Most communication services have a demand "externality" in that the benefit to a subscriber depends upon how many of his communication partners also subscribe. This article develops an economic model that determines both the required critical mass size for startup and the ultimate expansion...

A new criterion is introduced for comparing the convergence properties of variable metric algorithms, focusing on stepwise descent properties. This criterion is a bound on the rate of decrease in the function value at each iterative step (single-step convergence rate). Using this criterion as a...

A simple model is presented which allows us to determine the optimal size, fillup, and drawdown rates for a Strategic Petroleum Reserve (SPR) under a variety of supply and demand conditions. The optimal policy variables are determined by minimizing an analytic expression which we derive for the...

This paper analyzes the dynamic pricing decision of a monopolist marketing a new product or service whose consumption value increases with the expansion of the “network” of adopters. We characterize an optimal pricing strategy which maximizes the present value of the monopolist's profits,...

This paper provides a mathematical framework for modeling demand and determining optimal price schedules in markets which have demand externalities and can sustain nonlinear pricing. These fundamental economic concepts appear in the marketplace in the form of mutual buyers' benefits and quantity...

We investigate the firm's dynamic nonlinear pricing problem when facing consumers whose tastes vary according to a scalar index. We relax the standard assumption that the firm knows the distribution of this index. In general the firm should determine its marginal price schedule as if it were...

New product planning models attempt to predict the market consequences of product line and product design decisions. One output of such models, especially those driven by subjective or market research data, is usually theoretical market shares based upon consumer preferences under idealized...