Search results for: competitive pricing

Authors: Salah Alrabeei, Mohammad Yousuf

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The goal of option pricing theory is to help the investors to manage their money, enhance returns and control their financial future by theoretically valuing their options. Modeling option pricing by Black-School models with jumps guarantees to consider the market movement. However, only numerical methods can solve this model. Furthermore, not all the numerical methods are efficient to solve these models because they have nonsmoothing payoffs or discontinuous derivatives at the exercise price. In this paper, the exponential time differencing (ETD) method is applied for solving partial integrodifferential equations arising in pricing European options under Merton’s and Kou’s jump-diffusion models. Fast Fourier Transform (FFT) algorithm is used as a matrix-vector multiplication solver, which reduces the complexity from O(M2) into O(M logM). A partial fraction form of Pad`e schemes is used to overcome the complexity of inverting polynomial of matrices. These two tools guarantee to get efficient and accurate numerical solutions. We construct a parallel and easy to implement a version of the numerical scheme. Numerical experiments are given to show how fast and accurate is our scheme.

Keywords: Integral differential equations, , L-stable methods, pricing European options, Jump–diffusion model

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Authors: Deeksha Arora

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The study aims to explore the applicability of the widely used asset pricing models, namely, Capital Asset Pricing Model (CAPM) and the Fama-French Four Factor Model in the Indian equity market. The study will be based on the companies that form part of the Nifty Fifty Index for a period of five years: 2011 to 2016. The asset pricing model is examined by forming portfolios on the basis of three variables – market capitalization (size effect), book-to-market equity ratio (value effect) and profitability. The study provides a basis to test the presence of the Fama-French Four factor model in Indian stock market. This study may provide a basis for future research in the generalized asset pricing model comprising of multiple risk factors.

Keywords: book to market equity, Fama French four factor model, market capitalization, profitability, size effect, value effect

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Authors: Andrea Trimarchi

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This paper is designed to provide a comprehensive overview on the EU Regulation No. 868/2004 concerning protection against subsidisation and unfair pricing practices regarding non-EU carriers and causing injury to Community air carriers. The analysis will focus, at first, on the exegetical scrutiny of the legal categories encompassed by the Regulation. In addition to that, while considering the peculiarities of such legal instrument, the attention will be addressed on the assessment on its effectiveness. The Regulation, indeed, having received lots of criticism, is in need of a profound revision. In this context, the present work will try to take into account the policy alternatives. In light of the failure of Regulation 868, which is to be seen as the expression of a unilateral and regional approach, there would seem to be the necessity for the aviation sector to reconsider the topic of subsidisation and unfair pricing practices in a more international oriented manner.

Keywords: non-EU airlines, aviation, subisidisation, unfair

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Authors: Urmi Khatri

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Capital asset pricing model (CAPM) draws a direct relationship between the risk and the expected rate of return. There was a criticism on the beta and the assumptions of CAPM, as they are not applicable in the real world. Fama French Three Factor Model and Fama French Five Factor Model have given different factors, which have an impact on the return of any asset like size, value, investment and profitability. This study proposes to see Capital Asset pricing Model through the lenses of the quality aspect. In the study, the six factors are studied. The Fama French Five Factor Model and addition of the quality dimension are studied. Here, Graham’s seven quality and quantity criteria are measured to determine the score of the sample firms. Thus, this study tries to check the model fit. The beta coefficient of the quality dimension and the R square value is seen to determine validity of the proposed model. The sample is drawn from the firms listed on Indian Stock Exchange (BSE). For the study, only nonfinancial firms are been selected. The time period of the study is from January 1999 to December 2019. Hence, the primary objective of the study is to check how robust the model becomes after giving the quality dimension to the capital asset pricing model in addition to the size, value, profitability and investment.

Keywords: asset pricing model, CAPM, Graham’s score, G-score, multifactor model, quality

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Authors: Despina Yiakoumi, Agathe Rouaix

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Laboratory experiments were run to investigate the impact of different design characteristics of the auctions, which have been implemented to procure capacity in the UK’s reformed electricity markets. The experiment studies competition among bidders in procurement multi-unit discrete descending clock auctions under different feedback policies and pricing rules. Theory indicates that feedback policy in combination with the two common pricing rules; last-accepted bid (LAB) and first-rejected bid (FRB), could affect significantly the auction outcome. Two information feedback policies regarding the bidding prices of the participants are considered; with feedback and without feedback. With feedback, after each round participants are informed of the number of items still in the auction and without feedback, after each round participants have no information about the aggregate supply. Under LAB, winning bidders receive the amount of the highest successful bid and under the FRB the winning bidders receive the lowest unsuccessful bid. Based on the theoretical predictions of the alternative auction designs, it was decided to run three treatments. First treatment considers LAB with feedback; second treatment studies LAB without feedback; third treatment investigates FRB without feedback. Theoretical predictions of the game showed that under FRB, the alternative feedback policies are indifferent to the auction outcome. Preliminary results indicate that LAB with feedback and FRB without feedback achieve on average higher clearing prices in comparison to the LAB treatment without feedback. However, the clearing prices under LAB with feedback and FRB without feedback are on average lower compared to the theoretical predictions. Although under LAB without feedback theory predicts the clearing price will drop to the competitive equilibrium, experimental results indicate that participants could still engage in cooperative behavior and drive up the price of the auction. It is showed, both theoretically and experimentally, that the pricing rules and the feedback policy, affect the bidding competitiveness of the auction by providing opportunities to participants to engage in cooperative behavior and exercise market power. LAB without feedback seems to be less vulnerable to market power opportunities compared to the alternative auction designs. This could be an argument for the use of LAB pricing rule in combination with limited feedback in the UK capacity market in an attempt to improve affordability for consumers.

Keywords: descending clock auctions, experiments, feedback policy, market design, multi-unit auctions, pricing rules, procurement auctions

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Authors: S. Avdasheva, D. Tsytsulina

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In many regulated industries over the world price cap as a method of price regulation replaces cost-plus pricing. It is a kind of incentive regulation introduced in order to enhance productive efficiency by strengthening sellers’ incentives for cost reduction as well as incentives for more efficient pricing. However pricing under cap is not neutral for competition in the market. We consider influence on competition on the markets where benchmark for cap is chosen from when sellers are multi-market. We argue that the impact of price cap regulation on market competition depends on the design of cap. More specifically if cap for one (regulated) market depends on the price of the supplier in other (non-regulated) market, there is sub-type of price cap regulation (known in Russian tariff regulation as ‘netback minus’) that enhance incentives to collude in non-regulated market.

Keywords: price regulation, competition, collusion

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Authors: Ali Safdari-Vaighani

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Pricing financial contracts on several underlying assets received more and more interest as a demand for complex derivatives. The option pricing under asset price involving jump diffusion processes leads to the partial integral differential equation (PIDEs), which is an extension of the Black-Scholes PDE with a new integral term. The aim of this paper is to show how basket option prices in the jump diffusion models, mainly on the Merton model, can be computed using RBF based approximation methods. For a test problem, the RBF-PU method is applied for numerical solution of partial integral differential equation arising from the two-asset European vanilla put options. The numerical result shows the accuracy and efficiency of the presented method.

Keywords: basket option, jump diffusion, ‎radial basis function, RBF-PUM

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Authors: V. Benedico, C. Anacleto, A. Bearzi, L. Brice, V. Delahaye

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The aim in present paper is to construct an affordable and reliable commodity prices based on a recalculation of its cost through time which allows visualize the potential risks and thus, take more appropriate decisions regarding forecasts. Here attention has been focused on Levy model, more reliable and realistic than classical random Gaussian one as it takes into consideration observed abrupt jumps in case of sudden price variation. In application to Energy Trading sector where it has never been used before, equations corresponding to Levy model have been written for electricity pricing in European market. Parameters have been set in order to predict and simulate the price and its evolution through time to remarkable accuracy. As predicted by Levy model, the results show significant spikes which reach unconventional levels contrary to currently used Brownian model.

Keywords: commodity pricing, Lévy Model, price spikes, electricity market

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Authors: Laxuman Thakuri

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Community-based forest management is often glorified as one of the best forest management alternatives in the developing countries like Nepal. It is also believed that the transfer of forest management authorities to local communities is decisive to take efficient decisions, maximize the forest benefits and improve the people’s livelihood. The community forestry of Nepal also aims to maximize the forest benefits; share them among the user households and improve their livelihood. However, how the local communities fix the price of forest products and local pricing made by the forest user groups affects to equitable forest benefits-sharing among the user households and their livelihood improvement objectives, the answer is largely silent among the researchers and policy-makers alike. This study examines local pricing system of forest products in the lowland community forestry and its effects on equitable benefit-sharing and livelihood improvement objectives. The study discovered that forest user groups fixed the price of forest products based on three criteria: i) costs incur in harvesting, ii) office operation costs, and iii) livelihood improvement costs through community development and income generating activities. Since user households have heterogeneous socio-economic conditions, the forest user groups have been applied low pricing strategy even for high-value forest products that the access of socio-economically worse-off households can be increased. However, the results of forest products distribution showed that as a result of low pricing strategy the access of socio-economically better-off households has been increasing at higher rate than worse-off and an inequality situation has been created. Similarly, the low pricing strategy is also found defective to livelihood improvement objectives. The study suggests for revising the forest products pricing system in community forest management and reforming the community forestry policy as well.

Keywords: community forestry, forest products pricing, equitable benefit-sharing, livelihood improvement, Nepal

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Authors: Faisal Asad Aburub

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Many organizations are investing in web applications and technologies in order to be competitive, some of them could not achieve its goals. The quality of web-based applications could play an important role for organizations to be competitive. So the aim of this study is to investigate the impact of quality of web-based applications to achieve a competitive advantage. A new model has been developed. An empirical investigation was performed on a banking sector in Jordan to test the new model. The results show that impact of web-based applications on competitive advantage is significant. Finally, further work is planned to validate and evaluate the proposed model using several domains.

Keywords: competitive advantage, web-based applications, empirical investigation, commercial banks in Jordan

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Authors: A. Chateauneuf, M. Mostoufi, D. Vyncke

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Monte Carlo (MC) simulation is a technique that provides approximate solutions to a broad range of mathematical problems. A drawback of the method is its high computational cost, especially in a high-dimensional setting, such as estimating the Tail Value-at-Risk for large portfolios or pricing basket options and Asian options. For these types of problems, one can construct an upper bound in the convex order by replacing the copula by the comonotonic copula. This comonotonic upper bound can be computed very quickly, but it gives only a rough approximation. In this paper we introduce the Comonotonic Monte Carlo (CoMC) simulation, by using the comonotonic approximation as a control variate. The CoMC is of broad applicability and numerical results show a remarkable speed improvement. We illustrate the method for estimating Tail Value-at-Risk and pricing basket options and Asian options when the logreturns follow a Black-Scholes model or a variance gamma model.

Keywords: control variate Monte Carlo, comonotonicity, option pricing, scientific computing

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Authors: M. Babul Hasan

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Management sciences (MS), big group of companies and industries or government policies (GP) is affiliated with a huge number of decision ingredients and complicated restrictions. Every factor in MS, every product in Industries or decision in GP is not always bankable in practice. After formulating these models there arises large-scale mixed integer programming (MIP) problem. In this paper, we developed decomposition-based pricing procedure to filter the unnecessary decision ingredients from MIP where the variables in huge number will be abated and the complicacy of restrictions will be elementary. A real life numerical example has been illustrated to demonstrate the methods. We develop the computer techniques for these methods by using a mathematical programming language (AMPL).

Keywords: Lagrangian relaxation, decomposition, sub-problem, master-problem, pricing, mixed IP, AMPL

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Authors: B. F. Nteumagne, E. Pindza, E. Mare

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We apply Lie symmetries analysis to price and hedge options in the fractional Brownian framework. The reputation of Lie groups is well spread in the area of Mathematical sciences and lately, in Finance. In the presence of transactions costs and under fractional Brownian motions, analytical solutions become difficult to obtain. Lie symmetries analysis allows us to simplify the problem and obtain new analytical solution. In this paper, we investigate the use of symmetries to reduce the partial differential equation obtained and obtain the analytical solution. We then proposed a hedging procedure and calibration technique for these types of options, and test the model on real market data. We show the robustness of our methodology by its application to the pricing of digital options.

Keywords: fractional brownian model, symmetry, transaction cost, option pricing

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Authors: Saeed Sayyad Hagh Shomar

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Traffic congestion pricing in urban streets is one of the most suitable options for solving the traffic problems and environment pollutions in the cities of the country. Unlike its acceptable outcomes, there are problems concerning the necessity to pay by the mass. Regarding the fact that public response in order to succeed in this strategy is so influential, studying their response and behavior to get the feedback and improve the strategies is of great importance. In this study, a questionnaire was used to examine the public reactions to the traffic congestion pricing schemes at the center of Tehran metropolis and the factors involved in people’s decision making in accepting or rejecting the congestion pricing schemes were assessed based on the data obtained from the questionnaire as well as the international experiences. Then, by analyzing and comparing the schemes, guidelines to reduce public objections to them are discussed. The results of reviewing and evaluating the public reactions show that all the pros and cons must be considered to guarantee the success of these projects. Consequently, with targeted public education and consciousness-raising advertisements, prior to initiating a scheme and ensuring the mechanism of the implementation after the start of the project, the initial opposition is reduced and, with the gradual emergence of the real and tangible benefits of its implementation, users’ satisfaction will increase.

Keywords: demand management, international experiences, traffic congestion pricing, public acceptance, public reactions, public objection

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Authors: Cesar Leines

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The social effects of the pandemic are significant and diverse, most of those effects have widened the gap of economic inequality. Without a doubt, each country faces difficulties associated with the strengths and weaknesses of its own institutions that can address these causes and consequences. Around the world, pricing practices that have no connection to production costs have been used extensively in numerous markets beyond those relating to the supply of essential goods and services, and although it is not unlawful to adjust pricing considering the increased demand of certain products, shortages and disruption of supply chains, illegitimate pricing practices may arise and these tend to transfer wealth from consumers to producers that affect the purchasing power of the former, making people worse off. High prices with no objective justification indicate a poor state of the competitive process in any market and the impact of those underlying competition issues leading to inefficiency is increased when national competition agencies are weak and ineffective in enforcing competition in law and policy. It has been observed that in those countries where competition authorities are perceived as weak or ineffective, price increases of a wide range of products and services were more significant during the pandemic than those price increases observed in countries where the perception of the effectiveness of the competition agency is high. When a perception is created of a highly effective competition authority, one which enforces competition law and its non-enforcement activities result in the fulfillment of its substantive functions of protecting competition as the means to create efficient markets, the price rise observed in markets under its jurisdiction is low. A case study focused on the effectiveness of the national competition agency in Mexico (COFECE) points to institutional weakness as one of the causes leading to excessive pricing. There are many factors that contribute to its low effectiveness and which, in turn, have led to a very significant price hike, potentiated by the pandemic. This paper contributes to the discussion of these factors and proposes different steps that overall help COFECE or any other competition agency to increase the perception of effectiveness for the benefit of the consumers.

Keywords: agency effectiveness, competition, institutional weakness, price gouging

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Authors: Pallavi Thacker, H. P. Mathur

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This paper tries to find out from the available literature the status of Competitive Advantage. It has been stated a number of times that firms must strive to attain sustainable competitive advantage; but is the concept of sustainability of advantage still valid in this new diversified and too-rapidly changing world? The paper reaches a conclusion that the answer is “no”. Gone is the time when once attained position could easily be retained forever or at-least for a substantial amount of time. We live in a time which is very much globalised. We are used to a high level of competition from all directions. Technological advances, developed human capital, flexibility and end number of factors make the sustenance of competitive advantage difficult. This paper analyses competitive advantage from the view points of Michael Porter (who talks about sustainability) and Rita Gunther McGrath (who says competitive advantage can no more be sustained). It uses many examples and evidences from papers, journals and news. A research in this area is very much required (especially in a developing country like India) so that industries, firms and people can find out the suitable strategies that match with the changing times.

Keywords: competitive advantage, sustainable, transient, globalisation

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Authors: Zainab Atia, Hongwei He, Panagiotis Sarantopoulos

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Over the past few years, firms have witnessed a massive increase in sophisticated algorithmic deployment, which has become quite pervasive in today’s modern society. With the wide availability of data for retailers, the ability to track consumers using algorithmic pricing has become an integral option in online platforms. As more companies are transforming their businesses and relying more on massive technological advancement, pricing algorithmic systems have brought attention and given rise to its wide adoption, with many accompanying benefits and challenges to be found within its usage. With the overall aim of increasing profits by organizations, algorithmic pricing is becoming a sound option by enabling suppliers to cut costs, allowing better services, improving efficiency and product availability, and enhancing overall consumer experiences. The adoption of algorithms in retail has been pioneered and widely used in literature across varied fields, including marketing, computer science, engineering, economics, and public policy. However, what is more, alarming today is the comprehensive understanding and focus of this technology and its associated ethical influence on consumers’ perceptions and behaviours. Indeed, due to algorithmic ethical concerns, consumers are found to be reluctant in some instances to share their personal data with retailers, which reduces their retention and leads to negative consumer outcomes in some instances. This, in its turn, raises the question of whether firms can still manifest the acceptance of such technologies by consumers while minimizing the ethical transgressions accompanied by their deployment. As recent modest research within the area of marketing and consumer behavior, the current research advances the literature on algorithmic pricing, pricing ethics, consumers’ perceptions, and price fairness literature. With its empirical focus, this paper aims to contribute to the literature by applying the distinction of the two common types of algorithmic pricing, dynamic and personalized, while measuring their relative effect on consumers’ behavioural outcomes. From a managerial perspective, this research offers significant implications that pertain to providing a better human-machine interactive environment (whether online or offline) to improve both businesses’ overall performance and consumers’ wellbeing. Therefore, by allowing more transparent pricing systems, businesses can harness their generated ethical strategies, which fosters consumers’ loyalty and extend their post-purchase behaviour. Thus, by defining the correct balance of pricing and right measures, whether using dynamic or personalized (or both), managers can hence approach consumers more ethically while taking their expectations and responses at a critical stance.

Keywords: algorithmic pricing, dynamic pricing, personalized pricing, price ethicality

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Authors: Rong-Tsorng Wang

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In this paper, we derive a pricing formula for catastrophe equity put options (or CatEPut) with non-homogeneous loss and approximated compound distributions. We assume that the loss claims arrival process is a nonhomogeneous Poisson process (NHPP) representing the clustering occurrences of loss claims, the size of loss claims is a sequence of independent and identically distributed random variables, and the accumulated loss distribution forms a compound distribution and is approximated by a heavy-tailed distribution. A numerical example is given to calibrate parameters, and we discuss how the value of CatEPut is affected by the changes of parameters in the pricing model we provided.

Keywords: catastrophe equity put options, compound distributions, nonhomogeneous Poisson process, pricing model

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Authors: Seyedabdolali Mortazavi Kamalabadi, Faegheh Taheran

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By giving an overview of previous arguments and findings concerned with the concept of competitive advantage, first, we define the overall concept of competitive advantage and discuss nuances of understanding such an important and strategic idea. Finally, by considering the major concerns of marketing academia, including globalization, AI-based technologies, consumer well-being, and internal coopetition between a firm’s units, fruitful avenues to be explored by future studies are presented in the form of research propositions. In the end, relevant gaps mentioned by numerous studies that are worth investigating are demonstrated.

Keywords: artificial intelligence, competitive advantage, consumer well-being, coopetition, globalization, literature review, temporary competitive advantage

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Authors: Guillaume Leduc

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In this paper, we describe a broad setting under which the error of the approximation can be quantified, controlled, and for which convergence occurs at a speed of n⁻¹ for European and American options. We describe how knowledge of the error allows for arbitrarily fast acceleration of the convergence.

Keywords: random walk approximation, European and American options, rate of convergence, option pricing

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Authors: Malki Fatima Zahra Nadia, Kellal Chaimaa, Brahimi Houria

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The world has undergone a big dramatic transformations as a result of the liberalization of the economy. Which lead to intensity of competition between economic institutions under the slogan “ Survival of the fittest”.in the line with these changes, it is imperative for Organizations to adopt the philosophy of applying ICT in the era of globalization in order to survive and sustain in the local and international markets.and even the Algerian economic institutions are concerned in what witnessed by the international institutions,especially after Algeria adopted the policy of trade openness.And from this point, it was the start of the study, that aims at identifying the role of ICT in achieving competitive advantage in the economic institutions according to an analytical study of Mobilis Telecom in Algeria city, and then the analysis of the results by SPSS edition 24.To sum up, i have come to the conclusion that ICT has effectively contributed to the achievement of competitive advantage, and that the value of organizations today lies in the extent to which they use ICT’s which make it gain speed, efficiency, and the quality of its operations especially in the competitive competition.

Keywords: ICT, company, competitive advantage, competitive strategie

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Authors: Malki Fatima Zahra Nadia, Kellal Cheiimaa, Brahimi Houria

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Total Quality Management (TQM) is one of the most important modern management systems in marketing, that help organizations to survive and remain competitive in the dynamic market with frequent changes. It assists them in gaining a competitive advantage, growth, and excellence compared to their competitors. To understand the impact of TQM on competitive advantage in economic companies, a study was conducted in Ooredoo Telecommunications Company. A questionnaire was designed and distributed to OOredoo' 75 employees in each of the departments of leadership, quality assurance, quality control, research and development, production, customer service, Similarly, resulting in the retrieval of 72 questionnaires. To analyze the descriptive results of the study, the SPSS software version 25 was used. Additionally, Structural Equation Modeling (SEM) with the help of Smart Pls4 software was utilized to test the study's hypotheses. The study concluded that there is an impact between total quality management and competitive advantage in Ooredoo company to different degrees. On this basis, the study recommended the need to implement the total quality management system at the level of all organizations and in various fields.

Keywords: total quality management, ISO system, competitive advantage, competitive strategies

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Authors: Yazan Khalid Abed-Allah Migdadi

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The aim of this study is identifying the effective operations competitive advantages of mobile phone service providers across countries. All Arab countries in the Middle East region were surveyed except Syria, and 27 out of 31 service providers were surveyed. Data collected from corporations’ annual reports, websites and other professional institutions published sources. Multiple linear regression analysis test was used to identify the relationship between operations competitive advantages and market share. The effective operations competitive advantages were; diversity of offers and service accessibility

Keywords: competitive advantage, mobile telecommunication operations, Middle East, service provider

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Authors: Alma Lucero Ortiz, Mario Gómez

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The purpose of this article is to conduct a theoretical and empirical study in order to analyze how the Supply Chain Management (SCM) and Supply Chain Responsiveness (SCR) affects the competitive advantage of the agrofood sector in 2017, in particular, the exporting companies of berries in Mexico. This work is presented in two parts, as a first part is developed a theoretical analysis of the main studies to measure the variables subject to the study. Subsequently an empirical study is carried out through field work and to process the data a logical econometric model is performed to be able to evaluate the effect of the SCM and SCR on the competitive advantage in the companies exporting berries. The results suggest that the SCM has a positive effect on the competitive advantage of the companies under study, so it is necessary to implement greater practices oriented towards a suitable SCM for the companies to achieve a competitive performance. In the case of SCR, it was found that this variable does not have effect on competitive advantage.

Keywords: competitive advantage, econometric model, supply chain management, supply chain responsiveness, sustained competitive advantage

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Authors: Erindi Allaj

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This paper studies arbitrage pricing theory in financial markets with transaction costs. We extend the existing theory to include the more realistic possibility that the price at which the investors trade is dependent on the traded volume. The investors in the market always buy at the ask and sell at the bid price. Transaction costs are composed of two terms, one is able to capture the implicit transaction costs and the other the price impact. Moreover, a new definition of a self-financing portfolio is obtained. The self-financing condition suggests that continuous trading is possible, but is restricted to predictable trading strategies which have left and right limit and finite quadratic variation. That is, predictable trading strategies of infinite variation and of finite quadratic variation are allowed in our setting. Within this framework, the existence of an equivalent probability measure is equivalent to the absence of arbitrage opportunities, so that the first fundamental theorem of asset pricing (FFTAP) holds. It is also proved that, when this probability measure is unique, any contingent claim in the market is hedgeable in an L2-sense. The price of any contingent claim is equal to the risk-neutral price. To better understand how to apply the theory proposed we provide an example with linear transaction costs.

Keywords: arbitrage pricing theory,
transaction costs, fundamental theorems of arbitrage, financial markets

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Authors: M. Chobotová, Ž. Rylková

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Time full of changes which is associated with globalization, tougher competition, changes in the structures of markets and economic downturn, that all force companies to think about their competitive advantages. These changes can bring the company a competitive advantage and that can help improve competitive position in the market. Policy of the European Union is focused on the fast growing innovative companies which quickly respond to market demands and consequently increase its competitiveness. To meet those objectives companies need the right conditions and support of their state.

Keywords: innovation, performance, measurements metrics, indices

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Authors: Betul Zehra Karagul

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A game consists of strategies that each actor has in his/her own choice strategies, and a game regulates the certain rules in the strategies that the actors choose, express how they evaluate their knowledge and the utility of output results. Game theory examines the human behaviors (preferences) of strategic situations in which each actor of a game regards the action that others will make in spite of his own moves. There is a balance between each player playing a game with the final number of players and the player with a certain probability of choosing the players, and this is called Nash equilibrium. The insurance is a two-person game where the insurer and insured are the actors. Both sides have the right to act in favor of utility functions. The insured has to pay a premium to buy the insurance cover. The insured will want to pay a low premium while the insurer is willing to get a high premium. In this study, the state of equilibrium for insurance pricing was examined in terms of the insurer and insured with game theory.

Keywords: game theory, insurance pricing, Nash equilibrium, utility function

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Authors: Monia Hassan Abdulrahman

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Resource-based view is built on many theories in addition to diverse perspectives, we extend this view placing emphasis on human resources addressing the tools required to sustain competitive advantage. Highlighting on several theories and judgments, assumptions were established to clearly reach if resource possession alone suffices for the sustainability of competitive advantage, or necessary accommodation are required for better performance. New practices were indicated in terms of resources used in firms, these practices were implemented on the human resources in particular, and results were developed in compliance to the mentioned assumptions. Such results drew attention to the significance of practices that provide enhancement of human resources that have a core responsibility of maintaining resource-based view for an organization to lead the way to gaining competitive advantage.

Keywords: competitive advantage, resource based value, human resources, strategic management

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Authors: Mohammad Saber Rohi, Saghar Heidari

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In this paper, we studied the pricing problem of American options under a regime-switching model with the possibility of a non-optimal exercise policy (early or late exercise time) which is called an irrational strategy. For this, we consider a Markovmodulated model for the dynamic of the underlying asset as an alternative model to the classical Balck-Scholes-Merton model (BSM) and an intensity-based model for the irrational strategy, to provide more realistic results for American option prices under the irrational behavior in real financial markets. Applying a partial differential equation (PDE) approach, the pricing problem of American options under regime-switching models can be formulated as coupled PDEs. To solve the resulting systems of PDEs in this model, we apply a finite element method as the numerical solving procedure to the resulting variational inequality. Under some appropriate assumptions, we establish the stability of the method and compare its accuracy to some recent works to illustrate the suitability of the proposed model and the accuracy of the applied numerical method for the pricing problem of American options under the regime-switching model with irrational behaviors.

Keywords: irrational exercise strategy, rationality parameter, regime-switching model, American option, finite element method, variational inequality

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Authors: Samaneh Pouyanfar, Michael Oliff

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Nowadays, customer satisfaction and discovering the superior services, are counted as vital issues in most manufacturing and services companies. In these terms, gaining the competitive advantage by a business depends on products and services which are able to cause the customer satisfaction. Given the importance of this subject, this paper tries to investigate the correlation between components of customer satisfaction and gaining the competitive advantage by the business. For this purpose, after reviewing the research literature and doing deep interviews with authors and active people in the industry, based on the variables affecting the customer satisfaction and determinant components of business competitive advantage, research questionnaire was prepared. In sum, 96 executives of PARS-KHAZAR Company were asked in a survey. The results of P.L.S. Test for the research structure analysis showed that the measuring tools in terms of technical features, like convergent and divergent validity and compound reliability were very appropriate. Moreover the results showed that, the structure of products and factors related to foundation, has affected the competitive advantage performance positively and significantly; but the influence of structure of services and business environment on competitive advantage was not confirmed.

Keywords: customer satisfaction, competitive advantage, products, foundation, home appliances

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