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To provide consumers with a channel to interact directly with service retailers, some service platforms have allowed consumers to incentivize service retailers for better service via tipping. There are pros and cons of allowing and not allowing tipping in terms of service levels and costs, which can affect consumer utility and platform profitability. By developing a game-theoretic model, we analyze the tipping strategy choices of platforms under competition. We find that when the service ability of service retailers is high, platforms with service retailer pricing should allow tipping, whereas for at least one platform with platform pricing, they should allow it only when the commission rate is also high. Interestingly, if consumers are concerned about service levels in addition to service prices during tipping, for platforms with platform pricing, only one platform should allow tipping when the service ability is medium. However, when the service ability is low or when the sensitiveness of the service level to tips exceeds the threshold, neither platform should allow tipping, regardless of pricing models. Finally, an all-win outcome for service platforms, service retailers, and consumers may be achieved only when platforms adopt different pricing models. [ABSTRACT FROM AUTHOR]

Over the past 50 years, wellbeing, tourism and recreation have driven significant changes to coastal areas, yet our understanding of the drivers remains focused on traditional activities like swimming, fishing and scuba diving. Over 50 million people worldwide practice recreational surfing, and the presence of high-quality waves is an increasing appeal for surf-rich locations. Focusing on Noosa World Surfing Reserve in Queensland, Australia, this study has two goals: understand the market and nonmarket values associated with recreational surfing; and highlight opportunities for surf break management to be better incorporated into coastal management activities. Based on our survey responses (n = 140), we found average surf-related expenditures are $1,897 per person per year, including direct expenditure in the reserve and surfing equipment. An application of the travel cost method reveals consumer surplus of A$48 per surfing trip to the Noosa World Surfing Reserve. We conclude that policies aimed at preserving surf breaks and improve users' experience offer an important contribution to coastal management and planning, particularly when managed and natural coasts are under increasing pressures, such as from urban developments and coastal erosion. [ABSTRACT FROM AUTHOR]

This paper considers a dual-channel supply chain consisting of a monopoly manufacturer, an independent retailer and a continuum of heterogeneous consumers who are classified into two segments according to their channel preferences. Due to various activities undertaken in different channels leading to retail costs, we highlight the effect of retail costs (i.e. fixed, linear and quadratic costs) on the optimal channel structures for the manufacturer, consumers and society. Our results show that the retail cost greatly influences the optimal channel structures for different parties. First, the manufacturer's channel selection varies considerably across retail costs. Specifically, when there are variable costs (linear and quadratic costs): on the one hand, the manufacturer might give up the grocery encroachment strategy; on the other hand, some profitable strategies which are missed in the case with fixed cost are likely to be implemented. Second, both consumer surplus and social welfare are maximised in the manufacturer-owned online channel unless the linear costs are sufficiently high or the cost gap between different channels is large. Collectively, the optimal channel structure for the manufacturer is not always optimal for consumer surplus or social welfare. [ABSTRACT FROM AUTHOR]

The development of smart electronic devices are enabling online businesses to collect any data related to the consumer's online activity. Such an extensive trove of consumer personal data can be used for "personalized pricing". We have evaluated the challenges this form of price discrimination creates for competition and found that in jurisdictions such as the EU which prosecute exploitative abuses, the probability that personalized pricing might be assessed as an abuse of dominant position is high. Another issue raised by the collection and the processing of data for personalized pricing purposes is the growing invasion of privacy. In the EU, the General Data Protection Regulation foresees that personal data cannot be used without the consent of the consumer. As for online businesses processing personal data, they'd better stick to the provisions of the GDPR aiming to ensure greater transparency, if they are to avoid any risk of infringement of privacy law. [ABSTRACT FROM AUTHOR]

The emerging sharing economy increases the utilization of existing products/services, reduces the consumption of new resources, and gets more popular in recent years. We consider a market where consumers are differentiated by their preference for the product and develop an analytical model to study how a person-to-person (P2P) sharing market (ideal or imperfect) affects the manufacturer's pricing strategies, consumers' consumption time, consumer surplus, and social welfare. Surprisingly, we find that the existence of the sharing market may drive up the selling price of the product if the sharing platform can endogenously determine the commission fee of sharing transactions. Accordingly, depending on the transaction costs and the proportion of high-type consumers, we find that consumers' total consumption time, consumer surplus, manufacturer's profit, and social welfare may not improve in the presence of a sharing market. This study also offers guidelines for the sharing platform and optimal pricing strategies for manufacturers. [ABSTRACT FROM AUTHOR]

The capturing of full benefits associated with nature-based tourism could be one of the strategies for the promotion of sustainable tourism in the Okavango Delta (OD). The general objective of this paper is to establish the perceptions of tourists in relation to consumer surplus (CS) of tourist visitation to the OD and implications on rural development. The study shows that there is substantial CS of tourist visitation in the OD. A significant proportion of tourists (53%) said that they were willing to contribute to a fund for the compensation of farmers for their loss of property resulting from their conflict with wildlife. Most tourists (90%) thought tourism should contribute to the development of local communities. They suggested that the captured CS could be used for rural development and wildlife conservation. The study recommends that the CS could be captured in the OD as entry and conservation fees. [ABSTRACT FROM AUTHOR]

Product information websites have become ubiquitous in supporting B2C E-Commerce. This study explores their impact on firm profitability, consumer surplus, and social welfare. Using an analytical model, we show that firms take advantage of such infomediaries and reduce their own information investments, increasing their profitability. Surprisingly, we find that the existence of these websites may actually reduce social welfare. Contrary to the common belief that product information websites are good for buyers, we show that they may be hurting consumers, even when they seek to maximize consumer surplus as their principal goal. These findings question the uncritical acceptance of infomediaries as beneficial to markets in general, and buyers in particular, especially when the infomediaries assume roles that substitute the information disclosure investments that sellers freely choose to make. [ABSTRACT FROM AUTHOR]

The recent case in the meal vouchers market in France has put collusion in two-sided markets in the spotlight. This paper discusses the key insights from the recent literature with respect to the consequences of collusion on prices and consumer surplus. I explain why focusing exclusively on prices is misleading in the case of two-sided markets and why a broader assessment also accounting for the impact of collusion on externalities is required. Furthermore, collusion does not necessarily harm all users, which justifies a case-by-case approach. Finally, I provide a concrete example of the assessment of collusion in two-sided markets using the example of the meal vouchers market and show that the insights from the current literature do not apply in this instance. This demonstrates the role that the characteristics of the market under investigation play with respect to the conclusions that may be drawn from collusion in two-sided markets. [ABSTRACT FROM AUTHOR]

We used a Cournot model to associate process innovation with the market structure in a theoretical duopoly for secondary healthcare. We considered a situation wherein neither incumbent hospital focuses on process innovation and another situation wherein one hospital brings in process innovation but another does not. This approach highlights two points. The first concerns secondary care settings wherein incentives for process innovation in healthcare provided by hospitals can be created with moderate marginal costs. Inter-hospital competition lowers costs for patients and improves consumer surplus. The second point concerns primary and tertiary care wherein marginal costs are rather high or low and incentive to innovate processes is limited. In such settings, inter-hospital competition does not improve consumer surplus and is less likely to reduce costs. As a result, neither hospital may choose to provide these types of care. [ABSTRACT FROM AUTHOR]

Whether broadband service providers (BSPs) should be allowed to vertically integrate with content providers is a contentious issue. This is even more so when viewed through the lens of the net neutrality debate, since the vertically integrated firm can prioritize the delivery of its own content at the expense of that of its competitors if net neutrality is not enforced. Using a game-theoretic model, we analyze the issues of vertical integration of content and broadband services surrounding this debate from an economic perspective. Our analysis establishes the various equilibria in the game and shows that the vertically integrated BSP does not have any incentive to abide by the principles of net neutrality. If net neutrality is not enforced, social welfare might, in certain cases, decrease with vertical integration, and in such cases, the BSP's objectives are at odds with that of the social planner. With other ranges of parameter values, social welfare increases with vertical integration at the expense of the competing pure-play content provider. Interestingly, we find that it is not always true that the BSP will always degrade the delivery of the competing content, and in fact will sometimes have the incentive to prioritize the latter over its own. The analysis thus provides crucial inputs to policymakers as they decide on whether to allow vertical integration between a BSP and a content provider in the absence of net neutrality. [ABSTRACT FROM AUTHOR]

Trust is particularly important in online markets to facilitate the transfer of sensitive consumer information to online retailers. In electronic markets, various proposals have been made to facilitate these information transfers. We develop analytic models of hidden information to analyze the effectiveness of these regimes to build trust and their efficiency in terms of social welfare. We find that firms' ability to influence consumer beliefs about trust depends on whether firms can send unambiguous signals to consumers regarding their intention of protecting privacy. Ambiguous signals can lead to a breakdown of consumer trust, while the clarity and credibility of the signal under industry self-regulation can lead to enhanced trust and improved social welfare. Our results also indicate that although overarching government regulations can enhance consumer trust, regulation may not be socially optimal in all environments because of lower profit margins for firms and higher prices for consumers. [ABSTRACT FROM AUTHOR]

Many economic studies value birdwatching in general and often do not account for potential differences in viewers’ benefits from observing different species. But, how different are economic values of viewing various bird species? To answer that question, we surveyed Ducks Unlimited (DU) members using an online questionnaire to estimate trip expenditures and consumer surplus per trip for viewing pintail ducks, waterfowl in general, and other species of waterfowl. Expenditures per trip were USD $231, $199, and $182, respectively. Consumer surpluses per trip, estimated using the contingent valuation method, were $28, $32, and $29, respectively. Neither expenditures nor consumer surplus were statistically different among species for DU members who are adept at species differentiation. Our results suggest that it may be reasonable to use a general economic value for waterfowl viewing when formulating management alternatives for a variety of waterfowl. [ABSTRACT FROM AUTHOR]

This article estimates the effect of climatic variables on house prices near ski resorts in different regions in the United States. We find that among the climate variables we test, average winter temperature has the most significant and robust effect where an increase in this climate variable increases house prices near ski resorts at a decreasing rate. At the mean average winter temperature levels, an increase in average winter temperature reduces housing prices for all regions except the Northeast. The consumer surplus from projected average winter temperature changes is negative across all regions and the largest negative effects are in the Midwest and Mountain regions. [ABSTRACT FROM AUTHOR]

This study examines the private consumption benefits of sports attendance using revealed and stated preference data from 28 Football Bundesliga teams across three divisions. Survey respondents were presented with positive (sporting success) and negative (management failure) scenarios and asked for the number of game trips if each scenario occurred. The results of a pooled random effects Poisson model show that travel costs and ticket price have a significant negative effect on the number of home game trips. The weighted consumer surplus per game trip including travel costs and ticket prices is €345. Consumer surplus per game trip was found to change by €41 (first division) and €98 (second and third division) if the positive scenario occurred and by €39 if the negative scenario occurred. [ABSTRACT FROM PUBLISHER]

Remote and unique destinations present difficulties when attempting to construct traditional travel cost models to value recreation demand. The biggest limitation comes from the lack of variation in the dependent variable, defined as the number of trips taken over a set time frame. There are various approaches that can be used for overcoming limitations of the traditional travel cost model in the context of remote destinations. This study applies an adaptation of the standard model to estimate recreation benefits of bear viewing at Katmai National Park and Preserve in Alaska, which represents a once-in-a-lifetime experience for many visitors. Results demonstrate that visitors to this park’s Brooks Camp area are willing to pay an average of US$287 per day of bear viewing. Implications of these findings for valuing recreation at other remote destinations are discussed. [ABSTRACT FROM PUBLISHER]

Most ecosystem services that are not traded on markets contribute to human welfare; however, these services are often undervalued due to the fact that their economic value is not well known. Accounting for the value of these services can help in making decisions that enable efficient use of environmental resources. This paper reports on a study of recreational trips to nature areas, the economic value of recreation in nature and factors influencing such trips. It also aimed to explore the possibilities of designing a nature-based recreation management strategy that could meet societal preferences and demands for recreation amenities. Data were obtained from a survey that involved Swedish residents who were randomly selected from a national register and were analysed using a negative binomial regression model. The results showed that the average frequency of trips to nature areas was 80 trips annually and the average travel cost for a trip to these areas was 117 SEK (16 USD). Forest-dominated areas were the most frequently visited and mountainous areas the least. Trips to mountain-dominated areas had the highest travel cost, followed by water-dominated areas, with forest areas the lowest. The consumer surplus for a trip to a nature area was 526 SEK (72 USD). The frequency of trips to nature areas was influenced by factors such as travel cost, type of nature area, travel time to and time spent at the nature area, recreational activity, income and dwelling place. If the aim of the Swedish policy on outdoor recreation (i.e. Right to Public Access) is to increase the frequency of trips to nature areas, facilities that could help reduce travel costs to these areas should be provided. Nature areas should be managed towards meeting societal preferences and demands for recreation. The findings could assist ecosystem managers in land use planning processes and in designing a sustainable nature-based recreation strategy. [ABSTRACT FROM AUTHOR]

Since 1955, the United States Fish and Wildlife Service has conducted the National Survey of Fishing, Hunting, and Wildlife-Association Recreation (FHWAR) with the purpose of evaluating outdoor recreation. Using the socioeconomic, activity, and contingent valuation data collected from the last three rounds of this national survey (2001, 2006, 2011), econometric modeling demonstrates that variables such as age, income, gender, and type of land visited (public/private) explain variation in wildlife watching willingness to pay (WTP) and consumer surplus (CS). Although not having been fully investigated in the previous FHWAR contingent valuation literature, results suggest that distinguishing between in-state and out-of-state wildlife watching is important. Additionally, analyses indicate that CS for out-of-state wildlife watching along with CS and WTP for in-state wildlife watching are temporarily reliable. Given the study period overlaps the recent recession, this outcome suggests that welfare is stable across time and in the face of business cycles. [ABSTRACT FROM PUBLISHER]

This paper presents recreation trip demand models from three beaches administrated by the Ko Chang National Marine Park in Thailand. In specific, we apply Poisson (POI) and negative binomial (NB) count data models to estimate consumer surplus (CS) attributed to tourism development. An onsite stratified random sample of 409 beach visitors was administrated along the shorelines of the marine park. The results show that the estimated CS of a Thai visitor is $244 per trip and $256 per trip, respectively, under POI and NB models. In contrast, the CS per trip of a foreign visitor is double that of the Thai visitor's. As all the potential beach visitors’ CS counted, it suggests that the beaches along the Ko Chang's coastline are highly valuable public resources. As a result, several important policy-making comments regarding the coastal park management are addressed. [ABSTRACT FROM PUBLISHER]

This article establishes optimal pricing rules for rationing indivisible units of rival and otherwise nonexcludable goods by lottery or a hybrid of a lottery and outright sale by posted price. Given the distributional objective of maximizing expected consumer surplus, the solutions to unconstrained and constrained versions of the pricing problem may be expressed in classic inverse elasticity form, with the lottery price appearing as an entry fee, user fee or a combination of the two. Numerical analysis of a rich class of private value distributions indicates that sizable gains in expected consumer surplus can be realized over competitive pricing and zero pricing. [ABSTRACT FROM AUTHOR]

Natural gas (NG) is the basic building block of economic development and constitutes one of the vital infrastructural inputs in socioeconomic development. The demand for NG has been increasing due to extensive urbanization, industrialization, and a rise in the standard of living, as is the case with residential electricity consumption in Seoul, Korea. This article attempts to estimate the consumer surplus and the economic value of the residential consumption of NG in Seoul to assist in decision-making in NG management. The estimated consumer surplus represents the value of the area under the demand curve, above the actual price that is paid for residential NG consumption. The estimated annual consumer surplus and economic value amount is KRW 3,680.8 and 6,882.6 billion (USD 2.83 and 5.29 billion), respectively. The estimates per cubic meter were KRW 758.6 (USD 0.58) and KRW 1,418.5 (USD 1.09), respectively, which imply that the consumer surplus and the economic value of residential NG consumption significantly outweigh the price of NG in 2008 of KRW 659.9 (USD 0.51) per cubic meter. [ABSTRACT FROM AUTHOR]

This short communication deals with the hunting value of all game in Sweden, specifically changes over time in value and value components, and differences between the northern and southern parts of the country. The investigation was based on two mail surveys, one conducted in 1987 and the other in 2006. The results suggested that the gross hunting value and the hunting cost share of this value increased over the two decades. The consumer surplus (net value) share decreased correspondingly, while the recreation share and the meat share of the hunting value were more stable over time. It appeared that in 1987 as well as in 2006 the southern Swedish hunters tended to value their hunting higher than the hunters in northern Sweden, especially when it came to the recreation. The results should be relevant in the context of game management, adaptive game management in particular. [ABSTRACT FROM PUBLISHER]

The impact of Voice over Internet Protocol (VoIP) growth on other telecommunication services, such as landlines and mobile telephony, has gained significant interest in Korea recently. An emerging alternative to landline telecommunications, VoIP is experiencing explosive growth in demand and is providing significant economic utility to consumers. The rapid growth of smart phones has also created a considerable amount of controversy regarding the potential impact of VoIP on the mobile phone market. This study provides quantitative estimations of consumer surplus for landline, mobile and VoIP services in the Korean telecommunications market using monthly call data from January of 2006 to June of 2009, a period when VoIP services grew rapidly. Empirical analyses are conducted to estimate consumer surplus based on the demand functions of each telecommunication service. Additional analyses are conducted on consumer surplus change as well. Policy implications for the rapid growth of VoIP and its impact on consumer surplus change are also discussed. [ABSTRACT FROM PUBLISHER]

The Edgeworth exchange diagram is a traditional tool of undergraduate microeconomic theory that depicts the mutually beneficial gains from voluntary trade. The authors take the analysis one step further. They identify the buyer's and seller's surpluses that accrue to both trading parties in the Edgeworth diagram. This is a straightforward exercise that has not, however, been developed in microeconomics textbooks, an exercise that can further hone students’ understanding of the concept of buyer's and seller's surpluses and the notion of gains from voluntary exchange. [ABSTRACT FROM AUTHOR]

The growing popularity of using all terrain vehicles (ATVs) for leisure has become an important issue for both existing and planned trails. A contingent trip survey was used to examine the impact of different ATV access levels on trip demand for a proposed trail in the province of Nova Scotia (Canada). Relative to a prohibition on ATVs, permitting their use reduced non-ATV users' expected trips by 48% and their consumer surplus by 41%. Depending on ATV access level and travel cost, total consumer surplus ranges from approximately $1million (M) Canadian dollars ($C) to $C4M and between C$9.19 and C$26.89 per trip. Trip demand is also weakly related to trail surface, particularly for potential commuters. We suggest that the trail be implemented as a paved pathway in the central core where the population is most dense and that ATV use be prohibited on this portion. A gravel-based shared-use path with controlled ATV use is recommended for the eastern end of the trail where the population is of much less density and where non-ATV use will likely be low. [ABSTRACT FROM AUTHOR]