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Strategic cooperation has garnered significant attention in business. In this study, we explored the operating mechanisms of supply chains utilizing three Stackelberg models, in the following ascending order of cooperation level: price only, marketing cost sharing, and cross-shareholding. Further, we investigated the impact of cooperation on prices, marketing efforts, and profits, and analyzed the strategic cooperation preferences of different supply chain members. The results show that the influence of the level of cooperation on the wholesale and selling price is nonlinear. Interestingly, increased levels of cooperation do not always result in better outcomes. The marketing cost-sharing strategy aggravates the marketing burden on retailers. In contrast, the cross-shareholding strategy not only increases the total marketing effort level, but also efficiently reduces the burden of marketing on retailers. Moreover, all cooperation strategies solely benefit manufacturers rather than retailers, and not all of them improve the supply chain's performance. Finally, the cross-shareholding cooperation strategy only maximizes the consumer surplus and social welfare under certain conditions. Overall, our study describes the operational mechanisms of diverse cooperative strategies and provides managerial guidance for those seeking to enhance marketing efforts and economic and social performance using a cooperation strategy. [ABSTRACT FROM AUTHOR]

This paper studies the recycling and remanufacturing mode and sales channel issues in the closed-loop supply chain. Specifically, this study establishes an e-commerce closed-loop supply chain consisting of a manufacturer and an e-commerce platform, and divides the recycling model into recycling by the manufacturer or recycling by the platform. Considering two common sales models in e-commerce platforms: the resale model and agency model, combined with the recycling model, four different research scenarios are formed. We use backward induction to solve the Stackelberg game problem and explore the remanufacturing and channel strategies of the manufacturer and the e-commerce platform. The research results show that for the manufacturer, under the same recycling model, when consumers' preference for remanufactured products and the sensitivity of recycling volume to recycling prices are low, he will prefer the resale model. Under the same sales model, the manufacturer always prefers the recycling model in which he is responsible for recycling. However, the choice of platform is contrary to that of the manufacturer. In the resale model, both the manufacturer and the platform will choose to recycle by themselves, which cannot achieve a win-win situation. Under the agency model, when consumers' preference for remanufactured products is high and the sensitivity coefficient of recycling volume to recycling price is low, supply chain members can achieve a win-win situation, and the scope of the win-win situation decreases as the unit production cost of new products increases. In addition, rising consumer preference for remanufactured products will lead to lower consumer surplus. [ABSTRACT FROM AUTHOR]

We compare social welfare, consumer surplus and profits in two different institutional settings in which an item whose quantity is fixed and controlled (vehicle registration permit) is allocated to the buyers of a complementary good (car). In the first setting, which resembles the way in which vehicle registration permits are allocated in Singapore, the central planner runs a uniform price auction for permits in which the consumers who bid the highest receive the permits and pay the highest losing bid. Then each winning consumer purchases a car from a seller. In the alternative setting, the central planner first allocates the permits to sellers and then sellers offer to consumers bundles, each consisting of a car and a permit. For two different models of product differentiation, we find that social welfare is greater when permits are auctioned to consumers, but consumers and sellers generally prefer the alternative setting. • We study a model inspired by allocation of vehicle registration permits in Singapore. • We consider two institutional settings for permits allocation. • In one setting, first the government auctions permits and winning bidders buy cars. • In the other, government allocates permits to sellers, who offer bundles car&permit. • We compare these settings in terms of social welfare, consumer surplus, seller profit. [ABSTRACT FROM AUTHOR]

On February 24, 2022, Russian Federation troops invaded Ukraine. Ukraine was previously at war with Russia in 2014, and in April 2015, the government abruptly raised the natural gas tariffs to residential customers. It also scaled up its energy assistance program, the HUS. We examine the welfare effects of the HUS. Using Ukraine's Household Budget Survey, we find that after the tariff hike, the average household that did not receive the HUS spends 11% of its income on electricity, gas, and fuels, meeting the definition of "fuel poor." The average share among households that do receive the subsidy is 6-8%. The HUS cuts the rate of fuel poverty in half and brings considerable consumer surplus gains (6% of income), at a price tag of 1-2.5% of GDP. Meaningful savings would be achieved with only a moderate loss of consumer surplus if the HUS was cut in half. Social tariffs or replacing the HUS with a one-time energy efficiency subsidy would be sustainable and entail modest or no welfare losses. [ABSTRACT FROM AUTHOR]

In the book "The Consumer Welfare Hypothesis in Law and Economics: Towards a Synthesis for the 21st Century" by Fabrizio Esposito, the author argues for replacing the classical total welfare approach with the consumer welfare hypothesis in Law and Economics. This proposal is likely to face opposition from different strands of legal scholarship. Esposito aligns with Calabresi's Law and Economics school of thought, which prioritizes consumer welfare over total welfare. The book explores the economic pedigree of consumer welfare and examines how EU legal structures, such as antitrust and consumer law, align with the goal of maximizing consumer welfare. The author suggests that efficiency and equity are not necessarily in conflict and that economic analysis can provide valuable insights into European antitrust and consumer laws. While the book may face criticism for oversimplification and potential tautology, it offers a third way between Posnerian Law and Economics and Law and Political Economy, making it a significant contribution to legal scholarship. [Extracted from the article]

This paper analyzes strategic environmental policy when polluting firms engage in overlapping ownership arrangements (OOAs) under differentiated duopoly with quantity competition. Specifically, we focus on two pollution control instruments: emission taxes and standards. The key findings are as follows: (i) Compared to the case without ownership, the optimal environmental tax rate and absolute standard are higher (lower) when the polluting firms' products are complements (substitutes). (ii) Both the tax and standard policies are equally efficient in their effects on the firms' output and abatement decisions, consumer surplus, environmental quality, and social welfare, regardless of whether the differentiated products are complements or substitutes. (iii) If the government sets equity share and emission tax (or standard) simultaneously to maximize social welfare, the optimal equity share may exceed 50% for OOA firms producing two complements and is inversely related to the degree of product complementarity. Our results have welfare implications for the choice of environmental regulation between taxes and standards, when equity share is exogenous, or when the government determines an optimal mix of equity share and emission tax (or standard). [ABSTRACT FROM AUTHOR]

Indication-specific value-based pricing (ISVBP) is a mechanism that allows the prices of multi-indication drugs to vary across indications by aligning the drug prices with value. However, the overall impact of ISVBP on patients across indications is uncertain. This study examines the theoretical welfare effects of ISVBP for multi-indication drugs and compares consumer surplus under ISVBP and single pricing, the latter of which is based on the weighted average value. We considered a healthcare system with government-negotiated drug prices based on the value of drugs. We assumed a drug with 2 indications and 1 relevant comparator for each indication. The value of the drug was uniformly distributed among the patients of each indication in the base case. We also considered alternative scenarios with exponentially and Pareto distributed drug values. Numerical simulations were conducted to explore potential settings where ISVBP was welfare-improving for patients compared with single pricing. The theoretical analysis showed that the consumer surplus change was strictly non-positive from single pricing to ISVBP. Therefore, it was not welfare-improving for patients in the settings of interest. Numerical simulations confirmed this result across various scenarios of value distributions. This study provides insights into the patient welfare implications of ISVBP for multi-indication drugs. We did not identify conditions under which ISVBP can enhance overall patient well-being, suggesting that it should be implemented cautiously. Future research should examine dynamic welfare implications related to innovation incentives because they may significantly affect population health in the future. • Indication-specific value-based pricing (ISVBP) varies drug prices across users. • The patient welfare implications of ISVBP are not well documented by far. • Our theoretical results suggest that ISVBP is not necessarily patient welfare improving, and ISVBP should be carefully evaluated and implemented. [ABSTRACT FROM AUTHOR]

We discuss horizontal mergers in a homogeneous good industry where firms compete à la Bertrand with increasing marginal production costs. We show that profitable mergers can occur even for lower post-merger prices with respect to the pre-merger scenario, thus implying an increase in consumer surplus. The driving force of the result is the ability of the merged entity cutting production costs by sharing the output among its plants. This output rationalization effect can compensate for the revenue loss due to the merged entity producing less than the cumulated pre-merger production of the merging parties. • Mergers can be profitable for lower post-merger prices compared to the pre-merger case. • They can increase consumer surplus without creating any merger-induced synergy. • They can be profitable and welfare enhancing in a coalition proof market structure. [ABSTRACT FROM AUTHOR]

As high-cost medicines put increasing pressure on public health care budgets, the need to identify 'fair' prices for medicines has never been greater. This paper proposes a framework, built upon fundamental economic principles, that allows for the consideration of 'fair' prices for medicines. The framework incorporates key considerations from conventional supply-side and demand-side approaches for specifying a cost-effectiveness 'threshold', including the health opportunity cost borne by other patients (k ) and society's willingness to pay for marginal improvements in population health (v ). The costs incurred by manufacturers in developing and supplying new medicines are also considered, as are the incentives for manufacturers to strategically price up to any common price per unit of benefit (cost-effectiveness 'threshold') specified by the payer. The framework finds that, at any 'fair' price, a medicine's dynamically calculated incremental cost-effectiveness ratio (ICER) lies below k . When pricing medicines collectively, the framework finds that a common price below k is required to maximize population health (consumer surplus) or to maximize total welfare (consumer and producer surplus). This framework has important policy implications for payers who wish to improve population health outcomes from constrained health care budgets. In particular, existing approaches to 'value-based pricing' should be reconsidered to ensure that patients receive a 'fair' share of the resulting economic surplus. [ABSTRACT FROM AUTHOR]

When externalities are present, is the inclusion of the affected stakeholders in the firm's decision process a better solution than the shareholder governance? This paper argues that the internalization of the externality hinges on the available information and the market strategy used by the firm rather than its governance structure. In the absence of income effects (i.e., if preferences are quasi-linear), a market for "customer rights" reveals all the necessary information about the surplus of a homogeneous consumer population. In that case, a Coase-type equivalence obtains: whether the firm uses the information in the interest of its shareholders or all its stakeholders, the outcome in each case is an efficient allocation. With income effects, the market for customer rights may fail. Still, if appropriate information can be obtained, efficiency can be achieved under both governance structures (or neither). [ABSTRACT FROM AUTHOR]

Prior to designing detailed subsidy contract terms for public–private partnerships (PPPs), local governments often face the challenge of selecting the basic modes of a subsidy (in this case, passenger demand subsidy or vehicle-kilometer subsidy). However, most studies do not discuss the reasons for choosing a particular mode or its applicability. This paper addresses this gap by constructing Stackelberg game models to analyze the characteristics of two subsidy modes: vehicle-kilometer subsidy and passenger demand subsidy. Four situations derived from these two subsidy modes are then modeled and analyzed, exploring the relationships among parameters and clarifying the strategies of local governments. Additionally, a comparison is made between the two subsidy modes to demonstrate the optimal utilization of subsidies. Based on this analysis, an efficiency-oriented subsidy framework is proposed to overcome the shortcomings of existing subsidies and provide new insights into subsidy design for PPPs. The results indicate that the vehicle-kilometer subsidy loses its incentive or regulatory effects on the private sector when the vehicle-kilometer is predetermined. Furthermore, the subsidy mode, the local government's goals, and financial stress will influence key parameters (price and vehicle-kilometer); further, the preference of both parties for subsidy modes is closely related to price. The proposed efficiency-oriented subsidy framework offers significant advantages in reducing prices, increasing consumer surplus and efficiency, conserving social resources, and strengthening cost control. This paper contributes to the literature by emphasizing the importance of selecting appropriate subsidy modes, exploring the differences between two common modes, and further providing a novel and effective subsidy mode. Further, this paper can also guide mutual parties to optimize their strategies and enhance the overall efficiency and performance in PPP urban rail transit projects. [ABSTRACT FROM AUTHOR]

We model consumer choices for recreational cannabis in a risky environment and its supply under prohibition and legalization. While legalization reduces the profits of illegal providers, it increases cannabis consumption. This trade-off can be overcome by combining legalization with sanctions against the black market, and improvements to the quality of legal products. Numerical calibrations highlight how a policy mix can control the increase in cannabis consumption and throttle the illegal market. In the US, the eviction prices we predict to drive dealers out of business are much lower than the prices of legal cannabis in most of the states that opted for legalization, leaving room for the black market to flourish. Analyzing the compatibility of several policy goals sheds light on the less favorable outcomes of recent legalization reforms and suggests a new way forward. • Legalizing cannabis can reduce illegal providers' profits but increases consumption. • A policy-mix legalizing high-quality cannabis while enforcing sanctions against the black market overcomes this trade-off. • This policy-mix is compatible with a large set of government objectives. • These include maximizing consumer surplus as well as minimizing enforcement costs and negative externalities of illegal use. • Maximizing tax revenue is likely to leave room for illegal providers to operate. [ABSTRACT FROM AUTHOR]

We analyze the location of final goods producers under spatial competition with strategic input price determination by firm-specific input suppliers when the final goods producers undertake complete outsourcing or bi-sourcing. Under complete outsourcing, the final goods producers locate closer as the distance between the input suppliers decreases, but the distance between the final goods producers may increase or decrease with the transportation costs of the consumers and the transportation costs between the input suppliers and the final goods producers depending on the distance between the input suppliers. The possibility of bi-sourcing reduces the benefit from saving the transportation costs between the input suppliers and the final goods producers, and creates effects which are opposite to those under complete outsourcing. Thus, our results differ significantly from the extant literature considering either no strategic input price determination or strategic input price determination under competition in the input market. We also discuss the implications on the profits, consumer surplus and welfare, and the implications of endogenous location choice of the input suppliers. [ABSTRACT FROM AUTHOR]

The static analysis shows that a merger among complementary input suppliers or complementary patent holders benefits the consumers and the society by reducing the input prices. We show that the effects of a merger of complements are not so straightforward in a dynamic set up with endogenous product differentiation in the final goods market. The merger of complements reduces the total input prices and increases product differentiation. However, whether it increases or decreases consumer surplus and welfare depends on the market expansion following product differentiation, the number of merged input suppliers and the intensity of competition. Hence, in a dynamic setup with endogenous product differentiation, the antitrust authorities may need to be more careful about mergers of complements. Our analysis has also relevance for vertical mergers. • We show mergers of complements may make the consumers and the society worse off. • Endogenous product differentiation in the final goods market constitutes our results. • Our results hold under Bertrand and Cournot competition in the final goods market. • Market expansion, competition, and number of merged input suppliers are important. • Important for vertical merger and different from the results under static analysis. [ABSTRACT FROM AUTHOR]

In the operation of service-sharing platforms, online review information is crucial to attracting consumers. Considering consumers' preference for online review information, this paper discusses the pricing policy selection for a service-sharing platform providing vertically differentiated services in sharing economy, which is worth studying. In this paper, a platform service supply chain composed of a high-quality service provider, a low-quality service provider, and a service-sharing platform is considered. For the two pricing policies of a platform: service provider pricing and platform pricing, the profit-maximizing models are constructed, and the optimal high-quality and the low-quality service prices are obtained. This paper also analyzes the effects of online review information on the profits of service providers, platform profits, consumer surplus, and social welfare under the two policies. The results show that under the platform pricing policy, the platform can gain more profits, while the surplus of consumers and service providers may decrease. When the online review information exceeds a threshold, the high-quality service provider profit under the service provider pricing policy is larger than that under the platform pricing policy. Under the platform pricing policy, the low-quality service provider can earn more profit. We also find that the low-quality service provider is more motivated to encourage consumers to provide online reviews regardless of the pricing policy. [ABSTRACT FROM AUTHOR]

In 2014, Mexico implemented a tax on sugar-sweetened beverages (SSB) equivalent to one Mexican peso (MP) per liter to address the high obesity prevalence. This tax has effectively reduced SSB purchases and yielded healthcare savings; however, it remains unknown whether SSB taxes lead to net benefits at the societal level in Mexico. Moreover, public health experts recommend increasing the tax. The objective of this study is to estimate the net benefits of SSB taxes compared to a scenario of no tax in urban Mexico. Taxes include the one-MP tax and alternative higher taxes (two and three MP per SSB liter). Thus, we conducted a cost-benefit analysis from the perspective of the government, producers, and consumers for a simulated closed cohort of adults in a life-table model. We defined net benefits as the difference between economic benefits (the value of statistical life, healthcare savings, and tax revenue) and costs (consumer surplus and profit losses). We found that, at the societal level, all simulated taxes will eventually generate benefits that surpass costs within ten years. Overall net benefits can reach USD 7.1 billion and 15.3 billion for the one-MP and the three-MP tax, respectively. Hence, these benefits increased at a declining rate compared to taxes. The government and consumers will experience overall positive net benefits among society's members. Policymakers should consider time horizons and tradeoffs between health gains and economic outcomes across different society members. [ABSTRACT FROM AUTHOR]

In e-commerce, sellers can disclose product information (such as quality, size information, function, and so on) to make consumers understand the products. However, in the process of information disclosure, consumers often fall into information distortion or information loss. Because of its immutability and traceability, blockchain can help e-commerce sellers improve information disclosure and ensure the efficiency of information transmission. We study a duopoly competitive e-commerce market in which two e-commerce sellers compete in information disclosure. According to whether to apply blockchain, we divide the sellers' decision-making into four research scenarios (NN, BN, NB, BB). Based on the above four scenarios, we get the market demand of different products depending on the consumer utility, and further establish the game model in the competitive environment. This paper explores the impact of blockchain on information disclosure and consumer surplus, and achieves the Nash equilibrium of blockchain application for both sides. In the expansion model, we study e-commerce sellers' risk aversion and capital constraints, and further explore their impact on blockchain in practice. Finally, combining with blockchain's characteristics, we also analyze the impact of the application of blockchain at other aspects on the supply chain. We find that when consumers' trust in information is low or the cost of blockchain applications is low, all e-commerce sellers in competition will adopt blockchain. In addition, when consumers have low trust in information, it will be difficult to achieve complete equilibrium in the application of blockchain as their risk aversion increases. For capital constrained sellers, when the cost of blockchain application is low, it will be difficult to achieve full equilibrium for blockchain applicants as the bank financing rate increases. [ABSTRACT FROM AUTHOR]

Information technology and data science have enabled firms to practice price discrimination on an unprecedented scale, arousing privacy concerns among their customers. When consumers know a firm is practicing price discrimination, they may take costly measures to conceal their identities so as to avoid being targeted. Governments, in turn, may require firms to disclose their price discrimination practices in order to protect consumers' interests. In this paper, we consider a pricing game in which two competitive, vertically differentiated firms may implement price discrimination using information purchased from a third-party data supplier. We determine (1) the firms' optimal pricing strategies when consumers can (or cannot) safeguard their personal information by paying a "privacy cost"; (2) the data supplier's optimal sales strategy and the value of the data; and (3) the effects of the cost of consumer privacy and of the disclosure of price discrimination practices on firms and consumers. We find that for the data supplier, the optimal sales strategy is always to sell exclusively to one firm, regardless of whether consumers are aware that the firm practices "personalized pricing". The question of which firm the data broker should sell to depends on what we term the "quality-adjusted cost"—the ratio between the additional cost of the high-quality product and the magnitude of the quality difference. If this ratio is smaller than 1/2, the data broker will sell to the high-quality firm; if greater, to the low-quality firm. Second, by comparing two scenarios involving the disclosure or non-disclosure of price discrimination, we find, somewhat counter-intuitively, that mandatory transparency increases industry profits and decreases consumer surplus when only the high-quality firm has access to consumer data. When only the low-quality firm has such access, transparency lowers industry profits once the quality-adjusted cost exceeds a certain threshold. When the quality-adjusted cost is in the intermediate range, mandatory transparency decreases social welfare. This means that the disclosure of price discrimination practices may have unfavorable consequences from a social planning standpoint. Thus, the new insights our findings offer into competitive personalized pricing in vertically differentiated markets will be useful not only to managers in the industry but also to regulators. [ABSTRACT FROM AUTHOR]

In this study, the dynamic effects of new product supply chain cooperation behavior on optimal government subsidies and supply chain decision-making are studied by establishing a nonlinear discrete inventory decision system; In this system, the government subsidizes authorized remanufacturers to promote remanufacturing, and cooperative behavior exists in the supply chain of new products. The research method is modeling and simulation of a supply chain system based on nonlinear system dynamics theory. The complexity analysis includes the stability analysis of the decision system, the path of the system into chaos, the change of entropy of the system and the performance in chaos system. Our findings indicate that the optimal government subsidy in the cooperative model is lower than that in the non-cooperative model. Consumer surplus is the main reason for the subsidy difference between the two models. In comparison with the cooperative supply chain, the stability of the non-cooperative supply chain is more easily affected by government subsidies. Further, the market is more likely to enter chaos due to improper adjustment of the new products' inventory with cooperative behavior in the supply chain of new products. When the system enters chaos, the new product supply chain's profit in the cooperative system is more likely to be far lower than the equilibrium profit. This study provides a theoretical reference for supply chain inventory management and government subsidy remanufacturer decision-making from the perspective of dynamic systems science. [ABSTRACT FROM AUTHOR]

Hunger among senior citizens is emerging as a considerable global problem, but social-welfare organizations' efforts are limited by the complexities of safely collecting surplus food and targeting it to those in need. However, these logistical problems have received scant attention in the literature, an absence that this study addresses. This study develops a logistics approach to tackling the problems of long-term care operations' surplus food collection and meal distribution, with the wider aim of achieving sustainable food security. The analytical results reveal that hub-and-spoke meal distribution was found to have better logistics performance than direct shipment. The critical logistics behaviors associated with long-term care organizations' meal operations were also identified. Specifically, delivery times, donor numbers, and vehicle-loading rates were found to be the essential factors in determining optimal fleet size for long-term care logistics in the sharing economy. However, the results of this study also imply that social-welfare organizations should categorize senior citizens into groups that will facilitate the identification of suitable centers for hub-and-spoke shipment. Moreover, the major decision-making parameters of the proposed approaches can be tailored to other sets of specific circumstances that necessitate surplus-food collection and meal distribution. This pioneering study scrutinizes some critical issues involved in sustainable food security and provides effective approaches for overcoming them. [ABSTRACT FROM AUTHOR]

Blockchain is currently used in a wide range of industries to improve the efficiency of the circulation of goods and effectively reduce counterfeiting in supply chains. In order to improve consumer trust in their purchases and reduce returns, the paper develops four models of consumers return based on blockchain technology from a consumer utility perspective. We conducted a Stackelberg game to analyze the impact of return modes and blockchain technology on optimal decisions and consumers, where consumers can return goods through the original channel, all through the online channel, and all through the offline channel. The major results of our study show that when blockchain technology is not used, the costs of return hassles in one channel can have an impact on other channels, and the adoption of online returns is advantageous to both consumers and the retailer. When blockchain technology is used, the manufacturer offers the retailer a lower wholesale price as a subsidy for the unit validation fee, which is always advantageous to the retailer. In most situations, implementing blockchain technology can boost consumer surplus. Only if the fixed cost of blockchain technology is low would the manufacturer adopt it. [ABSTRACT FROM AUTHOR]

The rapid expansion of renewable energies has the potential to decarbonize the electricity supply. This is more challenging in difficult-to-electrify sectors. The use of hydrogen provides a massive potential for this issue. However, expanding hydrogen production increases electricity demand while providing additional flexibility to the electricity market. This paper mainly aims to analyze the economic effects of this sector coupling between the European electricity and national hydrogen markets. The developed energy market model jointly considers both markets to reach an overall welfare optimum. A novel modeling approach allows the interaction of these markets without the need for several iterative optimization runs. This allows for a detailed analysis of various market participants' changes in consumer and producer surpluses. The optimization is conducted in 13 connected Central European countries to account for various power plant fleets, generation mixes, and electricity prices. Results show an overall welfare increase of EUR 4 to 28 billion in 2030 and an EUR 5 to 158 billion increase in 2040. However, there is a surplus shift from consumers to producers. The consumer surplus is reduced by up to EUR 44 billion in 2030 and EUR 60 billion while producers benefit to achieve the overall welfare benefits. The reduction of consumer surplus changes if significant price peaks occur. Fuel cell applications can avoid these price peaks, resulting in a surplus shift from thermal power plants to consumers. Hence, consumer surplus can increase by up to EUR 146 billion in the respective 2040 scenarios. Pink hydrogen accounts for a sizable portion of total hydrogen production, up to 58 percent in 2030 and up to 30 percent in 2040. As a result, nuclear power plants that are nearly entirely allocated in France stand to benefit greatly from this sector coupling. Additional efforts could be made to address the link between hydrogen and natural gas prices. Furthermore, the potential for cross-border hydrogen trade and the implementation of national legal and regulatory frameworks could be assessed. [ABSTRACT FROM AUTHOR]

After a short survey of the reasons why the label 'Neo-Ricardianism' customarily fixed to the surplus approach to political economy should be discarded for good, the note focuses on Marx's analysis of the influence of income distribution on the incentive to invest and technical change. It is held that it is principally this analysis that should be taken as the foundation for any further development of the surplus approach, with a view to putting together the essential elements of an alternative theory of employment and activity levels within which also the role of the State and its economic policy may be critically dealt with. [ABSTRACT FROM AUTHOR]

The spatial-temporal imbalance of demand will affect the formulation of urban rail transit public welfare fare schemes, and then affect the passenger benefits and the traffic structure. A bi-level programming model considering multi-period and different direction demands is established. The upper model takes the maximization of social welfare as the objective function, and considers public welfare constraints; the lower model is a stochastic user equilibrium model. A heuristic hybrid algorithm which combines multi-population genetic algorithm, continuous average method and parallel computation is designed. The results show that: compared with for-profit pricing scheme, when public welfare pricing scheme is adopted, ticket price is reduced by 43%; the generalized travel cost per passenger is decreased by 19% and 4% in peak and off-peak periods respectively in up direction, 16% and 6% in down direction; the consumer surplus is increased by 15.2% and 5.7% in peak and off-peak periods respectively in up direction, 12% and 7% in down direction; the urban rail transit sharing rate is increased by 40% and 71% in peak and off-peak periods respectively in up direction, 36% and 66% in down direction. This model provides some reference for government to formulate the fare and management strategy. [ABSTRACT FROM AUTHOR]

This study proposes a differentiated duopoly model considering capacity constraints and shared manufacturing, investigates the effects of product differentiation and capacity constraints in three scenarios, and compares the equilibrium outcomes in the three cases under Cournot and Stackelberg competitions. We find that capacity constraints affect the relationships between product differentiation and equilibrium results, even the market share of enterprises. Shared manufacturing impacts the degree of excess capacity, profits, consumer surplus, and social welfare. However, shared manufacturing may sometimes play a negative role in alleviating excess capacity. Moreover, the Cournot competition is a better choice for enterprises with capacity constraints than the Stackelberg competition. [ABSTRACT FROM AUTHOR]

We develop a quality-signaling game model to characterize a firm that produces an experience good with private quality information and chooses either a separating or pooling pricing strategy to sell the product to both early-arriving and late-arriving consumers. The firm endogenously determines whether to manipulate early-arriving consumers' reviews to influence late-arriving review-conscious consumers. We show the existence of multiple perfect Bayesian equilibriums (PBEs) and select the PBEs with the maximum ex ante expected profit. Based on the selected PBEs, we first establish the conditions under which the firm chooses the pooling pricing strategy but succeeds (fails) in manipulating early-arriving consumers to leave positive fake reviews on product quality. We also furnish the conditions under which the firm adopts the separating pricing strategy to truthfully reveal its private quality information, thereby ruling out the possibility of fake reviews. Second, by comparing the cases with and without consumer reviews, we explore how consumer reviews affect the welfare of the firm, consumers, and society. Third, we examine how the firm's profitability, consumer surplus, and social welfare vary with two key market parameters, the unit reputation cost of positive fake reviews and the probability that late-arriving consumers are review-conscious. Managerial insights are garnered on how the firm should price its product and whether it should manipulate consumer reviews as well as how consumer review manipulation should be regulated under different market conditions. [ABSTRACT FROM AUTHOR]

This study constructs a successive Cournot model to investigate the possibility that a separated upstream input supplier can solely sell the intermediate good to a separated downstream manufacturer through an exclusive contract in the presence of a vertically integrated rival. We find that the separated firms are indifferent on whether to sign the exclusive contract or not if the downstream party is less efficient than the integrated firm in producing the final good. Next, the separated firms with an efficient downstream party are indifferent between signing or not signing, willing to sign, and not willing to sign the exclusive contract if the upstream cost differential is relatively low, medium, and high, respectively. Finally, signing such an exclusive contract does not increase consumer surplus and social welfare. [ABSTRACT FROM AUTHOR]

Suppliers and large buyers of electricity often sign load-following forward contracts (LFFCs). A LFFC obligates an electricity supplier to deliver at a pre-specified unit price a fraction of the buyer’s ultimate demand for electricity. We show that relative to more standard (“swap”) forward contracts, LFFCs can reduce the variation in the wholesale price of electricity. However, LFFCs also can increase the expected wholesale price and thereby reduce expected consumer surplus and total surplus. [ABSTRACT FROM AUTHOR]

Urban transportation is viewed as the second leading source of carbon dioxide emissions. The growing number of vehicles and road infrastructure-based supply in Indian cities is viewed as the essential driver of climate change and relevant consequences affecting the sustainability of cities. In this study, sustainable transport measures were analyzed to understand the emission mitigation potential of the Bengaluru Metropolitan Region's transport sector in Karnataka, India. Relevant policies were identified under the planning, regulatory, economic, and technological instruments and grouped under four policy bundles. The mitigation potential of the policy bundles was quantitatively evaluated in terms of vehicle kilometers traveled (VKT), exhaust emissions, and greenhouse gas emissions. The study also estimated the carbon emission intensity and consumer surplus for different mode users across all policy bundles. The findings from this showed that Policy bundle 4, a comprehensive mix of various policies, demonstrated a critical decrease in VKT and emissions compared with the other policy bundles and, thus, provided good scientific decision support for transport policymakers. The study helps Bengaluru's transport planning authorities in designing comprehensive mobility plans in a much more sophisticated way. The inclusion of public participation in the planning process helps improve sustainability. The consumer surplus provides a better understanding of social benefits derived from the policies, and emissions intensity estimates help understand whether the emissions have decoupled from the economic growth. The study also presents that public transportation plays a major role in solving congestion problems. Thus, it helps the planning authorities to prioritize their investments to make cities more liveable. [ABSTRACT FROM AUTHOR]

In a perfectly competitive market and in multi-product monopoly with linear demands and costs, the socially optimal taxes are Ramsey independent taxes (RIT), which are independent of each other, have a simple structure, reduce all products proportionally, and affect consumers and firms in similar ways. Under imperfect competition, while not optimal in general for both social welfare and consumer surplus objectives, RIT nevertheless retain attractive uniform effects in all markets. In asymmetric Cournot and Bertrand oligopolies, the socially and consumer-efficient taxes are surprisingly complex even in simple settings. Postulating a third objective of taxation as the average of social welfare and consumer surplus restores the optimality of RIT. Finally, another important property is that RIT impose equal corresponding marginal costs across all types of markets, as required for economy-wide efficient taxation. [ABSTRACT FROM AUTHOR]

This paper investigates operational decisions and online channel mode selection for green products with an e-commerce supply chain in which the manufacturer is subject to capital constraint. Starting from a Stackelberg game framework where the platform acts as a leader, two different online channel modes applied with an e-commerce supply chain are explored for equilibria, respectively. This paper then extends to a different supply chain with a reversed channel leadership, so as to reveal how the supply chain leaderships affect the equilibriums and supply chain performance. With the analytical studies, several important and interesting insights are derived. For example, but not limited to, the following is found: (a) the equilibrium decisions of the capital-constrained supply chain highly rely on the associated interest rate but are independent of the initial capital level of the financially-constrained manufacturer; (b) the platform and the capital-constrained manufacturer act largely differently when choosing the optimal online channel mode for themselves; (c) a win-win situation benefiting two parties holds when and only when the two members choose the agency mode under certain conditions; (d) the impacts of the supply chain leaderships and online channel modes on the consumer surplus and social welfare are clearly revealed. These results derived in our paper shed lights on industrial practicer on how to effectively make such decision-making in platform economy. The members in an e-commerce supply chain can appropriately determine their decisions such as commission and slotting fee to reach a win-win situation for two parties. [ABSTRACT FROM AUTHOR]

Ignoring strategic interactions among final goods producers, the extant theoretical literature shows that lower costs of imported inputs increase the exports of the final goods using those inputs. Hence, it does not explain the empirically relevant positive relationship between the costs of imported inputs and the export of the final goods. We use a simple Cournot duopoly (i.e., duopoly quantity competition) with homogeneous products to show that if the exporters differ in input coefficients, lower costs of imported inputs may increase or decrease the exports of the final goods. Thus, we argue that strategic interdependence among the exporters can be an important factor for the positive relationship between lower costs of imported inputs and the export of the final goods. We further show that a lower cost of imported inputs may reduce the consumer surplus, total profits of the exporters, and world welfare. We also show the implications of a Bertrand duopoly (i.e., duopoly price competition) with horizontal product differentiation for our analysis. [ABSTRACT FROM AUTHOR]

In this work, we consider a classic international trade model with two countries and one firm in each country. The game has two stages: in the first stage, the governments of each country use their welfare functions to choose their tariffs either: (a) competitively (Nash equilibrium) or (b) cooperatively (social optimum); in the second stage, firms competitively choose (Nash) their home and export quantities under Cournot-type competition conditions. In a previous publication we compared the competitive tariffs with the cooperative tariffs and we showed that the game is one of the two following types: (i) prisoner's dilemma (when the competitive welfare outcome is dominated by the cooperative welfare outcome); or (ii) a lose–win dilemma (an asymmetric situation where only one of the countries is damaged in the cooperative welfare outcome, whereas the other is benefited). In both scenarios, their aggregate cooperative welfare is larger than the aggregate competitive welfare. The lack of coincidence of competitive and cooperative tariffs is one of the main difficulties in international trade calling for the establishment of trade agreements. In this work, we propose a welfare-balanced trade agreement where: (i) the countries implement their cooperative tariffs and so increase their aggregate welfare from the competitive to the cooperative outcome; (ii) they redistribute the aggregate cooperative welfare according to their relative competitive welfare shares. We analyse the impact of such trade agreement in the relative shares of relevant economic quantities such as the firm's profits, consumer surplus, and custom revenue. This analysis allows the countries to add other conditions to the agreement to mitigate the effects of high changes in these relative shares. Finally, we introduce the trade agreement index measuring the gains in the aggregate welfare of the two countries. In general, we observe that when the gains are higher, the relative shares also exhibit higher changes. Hence, higher gains demand additional caution in the construction of the trade agreement to safeguard the interests of the countries. [ABSTRACT FROM AUTHOR]

• An AMXL model is proposed with individual-level parameter specification. • A quadratic inverse optimization model is proposed to estimate the parameters. • A decomposition algorithm efficiently solves model for joint parameters. • Experiments are conducted with data from Shanghai for 26K commuters. • AMXL outperforms DCMs and dynamic DCMs in experiments. We propose an agent-based mixed-logit model (AMXL) that is estimated with inverse optimization (IO) estimation, an agent-level machine learning method theoretically consistent with a utility-maximizing mixed logit model framework. The method provides joint, individual-specific, and deterministic estimation, which overcomes the limitations of discrete choice models (DCMs) given ubiquitous datasets. A case study of the CBD in Shanghai is conducted with mobile phone data of 26,149 anonymous commuters whose whole-day activity schedule on weekdays contains three sub-choices and 1,470 alternatives. AMXL is built to estimate individual tastes and predict the activity scheduling choice in different scenarios. Multinomial logit model (MNL), mixed logit model (MXL), and their dynamic forms (DMNL, DMXL) are built as benchmarks. Prediction accuracies are calculated as the percentage consistency of observed choices and predicted choices, both at individual level (to each commuter) and aggregated level (to each alternative in the choice set). The results show that empirical coefficient distributions in AMXL are neither Gumbel nor Gaussian, i.e. capturing inter-individual heterogeneities in space that are hard for DCMs to capture. The prediction accuracy of AMXL is significantly higher than the best model (DMXL) in benchmarks, improving from 8.66% to 61.68% at aggregated level and from 1.69% to 4.33% at individual level. In a comparison scenario, AMXL predicts different while reasonable change of choices compared with benchmark models. In an optimization scenario, AMXL can be directly integrated into a binary programming (BP) problem, which optimally allocates 10 blocks to send restaurant coupons to increase population consumer surplus by 19%. [ABSTRACT FROM AUTHOR]

• An expression is derived for empirical evaluation of social costs and benefits of street parking charges. • Optimal parking charges are derived from this welfare rule. • Optimal charges and occupancy rates depend are not constant but depend on turnover etc. • A case study shows that introducing street parking charges in residential areas in Stockholm caused a net welfare loss. We develop a model for empirical evaluation of the social costs and benefits of street parking charges. From the model, we derive an expression for optimal parking charges and occupancy levels: in optimum, parking search costs are balanced against the loss of consumer surplus from unused parking spaces. Contrary to rules-of-thumb common in practice, optimal occupancy levels are not constant but depend on parking turnover rates and parking search costs. We demonstrate the model's applicability in a case study from Stockholm, where parking charges were recently introduced in suburban residential areas. The charges had considerable effects on parking demand, but our analysis shows that the overall welfare effect was a substantial welfare loss. Using parameters and demand functions estimated from the case study, we calculate optimal parking charges and occupancy levels, and show that the welfare loss arises because the introduced charges were considerably higher than the optimal ones. [ABSTRACT FROM AUTHOR]

Apps which allow customers to check waiting times in real time on their smartphones become increasingly popular across many industries. Waiting time information is ambiguous in the sense that it is good news for some customers and bad news for other customers depending on whether they get to know that they have to wait short or long times, respectively. This paper studies the strategic choice of information strategies by considering a transport company that charges a uniform price to passengers. Waiting times are determined by headways which are given by the time difference between vehicle departures. The sum of the price and waiting time costs (determined by the waiting times and time valuations) represent the full price of traveling which vary among passengers depending on arrival times at the station. Passengers respond to variations in the full price by adjusting their demand rates in the sense that passengers may use an alternative mode of transport or refuse to travel if they have to wait or expect to wait for too long for the next departure. Two types of information strategies are considered. The company can advertise the exact schedule or advertise only the average lengths of interdeparture times (headways). The analysis shows that the curvature of the demand-rate function in the waiting time is crucial for the choice of information strategies in both the case of profit-maximizing companies and the case of welfare-maximizing companies where welfare is calculated by the sum of profit and consumer surplus. Numerical examples further indicate the crucial role of demand rate curvatures for headway and price choices. • This paper studies the strategic choice of information strategies. • It considers a transport company that charges a uniform price to passengers. • It is shown that the curvature of the demand-rate function determines optimal information strategies. • Numerical examples indicate the role of demand rate curvatures for headway and price choices. [ABSTRACT FROM AUTHOR]

This paper studies a green manufacturer's strategic licensing of its green technology to a brown rival under the consideration of the green manufacturer's environmental concerns. Consumers in the market have green awareness. Adopting the green technology not only helps manufacturers to reduce carbon emissions, but also to increase market sizes. The green manufacturer can choose from three technology licensing strategies, i.e., no licensing (N), royalty licensing (R) or fixed-fee licensing (F). The equilibrium licensing strategy can be derived by comparing the respective payoff after adopting the three strategies. It is found that the green manufacturer should choose fixed-fee licensing strategy when the market size expansion effect is strong, and the competition intensity is moderate; otherwise, the green manufacturer should choose royalty licensing strategy. Furthermore, it is found that when the green manufacturer is more concerned about environmental impacts, it will be more willing to choose fixed-fee licensing strategy, rather than royalty licensing strategy. Through numerical tests, some interesting results are also found. For example, the brown manufacturer might be hurt even if the cost reduction effect of technology licensing is relatively stronger. Moreover, it is found that consumer surplus and social welfare nonmonotonically change with the substitution level. In summary, this research tries to provide some guidelines to the industry and the society on better managing green technology diffusions. [ABSTRACT FROM AUTHOR]

This paper utilized a three-stage dynamic game to analyze the conflicts of interest between stakeholders caused by firm heterogeneity. We show that the higher the degree of heterogeneity, the higher the sales delegation incentive given. The firm's heterogeneity scale will cause industry profit, union utility, consumer surplus and manager bonus conflicts of interest. Furthermore, the intensity of conflict is lower between the industry and the union than between the industry and consumer and between the industry and manager if the degree of heterogeneity is relatively small. [ABSTRACT FROM AUTHOR]

This paper advances Motta's (2004) study of two-firm Bertrand mergers with arbitrary synergies in symmetric linear models to m -firm mergers with cost-savings in asymmetric linear models. It identifies a set of Bertrand mergers that reduce not only consumer surplus but also rival firms' profits. Such severely anti-competitive mergers are intriguing because they can never happen in both Farrell and Shapiro (1990) and Nocke and Schutz (2018). • It advances Motta's (2004) two-firm mergers to m-firm with non-arbitrary synergy. • It finds a set of mergers that reduce both consumer surplus and outsiders' profits. • It provides simplified and previously unavailable expressions of equilibria. [ABSTRACT FROM AUTHOR]

• We present an optimization model for blockchain-enabled supply chains. • The strategic adoption of blockchain technology has a significant impact on the design of supply chain networks. • New form of product differentiation is enabled through blockchain adoption. • We present a case study focusing on the global supply chain of fresh-cut flowers. • The results show higher supply chain profitability and lower market prices for consumers. Supply chains have often benefited from breakthroughs in information technology. Blockchain, in particular, is a recent technology that is promising to revolutionize the way supply chains are designed and operated. This paper proposes a framework to optimize the adoption of blockchain jointly with the design of the supply chain network. A new form of product differentiation is enabled through blockchain adoption where blockchain-certified products are sold at a premium price to a growing segment of customers. The proposed framework allows supply chain managers to monetize data which has traditionally been used to improve supply chain efficiency. The framework is evaluated using a realistic case study inspired by the global supply chain of fresh-cut flowers. The results show that by strategically using blockchain at certain locations in the supply chain network, significant cost savings are realized compared to fully deploying blockchain throughout the supply chain. These cost savings lead to increased demand, better consumer surplus, and higher supply chain profit. Furthermore, the proposed data-enabled product differentiation leads to fresher products in the market. [ABSTRACT FROM AUTHOR]

Many consumer products, e.g., printer’s cartridges, milk’s glass bottles, etc., are sold with reusable parts, which can be formally collected under a used-part-collection (UPC) program. In today’s markets with high volatility, risk is present for UPC operations. In this article, building via standard consumer utility-based models, we uncover the value of the UPC program in a production system. In the basic model, we consider the case when the manufacturer is risk averse. For both the cases with and without UPC, the optimal product pricing and quality decisions are determined and the respective manufacturer’s utility and consumer surplus are derived. The values of UPC to the manufacturer and consumers are found. We find that: 1) both quality improvement and UPC can be beneficial to consumers under some situations and 2) the optimal quality level, the optimal utility, and the consumer surplus are independent of the return fee. In the extended models, we explore two cases, namely, the case when consumers are risk averse, and the case with a collection platform, which can enhance the collection rate. We find that no matter what the level of consumers’ risk averse is, it reduces consumers’ benefits. Moreover, a higher platform’s power is beneficial to the manufacturer and consumers but may reduce the platform’s profit. [ABSTRACT FROM AUTHOR]

In recent years, online reviews are increasingly getting more concerns by firms and consumers because they can help mitigate consumers' uncertainty on product quality and experienced attributes and significantly affect firms' operational decisions. We in this study attempt to examine the remanufacturing entry and pricing strategies of manufacturers in the presence of online reviews. We consider an original equipment manufacturer (OEM) selling a new product over two periods in online retailing and determine whether and when to adopt a remanufacturing entry strategy in the market. We uncover online reviews' quality-dimensional effect and experienced dimensional effect that jointly determine the OEM's pricing and remanufacturing strategies. We show that in the presence of online reviews, the OEM will cautiously determine whether to adopt the first-period remanufacturing entry strategy and may also adopt the second-period remanufacturing entry strategy under certain conditions. Interestingly, the OEM will adopt the penetration pricing strategy for the new product and the remanufactured product (if available) when the actual product quality is sufficiently high, but the skimming pricing strategy otherwise, which is different from the uniform pricing strategy in the absence of online reviews. Our results also show that online reviews significantly affect the OEM's profit and consumer surplus. In particular, when the actual product quality is high enough, the OEM and consumers will attain the "win–win" situation. [ABSTRACT FROM AUTHOR]

Recent research has shown that social media services create large consumer surplus. Despite their positive impact on economic welfare, concerns are raised about the negative association between social media usage and well-being or performance. However, causal empirical evidence is still scarce. To address this research gap, we conduct a randomized controlled trial among students in which we track participants' daily digital activities over the course of three quarters of an academic year. In the experiment, we randomly allocate half of the sample to a treatment condition in which social media usage (Facebook, Instagram, and Snapchat) is restricted to a maximum of 10 minutes per day. We find that participants in the treatment group substitute social media for instant messaging and do not decrease their total time spent on digital devices. Contrary to findings from previous correlational studies, we do not find any significant impact of social media usage as it was defined in our study on well-being and academic success. Our results also suggest that antitrust authorities should consider instant messaging and social media services as direct competitors before approving acquisitions. [ABSTRACT FROM AUTHOR]

Ecotourism sites are established to provide "sustainable tourism," bring economic opportunities to the local communities, and can potentially augment funding for conserving protected areas by charging entrance fees. A dilemma, however, faced by managers during the early stages of the development of ecotourism sites is the uncertain effect of increasing entrance fees on demand. This creates an apprehension to use entrance fees as a sustainable financing mechanism for conservation. This study used a combination of revealed and stated preference approaches to provide information on the recreational benefits and empirical guidance in setting entrance fee surcharges for proposed improvements in two eco-tourism sites of Bataan Natural Park -- specifically, Ambon-Ambon and Lumutan Eco-trail and Tala River. Count data regression models were used to estimate the consumer surplus of visitors for the current conditions. In contrast, the contingent behavior method was used to measure the visitors' willingness to pay (WTP) for improvements in the site attributes. Results of the count data models indicate the total consumer surplus from the ecotourism sites in their current state is significantly higher than the site's cost of improvement and maintenance. Furthermore, tourists are willing to pay more than the currently charged entrance fees. Protest and uncertainty corrected mean WTP for the improved condition are approximately PHP 130.90 for a visit to the eco-trail and PHP 108.50 for a visit to the river. The optimal and revenue-increasing entrance surcharge is estimated to be within PHP 15-76 for the Tala River and PHP 15-114 for the Falls. The results may have implications on providing alternative financing for protecting and conserving other natural parks and protected areas in their early stages of development in the Philippines. [ABSTRACT FROM AUTHOR]