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This paper contributes to the literature that postulates a relationship between income inequality and the relative importance of "market" and "organization" in the direction of resources. The paper emphasizes that both are endogenous; therefore, the empirical associations observed in the empirical data between inequality measures and production organization variables cannot be interpreted as indicative of causal relationships. The paper solves for the composition and size of occupational groups, the distribution of firm size, and the distribution of income as market equilibrium outcomes of an occupational choice economy, and performs a comparative static analysis. We find that the interaction between cross‐economy differences in the distribution of general skills in the labor force and the loss of control in the supervision of workers by managers can explain the empirical regularities observed in the relationship between the organization of production (distribution of firm size) and income inequality (distribution of labor income). This explanation of the empirical regularities differs from others proposed in the literature, such as those based on institutional constraints or the market power of firms. [ABSTRACT FROM AUTHOR]

We examine the fractal volatility and long‐range dependence of Bitcoin, Ethereum, Tether and USD Coin by employing the continuous wavelet transform, maximal overlap discrete wavelet transform and rescaled range. Our dataset consists of daily prices spanning from January 2017 through to October 2022, encapsulating pre‐ and post‐epidemic eras. Generally, our findings suggest that Tether presents the least overall volatility throughout the time‐frequency spectrum. USD Coin demonstrates ephemeral turbulence, contrary to Tether's maturity in influencing market equilibrium through token issuance and trade responses. In the post‐epidemic sample, both stablecoins indicate mean reversion, with USD Coin showing marginally better efficiency. Conversely, investment tokens display persistent clusters due to retail traders and long‐term fundamental institutions. Although both tokens illustrate multifractal volatility, Ethereum unveils more essence of self‐similarity than Bitcoin. Hence, there is no evidence that Ethereum truly duplicates Bitcoin since policy‐related events differ between them, as both return series move incongruously. Conditional dynamics signify that all cryptocurrencies, except Tether, were affected by the pandemic transition of COVID‐19 and subsequent macroeconomic news. The unconditional volatility of stablecoins evinces zero‐mean errors, antithetical to investment tokens exhibiting annual cycles. The fractal geometry suggests that investment tokens simulate one‐dimensional lines, whereas stablecoins mimic two‐dimensional planes. [ABSTRACT FROM AUTHOR]

Entry in a homogeneous Cournot‐oligopoly is excessive if there is business‐stealing. These findings assume that production costs reduce profits and welfare equally. If firms pay informational rents due to frictions in the employer–employee relationship, production costs partly reflect transfers, which do not alter welfare directly. We investigate the excessive entry theorem in the presence of rents. We find that informational rents can invalidate the theorem. Rents reduce profits and deter entry into the market equilibrium, while the socially optimal number of firms is not affected directly. The rent effect becomes stronger the lower the number of firms and can overcompensate the business‐stealing externality. As an example, we model a hidden action problem in which employees have an informational advantage after signing the contract with the firm. Insufficient entry occurs if entry costs are sufficiently high because they lower the number of firms and raise informational rents. [ABSTRACT FROM AUTHOR]

About 40% of workers find their jobs through referrals. We distinguish between two types of referrals based on whether the referrer works at the hiring firm (internal referrals) or not (external referrals). Interestingly, jobs found through internal (external) referrals pay more (less) than those found through formal methods. An equilibrium labor market model is then built by introducing an incentive‐compatible mechanism through which workers can share job opening information. A nondegenerate wage distribution arises in equilibrium with a wage premium (penalty) for internal (external) referrals. When calibrated, our model can capture these salient features of the U.S. labor market. [ABSTRACT FROM AUTHOR]

Long‐distance commuting (LDC) is an increasingly relevant strategy of labor mobility worldwide and is therefore key to understanding the structure and dynamics of labor markets. However, little is known about the effect that LDC has on the labor market equilibrium of host territories. This paper addresses this gap for the case of Chile. While LDC is a useful strategy for improving salary and employment on a national scale, our results show a negative effect for residents in host territories (on a local scale), particularly when LDC results in commuters with similar characteristics to residents competing for the same jobs. [ABSTRACT FROM AUTHOR]

In a model of vertical competition two firms draw costly public signals that are informative about the quality of their products and then competitively set prices. When each firm generates information independently from the other, there will be overinvestment (underinvestment) in information generation if the market share of the quality follower in the subsequent market equilibrium is high (low). Moreover, information generation by one firm has a positive externality on the other firm. Hence, coordination (e.g., via industry associations) increases information generation. When product qualities are endogenous, information generation may prevent quality degradation and thus have an additional social benefit. [ABSTRACT FROM AUTHOR]

Dollar stores have become the fastest‐growing retail format in the United States. However, there is considerable controversy regarding their entry, particularly into markets without grocery stores, and concerns that dollar‐store entry decisions are motivated by preemptive incentives. In this paper, we aim to study the market entry of dollar stores as an equilibrium phenomenon and to examine their impact on competing store formats in a dynamic environment. We use census‐tract level data and develop a dynamic model of oligopolistic competition to estimate the impact of dollar store entry on the equilibrium entry decisions of other retailers of the same format and other formats. We find that supermarkets and other large‐format owners thrive as dollar‐store expansion removes their "competitive fringe" in shared markets, whereas other small‐format stores (other dollar stores, convenience stores, and superettes) do not. Our findings have broad implications for the effect of dollar store entry on consumer welfare, as dollar‐store entry is not associated with grocery‐store exit but rather the exit of other small‐format stores. [ABSTRACT FROM AUTHOR]

Oil palm is a major driver of tropical deforestation. A key intervention proposed to reduce the footprint of oil palm is intensifying production to free up spare land for nature, yet the indirect land‐use implications of intensification through market forces are poorly understood. We used a spatially explicit land‐rent modeling framework to characterize the supply and demand of oil palm in Indonesia under multiple yield improvement and demand elasticity scenarios and explored how shifts in market equilibria alter projections of crop expansion. Oil palm supply was sensitive to crop prices and yield improvements. Across all our scenarios, intensification raised agricultural rents and lowered the effectiveness of reductions in crop expansion. Increased yields lowered oil palm prices, but these price‐drops were not sufficient to prevent further cropland expansion from increased agricultural rents under a range of price elasticities of demand. Crucially, we found that agricultural intensification might only result in land being spared when the demand relationship was highly inelastic and crop prices were very low (i.e., a 70% price reduction). Under this scenario, the extent of land spared (∼0.32 million ha) was countered by the continued establishment of new plantations (∼1.04 million ha). Oil palm intensification in Indonesia could exacerbate current pressures on its imperiled biodiversity and should be deployed with stronger spatial planning and enforcement to prevent further cropland expansion. [ABSTRACT FROM AUTHOR]

We assess the responsiveness of market equilibrium agricultural output, price and land use to shocks in agricultural demand, land yield and arable land area and the role of road infrastructure policy in offsetting them. We adapt a partial equilibrium model in the agricultural composite good and lands markets to guide the specification and estimation of a simultaneous equation model (SEM) for agricultural demand, land yield and acreage, and calculate market equilibrium responsiveness. We estimate the SEM by the generalised method of moments three‐stage least squares (GMM 3SLS) using a panel data set of the 10 biggest agricultural producer states in Brazil from 2001 to 2017. Using demand, land yield and acreage price elasticity estimates, we find that Brazil may expand equilibrium agricultural output while preserving its native vegetation land and dampening long‐term agricultural price escalation under a scenario of increasing worldwide demand for food, fibre and fuel and adverse climate shocks. Using acreage and land yield freight rate elasticity estimates, we show how shocks may be offset by road infrastructure policies that reduce freight rates to specific destination states, as they may be designed to induce less equilibrium land use for the same equilibrium output or raise equilibrium output with less equilibrium land use. [ABSTRACT FROM AUTHOR]

Drug shortages are becoming more frequent and severe in the United States, especially for generic drugs. A lack of economic incentives has been cited as a root cause. Only few firms choose to produce a such drugs, and, if they do, these firms do not allocate large levels of capacity. Hence, total industry supply is limited, increasing the odds of shortages. We develop and analyze a stylized game‐theoretic model of a generic drug market to understand the impact of various governmental interventions on the total industry equilibrium supply. We explicitly consider firm market entry and exit decisions and the participating firms' incentives to allocate productive capacity to the focal drug market. We first characterize sustainable numbers of active drug manufacturers and their equilibrium capacity allocation decisions for a given regulatory environment. We then analyze the effects of different possible policy interventions on these equilibrium decisions and total industry capacity. Finally, we consider the impact of combinations of different interventions and, importantly, the sequence in which such combined interventions are introduced. A key result of our analysis is that the sequence of policy interventions may have an important effect on the resulting equilibrium industry capacity. When changing the regulatory environment, policymakers should be careful never to lead a sequence of changes with an adjustment that adversely affects pharmaceutical firms' incentives to allocate capacity to the focal drug market; we show that starting with capacity‐supporting interventions always is a dominant strategy when aiming to increase total industry capacity. [ABSTRACT FROM AUTHOR]

This article presents a theory that explains the rise of foot‐binding in historical China, in response to a gender‐asymmetric social mobility shock that dispersed men's quality distribution in the marriage market. The theory characterizes the marriage market equilibrium and women's competition strategies before and after the shock. Empirical evidence using archival data corroborates the theoretical predictions that greater men's social mobility opportunities encouraged foot‐binding and that a greater cost of women's labor discouraged foot‐binding. The article thus highlights that costly gender norms can be traced back to gender asymmetry in social mobility opportunities. [ABSTRACT FROM AUTHOR]

This paper investigates asset allocation decisions made by three types of traders depending upon incomplete information in market equilibrium. Limited participation phenomenon is observed in the equilibrium. Moreover, we show that traders with more information might not hold more risky assets than others who have less information. Less‐informed traders trade‐off between a diversification effect induced by risk‐averse attitude and a "flight‐to‐quality" effect by their aversion towards correlation ambiguity. In equilibrium, the magnitudes between equilibrium positions of different traders are affected by the true correlation coefficient, the upper‐bound correlation conceived by naive traders and the quality of risky assets simultaneously. In some scenarios, we observe that naive and uninformed traders "escape" from low‐quality assets to high‐quality ones. [ABSTRACT FROM AUTHOR]

This study revisits the excess entry theorem for quantity and price competition with substitutes and complements in a Kantian oligopoly. In such an oligopoly, we demonstrate that the equilibrium market outcomes are the same between the aforementioned two types of competition regimes with substitutes and complements, and in particular, each firm's equilibrium price and consumer surplus do not depend on the number of firms. Therefore, in quantity and price competition with substitutes and complements in a Kantian oligopoly, the excess entry theorem holds that the number of firms is larger under free entry than under the second‐best social optimality. Finally, in the two types of competition with substitutes and complements, we characterize the ranking orders of the number of firms between free entry and the second‐best social optimality in Kantian and Nashian oligopolies. [ABSTRACT FROM AUTHOR]

This paper revisits horizontal mergers in an international oligopoly with differentiated goods under the segmented market assumption. In particular, we focus on an industry composed of firms that engage in their Kantian optimization. Strikingly from the case of each firm's Nashian optimization, we show that a duopoly with two international mergers can be uniquely observed in equilibrium except for a full monopoly, and the highest total social welfare can be achieved in its equilibrium market structure. In addition, we consider the managerial delegation cases from the viewpoints of two types of each firm's Kantian optimization. [ABSTRACT FROM AUTHOR]

A licensing commission policy can be used as a tool to orchestrate an ecosystem with complementary developers. For instance, Apple attempts to take advantage of a licensing‐related commission strategy. However, its economic mechanism is seldom discussed. Therefore, this study developed a framework of a platform ecosystem in order to analyze the economics of the licensing‐related commission strategy and the optimal licensing choice with the software function and content upgrade in a monopoly/duopoly market setting. We find that the commission rate serves not only as a value transfer instrument but also as a value‐creation incentive machine for the ecosystem with third‐party vendors. Further, by considering the above factors, the platform would use a win‐win commission rate that benefits both parties. We also find that the differential commission rate has a stronger extraction effect, but it may not result in a vendor‐friendly commission rate and may hurt the vendor's value creation incentive and social welfare. Furthermore, we investigate the equilibrium in the market with competing vendors. [ABSTRACT FROM AUTHOR]

Copper is the primary material of the national manufacturing industry, widely used to construct the national economy. As one of the critical minerals, trade security of copper resources is related to the stable development of the domestic industry. The dynamic evaluation of China's copper trade and identification of the principal risk points is helpful to promote the sustainable development of resources. In this paper, the environmental impact of trade is included in the research category, and the paper conducts a dynamic assessment of China's copper trade risks from 2001 to 2020 of multiple dimensions through the improved DEA‐like model, identifies the main risk points in different periods, and predicts future trade risks. The results show that China's copper resource trade risk has continued to rise since 2001, and its characteristics have gradually changed. The main risk points of trade have experienced the market equilibrium stage, reserve resources stage, and import dependency stage. A high degree of external dependence and environmental pollution intensification has become the key factors influencing the trade risk at the present stage. Copper resources risk will rise slowly in the future and reach a high‐risk state. Trade risks will decline slightly after 2025, but it is still in a dangerous condition. Relevant policies need to be issued to alleviate the trade risk. Combined with the evaluation results, this paper puts forward multidimensional risk management suggestions to ensure the security of copper resources, and improve the flexibility of the resource industry chain. The article provides direction for resource security and sustainable development in the future. © 2023 Society of Chemical Industry and John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This article develops and estimates an industry equilibrium model of the Korean electric motor industry from 1991 to 1996. Plant‐level decisions on R&D, physical capital investment, entry, and exit are integrated in a dynamic setting with knowledge spillovers. We apply the novel approximation of oblivious equilibrium to estimate the R&D cost, magnitude of knowledge spillovers, adjustment costs of physical investment, and plant scrap value distribution. Knowledge spillovers are essential to explaining the firm‐level productivity evolution and the equilibrium market configuration. A 15%$$ 15\% $$ R&D subsidy maximizes industry output and is broadly consistent with a past policy initiative of the Korean government. [ABSTRACT FROM AUTHOR]

This paper studies firms' data privacy and cybersecurity choices. We emphasise the strategic interdependence between these decisions and demonstrate that security in both the market equilibrium and the social optimum tends to be higher when data is shared. We also identify important market failures in the sense that firms tend to under‐invest in security and over‐share data. Our welfare analysis of a minimum security standard, disclosure and consumer education policies, liability rules and consumer mitigation strategies highlights the need for a co‐ordinated approach to regulation. [ABSTRACT FROM AUTHOR]

This study constructs a mixed oligopoly model considering product differentiation, the proportion of state‐owned shares, the efficiency gap, and the reform cost, investigates market equilibrium under different competition modes, and discusses the optimal proportion of state‐owned shares. Product differentiation, the proportion of state‐owned shares, and reform costs have complex impacts on the equilibrium results. Complete, partial, and no nationalization may be optimal under certain conditions. The competition mode affects welfare distribution among stakeholders. The government should decide on an optimal nationalization policy according to specific conditions and the market environment. [ABSTRACT FROM AUTHOR]

We assess how firms' incentives to operate and invest in energy storage depend on the market structure. For this purpose, we characterize equilibrium market outcomes allowing for market power in storage and/or production, as well as for vertical integration between storage and production. Market power reduces overall efficiency through two channels: It induces an inefficient use of the storage facilities, and it distorts investment incentives. The worst outcome for consumers and total welfare occurs under vertical integration. The results are key to understanding how to regulate energy storage, an issue which is critical for the deployment of renewable energies. [ABSTRACT FROM AUTHOR]

This paper presents a new intra‐day intra‐hourly local flexibility market (LFM) framework to exploit distributed energy resources' (DERs) flexibility capabilities. A technical virtual power plant (TVPP) operates the LFM in which the DER aggregators participate. The TVPP offers the provided flexibility capabilities to wholesale flexibility market (WFM) as well as compensating the intra‐hourly variability in power distribution network. In the proposed framework, the TVPP clears the LFM by considering hierarchical transactions with the aggregator agents to find the market equilibrium in which the DERs' flexibility capabilities are optimally exploited while all participating agents make profit by trading flexibility capabilities in the LFM. A bilevel optimization model with multiple lower levels is considered to address different agents' preferences and transactions in the LFM. In the upper‐level problem, the TVPP aims at maximizing its profit while each lower‐level problem represents an aggregator agent's optimization problem. The proposed model is reformulated into a single‐level mixed integer linear programming problem and is implemented on the distribution network connected to Bus 5 of the Roy Billinton test system (RBTS) as well as a 119‐bus test system. The results demonstrate the effectiveness of the model to utilize DERs' flexibility and provide revenue opportunities for different agents. [ABSTRACT FROM AUTHOR]

We compare welfare‐increasing and consumer‐surplus‐increasing merger policies in an oligopoly when merging firms face endogenous trade policies, and engage in cost‐reducing R&D activity. As R&D becomes less efficient, the equilibrium market structures (EMS) become less concentrated under both merger policies. When R&D is very efficient, monopoly becomes the EMS under the welfare‐increasing merger policy. This occurs as the absence of tariff and efficient R&D under monopoly limit the price increase and the gain in profits outweighs the loss in consumer surplus and tariff revenue. The results suggest that trade policies should take into account merger policies and industries' R&D efficiency. The results also show that global welfare maximization requires global merger policy coordination. [ABSTRACT FROM AUTHOR]

Global production of marine finfish has grown in total volume of production and the number of species farmed commercially, but there has been little production in the United States of marine finfish other than salmon and red drum. For most species considered to be ready for commercialization, there are few or no farms from which to evaluate the size of the market or to estimate revenues and costs necessary to assess economic feasibility. This present study takes a first step to fill this gap with an analysis of the existing supply of 20 marine finfish species identified as candidates for commercialization in the United States, as a proxy for effective demand (the volume of a product sold at the market equilibrium price). Secondary data from 1950 (where available) through 2019 were compiled on each species, including (1) global aquaculture production, (2) US aquaculture production, (3) US commercial landings, (4) US recreational landings, and (5) imports. Current effective market demand (measured as the sum of commercial landings, farmed production, and imports) was low, totaling 36.6 million kg across the 20 species, which is equivalent to less than 23% of the annual volume sold of US farmed catfish. Commercial landings for 17 of the 20 species exhibited declines, potentially offering opportunities for farmed product to capture market share by filling the increasing gaps in supply. The variability in commercial landings provides opportunities for farms to capitalize on their advantage in supplying product with a high degree of consistency of volume, size, delivery frequency, and quality. Several unknown factors suggest the need for follow‐up studies on consumer preferences, degree of substitutability among finfish species, and effects of recreational landings on demand. An important limitation to prospective producers is the lack of species‐specific import data for the generic categories of "flounder," "bass," and "snapper." This supply analysis provides a foundational analysis for prospective producers, investors, and researchers interested in commercialization of these marine species. [ABSTRACT FROM AUTHOR]

In this article, we deal with optimal dynamic carbon emission regulation of a set of firms. On the one hand, the regulator dynamically allocates emission allowances to each firm. On the other hand, firms face idiosyncratic, as well as common, economic shocks on emissions, and they have linear quadratic abatement costs. Firms can trade allowances so as to minimize total expected costs, which arise from abatement, trading, and terminal penalty. Using variational methods, we first exhibit in closed form the market equilibrium in function of the regulator's dynamic allocation. We then solve the Stackelberg game between the regulator and the firms. The result is a closed‐form expression of the optimal dynamic allocation policies that allow a desired expected emission reduction. The optimal policy is unique in the presence of market impact. In absence of market impact, the optimal policy is nonunique, but all the optimal policies share common properties. The optimal policies are fully responsive, and therefore induce a constant abatement effort and a constant price of allowances. Our results are robust to some extensions, like different penalty functions. [ABSTRACT FROM AUTHOR]

African Continental Free Trade Agreement (AFCFTA) is gradually becoming a reality and there are needs now more than ever to investigate how African countries will thrive under this new trade regime. Based on this consideration, this study seeks to investigate the revenue, welfare and trade effect of ACFTA on Nigerian economy with the Partial Equilibrium Analysis approach using the World Trade Integrated Solution‐Single Market Partial Equilibrium Simulation Tool (SMART) model. SMART is a trade simulation model developed by the World Bank and the UNCTAD using trade flow data and tariff data from Trade Analysis and Information Systems, the World Trade Organization Integrated Database and Consolidated Tariff Schedule. The findings from the study show that AFCFTA is a trade creating Free Trade Agreement in Africa and sectors like petrochemical industries, textile and maritime products are the leading trade creating sector in Nigeria. On the other hand, manufacturing activities in the production of sanitary, papers, electronics and automobiles are trade diverting in Nigeria. Overall, the total trade effect in Nigeria is US$ 145 million with an accompanying welfare effect of US$ 13 million. However, the Nigerian government might experience a loss of revenue of US$104 million as a result of tariff removal. Thus, this study concludes that AFCFTA is a trade creating and expanding policy but it comes at a huge loss of revenue on the part of the Nigerian government and this can be ameliorated with the introduction of the more comprehensive consumption tax system. [ABSTRACT FROM AUTHOR]

In China, after the revision of the renewable energy policy, transactions among the main parties involved in the electricity market are becoming increasingly complicated. Nevertheless, the impact of the Renewable Energy Portfolio Standard (RPS) on market equilibrium has not been studied so far. Hence, in this study, a noncooperative multiagent game model for the electricity market was developed on the basis of the recently released RPS and by considering various factors, such as green certificate transactions and the changing of the selling entities. The improved firefly algorithm was used to solve the model, and problematic gaming was analyzed empirically. Once the new RPS is implemented, the price of bound electricity will become higher than that of nonbound electricity, and the trading volume of bound electricity will increase. Because fossil energy producers will no longer be responsible for the electricity quotas, their electricity trading volumes will now be more related to the market demand than they were earlier. Renewable energy companies will increase their revenues by reducing their bound electricity sales. If the RPS increases the electricity quota ratios, the costs incurred by electricity sales companies and large power users will also increase, leading the electricity sales companies to reduce their electricity trading volumes. The study findings will help analyze the impacts of implementing the RPS and provide a basis and a reference for policymakers to make improvements to the standard in the future. [ABSTRACT FROM AUTHOR]

How does cost uncertainty affect the welfare consequences of an oligopoly? To answer this question, we investigate a Cournot oligopoly in which firms produce a homogeneous commodity and market entry is feasible. Marginal costs are unknown ex ante, that is, prior to entering the market. They become public knowledge before output choices are made. We show that uncertainty induces additional entry in market equilibrium and also raises the socially optimal number of firms. Since the first change dominates, the excessive entry distortion is aggravated. This prediction is robust to various extensions of the analytical setup. Furthermore, the welfare loss due to oligopoly tends to increase with uncertainty. [ABSTRACT FROM AUTHOR]

Charging resources are scarce due to the limited capacity of charging stations and the congestion of distribution networks. Here, a hierarchical scheduling framework that considers the privacy of participants is established to optimize the charging power with a fair payment mechanism. The charging resource allocation model is established considering the scarcity of charging resources. Furthermore, the model is divided into three sub problems, including the congestion management problem of distribution network operator, the energy management problem of charging station and the charging mode problem of electric vehicle. Then the collaborative optimization algorithms are proposed to ensure the privacy of participants. Finally, a hierarchical payment mechanism based on the opportunity cost theory is proposed. The performance of the proposed hierarchical scheduling framework is evaluated using the Roy Billiton Test System with 2000 EVs. On the premise of ensuring distribution network economic operation, the proposed hierarchical scheduling strategy can satisfy the requirement for privacy protection and eliminate the overload problem caused by electric vehicle charging. The simulation results have shown that the additional capacity cost has an obvious levelling effect. With the application of the payment mechanism, charging resources is equitably allocated. Also, the equilibrium of a market and the stable operation of power system can be guaranteed. [ABSTRACT FROM AUTHOR]

The conventional model of the day-ahead electricity markets employs an energy-based approach to manage the competition among the players. Under this format, it is assumed that everything (including the demand and output power of the generating units) is constant during each hour. This assumption greatly simplifies the market, and it is widely incorporated over the globe. However, it leads to mismatches in the real-time operation. With the increase in the share of intermittent sources, such mismatches get higher amplitude and become more threatening for market performance and system security. Powerbased modelling of the electricity market (PbM), which has been introduced as a remedy to eliminate mismatches in real-time operation, has been scrutinized. The previous comparisons between the conventional model and PbM generally deploy a rigid approach based on the existence of perfect competition. They assume that all the generation companies offer their maximum capacity and marginal cost into the market. Moreover, they model a single-side auction in which only the supply side is actively involved in the market. In order to develop the previous studies on PbM, an equilibrium environment to model the players' interactions within a competitive market has been employed. Employment of an equilibrium model brings the benefits of modelling a double-side market and can simulate the strategic behaviour of the market players on both sides within a partially competitive electricity market. The equilibrium model provides empirical insight on how changing the market structure to PbM affects players' behaviour and shifts the market equilibrium and provided some unreported attributes of PbM. The study is based on a real-world network of the Gilan province in northern Iran. [ABSTRACT FROM AUTHOR]

New technologies may allow principals or firms to learn more quickly about the characteristics of their agents or clients—at some cost of employing that technology. We study the implications of this speed‐versus‐cost tradeoff for equilibrium pricing and purchasing decisions in insurance markets featuring adverse selection. In particular, we study dynamic competitive equilibrium in a theoretical model featuring individuals who differ in their privately known risk types and featuring two types of insurers: conventional insurers who employ a legacy learning technology and tech insurers who employ a new technology. Equilibrium in our model features sorting of low‐risk types into tech firms and high‐risk types into conventional firms. We show, intuitively, that lowering the technology cost raises this cutoff and thus increases the equilibrium market share of tech firms. Perhaps counter‐intuitively, however, we show that adverse selection effects within the conventional market can cause an attempt by conventional insurers to catch up with tech firms—by increasing the speed at which they learn about the risk types of their insureds—to backfire and lead to an increase in the market share of tech firms. Our results are readily adapted to bank lending and labor market settings. [ABSTRACT FROM AUTHOR]

Child labor is a widespread phenomenon and therefore is of interest to both researchers and policy‐makers. Various reasons for the existence of child labor have been proposed with the goal of designing appropriate solutions. While household poverty is viewed as the main reason for child labor, we choose to focus on the phenomenon that parents who worked during their own childhood are more likely to send their children to work. We also look at the effect of social norms on the parents' child labor decision and analyze both these effects on the supply of labor and equilibrium in the labor market. Finally, we suggest an explanation for the phenomenon of poor societies with similar income levels that differ significantly in literacy rates, and we propose policy improvements. [ABSTRACT FROM AUTHOR]

Schumpeterian theory simply predicts a negative relationship between corporate income tax and the economic growth rate because this tax decreases innovation rewards. However, empirical evidence for the effect of corporate tax on the growth rate is mixed. To fill this gap, this paper presents a Schumpeterian growth model with an endogenous market structure that generates an ambiguous relationship between the corporate tax rate and the growth rate. We analytically find that the relationship between the corporate tax rate and the growth rate can be either inverted U‐shaped or negative. In our endogenous market structure model, corporate tax cuts make the market more competitive and increase the costs of employing researchers through labor market equilibrium. Consequently, these two effects may dominate the Schumpeterian effect. In this case, a corporate tax cut may decrease economic growth. [ABSTRACT FROM AUTHOR]

We model multistage competition in supply chains by a sequential game theoretical model in a network. We show the uniqueness of equilibrium for series parallel networks and provide a linear time algorithm to compute the equilibrium. We study the impact of the network structure on the firms' payoffs, the total trade flow, and the overall social welfare. [ABSTRACT FROM AUTHOR]

The increasing penetration of renewable energy resources into regional‐integrated energy systems (RIES) holds higher standards on operational flexibility. To alleviate the negative effects of insufficient operational flexibility, this paper proposes a joint market equilibrium model to obtain flexible resources in microgrids (MGs) and district heating networks (DHNs) through economic incentives. Based on the incorporation of the flexiramp (FRP) into the energy markets, a joint market mechanism is first established. Through multi‐energy synergy, the FRP provisions on the supply and demand sides in MGs are then introduced. Considering the flexibility exploitation of DHNs, a collaborative FRP supply method is developed to formulate the optimal bidding strategy for MGs. Moreover, a hierarchical model is designed to achieve joint market equilibrium, where MGs strategically bid in the external layer and the RIES operator optimally clears the market in the internal layer. The combined utilization of the Q‐learning algorithm and path‐tracking interior point method is applied to solve the hierarchical model efficiently. The performance of the proposed approach is verified by case studies. The results demonstrate the efficacy of the proposed approach for operational flexibility improvement through minimizing renewable energy curtailment, the overall cost, and the average energy prices. [ABSTRACT FROM AUTHOR]

Firstly, this paper makes a distinction between two notions of numéraire in order to clarify the problem of market equilibrium which depends on the choice of a standard of value. This problem has recently re‐emerged, although it smoldered before and during the "Two Cambridge Controversies" on capital theory in the Seventies. Secondly, it presents a collection of equilibrium/disequilibrium analysis which exhibits numéraire dependence. Thirdly, it takes a neo‐Walrasian model of non‐monetary general equilibrium as a benchmark to argue that a prominent role of numéraire should be attributed to fiat money in the analysis of market adjustment. Such a redirection of focus would avoid some typical cases of numéraire dependence that characterize a frictionless barter economy. [ABSTRACT FROM AUTHOR]

We study the effect of environmental regulation (taxation) on emissions when the only available abatement method consists of product‐mix changes. Firms choose to produce one or both varieties of a product—a pollution‐intensive (dirty) and a non‐pollution‐intensive (green)—and compete in a differentiated Cournot duopoly. We characterize the equilibrium market structure as a function of the tax rate and show that increases in the tax can promote product‐mix changes that lead to a jump in emissions for some tax range, an effect we call the perverse effect of taxation. Our work emphasizes the key role horizontal product differentiation in this process and shows that the perverse effect does not require the presence of vertical product differentiation. Further, the perverse effect of taxation is especially strong in the presence of incomplete regulation, that is, when only one of the markets is subject to taxation. [ABSTRACT FROM AUTHOR]

This paper introduces a maximum likelihood estimator of the value of job amenities and labor productivity in a single matching market based on the observation of equilibrium matches and wages. The estimation procedure simultaneously fits both the matching patterns and the wage curve. While our estimator is suited for a wide range of assignment problems, we provide an application to the estimation of the Value of a Statistical Life using compensating wage differentials for the risk of fatal injury on the job. Using US data for 2017, we estimate the Value of Statistical Life at $6.3 million ($2017). [ABSTRACT FROM AUTHOR]

Understanding market integration has greatly benefited from analysing and comparing variations in price transmissions. An important source of variation in agricultural markets is seasonal changes in production, consumption and transaction costs. A key factor driving seasonality in agricultural price is temperature, as supply and demand changes are triggered by seasonal temperature differences. In this paper, we study the seasonal variations in vertical price transmission focusing on the asymmetric price adjustment to analyse changes in the market interactions between the stages of the value chain. Our data reveal significant transitory effects of temperature on the price transmission process. Results of a panel threshold model suggest that the farm–wholesale price adjustments to deviations from the market equilibrium are more symmetric at higher temperatures. However, we do not find an effect of temperature on the wholesale–retail price relationship. Our findings can be rationalised with wholesalers making use of their market power to extend their margins in the upstream chain. Wholesaler market power is lower during warm periods, and price adjustment is more symmetric. Concerning the Iranian poultry value chain, our findings imply that temperature‐related differences in market interactions should be considered in formulating policy interventions. [ABSTRACT FROM AUTHOR]

This study investigates how a privatisation policy affects long‐run market equilibrium when a public firm produces multiple products. It contributes to the literature by (a) examining the long‐run effect of a privatisation policy on a multi‐product public firm and (b) investigating whether the market is characterised by excess or insufficient entry when in long‐run equilibrium. This study assumes that there is a multi‐product public firm and potential private firm entrants that produce one product in the economy. The public firm can privatise some production sectors, the privatised firm produces only one product, and the potential entrant private firm can enter the market by incurring entry costs. The public firm decides how many sectors to privatise. The private firms enter the market if they earn non‐negative profits. The study's findings show that full nationalisation is socially preferable in the long run. In equilibrium, when the number of production sectors of the public firm is small, excess entry occurs easily; the converse is also true. The results may assist the government in determining its privatisation policy and the private sector in determining whether to enter markets that were previously monopolised by the government. [ABSTRACT FROM AUTHOR]

Network effects typically generate multiple equilibria in two‐sided markets. To overcome the methodological challenge of selecting an appropriate equilibrium, this article shows that many two‐sided market models are weighted potential games, and therefore, a refinement of Nash equilibrium justified by many theoretical and experimental studies, potential maximization, pins down an equilibrium. Under potential maximization, platforms often subsidize one side and charge the other, that is, divide and conquer. The primary determinant of which side to subsidize/monetize is cross‐side network effects. This divide‐and‐conquer strategy implies that platforms are often designed to favor the money side much more than the subsidy side. [ABSTRACT FROM AUTHOR]

We study the role of endogenous healthcare choices by households to extend their expected lifetimes on economic growth and welfare in a decentralized overlapping generations economy with annuitized wealth. We characterize endogenous healthcare spending in the decentralized market equilibrium and its effects on economic growth, and we identify the moral‐hazard effect in healthcare investments when annuity rates are conditioned on average mortality. In a numerical simulation of our model with OECD data from 2005, we find that the moral‐hazard effect can be substantial and implies sizable welfare losses of approximately 1.4–2.8 percent, depending on the share of annuitized retirement wealth. [ABSTRACT FROM AUTHOR]