Information provision and consumer search behavior for products with asymmetric uncertainty

When selling multiple products with asymmetric uncertainty,should the seller disclose product information so that customers do not have to incur any cost to resolve their uncertainties;if so,which product should the seller choose?To address these questions,we consider a monopolist selling two substitutable products to a group of consumers.Each consumer has asymmetric uncertainty regarding the two products.A total of four different information provision structures are considered based on whether the seller discloses information about each product with the aim of determining which strategy provides the seller with the greatest revenue.We derive several interesting results.First,the optimal information provision strategy depends on the magnitude of uncertainty in relation to the product with lower uncertainty.Specifically,if the uncertainty regarding the product with lower uncertainty is sufficiently small,it is optimal for the seller to provide information about the product with higher uncertainty,otherwise,the seller should provide information about both products.Second,when only one product's information should be revealed,it is optimal for the seller to choose the product with higher uncertainty and charge a higher price.Third,withholding information on both products is never optimal for the seller.Finally,our main model is extended by examining the Mean-Preserving Spread setting,and the robustness of our main results is confirmed.Furthermore,we examine the situation in which a monopolist sells a single product with two main attributes.We find that each of the four information provision strategies can be optimal under various scenarios.

Test sequencing problem arising at the design stage for reducing life cycle cost

Previous test sequencing algorithms only consider the execution cost of a test at the application stage. Due to the fact that the placement cost of some tests at the design stage is considerably high compared with the execution cost, the sequential diagnosis strategy obtained by previous methods is actually not optimal from the view of life cycle. In this paper, the test sequencing problem based on life cycle cost is presented. It is formulated as an optimization problem, which is non-deterministic polynomial-time hard （NP-hard）. An algorithm and a strategy to improve its computational efficiency are proposed. The formulation and algorithms are tested on various simulated systems and comparisons are made with the extant test sequencing methods. Application on a pump rotational speed control （PRSC） system of a spacecraft is studied in detail. Both the simulation results and the real-world case application results suggest that the solution proposed in this paper can significantly reduce the life cycle cost of a sequential fault diagnosis strategy.