs) that allowing the users to take part into price negotiating process. The users may lose their interest to use Cloud services while reducing CSPs profit. Therefore, this paper proposes a generic costing scheme for Cloud services using General Equilibrium Theory (GET). GET helps to formulate the price function for various services' factors to match with various demands from the users. It is initially determined by identifying the market circumstances that a general equilibrium will be hold and reached. Specifically, there are two procedures of agreement made in response to (i) established equilibrium supply and demand, and (ii) service price formed and constructed in a price range. The SLAs in our costing scheme is integrated to satisfy both CSPs and users' needs while minimizing their conflicts. The price ranging strategy is deliberated to provide prices' options to the users with respect their budget limit. Meanwhile, the CSPs can adaptively charge based on users' preferences without losing their profit. The costing scheme is testable and analyzed in multi-tenant computing environments. The results from our simulation experiments demonstrate that the proposed costing scheme provides better users' satisfaction while fostering fairness pricing in the Cloud market.

• Journal of Korean Institute of Industrial Engineers
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• v.28 no.4
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• pp.379-389
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• 2002

In this paper, we study the competition between two kinds of suppliers, a bricks and mortars(B&M) and a clicks and mortars(C&M). Using the circular spatial market model, we derive and analyze the Nash and Stackelberg equilibria as a function of offline market share and efficiency of online channel of the C&M supplier. The result can be summarized as follows: (1) Stackelberg equilibrium is always superior to the Nash equilibrium, (2) Under certain conditions, the price of online channel can be higher than that of offline channel, (3) It is impossible for the C&M supplier to encroach on all of the B&M supplier's market, (4) In some cases, the C&M supplier has incentive to lower the efficiency of its online channel for more profit.