• KDI Journal of Economic Policy
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• v.13 no.1
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• pp.151-166
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• 1991

In this paper, a simple game-theoretic entry deterrence model is developed that integrates both limit pricing and predatory pricing. While there have been extensive studies which have dealt with predation and limit pricing separately, no study so far has analyzed these closely related practices in a unified framework. Treating each practice as if it were an independent phenomenon is, of course, an analytical necessity to abstract from complex realities. However, welfare analysis based on such a model may give misleading policy implications. By analyzing limit and predatory pricing within a single framework, this paper attempts to shed some light on the effects of interactions between these two frequently cited tactics of entry deterrence. Another distinctive feature of the paper is that limit and predatory pricing emerge, in equilibrium, as rational, profit maximizing strategies in the model. Until recently, the only conclusion from formal analyses of predatory pricing was that predation is unlikely to take place if every economic agent is assumed to be rational. This conclusion rests upon the argument that predation is costly; that is, it inflicts more losses upon the predator than upon the rival producer, and, therefore, is unlikely to succeed in driving out the rival, who understands that the price cutting, if it ever takes place, must be temporary. Recently several attempts have been made to overcome this modelling difficulty by Kreps and Wilson, Milgram and Roberts, Benoit, Fudenberg and Tirole, and Roberts. With the exception of Roberts, however, these studies, though successful in preserving the rationality of players, still share one serious weakness in that they resort to ad hoc, external constraints in order to generate profit maximizing predation. The present paper uses a highly stylized model of Cournot duopoly and derives the equilibrium predatory strategy without invoking external constraints except the assumption of asymmetrically distributed information. The underlying intuition behind the model can be summarized as follows. Imagine a firm that is considering entry into a monopolist's market but is uncertain about the incumbent firm's cost structure. If the monopolist has low cost, the rival would rather not enter because it would be difficult to compete with an efficient, low-cost firm. If the monopolist has high costs, however, the rival will definitely enter the market because it can make positive profits. In this situation, if the incumbent firm unwittingly produces its monopoly output, the entrant can infer the nature of the monopolist's cost by observing the monopolist's price. Knowing this, the high cost monopolist increases its output level up to what would have been produced by a low cost firm in an effort to conceal its cost condition. This constitutes limit pricing. The same logic applies when there is a rival competitor in the market. Producing a high cost duopoly output is self-revealing and thus to be avoided. Therefore, the firm chooses to produce the low cost duopoly output, consequently inflicting losses to the entrant or rival producer, thus acting in a predatory manner. The policy implications of the analysis are rather mixed. Contrary to the widely accepted hypothesis that predation is, at best, a negative sum game, and thus, a strategy that is unlikely to be played from the outset, this paper concludes that predation can be real occurence by showing that it can arise as an effective profit maximizing strategy. This conclusion alone may imply that the government can play a role in increasing the consumer welfare, say, by banning predation or limit pricing. However, the problem is that it is rather difficult to ascribe any welfare losses to these kinds of entry deterring practices. This difficulty arises from the fact that if the same practices have been adopted by a low cost firm, they could not be called entry-deterring. Moreover, the high cost incumbent in the model is doing exactly what the low cost firm would have done to keep the market to itself. All in all, this paper suggests that a government injunction of limit and predatory pricing should be applied with great care, evaluating each case on its own basis. Hasty generalization may work to the detriment, rather than the enhancement of consumer welfare.

• Journal of Global Scholars of Marketing Science
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• v.20 no.1
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• pp.89-97
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• 2010

This study researches the effects of common features on a no-choice option with respect to regulatory focus theory. The primary interest is in three factors and their interrelationship: common features, no-choice option, and regulatory focus. Prior studies have compiled vast body of research in these areas. First, the "common features effect" has been observed bymany noted marketing researchers. Tversky (1972) proposed the seminal theory, the EBA model: elimination by aspect. According to this theory, consumers are prone to focus only on unique features during comparison processing, thereby dismissing any common features as redundant information. Recently, however, more provocative ideas have attacked the EBA model by asserting that common features really do affect consumer judgment. Chernev (1997) first reported that adding common features mitigates the choice gap because of the increasing perception of similarity among alternatives. Later, however, Chernev (2001) published a critically developed study against his prior perspective with the proposition that common features may be a cognitive load to consumers, and thus consumers are possible that they are prone to prefer the heuristic processing to the systematic processing. This tends to bring one question to the forefront: Do "common features" affect consumer choice? If so, what are the concrete effects? This study tries to answer the question with respect to the "no-choice" option and regulatory focus. Second, some researchers hold that the no-choice option is another best alternative of consumers, who are likely to avoid having to choose in the context of knotty trade-off settings or mental conflicts. Hope for the future also may increase the no-choice option in the context of optimism or the expectancy of a more satisfactory alternative appearing later. Other issues reported in this domain are time pressure, consumer confidence, and alternative numbers (Dhar and Nowlis 1999; Lin and Wu 2005; Zakay and Tsal 1993). This study casts the no-choice option in yet another perspective: the interactive effects between common features and regulatory focus. Third, "regulatory focus theory" is a very popular theme in recent marketing research. It suggests that consumers have two focal goals facing each other: promotion vs. prevention. A promotion focus deals with the concepts of hope, inspiration, achievement, or gain, whereas prevention focus involves duty, responsibility, safety, or loss-aversion. Thus, while consumers with a promotion focus tend to take risks for gain, the same does not hold true for a prevention focus. Regulatory focus theory predicts consumers' emotions, creativity, attitudes, memory, performance, and judgment, as documented in a vast field of marketing and psychology articles. The perspective of the current study in exploring consumer choice and common features is a somewhat creative viewpoint in the area of regulatory focus. These reviews inspire this study of the interaction possibility between regulatory focus and common features with a no-choice option. Specifically, adding common features rather than omitting them may increase the no-choice option ratio in the choice setting only to prevention-focused consumers, but vice versa to promotion-focused consumers. The reasoning is that when prevention-focused consumers come in contact with common features, they may perceive higher similarity among the alternatives. This conflict among similar options would increase the no-choice ratio. Promotion-focused consumers, however, are possible that they perceive common features as a cue of confirmation bias. And thus their confirmation processing would make their prior preference more robust, then the no-choice ratio may shrink. This logic is verified in two experiments. The first is a $2{\times}2$ between-subject design (whether common features or not X regulatory focus) using a digital cameras as the relevant stimulus-a product very familiar to young subjects. Specifically, the regulatory focus variable is median split through a measure of eleven items. Common features included zoom, weight, memory, and battery, whereas the other two attributes (pixel and price) were unique features. Results supported our hypothesis that adding common features enhanced the no-choice ratio only to prevention-focus consumers, not to those with a promotion focus. These results confirm our hypothesis - the interactive effects between a regulatory focus and the common features. Prior research had suggested that including common features had a effect on consumer choice, but this study shows that common features affect choice by consumer segmentation. The second experiment was used to replicate the results of the first experiment. This experimental study is equal to the prior except only two - priming manipulation and another stimulus. For the promotion focus condition, subjects had to write an essay using words such as profit, inspiration, pleasure, achievement, development, hedonic, change, pursuit, etc. For prevention, however, they had to use the words persistence, safety, protection, aversion, loss, responsibility, stability etc. The room for rent had common features (sunshine, facility, ventilation) and unique features (distance time and building state). These attributes implied various levels and valence for replication of the prior experiment. Our hypothesis was supported repeatedly in the results, and the interaction effects were significant between regulatory focus and common features. Thus, these studies showed the dual effects of common features on consumer choice for a no-choice option. Adding common features may enhance or mitigate no-choice, contradictory as it may sound. Under a prevention focus, adding common features is likely to enhance the no-choice ratio because of increasing mental conflict; under the promotion focus, it is prone to shrink the ratio perhaps because of a "confirmation bias." The research has practical and theoretical implications for marketers, who may need to consider common features carefully in a practical display context according to consumer segmentation (i.e., promotion vs. prevention focus.) Theoretically, the results suggest some meaningful moderator variable between common features and no-choice in that the effect on no-choice option is partly dependent on a regulatory focus. This variable corresponds not only to a chronic perspective but also a situational perspective in our hypothesis domain. Finally, in light of some shortcomings in the research, such as overlooked attribute importance, low ratio of no-choice, or the external validity issue, we hope it influences future studies to explore the little-known world of the "no-choice option."

• Journal of Korean Medical classics
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• v.20 no.4
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• pp.91-117
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• 2007

Through a simple study of the medical classics in the '$\bar{A}yurveda$', we have summarized them as follows. 1) Traditional Indian medicine started in the Ganges river area at about 1500 B. C. E. and traces of medical science can be found in the "Rigveda" and "Atharvaveda". 2) The "Charaka" and "$Su\acute{s}hruta$(妙聞集)", ancient texts from India, are not the work of one person, but the result of the work and errors of different doctors and philosophers. Due to the lack of historical records, the time of Charaka or $Su\acute{s}hruta$(妙聞)s' lives are not exactly known. So the completion of the "Charaka" is estimated at 1st${\sim}$2nd century C. E. in northwestern India, and the "$Su\acute{s}hruta$" is estimated to have been completed in 3rd${\sim}$4th century C. E. in central India. Also, the "Charaka" contains details on internal medicine, while the "$Su\acute{s}hruta$" contains more details on surgery by comparison. 3) '$V\bar{a}gbhata$', one of the revered Vriddha Trayi(triad of the ancients, 三醫聖) of the '$\bar{A}yurveda$', lived and worked in about the 7th century and wrote the "$A\d{s}\d{t}\bar{a}nga$ $A\d{s}\d{t}\bar{a}nga$ $h\d{r}daya$ $sa\d{m}hit\bar{a}$ $samhit\bar{a}$(八支集)" and "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$(八心集)", where he tried to compromise and unify the "Charaka" and "$Su\acute{s}hruta$". The "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$" was translated into Tibetan and Arabic at about the 8th${\sim}$9th century, and if we generalize the medicinal plants recorded in each the "Charaka", "$Su\acute{s}hruta$" and the "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$", there are 240, 370, 240 types each. 4) The 'Madhava' focused on one of the subjects of Indian medicine, '$Nid\bar{a}na$' ie meaning "the cause of diseases(病因論)", and in one of the copies found by Bower in 4th century C. E. we can see that it uses prescriptions from the "BuHaLaJi(布哈拉集)", "Charaka", "$Su\acute{s}hruta$". 5) According to the "Charaka", there were 8 branches of ancient medicine in India : treatment of the body(kayacikitsa), special surgery(salakya), removal of alien substances(salyapahartka), treatment of poison or mis-combined medicines(visagaravairodhikaprasamana), the study of ghosts(bhutavidya), pediatrics(kaumarabhrtya), perennial youth and long life(rasayana), and the strengthening of the essence of the body(vajikarana). 6) The '$\bar{A}yurveda$', which originated from ancient experience, was recorded in Sanskrit, which was a theorization of knowledge, and also was written in verses to make memorizing easy, and made medicine the exclusive possession of the Brahmin. The first annotations were 1060 for the "Charaka", 1200 for the "$Su\acute{s}hruta$", 1150 for the "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$", and 1100 for the "$Nid\bar{a}na$", The use of various mineral medicines in the "Charaka" or the use of mercury as internal medicine in the "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$", and the palpation of the pulse for diagnosing in the '$\bar{A}yurveda$' and 'XiZhang(西藏)' medicine are similar to TCM's pulse diagnostics. The coexistence with Arabian 'Unani' medicine, compromise with western medicine and the reactionism trend restored the '$\bar{A}yurveda$' today. 7) The "Charaka" is a book inclined to internal medicine that investigates the origin of human disease which used the dualism of the 'Samkhya', the natural philosophy of the 'Vaisesika' and the logic of the 'Nyaya' in medical theories, and its structure has 16 syllables per line, 2 lines per poem and is recorded in poetry and prose. Also, the "Charaka" can be summarized into the introduction, cause, judgement, body, sensory organs, treatment, pharmaceuticals, and end, and can be seen as a work that strongly reflects the moral code of Brahmin and Aryans. 8) In extracting bloody pus, the "Charaka" introduces a 'sharp tool' bloodletting treatment, while the "$Su\scute{s}hruta$" introduces many surgical methods such as the use of gourd dippers, horns, sucking the blood with leeches. Also the "$Su\acute{s}hruta$" has 19 chapters specializing in ophthalmology, and shows 76 types of eye diseases and their treatments. 9) Since anatomy did not develop in Indian medicine, the inner structure of the human body was not well known. The only exception is 'GuXiangXue(骨相學)' which developed from 'Atharvaveda' times and the "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$". In the "$A\d{s}\d{t}\bar{a}nga$ Sangraha $samhit\bar{a}$"'s 'ShenTiLun(身體論)' there is a thorough listing of the development of a child from pregnancy to birth. The '$\bar{A}yurveda$' is not just an ancient traditional medical system but is being called alternative medicine in the west because of its ability to supplement western medicine and, as its effects are being proved scientifically it is gaining attention worldwide. We would like to say that what we have researched is just a small fragment and a limited view, and would like to correct and supplement any insufficient parts through more research of new records.

• The Journal of Dong Guk Oriental Medicine
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• v.10
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• pp.119-145
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• 2008

Through a simple study of the medical classics in the '$\bar{A}yurveda$', we have summarized them as follows. 1) Traditional Indian medicine started in the Ganges river area at about 1500 B. C. E. and traces of medical science can be found in the "Rigveda" and "Atharvaveda". 2) The "Charaka(閣羅迦集)" and "$Su\acute{s}hruta$(妙聞集)", ancient texts from India, are not the work of one person, but the result of the work and errors of different doctors and philosophers. Due to the lack of historical records, the time of Charaka(閣羅迦) or $Su\acute{s}hruta$(妙聞)s' lives are not exactly known. So the completion of the "Charaka" is estimated at 1st$\sim$2nd century C. E. in northwestern India, and the "$Su\acute{s}hruta$" is estimated to have been completed in 3rd$\sim$4th century C. E. in central India. Also, the "Charaka" contains details on internal medicine, while the "$Su\acute{s}hruta$" contains more details on surgery by comparison. 3) '$V\bar{a}gbhata$', one of the revered Vriddha Trayi(triad of the ancients, 三醫聖) of the '$\bar{A}yurveda$', lived and worked in about the 7th century and wrote the "$Ast\bar{a}nga$ $Ast\bar{a}nga$ hrdaya $samhit\bar{a}$ $samhit\bar{a}$(八支集) and "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$(八心集)", where he tried to compromise and unify the "Charaka" and "$Su\acute{s}hruta$". The "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$" was translated into Tibetan and Arabic at about the 8th$\sim$9th century, and if we generalize the medicinal plants recorded in each the "Charaka", "$Su\acute{s}hruta$" and the "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$", there are 240, 370, 240 types each. 4) The 'Madhava' focused on one of the subjects of Indian medicine, '$Nid\bar{a}na$' ie meaning "the cause of diseases(病因論)", and in one of the copies found by Bower in 4th century C. E. we can see that it uses prescriptions from the "BuHaLaJi(布唅拉集)", "Charaka", "$Su\acute{s}hruta$". 5) According to the "Charaka", there were 8 branches of ancient medicine in India : treatment of the body(kayacikitsa), special surgery(salakya), removal of alien substances(salyapahartka), treatment of poison or mis-combined medicines(visagaravairodhikaprasamana), the study of ghosts(bhutavidya), pediatrics(kaumarabhrtya), perennial youth and long life(rasayana), and the strengthening of the essence of the body(vajikarana). 6) The '$\bar{A}yurveda$', which originated from ancient experience, was recorded in Sanskrit, which was a theorization of knowledge, and also was written in verses to make memorizing easy, and made medicine the exclusive possession of the Brahmin. The first annotations were 1060 for the "Charaka", 1200 for the "$Su\acute{s}hruta$", 1150 for the "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$", and 1100 for the "$Nid\bar{a}na$". The use of various mineral medicines in the "Charaka" or the use of mercury as internal medicine in the "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$", and the palpation of the pulse for diagnosing in the '$\bar{A}yurveda$' and 'XiZhang(西藏)' medicine are similar to TCM's pulse diagnostics. The coexistence with Arabian 'Unani' medicine, compromise with western medicine and the reactionism trend restored the '$\bar{A}yurveda$' today. 7) The "Charaka" is a book inclined to internal medicine that investigates the origin of human disease which used the dualism of the 'Samkhya', the natural philosophy of the 'Vaisesika' and the logic of the 'Nyaya' in medical theories, and its structure has 16 syllables per line, 2 lines per poem and is recorded in poetry and prose. Also, the "Charaka" can be summarized into the introduction, cause, judgement, body, sensory organs, treatment, pharmaceuticals, and end, and can be seen as a work that strongly reflects the moral code of Brahmin and Aryans. 8) In extracting bloody pus, the "Charaka" introduces a 'sharp tool' bloodletting treatment, while the "$Su\acute{s}hruta$" introduces many surgical methods such as the use of gourd dippers, horns, sucking the blood with leeches. Also the "$Su\acute{s}hruta$" has 19 chapters specializing in ophthalmology, and shows 76 types of eye diseases and their treatments. 9) Since anatomy did not develop in Indian medicine, the inner structure of the human body was not well known. The only exception is 'GuXiangXue(骨相學)' which developed from 'Atharvaveda' times and the "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$". In the "$Ast\bar{a}nga$ Sangraha $samhit\bar{a}$"'s 'ShenTiLun(身體論)' there is a thorough listing of the development of a child from pregnancy to birth. The '$\bar{A}yurveda$' is not just an ancient traditional medical system but is being called alternative medicine in the west because of its ability to supplement western medicine and, as its effects are being proved scientifically it is gaining attention worldwide. We would like to say that what we have researched is just a small fragment and a limited view, and would like to correct and supplement any insufficient parts through more research of new records.

• Journal of Intelligence and Information Systems
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• v.20 no.4
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• pp.59-87
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• 2014

In MIS field, the researches on payment services are focused on adoption factors of payment service using behavior theories such as TRA(Theory of Reasoned Action), TAM(Technology Acceptance Model), and TPB (Theory of Planned Behavior). The previous researches presented various adoption factors according to types of payment service, nations, culture and so on even though adoption factors of identical payment service were presented differently by researchers. The payment service industry relatively has strong path dependency to the existing payment methods so that the research results on the identical payment service are different due to payment culture of nation. This paper aims to suggest a successful adoption factor of noble payment service regardless of nation's culture and characteristics of payment and prove it. In previous researches, common adoption factors of payment service are convenience, ease of use, security, convenience, speed etc. But real cases prove the fact that adoption factors that the previous researches present are not always critical to success to penetrate a market. For example, PayByPhone, NFC based parking payment service, successfully has penetrated to early market and grown. In contrast, Google Wallet service failed to be adopted to users despite NFC based payment method which provides convenience, security, ease of use. As shown in upper case, there remains an unexplained aspect. Therefore, the present research question emerged from the question: "What is the more essential and fundamental factor that should takes precedence over factors such as provides convenience, security, ease of use for successful penetration to market". With these cases, this paper analyzes four cases predicted on the following hypothesis and demonstrates it. "To successfully penetrate a market and sustainably grow, new payment service should find non-customer of the existing payment service and provide noble payment method so that they can use payment method". We give plausible explanations for the hypothesis using multiple case studies. Diners club, Danal, PayPal, Square were selected as a typical and successful cases in each category of payment service. The discussion on cases is primarily non-customer analysis that noble payment service targets on to find the most crucial factor in the early market, we does not attempt to consider factors for business growth. We clarified three-tier non-customer of the payment method that new payment service targets on and elaborated how new payment service satisfy them. In case of credit card, this payment service target first tier of non-customer who can't pay for because they don't have any cash temporarily but they have regular income. So credit card provides an opportunity which they can do economic activities by delaying the date of payment. In a result of wireless phone payment's case study, this service targets on second of non-customer who can't use online payment because they concern about security or have to take a complex process and learn how to use online payment method. Therefore, wireless phone payment provides very convenient payment method. Especially, it made group of young pay for a little money without a credit card. Case study result of PayPal, online payment service, shows that it targets on second tier of non-customer who reject to use online payment service because of concern about sensitive information leaks such as passwords and credit card details. Accordingly, PayPal service allows users to pay online without a provision of sensitive information. Final Square case result, Mobile POS -based payment service, also shows that it targets on second tier of non-customer who can't individually transact offline because of cash's shortness. Hence, Square provides dongle which function as POS by putting dongle in earphone terminal. As a result, four cases made non-customer their customer so that they could penetrate early market and had been extended their market share. Consequently, all cases supported the hypothesis and it is highly probable according to 'analytic generation' that case study methodology suggests. We present for judging the quality of research designs the following. Construct validity, internal validity, external validity, reliability are common to all social science methods, these have been summarized in numerous textbooks(Yin, 2014). In case study methodology, these also have served as a framework for assessing a large group of case studies (Gibbert, Ruigrok & Wicki, 2008). Construct validity is to identify correct operational measures for the concepts being studied. To satisfy construct validity, we use multiple sources of evidence such as the academic journals, magazine and articles etc. Internal validity is to seek to establish a causal relationship, whereby certain conditions are believed to lead to other conditions, as distinguished from spurious relationships. To satisfy internal validity, we do explanation building through four cases analysis. External validity is to define the domain to which a study's findings can be generalized. To satisfy this, replication logic in multiple case studies is used. Reliability is to demonstrate that the operations of a study -such as the data collection procedures- can be repeated, with the same results. To satisfy this, we use case study protocol. In Korea, the competition among stakeholders over mobile payment industry is intensifying. Not only main three Telecom Companies but also Smartphone companies and service provider like KakaoTalk announced that they would enter into mobile payment industry. Mobile payment industry is getting competitive. But it doesn't still have momentum effect notwithstanding positive presumptions that will grow very fast. Mobile payment services are categorized into various technology based payment service such as IC mobile card and Application payment service of cloud based, NFC, sound wave, BLE(Bluetooth Low Energy), Biometric recognition technology etc. Especially, mobile payment service is discontinuous innovations that users should change their behavior and noble infrastructure should be installed. These require users to learn how to use it and cause infra-installation cost to shopkeepers. Additionally, payment industry has the strong path dependency. In spite of these obstacles, mobile payment service which should provide dramatically improved value as a products and service of discontinuous innovations is focusing on convenience and security, convenience and so on. We suggest the following to success mobile payment service. First, non-customers of the existing payment service need to be identified. Second, needs of them should be taken. Then, noble payment service provides non-customer who can't pay by the previous payment method to payment method. In conclusion, mobile payment service can create new market and will result in extension of payment market.