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Copyright of Revista de Economia e Sociologia Rural is the property of Sociedade Brasileira de Economia e Sociologia Rural and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In many settings, consumer surplus directly impacts a firm or organization's objective, and the profit‐only objective becomes inadequate. Our paper is the first to consider the dual objective of profit and consumer surplus in multi‐product pricing under the multinomial logit demand, where the prices are continuously set. We define a firm's marginal consumer surplus as its marginal contribution to the expected customer utility transformed into monetary unit. Although the profit is concave in the choice probability space, the marginal consumer surplus is convex, complicating the analysis. We identify the optimal monopoly pricing solution and develop solution approaches for the equilibrium solutions of both price‐competition and quantity‐competition oligopolies. In the monopolistic setting, we solve the optimal solution in a near‐closed‐form expression, and show that the firm's markup and profit decline as its emphasis for marginal consumer surplus increases and eventually drops to zero when the firm turns into a social welfare maximizer. Therefore, social welfare is maximized only when the monopolist is willing to endure zero profit. In competitive settings, if one firm's emphasis on marginal consumer surplus increases, then the improvement in marginal consumer surplus can magnify through competitive forces, reflected in reduced equilibrium prices for all firms. Moreover, we find that, while the overall marginal consumer surplus always increases with any firm's weight on marginal consumer surplus in its objective (referred to as the CS weight), a firm's marginal consumer surplus increases in its own CS weight but decreases in other firms' CS weight. Finally, we prove that, all else equal, a firm with a higher CS weight can earn a higher profit than its profit‐maximizing competitors, which is counterintuitive. In the quantity competition, a firm may even increase its absolute profit level by increasing its CS weight. [ABSTRACT FROM AUTHOR]

This article estimates the life-cycle value of risperidone as representative of second-generation antipsychotics (SGA) relative to haloperidol (first-generation antipsychotics). We estimated the number of patients treated with risperidone in Sweden and the United Kingdom, from 1994 to 2017, using data of usage and volume sales. We collected data from the literature on the effectiveness (quality-adjusted life-years per patient per year), direct costs (health services), and indirect costs (productivity) of risperidone and haloperidol. We proxied the incremental value added by the new class (SGA) using a comparator from the inferior class. Next, we modeled the life-cycle uptake of risperidone to estimate the life-cycle incremental cost (ie, direct, indirect, and medicine costs), incremental quality-adjusted life-years, and net monetary benefit of risperidone. We also assessed the life-cycle distribution of the social surplus between the payer (consumer surplus) and the innovator (producer surplus). For the United Kingdom, consumer surplus represents around 72% of the total surplus before patent expiration and around 95% after patent expiration. For Sweden, the consumer surplus represents around 94% of the total surplus before patent expiration and around 99% after generic competition. These results suggest that the value added by SGAs to the system is higher than the expected value estimated using cost-effectiveness analysis at launch. Pricing and reimbursement decisions could recognize the full life cycle of value of innovative medicines. This not only presents a challenge of estimation but also of assessing the appropriate division of shares of social value. [ABSTRACT FROM AUTHOR]

Conventional cost-effectiveness analysis (CEA) for the value-based pricing of new medicines largely ignores the implications of limited market exclusivity (ie, patent-protection periods plus any exclusivity granted by regulators). This paper explores the implications of this methodological shortcoming, which produces several pricing anomalies with potentially unintended effects on research and development (R&D) incentives. We illustrate these implications by comparing 4 stylized examples of increasing complexity, from short-term cures for acute conditions to long-term cures for rare, health-catastrophic conditions. (1) Conventional-CEA will project a different result than an adjusted CEA that considers generic or biosimilar entry; (2) free and flexible pricing of long-term treatments (eg, statins for hypercholesterolemia) or repeated-dose cures (eg, insulin for type 1 diabetes) for chronic conditions will likely result in predictable price increases at the end of the exclusivity period that may be perceived as unjustified or unsupported; and (3) one-time administration "cures" (eg, gene therapy for spinal muscular atrophy) have the potential to allocate a large share of the social surplus to the manufacturer over the product lifetime, which may or may not be dynamically efficient per se , but may also inadvertently disadvantage the development of valuable long-term treatments or repeated-dose cures for chronic conditions. We highlight the need for additional research on long-term solutions to these issues that would aim to promote dynamically efficient global R&D. More work is needed on the following: (1) relationships between social surplus allocation and the amount and composition of global R&D, as we may be as likely to be encouraging excessive R&D in some areas as to be undersupplying it in others; and (2) relating the size of the surplus reward to R&D cost and, thus, the return on investment. • Conventional cost-effectiveness analyses have generally not taken patent expiry (or, similarly, "loss of exclusivity") into account, and overlook the impact on sharing of social surplus between the manufacturer and society following the loss of exclusivity. • Different medicinal products are rewarded vastly different shares over an assumed product lifetime of 30 years, even when all are assumed and modeled to 12 years of exclusivity. • These practices generate pricing "anomalies" that might inadvertently create an unlevel playing field across different products, especially curative ones, and may be distorting prices, rewards, and incentives for the size and composition of pharmaceutical research and development in unintended ways. [ABSTRACT FROM AUTHOR]

Many studies have been conducted to analyze the impact of road capacity restrictions on transportation networks. Numerous studies related to network capacity restrictions have focused on estimating the inconvenience caused by an increase in travel time as a measurement indicator for capacity restrictions occurring over a short period of time. In terms of network capacity restrictions, this study focuses on monetary loss from the perspective of economic welfare analysis. Using an agent-based model, this study analyzes the effect of disrupting all modes over the short and long term as the capacity of roads is reduced because of area-wide road capacity restrictions. Many studies have used the method of estimating inconvenience caused by increased travel time as an effect analysis, but this study uses logsum-based benefit method; benefit estimated results by the two methods are then compared. A large difference between the two benefit calculation methods was found. In detail, although there was a large loss in terms of increased travel time because of capacity reduction, despite the increase in average travel time because of the long-term change of modes, the derived consumer surplus inconvenience was relatively small because of the adjustment in the utility between modes. The effect of mode conversion was reflected in the benefits of consumer surplus from the perspective of a consumer welfare analysis. The case study showed that the scale of the inconvenience of the consumer surplus method was small because of the highly influential transport policy in small study area, where it was easy to switch between walking and cars. The present study targeted drastic policies that are expected to be quite difficult to accept socially, but a somewhat relaxed scenario analysis is also needed. In addition, it is necessary to consider inconvenient loss for changing the departure time and route in the further studies. [ABSTRACT FROM AUTHOR]

In the cost–benefit analysis of transportation investment, although the benefit estimation method due to the effect of travel time saving has been widely used, several limitations with the method have been pointed out in a number of studies. As an alternative, a logsum-based benefit calculation has been widely adopted, with most of the research focused on urban transportation. Therefore, it is rarely applied to interregional transportation. In this study, we applied a logsum-based approach to the calculation of benefits for expressway road projects in Korea's long-term transportation plan. To calculate the logsum, this study used input data from both the mode choice and destination choice models, finding that an analysis of the feasibility of inter-regional road investment was possible. Various studies have calculated the benefits based on one of the two models. The two methods have similar formulas; however, varying results were derived due to differences in the application of formulas for parameter estimation and benefit estimation. In conclusion, the proposed methods are expected to enable a more comprehensive evaluation of the transport system. Looking at more detailed research results, the logsum based on the mode choice model had great benefits in the Seoul metropolitan area where demand was high; however, the logsum of the destination-based model showed a large difference in distribution of benefits evenly by various metropolitan areas. On the other hand, it was found that the traditional reduction of travel time was much less by region than the logsum methods, but the effect was large in the metropolitan area. From the perspective of the theoretical and practical consumer surplus analysis, we suggest open discussions regarding which method to choose when calculating benefits from the mode choice logsum model, the destination logsum model and travel time savings method. [ABSTRACT FROM AUTHOR]

With the enhancement of environmental protection, more and more enterprises begin to develop green products. However, the high cost of green R&D leads to an increase of product price, which reduces the competitiveness of green products. In this paper, we model a supply chain which consists of one manufacturer and one retailer providing a primary product and a substitutable green added product in the market. In order to capture the impact of consumer behavior on the supply chain members' decision-making, we classify the market into two segments and assume that high-end green consumers have higher preferences for green products than ordinary consumers. Different to existing research, we assume ordinary consumers hold a positive but lower green preference compared to the green consumers. When analyzing the impacts of consumers' green preferences, we find that there exist specific boundaries of cost and market potential which define the optimal pricing strategy and product line design. Regarding profits, we find that when the green preferences of high-end and low-end consumers increase in the same proportion, the high-end market may not bring greater supply chain revenue. In particular, the marginal profit increase of the manufacturer is always greater than that of the retailer. [ABSTRACT FROM AUTHOR]

Motivated by the widespread adoption of corporate social responsibility (CSR), we investigate a socially responsible e-commerce supply chain where the E-platform owns a store brand product and supports online sales of the manufacturer's product under agency selling or reselling. The socially responsible firm has a mixed objective of its profit and consumer surplus. We explore how the firms' CSR concern affects their decisions and economic performance. Our results contradict conventional wisdom which suggests that a firm has to sacrifice profitability to achieve social responsibility and that a firm's CSR concern benefits its supply chain partner. Instead, we show that under agency selling, the E-platform's concern on consumers can improve its own profit while harming the manufacturer's profit. Furthermore, when both firms are socially responsible, their consumer concern can improve their profits simultaneously under reselling, leading to a "doing well by doing good" effect. As horizontal or vertical differentiation between the two products increases, this effect is more likely to be realized. Regarding firms' sales mode preferences, in a traditional for-profit supply chain, agency selling is the only mode preferred by both parties. However, in a socially responsible supply chain, they can achieve preference alignment under either agency selling or reselling. • We study a socially responsible supply chain focused on consumer surplus. • The E-platform owns a store brand and allows agency selling and reselling. • We explore how CSR impacts firms' decisions and economic performance. • Firms can align preferences under either agency selling or reselling. • The E-platform's consumer concern can boost its profit but harm its partner's. [ABSTRACT FROM AUTHOR]

In order to promote the high-quality development of Zhoushan City′s tourism industry, this paper used the form of questionnaire and the method of travel cost interval analysis to evaluate the value of Zhoushan City′s marine tourism resources, and put forward countermeasures and suggestions. The results showed that the total travel cost of Zhoushan City was in a reasonable range. According to the calculation results of consumer surplus, the overall satisfaction of sample tourists with Zhoushan City′s tourism was not high. In 2019, the value of marine tourism resources in Zhoushan City was 139.915 billion yuan, and marine tourism resources were the precious wealth of Zhoushan City. Zhoushan City′s tourism industry had a lot of room for development. In the future, the construction of tourism environment should be strengthened, marine tourism formats be enriched, emerging tourism products be developed, a tourist demand response mechanism be established and the satisfaction of tourists at different levels be improved.

Online cooked meal deliveries (CMD) have become prevalent with the advancement of on-demand delivery services offered by vendors such as Uber Eats and DoorDash. Thus, the development of a CMD demand generation model holds significant importance for CMD vendors, consumers, and policymakers. The model serves as a strategic tool for CMD vendors to address consumer needs. At the same time, it also holds substantial relevance for policymakers seeking to understand CMD demand and formulate effective regulatory measures for CMD operations. This paper presents such a modelling framework. The model is developed under the behavioural principle of random utility maximization (RUM) and explicitly represents various socioeconomic characteristics in the CMD demand generation process. The model is estimated using a Greater Toronto Area, Canada dataset. The empirical model provides insights into the factors influencing week-long CMD usage. The model also offers assessments for households' consumer surplus brought by CMD, which can inform public policies through well-fare analysis. [ABSTRACT FROM AUTHOR]

In most European and Asian countries, the owner of the high-speed train (HST) track is either fully independent from, or integrated with, the operations of train service. In this paper, we build a simple model to analyze a particularly unique ownership structure of HST infrastructure, namely, a mixed structure featuring both integration and separation within a network. We compare this mixed case with the scenario where ownership and operations of HST are integrated and identify a conflict between social welfare (consumer surplus) and HST profit. Specifically, consumer surplus and social welfare are higher in the mixed case (compared with the integrated case), while the profit of the HST industry is lower if any of the following conditions holds: 1) the size of the market, where ownership and operations may be separated, is sufficiently small; 2) the weight that the HST operator puts on social welfare is sufficiently small; 3) the fee paid by the infrastructure owner to HST operator for operational services is sufficiently high. Our results prove to be robust when there exists competition from airlines. Additionally, we observe consistent outcomes when varying the weights on social welfare. Finally, several policy implications are discussed. [ABSTRACT FROM AUTHOR]

The "right-to-repair" (RTR) movement calls for government legislation that requires manufacturers to provide repair information, tools, and parts so that consumers can independently repair their own products with more ease. The initiative has gained global traction in recent years. Repair advocates argue that such legislation would break manufacturers' monopoly on the repair market and benefit consumers. They further contend that it would reduce the environmental impact by reducing e-waste and new production. Yet the RTR legislation may also trigger a price response in the product market as manufacturers try to mitigate the profit loss. This paper employs an analytical model to study the pricing, welfare, and environmental implications of RTR. We find that, as the RTR legislation continually lowers the independent repair cost, manufacturers may initially cut the new product price and then raise it. This nonmonotone price adjustment may further induce a nonmonotone change in consumer surplus, social welfare, and the environmental impact. Strikingly, the RTR legislation can potentially lead to a lose–lose–lose outcome that compromises manufacturer profit, reduces consumer surplus, and increases the environmental impact despite repair being made easier and more affordable. This paper was accepted by Charles Corbett, operations management. Funding: Chen Jin gratefully acknowledges the Singapore Ministry of Education Academic Research Fund [Tier 1, Grant R-253-000-144-133]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4401. [ABSTRACT FROM AUTHOR]

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

This study aims to determine the economic value of tourism objects and whether there is a consumer surplus at the Petrus Kafiar beach based on the Travel Cost Method (TCM). The consumer surplus value is obtained by using the Individual Travel Cost Method (ITCM) approach and willingness to pay to calculate the willingness to pay of tourists visiting Petrus Kafiar Beach. The value of WTP obtained is Rp 23.358,21 per person per visit. Meanwhile, the average WTP (willingness to pay) per year for one visit is only Rp 5.491,23. The results of the integral calculation to find the consumer surplus of visitors to the Petrus beach tourism object, the consumer surplus is ranged from Rp 5.201,5 to Rp 10.403,91 per individual/visit. As for the factors that influence the number of visits to Petrus Kafiar beach, two significant variables were found, namely the level of income and distance at the 95% confidence level. [ABSTRACT FROM AUTHOR]

Introduction: Recent work examining the impact of climate-change induced extremes on food-energy-water systems (FEWS) estimates the potential changes in physical flows of multiple elements of the systems. Climate adaptation decisions can involve tradeoffs between different system outcomes. Thus, it is important for decision makers to consider the potential changes in monetary value attributed to the observed changes in physical flows from these events, since the value to society of a unit change in an outcome varies widely between thing like food and energy production, water quality, and carbon sequestration.Methods: We develop a valuation tool (FEWSVT) that applies theoretically sound valuation techniques to estimates changes in value for four parameters within the food-energy-water nexus. We demonstrate the utility of the tool through the application of a case study that analyzes the monetary changes in value of a modelled heat wave scenario relative to historic (baseline) conditions in two study regions in the United States.Results: We find that food (corn and soybeans) comprises the majority (89%) of total changes in value, as heatwaves trigger physical changes in corn and soybeans yields. We also find that specifying overly simplified and incorrect valuation methods lead to monetary values that largely differ from FEWSVT results that use accepted valuation methods.Discussion: These results demonstrate the value in considering changes in monetary value instead of just physical flows when making decisions on how to distribute investments and address the many potential impacts of climate change-induced extremes.

Tis-Abay Waterfall is a famous tourist destination in northern Ethiopia, attracting both domestic and international visitors. Although the site's recreation and tourism potential are enormous, the value of the waterfall remains underestimated; an application of economic valuation methods can provide information to better utilize the resource. This study estimates the recreational value of Tis-Abay Waterfall and analyzes the consumer characteristics associated with recreational demand. Drawing on data from 1044 on-site surveys, the study uses the Individual Travel Cost Method (ITCM) with a Zero-Truncated Poisson (ZTP) regression model. Results of the ZTP regression suggest that visitors' age, monthly income, and interest in alternative recreation sites like Lake Tana and Gondar Fasiledes Royal Castle are variables significantly and positively related with recreational demand for the Tis-Abay Waterfall. However, visitors' recreational demand is negatively associated with respondents' distance from the site, leisure time, and total cost of site access. The appraisal suggests that the Tis-Abay Waterfall has a significant annual recreational value of $9.5 million. But it also shows that the waterfall's value would increase significantly, up to $17.3 million, with hypothetical quality improvements in the waterfall settings. The value attachment suggests that estimating the recreation value for Tis-Abay Waterfall is a central component in the sustainable use and management of the resource. However, the presence of unfavorable trade-offs with the electric power plant and the inadequate infrastructure and services for reaching the site are major concerns that require immediate attention to make better use of Tis-Abay Waterfall's recreational services.

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

We revisit the wholesale model and the agency model in differentiated markets of Lu (Review of Industrial Organization,51, 151–172, 2017) and show the changes of the equilibrium outcomes of consumer surplus and social welfare. Unlike Lu (Review of Industrial Organization,51, 151–172, 2017), we find that: (i) social welfare is always greater in agency model than in wholesale model; and (ii) different rankings of equilibrium aggregate profits and social welfare are obtained under the two models. [ABSTRACT FROM AUTHOR]

We investigate a modification of the Dixit–Stiglitz model supplemented by retailing; namely, we consider various situations of Stackelberg equilibrium under retailer leadership and the condition of free entry of manufacturers to the market. For each of the situations, we provide detailed solutions considered taking into account the preferences of participants in the market interaction. This allows one to understand which of the considered situations are most beneficial to occur for retailer, manufacturers, and for society as a whole. Moreover, optimal taxation is considered. Situations are revealed when it is beneficial for the state to tax and when, on the contrary, to subsidize the producer. [ABSTRACT FROM AUTHOR]

In recent years, two pricing policies are commonly adopted by on-demand delivery service platforms (e.g., Meituan PaoTui and Costco) that provide delivery services to heterogeneous customers via self-scheduling providers. One called "transaction-based" pricing policy (TBPP) allows the platforms to determine a per-service wage paid to providers and a price charged to customers for each transaction. The other one called "membership-based" pricing policy (MBPP) also allows the platforms to announce a wage paid to providers but charge customers a membership fee for using an unlimited number of the services in a certain period (e.g., one month). This paper considers an on-demand delivery service platform with self-scheduling providers and two classes of customers (i.e., regular and frequent customers). We aim to analyze and compare the platform's profits and welfare performances generated by the two pricing policies. If the number of regular customers and their preference for TBPP equal the number of frequent customers and their preference for MBPP, respectively, we show that compared with the MBPP, employing the TBPP is beneficial for the platform but is detrimental for customers and providers. However, adopting the MBPP (TBPP) can simultaneously benefit the platform, customers and providers if frequent customers' preference for MBPP is higher (lower) than regular customers' preference for TBPP or the number of frequent customers is larger (less) than regular customers. [ABSTRACT FROM AUTHOR]

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

This paper estimates the consumer surplus that Uber brings for consumers. The estimation uses three datasets: individual-level choice dataset—the National Household Travel Survey (NHTS) data of 2008–2009, origin-destination level dataset—Uber data, and Google data of 2017. Firstly, we use NHTS data to identify consumer's preferences in 2008 under a discrete-choice framework. Assuming unchanged preferences of consumers, we use the coefficients of the discrete-choice model to reveal passengers' demand on different transportation modes in 2017. After revealing the demand curve, this paper calculates the consumer surplus by differencing the consumer surplus in the circumstance where Uber is available with the consumer surplus of the scenario if Uber is not available. We find that Uber brings at least $0.76 gains for each trip. The overall consumer surplus generated by Uber in San Francisco is around $100 million per year.

This study investigates asymmetric price transmission (APT) in the rice market in Bangladesh using monthly price series at farm, wholesale, and retail levels from October 2005 to June 2017 in a nonlinear autoregressive distributed lag model (NARDL). The results indicate a significant asymmetric relationship across price at retail, wholesale, and farm levels in the long and short term. While wholesalers/millers benefit from the imperfect price transmission at the expense of farmers, retailers gain over wholesalers/millers. We find that the consumer surplus decreases from a price rise at the wholesale or farm level, but consumers do not enjoy a proportional increase in their surplus from a price reduction. The study reveals that the consumer welfare loss due to APT along the rice value chain of Bangladesh is equivalent to US$89.05 million per month. This estimated aggregate welfare loss requires both the attention of decision‐makers and corrective actions. [ABSTRACT FROM AUTHOR]

Background: In 2015, the Swedish government in an unprecedented move decided to allocate 150 million € to provide funding for new drugs for hepatitis C. This was triggered by the introduction of the first second generation of direct-acting antivirals (DAAs) promising higher cure rates and reduced side effects. The drugs were cost-effective but had a prohibitive budget impact. Subsequently, additional products have entered the market leading to reduction in prices and expansions of the eligible patient base. Methods: We estimated the social surplus generated by the new DAAs in Stockholm, Sweden, for the years 2014–2019. The actual use and cost of the drugs was based on registry data. Effects on future health care costs, indirect costs and QALY gains were estimated using a Markov model based primarily on Swedish data and using previous generations of interferon-based therapies as the counterfactual. Results: A considerable social surplus was generated, 15% of which was appropriated by the producers whose share fell rapidly over time as prices fell. Most of the consumer surplus was generated by QALY gains, although 10% was from reduced indirect costs. QALY gains increased less rapidly than the number of treated patients as the eligibility criteria was loosened. Conclusions: The transfer of funds from the government to the regions helped generate substantial surplus for both consumers and producers with indirect costs playing an important role. The funding model may serve as a model for the financing of innovative treatments in the future. [ABSTRACT FROM AUTHOR]

Constantly rising expenditures for pharmaceuticals require government intervention in firms' pricing decisions. To this end, reference pricing systems are a frequently employed regulatory mechanism. This paper considers a duopoly market with vertically differentiated firms highlighting the effects of a reference pricing system on prices, consumer and producer surplus, expenditures and welfare. Reference pricing decreases equilibrium prices and induces a more competitive environment. It promotes generic usage leading to increased market coverage. Especially generic consumers benefit from a reference pricing regulation. The losses in producer surplus are mainly born by the brand-name firm. Introducing a reference pricing system unambiguously increases welfare. [ABSTRACT FROM AUTHOR]

Copyright of Artvin Çoruh Üniversitesi Orman Fakültesi Dergisi is the property of Artvin Coruh University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Agritourism is an example of a growing and important industry to rural communities in the United States seeking to leverage interest in their natural resource, agricultural, and other heritage assets. We use survey data and a flexible travel cost model to estimate the part-worth consumer surplus (CS) values of Western US agritourism trips for different regions, activities, and traveler types. Given the rural nature of agritourism may require interested travelers to come from long distances, we also pay particular attention to and compare travelers' marginal and cumulative travel costs to evaluate the impact on CS estimates. Results indicate that trip and traveler heterogeneity, if unaccounted for, may lead to misinformed policy and management decisions. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Agricultural Economics & Social Sciences is the property of Egyptian National Agricultural Library (ENAL) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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]

Short lifetime product retailers often face the challenge of cannibalization between new and old products, which can negatively impact their profitability. They attempt to influence consumers' choices through price differentiation, resulting in internal competition regarding products' age and price. The pricing decisions affect market demand, sales volume, and as a result, the whole supply chain (SC) profit. This paper coordinates inventory and pricing decisions in a short lifetime product supply chain (SLPSC), considering the cannibalization effect. The investigated SLPSC includes a supplier and a retailer operating in a segmented market. Firstly, the optimal decisions of the SLPSC members are obtained under decentralized and centralized decision-making structures. Then, a new coordination contract named wholesale price and double compensation (WPDC) is designed to motivate the SC members to shift from the decentralized structure to the centralized one. The findings indicate that the coordinated model creates more economic profitability for the whole SLPSC than the decentralized one. Furthermore, the proposed WPDC contract is more beneficial for the SLPSC from a social viewpoint, as it increases consumer surplus. The results also demonstrate that when consumers are more sensitive to the product's freshness, a price differentiation policy is more profitable than the same pricing. [ABSTRACT FROM AUTHOR]

Business rivals often collaborate on specific aspects of their operations in order to achieve cost efficiency. To better understand and manage such an operational collaboration, we formulate a multi‐stage duopoly competition model to study the strategic and welfare implications of a cost‐reducing cooperation between competing firms. Without any additional agreement beyond the collaborative effort in deterministic cost reduction, we characterize intuitive conditions under which there exists a unique equilibrium for the operational collaboration, where the high‐cost firm inputs more effort. Furthermore, the equilibrium cost reduction would benefit both firms when they have similar costs and/or their products have small substitutability. Moreover, such a pure operational collaboration never hurts consumer surplus. We then consider the effect of facilitating agreements and find that, with a properly designed unit transfer payment, the competition may be softened so that both firms are willing to collaborate. However, consumer surplus may decrease as a consequence. Finally, we assume that firms could receive signals of some random shock on the cost reduction process and examine the resulting Bayesian game. If the random shock is on the cost reduction fraction, then firms' equilibrium efforts could be independent of the random signal. If, however, the random shock is on the effort, then we apply simplifying assumptions and use special stochastic orders to capture the impact of signal variability on firms' effort levels. Our findings provide useful managerial insights into the underlying drivers of an operational collaboration between rivals. [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]

With the development of data-intensive internet services, the world has witnessed explosive growth in mobile data consumption during the last couple of years. The upcoming generation of 5G-capable phones and networks will continue and even accelerate that process. At the same time, consumers are becoming more conscious about their data consumption because their monthly caps of mobile data plans can be easily exhausted by premium content, such as high-definition videos and virtual-reality games. In response, the mobile network operators (MNOs) have proposed a new business model, the so-called sponsored data plans, to subsidize consumers by transferring at least part of the data bills from consumers to content providers. Although industry practitioners claim that sponsored data plans increase consumer welfare, our analysis reveals that the impact of sponsored data on consumer surplus depends crucially on whether the MNO has complete information of the consumers' valuation of mobile data. Our analysis helps provide a clearer picture of the impact of sponsored data on consumer surplus while reconciling the conflicting views from scholars, digital rights groups, and the network carriers. With the upcoming next-generation 5G networks, mobile network operators (MNOs, such as AT&T, T-Mobile, and Verizon) are investigating new business models that encourage content providers (such as Netflix and Spotify) to sponsor data for consumers. Sponsored data allow customers to browse, stream, and enjoy content from their data sponsors without impacting their monthly data plan allowance. We analyze this recent phenomenon using an incomplete information game-theoretical model, where the MNO does not observe consumers' types (personal valuation of mobile data) and provides multiple data plans to consumers. We find that the impact of sponsored data on consumer surplus crucially depends on whether the MNO has complete information over consumer types: Under complete information, sponsored data do not improve consumer surplus. However, under incomplete information, sponsored data increase consumer surplus. Our analysis also shows that under incomplete information, the MNO should allow sponsored data in a wider range of market conditions than those under complete information. Our study suggests that prior literature tends to underestimate both the long-run detrimental effect of sponsored data on content diversity and the short-run beneficial effect on consumer surplus. Our findings offer important managerial implications for the MNO, who is interested in optimizing the data plans, and for policymakers who regulate the wireless internet market. [ABSTRACT FROM AUTHOR]

This study aims to estimate the welfare gains of the Philippine milkfish industry in establishing local fry hatcheries to reduce imports from Indonesia and Taiwan. It also seeks to identify the industry stakeholders who gain from this import substitution endeavour. The economic surplus model was used to estimate the welfare gains from the commercialization of the hatchery-bred milkfish fry in the fishery sector. Specifically, the changes in consumer and/or producer surplus per stakeholder were compared to determine who the biggest gainers are. Results of the study showed that the consumer surplus from the milkfish fry industry was larger than its producer surplus. On the other hand, the reverse was true for the grow-out industry. It is interesting to note that the consumers in the fry industry and the producer in the grow-out industry were the same set of stakeholders, i.e., the milkfish grow-out operators, who gained the most from this development. The study also showed that commercializing the local milkfish hatchery technologies can bring about more benefits to the country than importing fry and fingerlings. Hence, the development of local hatcheries for other aquaculture species can be expected to bring similar welfare gains. More importantly, the technical and financial assistance that were extended by the government’s fishery institutions through the GAINEX project as pioneered by DOST-PCAARRD can serve as an effective catalyst to prospective hatchery operators in reducing the risks, especially when setting-up a new enterprise like the hatchery-bred fry for an emerging aquaculture species in the country.

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]

Consumer Surplus is traditionally defined for the case where demand is a deterministic function of the price. However, demand is usually stochastic and hence stock‐outs can occur. Policy makers who consider the impact of different regulations on Consumer Surplus often ignore the impact of demand uncertainty. We present a definition of the Consumer Surplus under stochastic demand. We then use this definition to study the impact of demand and supply uncertainty on consumers in several cases (additive and multiplicative demand noise). We show that, in many cases, demand uncertainty hurts consumers. We also derive analytical bounds on the ratio of the Consumer Surplus relative to the deterministic setting under linear demand. Our results suggest that ignoring uncertainty may severely impact the Consumer Surplus value. [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]

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In upcoming years, the introduction of autonomous vehicles (AVs) will reshape the transport system. The transition from a regular to an autonomous transport system, however, will take place over many years and lead to a long period with a mixed driving environment where AVs and regular vehicles (RVs) operate side by side. The purpose of this study is to investigate how the utilisation of the road capacity degrades as a function of heterogeneity in congested motorways. The analysis is based on a dedicated traffic simulator, which enables the investigation of complex dynamic spillback from congestion while allowing for different degrees of heterogeneity. The representation of autonomous vehicles is based on a modified intelligent driver model (IIDM) presented by Treiber et al. (Phys Rev E 62(2):1805–1824, 2000) and Treiber and Kesting (Traffic flow dynamics, Springer, Heidelberg, 2013), while the behaviour of drivers of RVs relies on a stochastic version of the IIDM. Three main conclusions stand out. Firstly, it is shown that in an idealised environment in which AVs operate alone, a substantially improved capacity utilisation can be attained. Secondly, when drivers of RVs are mixed with AVs, capacity utilisation degrades very fast as a function of the share of RVs. Thirdly, it is shown that the improved capacity utilisation of AVs comes in the form of reduced travel time and increased throughput, with indications that travel time reductions are the most important. From a strategical planning perspective, the results underline that dedicated lanes are preferable to attain the positive effects of AVs. Specifically, we compare a stylised situation with three lanes with a share of 33% AVs to a situation with two regular lanes and a single dedicated AV lane. The latter represents a tripling in consumer surplus all other things being equal. [ABSTRACT FROM AUTHOR]

Service contracts are common practice in some industries while being eliminated in others. To investigate this phenomenon, we identify expectation–reality discrepancy (ERD) as a key determinant. A provider's ERD is defined as consumers' ex‐ante expected valuation minus their ex‐post realized valuation of the provider's service. Our analysis reveals that providers' contract strategies critically depend on their ERDs rather than the true service valuations. A provider with a higher ERD is more likely to enforce contracts, regardless of whether the true service valuation is higher than that of the competitor. Providers should enforce contracts only when they have positive ERDs. Furthermore, contracts have a competition‐intensifying effect: when providers enforce contracts, their competition on promoting consumer expectations through marketing efforts is intensified, leading to higher ERDs with contracts than without contracts. Finally, consumers and society as a whole may benefit from higher switching costs because positive ERDs may mislead consumers to make wrong switching decisions and switching costs can help deter such switching behaviors. [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]