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In this paper we study a non-cooperative sequential equilibrium concept, namely the Stackelberg–Nash equilibrium, in a game in which heterogeneous atomic traders interact in interrelated markets. To this end, we consider a two-stage quantity setting strategic market game with a finite number of traders. Within this framework, we define a Stackelberg–Nash equilibrium. Then, we show existence and local uniqueness of a Stackelberg–Nash equilibrium with trade. To this end, we use a differentiable approach: the vector mapping which determines the strategies of followers is a smooth local diffeomorphism, and the set of Stackelberg–Nash equilibria with trade is discrete, i.e., the interior equilibria of the game are locally unique. We also compare through examples the sequential and the simultaneous moves games. A striking difference is that exchange can take place in one subgame while autarky can hold in another subgame, in which case only leaders (followers) make trade. [ABSTRACT FROM AUTHOR]

In this paper, we focus on a dynamic Cournot game in the market with a nonlinear (isoelastic) demand function. In our model, there are N competing firms featured by nonlinear cost functions, which enhances our model's resemblance to real-world scenarios. Firstly, we focus on the homogeneous case where firms' marginal costs change at equal rates. We establish analytical expressions of the market supply at equilibrium and perform comparative static analysis. In addition, we investigate the local stability under different economies of scale and show that there could be multiple stable equilibria if firms face economies of scale. The heterogeneous case where firms' marginal costs change at distinct rates is much more complex, thus we investigate the duopoly game with only two firms involved. Methods of symbolic computations such as triangular decomposition and partial cylindrical algebraic decomposition are employed in the analytical investigations of the equilibrium, which is nearly impossible by using the pencil-and-paper approach since the closed-form equilibrium is quite complicated. According to the computational results, we derive that two stable positive equilibria may coexist if both firms face economies of scale. Additionally, we conduct preliminary numerical simulations and find two different types of complex dynamics of the model considered in this paper: complex trajectories such as periodic and chaotic orbits may appear; the topological structure of the basins of attraction may be complex. [ABSTRACT FROM AUTHOR]

In the era of the rapid development of e-commerce, many retailers choose to launch promotional activities to become consumers' first choice for shopping. Since price discounts can greatly attract consumers, the e-commerce platforms have also begun to implement discount pricing. It is urgent for e-commerce platforms and retailers to formulate reasonable discount strategies to achieve sustainable business. In this paper, we construct a dynamic game model for implementing discount pricing on an e-commerce platform and two retailers, we study the market equilibrium between the two retailers and the e-commerce platform under various scenarios that considering consumers' strategic waiting behavior and competition between the two retailers, we further discuss the effectiveness of retailer discount pricing and the double discount pricing of the platform and retailers. We show that the optimal pricing decreases as the difference in product quality narrows under both pricing strategies. Low-quality retailers implementing a double discount pricing strategy are in relatively higher demand only when the difference in product quality is small. High-quality retailers implementing the retailer discount pricing strategy are in relatively higher demand only when the product quality difference is large. Double discount pricing is desirable for both e-commerce platforms and retailers and can be used to effectively achieve Pareto improvement in the market by increasing their expected profit. Our results emphasize the role of product quality and the value of the double discount pricing strategy. The double discount pricing strategy weakens the profit advantage that retailers and platforms gain from it as the rebate intensity and rebate redemption rates increase. [ABSTRACT FROM AUTHOR]

Typically, governments subcontract the operation of urban bus systems to several bus operators. In particular, the government aims to promote the service quality for passengers by introducing competition among bus operators and subsidizes bus operations to ensure affordable fares. However, most existing studies about subsidy allocation typically do not account for the competitive factors among bus operators and thus may underestimate the associated benefits. In this study, we investigate how the government allocates subsidies to minimize social costs, taking into account the competition among bus operators and passenger route decisions. We describe this problem as a trilevel optimization model and use a game-theoretic approach to characterize the market equilibrium of bus operators. Next, we transform the trilevel model into a mixed-integer programming problem with quadratic constraints and solve it using an exact algorithm with acceleration techniques. The results of numerical experiments demonstrate the computational efficiency of the proposed algorithm. Several valuable insights are derived: First, lines served by competing bus operators typically do not require subsidies. Second, competitive behavior decreases social costs (including bus operating costs and passenger travel costs) more effectively in cities in which the passengers assign higher value to time. Third, the competitive behavior may be guided by exogenous parameters, such as ticket prices, to approximate the optimum of urban bus systems. Funding: This work was supported by the Key Project [Grant 52131203], Youth Program [Grant 72301065], and Project of International Cooperation and Exchanges [Grant 72361137006] of the National Natural Science Foundation of China. [ABSTRACT FROM AUTHOR]

A Systemic Optimal Risk Transfer Equilibrium (SORTE) was introduced in: "Systemic optimal risk transfer equilibrium", Mathematics and Financial Economics (2021), for the analysis of the equilibrium among financial institutions or in insurance-reinsurance markets. A SORTE conjugates the classical Bühlmann's notion of a risk exchange equilibrium with a capital allocation principle based on systemic expected utility optimization. In this paper we extend such a notion to the case when the value function to be optimized is multivariate in a general sense, and it is not simply given by the sum of univariate utility functions. This takes into account the fact that preferences of single agents might depend on the actions of other participants in the game. Technically, the extension of SORTE to the new setup requires developing a theory for multivariate utility functions and selecting at the same time a suitable framework for the duality theory. Conceptually, this more general framework allows us to introduce and study a Nash Equilibrium property of the optimizer. We prove existence, uniqueness, and the Nash Equilibrium property of the newly defined Multivariate Systemic Optimal Risk Transfer Equilibrium. [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]

Auction-based parking mechanisms (ABPM) have been recognized as promising solutions to the parking problem. As the operator of the ABPM, the parking platform should not only be well-operated to provide parking services for demanders in need but also maintain commercial viability for sustainable operations. Motivated by this, we propose three ABPMs, namely, the ABPM without withdrawal right, the ABPM with costless withdrawal right, and the ABPM with non-free withdrawal right. Particularly, we characterize the parking demanders' withdrawal behaviors in the ABPMs. This behavior is motivated by the demanders' negative utilities derived from the auction sequence, where the demanders will first submit bid prices and are then allowed to withdraw from the parking market after the announcement of auction results when they are aware of their true valuations. We derive the equilibrium bidding strategies and the platform's expected revenues under the above three mechanisms and compare them in terms of the analytical results. It has been found that the introduction of withdrawal right will stimulate demanders to raise their bids for winning and the ABPM with non-free withdrawal right generates the highest revenue under certain conditions. A case study of parking in Beijing Financial Street has been conducted to illustrate the findings and explore managerial implications, including adapting the ABPM with non-free withdrawal right, narrowing the parking supply-demand gap, and enhancing travel experiences on the way to parking. • Parking demanders' endogenous withdrawal behaviors are modeled in the auction-based parking mechanism (ABPM). • Three ABPMs regarding the usage of withdrawal right are designed and compared under the market equilibrium framework. • The withdrawal right stimulates parking demanders to raise bids for winning. • The ABPM with non-free withdrawal right generates the highest revenue under certain conditions. • Managerial implications regarding boosting the parking platform's revenue are proposed. [ABSTRACT FROM AUTHOR]

This article argues that Croatia's growth over the past two decades is deeply related to the dynamics of international trade. Under the premise that what is bought and sold in global markets reflects the economy's fundamentals, we show that the rate of growth compatible with equilibrium in the balance-of-payments, i.e. the dynamic Harrod trade multiplier, is a good predictor of the country's actual long-run growth rate. For this purpose, we apply a state–space model and the Kalman smoother to obtain time-varying parameter estimates of the exports and imports functions. We use these estimates to investigate the determinants of international non-price competitiveness. Bayesian Model Averaging (BMA) and Weighted Average Least Squares (WALS) techniques are combined to tackle model selection uncertainty. It is shown that R&D investments and human capital accumulation are the most important explanatory variables. The success of the European Union's (EU) integration process depends on the capacity of its new members to achieve a balanced-growth path. Being the last country to join the union, the experience of this single country is particularly relevant to understand possible development alternatives for the region. We conclude by highlighting the policy relevance of our findings to the evaluation of Croatia's catching-up performance as part of the EU. • Croatia's growth is deeply related to the dynamics of international trade. • We apply a state–space model to estimate the trade-multiplier for this country. • We show it is a good predictor of the actual long-run growth rate. • Estimates are used to investigate the determinants of international non-price competitiveness. • R&D, human capital, and demography are the most important explanatory variables. [ABSTRACT FROM AUTHOR]

We develop an empirical model of the market for mobile services in the USA based on providers' response functions. Guided by a duopoly model, we obtain our empirical response functions from an approximation of quarterly response data on smartphone subscriptions by sigmoid functions of time. The robustness analysis suggests that our model fits the data well and outperforms the regression model. Further, we demonstrate that our empirical response functions satisfy the conditions for semi-cyclic contractions which guarantee the existence, uniqueness and stability of long-run equilibrium. [ABSTRACT FROM AUTHOR]

A price competition amongst two centralized dual-channel supply chains (DCSCs) has been investigated in this study. Three scenarios of competition are studied—a simultaneous move game and two sequential games (one in which the first supply chain is the leader and the second supply chain is the follower, and vice versa). The optimal prices and profits for these scenarios have been derived and compared. It is observed that prices and profits are higher under Stackelberg (Sequential move) competition as compared to Simultaneous move competition. Finally, the present study determines which type of competition structure would persist in the market by using a Wait or Declare two-strategy game. The game depicts the market entry decision of the competing supply chains. The results reveal that self interest in competing dual-channel supply chains leads to a sequential move competition and consequently to higher product prices. To reduce the price and thus induce a customer favourable equilibrium, regulatory authorities like the government can step in and provide incentives. We derive a lower bound on the incentive which would implement a low market price equilibrium in Dominant Strategies. Further, we note that under competition, dual-channel supply chains outperform traditional supply chains only upto a certain threshold of the retail channel market share and we derive an expression for the same threshold. This threshold is found to be independent of the nature of the product. [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]

Reward schemes are common in ride-sourcing markets. Each reward scheme incentivizes users with economic benefits as rewards for rides from the ride-sourcing platform. In practice, reward schemes differ in terms of their operational features. Operational features are the ways in which a ride-sourcing platform manages a reward scheme and users perceive and redeem their rewards. Therefore, different reward schemes involve different decision-making contexts for the platforms. As a result, it poses a challenge to understand the behavior of platforms with different types of reward schemes in the market. To address this challenge, this study analyzes the impacts of point-based and crypto-based fare-reward schemes on a ride-sourcing market. The market is defined as a mathematical model in which a ride-sourcing platform determines trip fares, commission fees, and rewards for passengers and drivers to maximize matching profits. A points-based reward scheme offers loyalty points with fixed redemption values. Issuance of point rewards incurs a liability for the reward scheme to accept users' point redemptions in the future. The crypto-based approach involves the cost of securing cryptocurrencies to reward users. Crypto rewards have various redemption values. Therefore, users perceive the value of crypto rewards based on their beliefs regarding their future value. This study performed an equilibrium analysis to elucidate the relationships between platform decisions and endogenous variables in the market using two fare-reward schemes. Subsequently, the properties of the optimal market solutions are further explored. These properties provide insights into the platform's reward and pricing decisions as follows: First, it is shown that a ride-sourcing platform is likely to adopt a single-sided reward strategy; that is, the platform's reward decisions with reward schemes are made exclusively between passengers and drivers. Second, the heterogeneity of user redemption behavior polarizes the platform's pricing decision on trip fares; that is, a ride-sourcing platform has incentives to set lower and higher trip fares when deciding to reward drivers and passengers, respectively. Third, such distinctive pricing decisions balance passenger demand with driver supply. Therefore, the ride-sourcing market can remain stable and efficient, even in the presence of the platform's reward decisions. A series of numerical experiments were performed to verify the findings of the current study. • This paper analyzes impacts of the point-based and crypto-based fare-reward schemes on a ride-sourcing market. The optimal pricing and reward decisions of ride-sourcing platforms are subject to operational features of the reward schemes. • Equilibrium analysis shows that the impact of trip fare on user retention depends on redemption behaviours of passengers and drivers in the reward schemes. The heterogeneity of their redemption behaviours becomes the reason for the platforms to make exclusive reward decisions between two sides of passengers and drivers. • The reward decisions polarize pricing strategies in such a way that the platforms have incentives to lower (higher) its trip fare when they decide to rewards drivers (passengers), while reaping benefits from passengers (drivers) owing to alleviation of matching frictions. [ABSTRACT FROM AUTHOR]

Using a parsimonious model, this paper analyzes a dockless bike-sharing (DLB) service that competes with walking and a generic motorized mode. The DLB operator chooses a fleet size and a fare schedule that dictate the level of service (LOS) as measured by the access time or the walking time taken to reach the nearest bike location. The market equilibrium is formulated as a solution to a nonlinear equation system over which three counterfactual design problems are defined to maximize (i) profit, (ii) ridership, or (iii) social welfare. The model is calibrated with empirical data collected in Chengdu, China, and all three counterfactual designs are tested against the status quo. We show the LOS of a DLB system is subject to rapidly diminishing returns to the investment on the fleet. Thus, under the monopoly setting considered herein, the current fleet cap set by Chengdu can be cut by up to three quarters even when the DLB operator aims to maximize ridership. This indicates the city's fleet cap decision might have been misguided by the prevailing conditions of a competitive yet highly inefficient market. For a regulator seeking to influence the DLB operator for social good, the choice of policy instruments depends on the operator's objective. When the operator focuses on profit, limiting fare is much more effective than limiting fleet size. If, instead, it aims to grow market share, then setting a limit on fleet size becomes a dominant strategy. We also show, both analytically and numerically, that the ability to achieve a stable LOS with a low rebalancing frequency is critical to profitability. A lower rebalancing frequency always rewards users with cheaper fares and better LOS even for a profit-maximizing operator. Funding: This research was partially supported by the U.S. National Science Foundation [Grant CMMI 1922665] and the National Natural Science Foundation of China [Grant 71971044]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/trsc.2022.0304. [ABSTRACT FROM AUTHOR]

Reflecting the ongoing public concern about strategic behavior among colleges, we develop a game-theoretic higher education model with peer effects to examine the equilibrium market response to changes in state and federal student aid. In addition to establishing perfect equilibrium existence, we find that state and federal student aid programs are vulnerable to equilibrium effects that conflict with the intended impact of policy instruments. For instance, even when college objectives are devoid of selfish intent, strict increases in state and federal student aid can induce decreased student access to higher education or even increased financial strain from college enrollment. [ABSTRACT FROM AUTHOR]

Financial instruments that help provide revenue certainty are fundamental for project finance in liberalized electricity markets. Improved management of locational risk caused by network congestion is becoming increasingly important with a growing share of production from geographically remote renewable resources. Nodal markets have financial transmission rights (FTRs) to enable participants to manage locational risk, but there is no evidence that FTRs have been used to support project finance. Through a stochastic equilibrium model in which market participants invest in production assets and trade risk, we show that long-term FTRs promote surplus-maximizing generation investments and reduce the cost of capital. Investors pair them with energy price hedges and thus protect themselves against both types of risk. Our results suggest that altering the definition and allocation of FTRs to match the needs of project finance, e.g., by enabling new generators to procure a long-term right at the time of interconnection, could help ensure a complete risk market and encourage efficient investments. [ABSTRACT FROM AUTHOR]

We studied a supply chain consisting of multiple suppliers and multiple retailers. We use the Cournot–Stackelberg game, the Market–Stackelberg game, and the Market–Nash game to simulate the situation where the upstream seller's market dominance power gradually decreases while the downstream buyer's market power increases. The equilibrium decision and supply chain performance under the three models are compared and analyzed, as well as their responses to external market changes such as demand fluctuation and market competition intensity. The research shows that (1) in a seller-dominated supply chain, the increase in buyer power reduces market equilibrium production and wholesale price; (2) in the face of strong demand fluctuations, equivalent power between upstream and downstream can contribute to the stabilization of production and wholesale prices; (3) when market demand fluctuation is small, market power brings a higher profit level, and supply chain participants would like to actively compete for market power. However, when the demand fluctuates greatly, the profit advantage brought by market dominance is no longer significant, and there is no need to spend much to fight for market dominance; (4) the fierce competition of upstream suppliers will induce upstream to give up the competition for market dominance, and make the market power less attractive to downstream retailers. While the fierce horizontal competition downstream will stimulate both suppliers and retailers to actively compete for market power, (5) sufficient market competition will improve total supply chain profit, so encouraging competition is conducive to the overall economic development of society. [ABSTRACT FROM AUTHOR]

In this paper, we present a general oligopolistic market equilibrium model in which each firm produces several commodities in a time interval. To this aim, we introduce tensor variational inequalities in Hilbert spaces which are a powerful tool to analyse the model. Indeed we characterize the equilibrium condition by means of a suitable time-dependent tensor variational inequality. In addition, we prove some existence and regularity results and a numerical scheme to compute the solution. Finally we provide a numerical example. [ABSTRACT FROM AUTHOR]

We study the monopolistic competition model of Dixit–Stiglitz–Krugman with additive separable utility and transport costs of "iceberg types". The production costs are not necessary linear. We study two concepts: market equilibrium and social optimality. There are well-known facts in the closed economy under monopolistic competition: (1) "in market equilibrium, the elasticity of revenue equals the elasticity of total costs" and (2) "in social optimality, the elasticity of utility equals the elasticity of total costs". Moreover, earlier Prof. Sergey Kokovin (HSE University, Russia) generated the idea that (3) "the search for equilibrium is equivalent to the problem of optimization, but revenue, not utility". For the case of several countries, it turns out that facts (1) and (2) and prediction (3) remain mostly true. [ABSTRACT FROM AUTHOR]

Are fairness and efficiency compatible in behavioral welfare economics? Assuming multi-self agents, who may not be able to integrate their various objectives into complete and transitive rankings, we call an allocation unambiguously-fair if it fair according to every self of every agent. We show that efficiency is generically compatible with the unambiguous fair-share guarantee, and — in two agent economies — with unambiguous no-envy. But in some larger economies, no efficient allocation satisfies unambiguous no-envy or unambiguous egalitarian equivalence. These non-existence results persist if the agents integrate their objectives into complete but intransitive rankings. Even if unambiguously envy-free Pareto optima exist, they may not arise as market equilibria from equal endowments. Finally, we show that there are Pareto optima with the unambiguous fair-share guarantee that are envy-free for at least one complete and transitive aggregation of the agents' preferences, and others that are egalitarian-equivalent according to at least one such aggregation. [ABSTRACT FROM AUTHOR]

The Fisher market is one of the most fundamental models for resource allocation. However, Fisher markets are less amenable for resource allocation settings when agents have additional linear constraints beyond the budget constraints of buyers and the capacity constraints of goods. Thus, in this work, we introduce a modified Fisher market, where agents may have additional linear constraints, and study the properties of the resulting equilibria. To set equilibrium prices, we introduce a budget-adjusted social optimization problem (BA-SOP), whose optimal dual variables correspond to the equilibrium prices. Since solving BA-SOP can be computationally intensive and requires centralized knowledge of all agents' utilities, we propose a new class of distributed algorithms based on the Alternating Direction Method of Multipliers (ADMM) to compute equilibrium prices. Our ADMM approach has strong convergence guarantees and provides a general-purpose method for computing market equilibria for Fisher markets with homogeneous linear constraints and classical Fisher markets. [ABSTRACT FROM AUTHOR]

The business activity is inseparable from the support of documental information flow. In the past, the commercial documents needed a lot of time to get to the point-to-point, which could lead to problems, such as insecurity or the relatively long time. With the emergence of new technologies, it is possible to change this information transmission method to enable fast and accurate dissemination. For considering the possibility of technology adoption, this study investigates the role of blockchain service in term of market size and file circulation time. Specifically, we construct a game-theoretic model to find the equilibrium strategy from a manufacturer and two competing retailers. From the perspective of equilibrium, we investigate the results for market effects, economic effects, service effects, and service efficiency, respectively. Moreover, we also analyze the service strategy of retailers providing service by manufacturer, time sensitivity, and competitive intensity, respectively. Based on the above analysis, this study has obtained an equilibrium to support the commercial practice. In summary, this study has two contributions. On the one hand, we analyze the impact of the technological investment in blockchain service on asymmetric market scale competition. This result extends the application scope of blockchain service in the market. On the other hand, this study discusses the impact of time value on technology investment in blockchain service. Therefore, through the discussion of our study, the results show the value of blockchain service in information exchanges. [ABSTRACT FROM AUTHOR]

Market power in water markets can be modeled as simultaneous quantity competition on a river structure and analyzed by applying social equilibrium. In an example of a duopoly water market, we argue that the lack of backward induction logic implies that the upstream supplier foregoes profitable strategic manipulation of water to the downstream supplier. To incorporate backward induction, we propose the Stackelberg social equilibrium concept. We prove the existence of Stackelberg social equilibrium in duopoly water markets with an upstream–downstream river structure and derive it in the example of a duopoly market. [ABSTRACT FROM AUTHOR]

Market power is a dominant feature of many modern electricity markets with an oligopolistic structure, resulting in increased consumer cost. This work investigates how consumers, through demand response (DR), can mitigate against market power. Within DR, our analysis particularly focusses on the impacts of load shifting and self-generation. A stochastic mixed complementarity problem is presented to model an electricity market characterised by an oligopoly with a competitive fringe. It incorporates both energy and capacity markets, multiple generating firms and different consumer types. The model is applied to a case study based on data for the Irish power system. The results demonstrate how DR can help consumers mitigate against the negative effects of market power and that load shifting and self-generation are competing technologies, whose effectiveness against market power is similar for most consumers. We also find that DR does not necessarily reduce emissions in the presence of market power. [ABSTRACT FROM AUTHOR]

We outline a model of endogenous choices of market entry and product scope in a partial-equilibrium model of heterogeneous firms with arbitrary productivity. Firms' choices of interest depend on market characteristics including variable trade and fixed market-entry costs. Conditional on fixed costs, the extent to which firms respond to shocks depends on their (potentially nonparametric) density around the zero-profit threshold. Accordingly, identical changes in, e.g., variable trade costs per product and market can lead to vastly different responses across not only markets and products but also firms. We shed light on the heterogeneity of these responses by estimating parameters and otherwise calibrating the model to firm-and-product-level bilateral trade data for China. [ABSTRACT FROM AUTHOR]

This article specifies the conditions on the utility function and on the cost function for which congestion or production overcapacity emerge in a market when information is perfect and prices are flexible. Consumers are of two types: Some appreciate a large production market, some do not. A typology underlines the shape of utility functions and cost functions which generate an optimal production overcapacity or an optimal congestion at the pure strategy Nash equilibrium. We show that the sign of the consumption externalities is endogenous. The result is independent of the nature (positive or negative) of the consumption externalities that affect the consumers' preferences. A welfare analysis is performed. We underline the conditions under which the social planner chooses whether to clear the market or not. Application to a network economy is developed. Extensions to the following three cases are provided: (1) unsold stocks of goods with or without warehouse inventories, (2) quality of goods and (3) software markets. • Consumption externalities sign may change depending on market or welfare equilibrium. • Alpha-concavity of utility and the shape of cost function are crucial for results. • Two Examples a) with Networks and b) with retail are simulated. [ABSTRACT FROM AUTHOR]

In this work, we address the beneficial role of noise in two different contexts, the human brain and financial markets. In particular, the similitude between the ability of financial markets to maintain in equilibrium asset prices is compared with the ability of the human nervous system to balance a stick on a fingertip. Numerical simulations of the human stick balancing phenomenon show that after the introduction of a small quantity of noise and a proper calibration of the main control parameters, intermittent changes in the angular velocity of the stick are able to reproduce the most basilar stylized facts involving price returns in financial markets. These results could also shed light on the relevance of the idea of the "planetary nervous system", already introduced elsewhere, in the financial context. [ABSTRACT FROM AUTHOR]

We develop a theory of optimal aircraft size, where the cost of the flight crew is the primary factor driving the use of larger aircraft, while passenger utility is primary factor driving the use of smaller aircraft. After fitting our model to U.S. data, we perform a counterfactual experiment where the minimum crew size requirement is relaxed from two pilots to one, a policy currently being discussed by aviation experts. Implications are derived for the number of aircraft demanded and its size distribution, demand for pilots, passenger traffic, flight frequency, and where new nonstop service may be introduced. • Aircraft size jumps by 5.7% to 7.5% when an additional relief pilot is required. • A theory of optimal aircraft size driven by scalable and non-scalable costs is developed. • A counterfactual experiment that relaxes the minimum crew size requirement from two pilots to one is performed. • Implications are derived for the number of aircraft demanded and its size distribution, demand for pilots, passenger traffic, flight frequency, and where new nonstop service may be introduced. [ABSTRACT FROM AUTHOR]

One of this paper's main goals is to demonstrate Brouwer's fixed point theorem which mainly depends on the closed unit ball fixed point condition in Rn. After that, we demonstrate the Walrasian auctioneer which is an economical application of Brouwer's fixed point theorem where it is a hypothetical technique of price adjustment that mimics how markets reach equilibrium as it increases the price of a good if demand exceeds supply. After price has increased, the Walrasian normalizes the increase. When this new pricing is revealed, the process is then repeated. [ABSTRACT FROM AUTHOR]

We study a tropical linear regression problem consisting in finding a best approximation of a set of points by a tropical hyperplane. We establish a strong duality theorem, showing that the value of this problem coincides with the maximal radius of a Hilbert's ball included in a tropical polyhedron. We also show that this regression problem is polynomial-time equivalent to mean payolf games. We illustrate our results by solving an inverse problem from auction theory. In this setting, a tropical hyperplane represents the set of equilibrium prices. Tropical linear regression allows us to quantify the distance of a market to the set of equilibria, and infer secret preferences of a decision maker. [ABSTRACT FROM AUTHOR]

In a duopoly model of horizontal and vertical differentiation, where consumers are ex-ante unaware of product qualities, we study the firms' incentives to signal quality via prices. Consumers, after they observe prices, can evaluate a firm's product quality before purchase if they incur a search cost. We show that a complete information (undistorted) separating equilibrium and a unique pooling equilibrium (in pure strategies) exist. A lower search cost moves the market equilibrium from pooling to separating and induces a mean-preserving spread in the distribution of the equilibrium prices. [ABSTRACT FROM AUTHOR]

We consider market models in which the supply and demand functions are determined by their price elasticities. We obtain sufficient conditions for the existence of an equilibrium state of the economic system. [ABSTRACT FROM AUTHOR]

The paper aims to introduce inverse tensor variational inequalities and analyze their application to an economic control equilibrium model. More precisely, some existence and uniqueness results are established and the well-posedness analysis is investigated. Moreover, the Tikhonov regularization method is extended to tensor inverse problems to study them when they are ill-posed. Lastly, the policymaker's point of view for the oligopolistic market equilibrium problem is introduced. The equivalence between the equilibrium conditions and a suitable inverse tensor variational inequality is established. [ABSTRACT FROM AUTHOR]

The application of blockchain technology in the financial industry has become the focus of global attention; thus, the traditional credit business of commercial banks faces unprecedented opportunities and challenges. Based on the theoretical analysis, this study systematically examines the dynamic impact of blockchain on the lending behavior of commercial banks. The results indicate that, in the case of interest rate marketization, the blockchain expands bank credit through the mechanism of "reducing management costs"; in the case that interest rates have not yet been marketized, the blockchain can also increase bank lending through the channel of "correcting the price of funds" by narrowing the difference between the market equilibrium and the bank deposit interest rate. The results are of great significance for a deeper understanding of the impact and mechanism of blockchain on bank credit. JEL codes: G21; O31; O33 [ABSTRACT FROM AUTHOR]

Financial market failures lead to deadweight (welfare) loss for society. Assessment of the deadweight loss started with the so-called Harberger Triangles, where Harberger offered a clear and persuasive derivation of the triangle method of analysing the deadweight loss and applied the method to estimate deadweight losses due to income taxes in the United States. Hertog further put the deadweight loss into the model with government intervention to assess the optimal level of welfare loss control. This concept is central to regulatory economics. Harberger’s approach is based on the deviation of market equilibrium measured in terms of price and quantity. When analysing imperfect competition as one of the market failures, authors have identified in the literature variables for “price” and “quantity”. The research presents the approach how calculating the deadweight loss arising from the imperfect competition using the following variables: “price” – interest rates (loans), “quantity” – exposure of loans on banks’ balance sheets. The outcome of the research is integral for the assessment of the deadweight loss arising from imperfect competition. Deadweight loss calculations for selected countries show results corresponding to the expectation to be lower than 12% - the maximum value is 4,6% for Latvia, which experienced the most significant increase in the banking market concentration from the sample. Research methods used: literature analysis, regression analysis, and mathematical analysis tools (integrals). [ABSTRACT FROM AUTHOR]

California's Proposition 12, which outlaws the use of cages in the egg production process, went into effect on January 1, 2022. The main focus of this study is to follow the trend of weekly Californian and national egg price changes before and after the implementation of Proposition 12. Using the price series reported by the United States Department of Agriculture (USDA), structural break tests and Ordinary Least Squares (OLS) regressions are carried out to directly measure the economic impacts of this new regulation on egg prices. With different models used, this study shows that California consumers now pay an additional $0.25 to $0.73 for a dozen eggs due to the new regulation, resulting in a state- level annual loss in consumer surplus of $223 million to $664 million. [ABSTRACT FROM AUTHOR]

On-demand ride-sourcing platforms have quickly emerged and become ubiquitous in our daily lives. Motivated by the rising public concern about service quality in the ride-sourcing market, this paper aims to examine the impact of exclusion policy that can serve as both quality management and supply regulation strategy. With an exclusion policy, the platform excludes low-quality service providers/drivers from the ride-sourcing market by setting a quality threshold of admission (QTA). We propose a model to describe and analyze the market equilibrium under the exclusion policy and present our analytical and numerical results – some of which are non-intuitive and intriguing. Considering network effects captured by both quality and quantity of service in the market, we find that both the realized supply and total labor welfare are not reduced but rather increase when the platform implements a well-designed exclusion policy. Whereas the platform's profit, customer surplus, labor welfare, and social welfare are each non-monotonic in the QTA level – first increasing and then decreasing – a moderate level of QTA can benefit all stakeholders (platform, drivers, and passengers) in the market. We also analyze the model with alternative network effects and present the theoretical and numerical results. Using the model, we further identify the principal factors in determining the optimal exclusion policy; these include passengers' quality preference, labor pool size, and quality differentiation among registered drivers. • We examine the impact of supply regulation under an exclusion policy. • A well-designed exclusion policy increases realized supply and total labor welfare. • Platform profit, customer surplus and labor welfare are each non-monotonic in QTA. • QTA relies on passenger quality preference and drivers' size and quality difference. [ABSTRACT FROM AUTHOR]

Many regions of the world aim to phase out conventional private gasoline cars within ten years, requiring imminent expansion of the electric vehicle (EV) charging infrastructure. However, because of high installation and maintenance costs, many landowners (LOs), such as shopping malls and commercial building owners, hesitate to install and operate large-scale EV charging facilities of their own volition. In light of this reason, government-led investment is widely provided in many cities, in which local governments provide subsidies to or directly invest in the installation of EV charging facilities. However, this mode cannot be sustained in the long run. As the charging infrastructure market grows, many charging station operators (CSOs), who specialize in EV charging facility installation and operation, have emerged in recent years. These CSOs rent parking spaces from LOs to operate their charging business, which can potentially benefit LOs by attracting more EV drivers to patronize LOs. This parking-charging integration scheme (P&C scheme) builds a symbiotic relationship between LOs and CSOs. However, such schemes may have negative impacts on LOs. Allocating parking spaces to CSOs will increase the time general consumers without charging needs spend searching for parking, which will reduce the number of general consumers. If the newly attracted EV drivers only charge but do not consume in the LO, the LO might not be better off by participating in this scheme. To analyze the economic viability of the P&C scheme and the resulting impact on consumers, we develop a sequential-move game model, taking into account the responses of general consumers and EV drivers. We analytically prove the existence and uniqueness of the market equilibrium and derive the feasibility conditions for this scheme. Interestingly, we find that when the proportion of charging drivers who choose to patronize the LO is high, the LO is willing to reward the CSO for operating the charging service. A realistic P&C example is also presented to demonstrate our analytical insights. • Develop a sequential-move model to capture interactions between the LO and the CSO. • Analyze the feasibility condition and the PURE-strategy equilibrium solution. • Both the LO and the CSO are better-off in the P&C scheme. • Subsidies for EV drivers patronizing the LO increase the number of e-parking spaces. [ABSTRACT FROM AUTHOR]

The paper presents a study of equilibrium in a two-sided market for network platforms with cross externalities between buyers and sellers. The proposed model is a generalization of Armstrong's (2006) monopoly model for the case of a duopoly in a two-sided market for network platforms located on a plane. The paper solves the problem of optimal pricing and investigates the question of the optimal location of platforms in the market, provided that the heterogeneous utility of agents of both groups (buyers and sellers) is formed taking into account the Hotelling specification with the Manhattan metric. [ABSTRACT FROM AUTHOR]

This paper proposes a semi-analytical method to obtain the equilibrium bidding strategies for generation and demand units in a combined oligopoly and oligopsony wholesale electricity market. Such market structure is the outcome of the increasing deployment of demand response programs that facilitate active participation of demand-side players in the price-setting process. In this analysis, the concept of supply function equilibrium (SFE) is used to investigate the oligopolistic competition among generation units. The SFE model is extended and the demand function equilibrium (DFE) is obtained to study the oligopsonistic competition among demand units. The economic behavior of a market participant is formulated as a bi-level programming (BLP) problem. The imperfect competition among generation units, as well as among demand units, are modeled as a non-cooperative game. Next, a direct method is developed to calculate all candidate equilibriums of the market, and the locational marginal prices (LMPs) in terms of the bidding strategies of the market participants. The BLP problem is solved by obtaining the coordinated Pareto-dominant Nash equilibrium of the market participants’ non-cooperative games. Finally, the proposed analysis is examined in case studies. Accordingly, we report insightful observations with respect to the impact of the changes in the new market structure, at firm-level and market-level, such as in terms of mitigating market power of generation units, the market clearing prices and quantities, surplus for generation units and demand units, and potential impact on market efficiency. [ABSTRACT FROM AUTHOR]

The bidding behaviors of the energy storage systems (ESS) are complicated due to time coupling and market coupling limited by their capacity states. The existing research is mainly based on optimization models and reinforcement learning (RL) models, which are idealized with analytical objective functions, rational decisions, and virtual historical data. This leads to mismatches between theoretical results and actual bidding behaviors, and the obtained results cannot be generalized to a real-world market. In recent years, the disclosure of market data has enabled data-driven analysis, while the complexity of actual data makes the analysis process challenging and calls for more suitable methods. On the basis of our investigation of ESS bidding behaviors and market data, we propose a novel inverse RL (IRL)-based framework to identify the bidding decision objective function of ESS in coupled multi-market through their historical bidding records and operation status. The identification results can be used as the model parameters to help RL-based simulation models available for a real-world market. Based on the proposed framework, we conduct an empirical analysis on the real-world data of a battery ESS in the Australian electricity market. The results show how the ESS balances its objective among different markets and maintains its state of charge (SOC) to gain more profits. This framework can help us model ESS behaviors by relying on historical data to better understand the ESS bidding decision-making mechanism, which will facilitate market equilibrium analysis and mechanism design. [ABSTRACT FROM AUTHOR]

Patent pricing is the core issue in patent industrialisation. This paper uses game theory to study the effects of auction behaviours when the members of the patent portfolio are auctioned either together or separately. A comparison of patent product yields the results (1) the outputs of a patented product are lower in a packaged auction than in a separate auction, and the outputs of the two auction modes decrease as the correlation between patent members increases; (2) the profits of package portfolios are higher under packaged auctions than under separate auctions, and an enterprise's profit is negatively related to the correlation between the patent members; (3) when a patent portfolio is subjected to separate auction, the product outputs under Stackelberg equilibrium in a game are higher than that under static equilibrium, and the product outputs in the Stackelberg equilibrium decrease with the correlation between patent members; and (4) when the members of a patent portfolio are auctioned separately, the profits in the Stackelberg equilibrium and static equilibrium are related to the correlation between patent portfolio members; the profits in the Stackelberg equilibrium will first decrease and then increase as the correlation between patent portfolio members increases. [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]

We study deferred acceptance algorithm (DA) with retrade by formulating a two-stage model where DA is played in the first stage, and a decentralized market opens in the second. Both non-monetary and monetary retrades are considered. Perfect market equilibrium (PME) is defined: market equilibrium prevails in the second stage both on and off the path, and Nash equilibrium is played in the first stage game induced by the second-stage markets. In the economies with no money, the stable and Pareto optimal allocation is the truthful PME allocation if and only if the priority structure is acyclical. A pure PME object allocation is unique if and only if the priority structure is unreversed. In the economies with money, an efficient PME allocation exists if and only if the minimum demand across tangible objects exceeds a certain threshold. A pure PME object allocation is always unique. • We study deferred acceptance algorithm (DA) with decentralized retrade. • Perfect market equilibrium (PME) is defined for economies with and without money. • With no money, a truthful PME exists iff the priority structure is acyclical. • A pure PME allocation is unique iff the priority structure is unreversed. • With money, any pure PME allocation is efficient iff demand is sufficient. [ABSTRACT FROM AUTHOR]

We study combinatorial auctions with bidders that exhibit an endowment effect. In most of the previous work on cognitive biases in algorithmic game theory the focus was on analyzing the implications and mitigating their negative consequences. In contrast, in this paper we show how in some cases cognitive biases can be harnessed to obtain better outcomes. Specifically, we study Walrasian equilibria in combinatorial markets. It is well known that Walrasian equilibria exist only in limited settings, e.g., when all valuations are gross substitutes, but fail to exist in more general settings, e.g., when the valuations are submodular. Our main result shows that when the valuations are submodular, even a mild degree of endowment effect is sufficient to guarantee the existence of Walrasian equilibria. [ABSTRACT FROM AUTHOR]

The “buy online and pick up in store” (BOPS) mode is gaining tremendous popularity among retailers since it is convenient for consumers and brings additional store sales to retailers. However, operating the BOPS channel requires additional investment, which is a challenge for retailers. This article considers the pricing strategies of competing dual-channel retailers, focuses on whether and when they should adopt the BOPS strategy, and explores the impacts of market factors on the equilibrium outcomes. Since retailers’ decisions are usually made sequentially in reality, we use the Stackelberg game model to analyze retailers’ optimal strategies. First, we show that the follower's price is not always lower than the leader's price. Specifically, when the unit additional profit from cross-selling of the follower is low enough, the follower will set a higher price than the leader. Second, we find that retailers prefer the BOPS strategy when the fixed costs for offering BOPS channels are low enough, or when the difference between the additional profits from cross-selling of two retailers is sufficiently large. Third, we present an interesting insight: an increase in product return probability or retailer cost of handling a returned product can be beneficial to retailers. [ABSTRACT FROM AUTHOR]

Within this article, a graphical discussion of the veterinary industry is constructed and discussed. This viewpoint centers around the 4 main markets that operate in veterinary medicine: the market for veterinary education, the market for veterinarians, the market for animals, and the market for veterinary services. Moreover, how each market within veterinary medicine is interconnected is the important point of the article. The purpose of the article is to provide a mechanism for discussion on how changes in one market will affect other markets. From this view, 1 argue that the market for veterinary services is completely dependent on the other 3 markets in terms of defining supply, demand, and market equilibrium. The remainder of the article discusses how to use the multimarket graphical model to aid in discussions around policy changes and provides an example. Some concluding remarks about this view on the interconnectedness of markets within the industry are provided. Again, the intended purpose of this viewpoint is to provide a graphical understanding of the multimarket nature of the industry and a way to discuss any proposed changes to a market based on literature that empirically estimates many aspects of these various markets. I highly encourage any proposed changes to the industry be supported by mathematical/statistical modeling, but the graphical model can aid in a conceptual understanding of those same changes. [ABSTRACT FROM AUTHOR]

The Bayh-Dole Act has been imperative to the development of the United States' dynamic pharma-biotech sector. However, the use of march-in rights under the Bayh-Dole Act has remained controversial. On the one hand, there is the idea of market equilibrium with a need to secure health care for the public. Many believe march-in rights should be used to create this balance by regulating the pricing of drugs that were developed using federally funded research. On the other hand, some advocates recognize that the current relationship between public-sector institutions and business as the developers of basic research, and private-sector biotechnology companies as the producers has proven to be fruitful. Thousands of patents have been issued since the execution of the Bayh-Dole Act in 1980. These advocates fear that the expansion of march-in right usage would result in a chilling effect that destroys the progress made in pharma-biotech research and development. This Article analyzes "march-in rights" under Section 203 of the Bayh-Dole Act by examining how individuals have attempted to use them and why in over 42 years of existence, march-in rights have never been invoked. It further addresses the current political climate surrounding the regulation of drug pricing and describes the potential consequences of improperly using march-in rights to lower drug prices. [ABSTRACT FROM AUTHOR]

The existence of vector functions of equilibrium prices in market models described by differential equations is studied. In the models under study, supply and demand depend not only on the commodity prices but also on the price change rate. Sufficient conditions for the existence of equilibrium in such models are obtained as corollaries of theorems on the existence of coincidence points for mappings acting from a -symmetric -quasimetric price space into the metric space of purchased sets of goods. [ABSTRACT FROM AUTHOR]

• Study of the CTBLPO problem through Error-Correction Neural Networks. • Investor's views are regarded as a forecasting problem. • Proposal of a feed-forward MAWTSNN model for time-series forecasting problems. • Four other high-performing NN models are compared to the MAWTSNN model. • The use of TVQP NN solvers, i.e. ZNN and LVI-PDNN, to finance. • Experiments in three distinct portfolio configurations using real-world datasets. The Black-Litterman (BL) model is a particularly essential analytical tool for effective portfolio management in financial services sector since it enables investment analysts to integrate investor views into market equilibrium returns. In this research, we define and study the continuous-time BL portfolio optimization (CTBLPO) problem as a time-varying quadratic programming (TVQP) problem. The investor's views in the CTBLPO problem are regarded as a forecasting problem, and they are generated by a novel neural network (NN) model. More precisely, employing a novel multi-function activated by a weights-and-structure-determination for time-series (MAWTS) algorithm, a 3-layer feed-forward NN model, called MAWTSNN, is proposed for handling time-series modeling and forecasting problems. Then, using real-world datasets, the CTBLPO problem is approached by two different TVQP NN solvers. These solvers are the zeroing NN (ZNN) and the linear-variational-inequality primal–dual NN (LVI-PDNN). The experiment findings illustrate and compare the performances of the ZNN and LVI-PDNN in three various portfolio configurations, as well as indicating that the MAWTSNN is an excellent alternative to the traditional approaches. To promote and contend the outcomes of this research, we created two MATLAB repositories for the interested user, that are publicly accessible on GitHub. [ABSTRACT FROM AUTHOR]