• Health Policy and Management
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• v.18 no.3
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• pp.128-146
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• 2008

Nonlinear pricing abounds in practice because it is a potentially powerful pricing method to explore consumer surplus. The various forms of nonlinear pricing are feasible within a given industry. In this context, it is important for manufacturers and retailers to understand which nonlinear pricing scheme is appropriate to apply in their specific situation and which nonlinear pricing schedule is the most profitable in their market situation. Although the merits of nonlinear pricing are well documented, the attempt to apply nonlinear pricing in medical service has been relatively rare. The researcher aims to try to full this gap by applying a practice-oriented simulation model to health examination data. We compare the sales volumes among nonlinear pricing scheme such as n-block tariff, two-part tariff, and uniform pricing. We found that n-block tariff outperforms two-part tariff and uniform pricing.

• Asia Marketing Journal
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• v.14 no.3
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• pp.49-68
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• 2012

When a channel is vertically separated, there can be inefficiencies, double marginalization. Channel coordination to amend this inefficiency has been an important issue in marketing and economics. Channel coordination deals with maximization of joint profit and achieving proper profit sharing among participants. In this paper, a manufacturer and heterogeneous multiple retailers with exclusive territory are assumed, and channel coordination with two-part tariff is considered. When multiple heterogeneous retailers are assumed, profit sharing can be an issue even though the tariffs based on marginal cost can maximize joint profit. In case of multiple heterogeneous retailers, the manufacturer earns the same profit (fixed fee) from each retailer. This means that a large retailer occupies all the gaps of channel profit between small and large markets. Then, the manufacturer, which generally plays the role of Stackelberg leader, will consider increasing fixed price or marginal price to earn more profit from large retailer. Those reactions can sacrifice maximization of joint profit by making small retailer withdraw or by changing the sales quantities. In this paper, to maximize joint profit and achieve proper profit sharing, two kinds of optional tariffs are considered. The first is an optional two-part tariff based on marginal cost and the second is an optional modified two-part tariff in which marginal prices are higher than the manufacturer's marginal cost. In both types of optional tariffs, maximization of joint profit in each market can be achieved. Moreover, optional tariffs alleviate the problem of profit sharing. Optional tariffs can provide a manufacturer more profit from a large retailer when profit from a small retailer is given. However, the analysis shows that the maximum share of manufacturer from a large retailer is restricted by the condition for self-selection. In case of optional two-part tariffs based on marginal cost, if the gap between demands is large, the maximum share of the manufacturer is sufficient to achieve proper profit sharing. If the gap between demands is not sufficiently large, the manufacturer cannot earn sufficient share from increased profit. An optional modified two-part tariff where marginal price is more than marginal cost of manufacturer is considered because of this scenario. The marginal price above the marginal cost may additionally control the distribution of the increased profit. However, the analysis shows that a manufacturer's maximum profit from a large retailer with given profit from a small retailer is the same as or lower than the maximum profit when optional two-part tariffs based on marginal cost are applied. Therefore, it can be concluded that the optional modified tariffs do not have additional contribution to profit sharing relative to the tariffs based on marginal cost. Although this paper does not cover all kinds of optional tariffs that are different from tariffs based on marginal cost, it shows the advantage of optional tariffs based on marginal cost and has important theoretical implications. The result of this paper also gives guide for channel coordination. Optional two-part tariff based on marginal cost can increase efficiency in channel coordination.

• Korean Management Science Review
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• v.26 no.1
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• pp.21-35
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• 2009

There is a controversy on Internet pricing, flat-rate vs. usage-based. This study gives a comparative analysis between flat-rate and two-part tariff which is realistic alternative of usage-based pricing. In a basic economic model, two-part tariff based on ISP's cost structure satisfies allocative efficiency and relatively expand the number of subscribers. But the characteristics of Internet service like consumers' uncertainty on cost, measurement cost of traffic and network externality induce increase of cost or decrease of marginal utility. The analysis shows that small impact of these can make flat-rate more efficient.

• Health Policy and Management
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• v.13 no.4
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• pp.84-98
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• 2003

This research objective is to determine the optimal price break points for n­block tariff, because comparing non­linear pricing with uniform pricing on the basis of profit, n­block tariff outperforms two­part tariff, all unit discount price schedule, and uniform pricing. Although the merits of non­linear pricing are well documented, the attempt to practice the non-linear pricing in medical service sector has been relatively rare. The determination of the parameters under n­block tariff is the interesting decision making agenda for marketers. Under n­block tariff, the marketers should decide the optimal price break points and the optimal marginal price for each price zone. The results can be summarized as follows: The researchers found that mixture model can be the feasible methodology for determining the optimal number of n­block tariff and identifying the optimal segmentation criteria. We demonstrate the feasibility and the superiority of the mixture model by applying it to the database of medical examination. The results appear that the number of patients per month can be the optimal segmentation variable. And 6­block tariff is the optimal price break for this medical service.

• Journal of the Korean Operations Research and Management Science Society
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• v.27 no.4
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• pp.11-27
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• 2002

This paper is aimed at surveying the method that supports logical and theoretical back grounds of electricity service pricing, to investigate whether the ESPM can reflect comprehensively the various interests of parties and persons concerned with electricity supply and demand, and analyzing the practical applicability of the model in short-term perspectives. The major findings of this study can be summarized as fellows. First, the ESPM explains what process the equilibrium price is attained through, which is the essential concept and object in evaluating the value of public enterprises or utilities and the price of electricity Second, the ESPM provides the logics and methods that can objectify the discrete price by each electricity user. Third, the ESPM presents theoretical logics and practical methods that can calculate the basic price and the variable price per electricity unit which are key concepts in the two-part tariff. Fourth, the ESPM has powerful practical applicabilities in the reasonable electricity pricing and in the explanation for the balance between parties and persons interested with electricity supply and demand.

• Journal of Korea Port Economic Association
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• v.35 no.3
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• pp.1-18
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• 2019

The competition between port authorities (PAs) and terminal operating companies (TOCs) in providing port logistics services has gained importance. The PAs enter into leasing contracts with TOCs in various ways. This study aims to model a contract method that maximizes the joint profit between a PA and a TOC. Particularly, this study aims to model the equilibrium by comparing four types of contract schemes in the non-coordination, cooperation, Cournot, and collusion models. The results of the analysis show that the two-part tariff scheme generates a higher joint profit than the fixed and fee contracts. It is understood that risk- and profit-sharing between the PAs and TOCs helps the latter to maximize the throughput and the joint profit. These results are expected to provide an important theoretical basis for decision-making about port rent and freight between the PAs and TOCs.

• Korea Trade Review
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• v.44 no.3
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• pp.253-269
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• 2019

This study examines the utilization effect of FTA on the sales and profit of the secondary auto-part suppliers in two aspects: 1) firm-level survey on the utilization of FTA and 2) statistical inference on the FTA effects on their sales and profit. We use the GLS statistical technique, panel and survey data of 130 secondary auto-part suppliers in the Daegu and Kyungpook area in 2007-2016. The evidence shows that the secondary auto-part suppliers struggle to prepare documents for the FTA certificates of origin due to their small firm size, although they utilize the FTA at the relatively high rate of 92 percent. Statistical evidence shows that an increase in the export of the first vender significantly affects the sale of the secondary auto-part vendors, but not their profit. The low profit and high managing cost of utilizing the FTA deteriorate the utilization effect of the FTA of the secondary auto-part vendors, which is a key factor in a global supply chain and for the competitiveness of the automobile industry. Government policies are required for the secondary auto-part suppliers to utilize the FTA more effectively and share the benefits of tariff reduction with first auto-part vendors under FTA transaction.

• Journal of Digital Convergence
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• v.10 no.1
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• pp.49-57
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• 2012

The Internet succeeded because of the end-to-end principle which allowed anyone to add functionality to the network. However, as the internet is increasingly becoming the platform for smart IT applications such as VoIP, IPTV, Cloud Computing and Smart Phone, networks are now under increasing strain of traffic congestion and the absence of quality of service insurances. To date, the debate over internet rules has focused on network neutrality rather than network efficiency. This article emphasizes the well-functioning role of market mechanism for the efficient use and further development of the network. To maximize the value of the network, this article proposes a differential treatment to packets based on customer types, and a two-part tariff pricing rule to secure funding to expand and upgrade networks.

• The Journal of Korean Institute of Communications and Information Sciences
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• v.32 no.11B
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• pp.700-708
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• 2007

This paper considers an incentive regulation in the telecommunications industry with respect to the sale of retail and access services. This regulation scheme induces the monopoly carrier who owns bottleneck facilities to adopt socially optimal outcomes when providing access and retail services. It is well known that upstream carriers can realize an integrated level of profit, without integration, by means of a two-part tariff. First, this paper introduces a framework for regulating an access and retail price combined with budget balancing. Second, this paper introduces two-part tariff (price discrimination) scheme for both access (upstream) and retail (downstream) services and discusses the resulting implications for incentive regulation when the regulator has incomplete information about cost functions. By imposing a self-selection mechanism, the regulator can induce firms to adopt socially optimal prices in both access and retail markets.

• Journal of the Korean Society of Costume
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• v.34
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• pp.135-150
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• 1997

The purpose of this study was to inves-tigate the economic performance of the textile industry for the Korean traditional clothes. The content of this paper had two pars; The first part was for the macroeconomic aspects such as location production employments and the produc-tion facilities of the textile industries. The second part was for the microeconomic aspects such as business type branding method fabric type R&D efforts sourc-ing and the distributional channel The major results were as follows: 1.) Most textile firms for the korean traditional clothes were located in Gongju for man-made fibers and in Jinju for silk fabrics. 2) The size of the textile industry in terms of the number of business produc-tion amount the number of employee de-creased during 1994 and 1995 due to the decreasing demand. 3) Over the half of the textile firms produced raw fabric products while only 20% of them were involved in additional dyeing and /or printing finish which re-sulted in low value added production 4) The R&D effort of the textile indus-try for the Korean traditional clothes was very low due to the market uncertainty lack of technological knowledge and most of all small size of the firms 5) Most raw materials for the textile in -dustry were imported with high(25%) tariff rates resulting in price increase and thus low competitiveness in the market. 6) The textile producers sole about the 70% of their products to the wholesalers while selling the rest to the retailers di-rectly. This showed the dual structure of the distribution channel in the textile products. These results suggested some implica-tions for the firms the policy makers and the researchers. The firms should develop new and improved products to increase and create consumer demand by intensive R&D efforts. The government policy ma-kers should give financial supports the firms with R&D investment and legal help such as lowing tariff rate for the raw ma-terials. The researchers from the academy could help the textile industry with the advanced technological knowledge and up-date information for the consumer fashion demand.