Optimal product design under price competition

Proceedings of the ASME Design Engineering Technical Conference

Volumn 1, Issue PARTS A AND B, 2008, Pages 403-415

  Shiau, Ching Shin ^a   Michalek, Jeremy J ^a  

^a CARNEGIE MELLON UNIVERSITY   (United States)

Author keywords

Demand model; Design for market; Design optimization; Game theory; Logit; Nash equilibrium; New product development; Stackelberg competition

Indexed keywords

DEMAND MODELS; DESIGN OPTIMIZATION; LOGIT; NASH EQUILIBRIUM; NEW PRODUCT DEVELOPMENT; STACKELBERG;

COMMERCE; COMPETITION; COMPUTER AIDED DESIGN; COSTS; ENGINEERING; GAME THEORY; OPTIMIZATION; PRODUCT DEVELOPMENT; PROFITABILITY;

PRODUCT DESIGN;

EID: 81155151503     PISSN: None     EISSN: None     Source Type: Conference Proceeding    
DOI: 10.1115/DETC2008-49176     Document Type: Conference Paper

References (31)

1. Hauser, J.R., 1988, "Competitive Price and Positioning Strategies," Marketing Science, 7(1), pp. 76-91.
2. Choi, S.C., Desarbo, W.S., and Harker, P.T., 1990, "Product Positioning under Price Competition," Management Science, 36(2), pp. 175-199.
3. Choi, S.C., Desarbo, W.S., and Harker, P.T., 1992, "A Numerical Approach to Deriving Long-Run Equilibrium Solutions in Spatial Positioning Models," Management Science, 38(1), pp. 75-86.
4. Mas-Colell, A., Whinston, M.D., and Green, J.R., 1995, Microeconomic Theory, Oxford University Press, New York, NY.
5. Choi, S.C., and Desarbo, W.S., 1993, "Game Theoretic Derivations of Competitive Strategies in Conjoint Analysis," Marketing Letters, 4(4), pp. 337-348.
6. Hadjinicola, G.C., 1999, "Product Positioning and Pricing under Production Cost Considerations," Decision Sciences, 30(3), pp. 849-864.
7. Michalek, J.J., Papalambros, P.Y., and Skerlos, S.J., 2004, "A Study of fuel Efficiency and Emission Policy Impact on Optimal Vehicle Design Decisions," ASME Journal of Mechanical Design, 126(6), pp. 1062-1070. (Pubitemid 40394119)
8. Shiau, C.-S., and Michalek, J.J, 2008, "Should Designers Worry About Market Systems?" Proceedings of the ASME International Design Engineering Technical Conferences, Aug. 3-6, New York, NY.
9. Horsky, D. and Nelson, P., 1992, "New Brand Positioning and Pricing in An Oligopolistic Market," Marketing Science, 11(2), pp. 133-153.
10. Rhim, H. and Cooper, L.G., 2005, "Assessing Potential Threats to Incumbent Brands: New Product Positioning under Price Competition in A Multisegmented Market," International Journal of Research in Marketing, 22(2), pp. 159-182. (Pubitemid 40792255)
11. Luo, L., Kannan, P.K., and Ratchford, B.T., 2007, "New Product Development under Channel Acceptance," Marketing Science, 26(2), pp. 149-163.
12. Choi, S.C. and Desarbo, W.S., 1994, "A Conjoint-Based Product Designing Procedure Incorporating Price- Competition," Journal of Product Innovation Management, 11(5), pp. 451-459.
13. Fudenberg, D. and Tirole, J., 1991, Game theory, MIT Press, Cambridge, Mass.
14. Harker, P.T., 1984, "A Variational Inequality Approach for the Determination of Oligopolistic Market Equilibrium," Mathematical Programming, 30(1), pp. 105-111.
15. Lou, Z.Q., Pang, J.S., and Ralph, D., 1996, Mathematical Programs with Equilibrium Constraints, Cambridge University Press, New York.
16. Ferris, M.C. and Pang, J.S., 1997, "Engineering and Economic Applications of Complementarity Problems," SIAM Review, 39(4), pp. 669-713. (Pubitemid 127661265)
17. Anderson, S.P., De Palma, A., and Thisse, J.F., 1992, Discrete choice theory of product differentiation, MIT Press, Cambridge, Mass.
18. Rao, A.R. and Monroe, K.B., 1989, "The Effect of Price, Brand Name, and Store Name on Buyers Perceptions of Product Quality - an Integrative Review," Journal of Marketing Research, 26(3), pp. 351-357.
19. Papalambros, P.Y. and Wilde, D.J., 2000, Principles of optimal design: modeling and computation, Cambridge University Press, Cambridge, New York.
20. Viswanathan, J. and Grossmann, I.E., 1990, "A Combined Penalty-Function and Outer-Approximation Method for MINLP Optimization," Computers & Chemical Engineering, 14(7), pp. 769-782.
21. Tawarmalani, M. and Sahinidis, N.V., 2004, "Global Optimization of Mixed-integer Nonlinear Programs: A Theoretical and Computational Study," Mathematical Programming, 99(3), pp. 563-591. (Pubitemid 40871718)
22. ARKI Consulting & Development A/S, 2002, GAMS/SBB Solver Manual, 〈http://www.gams.com/dd/docs/solvers/sbb.pdf〉 retrieved on Feb. 1, 2008.
23. Dirkse, S., and Ferris, M., 1994, "MCPLIB: A Collection of Nonlinear Mixed Complementarity Problems", 〈ftp://ftp.cs.wisc.edu/math-prog/ mcplib/〉 retrieved on Feb. 1, 2008.
24. Train, K.E., 2003, Discrete Choice Methods with Simulation, Cambridge University Press.
25. Lou, L., 2005, Essays on New Product Development, Ph.D. dissertation, University of Maryland, 〈http://hdl.handle.net/1903/2602〉 retrieved on Feb. 1, 2008
26. Luo, L., Kannan, P.K., Besharati, B., and Azarm, S., 2005, "Design of Robust New Products under Variability: Marketing Meets Design," Journal of Product Innovation Management, 22(2), pp. 177-192. (Pubitemid 40401831)
27. Besharati, B., Luo, L., Azarm, S., and Kannan, P.K., 2006, "Multi-objective Single Product Robust Optimization: An Integrated Design and Marketing Approach," Journal of Mechanical Design, 128(4), pp. 884-892. (Pubitemid 44123177)
28. Williams, N., Azarm, S., and Kannan, P.K., 2006, "Engineering Product Design Optimization for Retail Channel Acceptance," Proceedings of the Proceedings of the ASME Design Engineering Technical Conference, Philadelphia, PA.
29. Michalek, J.J., Feinberg, F.M., and Papalambros, P.Y., 2005, "Linking Marketing and Engineering Product Design Decisions via Analytical Target Cascading," Journal of Product Innovation Management, 22(1), pp. 42-62. (Pubitemid 40178606)
30. Michalek, J.J., Ceryan, O., Papalambros, P.Y., and Koren, Y., 2006, "Balancing Marketing and Manufacturing Objectives in Product Line Design," Journal of Mechanical Design, 128(6), pp. 1196-1204. (Pubitemid 44970610)
31. Michalek, J.J., Feinberg, F.M., Adigüzel, F., Ebbes, P., and Papalambros, P.Y., 2007, "Coordinated Positioning and Design of Product Lines for Markets with Heterogeneous Preferences," Management Science, in review.