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Pricing confidence is an essential organizational characteristic which allows teams to sell the product confidently and believe in the price-worthy value of the product (Liozu et al., 2011). [19] Therefore, it is important that companies build up pricing confidence in a team, showing the team a better insight, creating more value from the product.
Martingale pricing is a pricing approach based on the notions of martingale and risk neutrality. The martingale pricing approach is a cornerstone of modern quantitative finance and can be applied to a variety of derivatives contracts, e.g. options , futures , interest rate derivatives , credit derivatives , etc.
A price override is a feature of a retail management system which allows an authorised person to change the automated price of a product or service, in order to apply a discount. [1] [2] Price overrides occur for a variety of reasons. One common reason is to discount damaged goods. Another is employee discount and discounts given to other ...
Price optimization utilizes data analysis to predict the behavior of potential buyers to different prices of a product or service. Depending on the type of methodology being implemented, the analysis may leverage survey data (e.g. such as in a conjoint pricing analysis [7]) or raw data (e.g. such as in a behavioral analysis leveraging 'big data' [8] [9]).
This is heavily used in the pricing of financial derivatives due to the fundamental theorem of asset pricing, which implies that in a complete market, a derivative's price is the discounted expected value of the future payoff under the unique risk-neutral measure. [1] Such a measure exists if and only if the market is arbitrage-free.
A price war is a form of market competition in which companies within an industry engage in aggressive pricing activity "characterized by the repeated cutting of prices below those of competitors". [1] This leads to a vicious cycle, where each competitor attempts to match or undercut the price of the other. [2]
Asymmetric price transmission (sometimes abbreviated as APT and informally called "rockets and feathers" , also known as asymmetric cost pass-through) refers to pricing phenomenon occurring when downstream prices react in a different manner to upstream price changes, depending on the characteristics of upstream prices or changes in those prices.
The theory that stock prices move randomly was earlier proposed by Maurice Kendall in his 1953 paper, The Analysis of Economic Time Series, Part 1: Prices. [4] In 1993 in the Journal of Econometrics , K. Victor Chow and Karen C. Denning published a statistical tool (known as the Chow–Denning test) for checking whether a market follows the ...