Optional linear input prices in vertical relations

This paper examines how the option of a regulated linear input price affects vertical contracting, where a monopolistic upstream supplier sequentially offers supply contracts to two symmetric downstream firms. We find that equilibrium contracts vary with production cost and regulated price level: If the regulated price is not too high, the option allows for price discrimination, but prevents foreclosure in the intermediary market. Indeed, if both cost and optional price are rather low, non-discriminatory input prices below cost may arise. Optional input prices are socially more desirable than a flat ban on price discrimination, as consumers benefit from more intense downstream competition. --Price discrimination,vertical contracting,exclusion,regulatory outside option

Optional linear input prices in vertical relations

This paper examines how the option of a regulated linear input price affects vertical contracting, where a monopolistic upstream supplier sequentially offers supply contracts to two symmetric downstream firms. We find that equilibrium contracts vary with production cost and regulated price level: If the regulated price is not too high, the option allows for price discrimination, but prevents foreclosure in the intermediary market. Indeed, if both cost and optional price are rather low, non-discriminatory input prices below cost may arise. Optional input prices are socially more desirable than a flat ban on price discrimination, as consumers benefit from more intense downstream competition

Optional linear input prices in vertical relations

This paper examines how the option of a regulated linear input price affects vertical contracting, where a monopolistic upstream supplier sequentially offers supply contracts to two symmetric downstream firms. We find that equilibrium contracts vary with production cost and regulated price level: If the regulated price is not too high, the option allows for price discrimination, but prevents foreclosure in the intermediary market. Indeed, if both cost and optional price are rather low, non-discriminatory input prices below cost may arise. Optional input prices are socially more desirable than a flat ban on price discrimination, as consumers benefit from more intense downstream competition.price discrimination; vertical contracting; exclusion; regulatory outside option

SWAP Version 3.2. Theory description and user manual

SWAP 3.2 simulates transport of water, solutes and heat in the vadose zone. It describes a domain from the top of canopy into the groundwater which may be in interaction with a surface water system. The program has been developed by Alterra and Wageningen University, and is designed to simulate transport processes at field scale and during whole growing seasons. This is a new release with special emphasis on numerical stability, macro pore flow, and options for detailed meteorological input and linkage to other models. This manual describes the theoretical background, model use, input requirements and output tables

Calculating the Cost of the Universal Service Obligation: The Need for a Global Approach

The paper presents the basic approaches to calculate the cost of the USO and compares them with the requirements of the 3rd postal directive. We conclude that the profitability cost approach will lead to consistent estimations if it is applied in a global way. We illustrate our findings with an econometric estimation of the net costs of Swiss Post’s obligation to provide a nationwide post office network for postal and financial services. We finally illustrate that the financing mechanism in place must be considered as well as there are important drawbacks on the cost of the USO.USO, net costs, cost of the universal service obligation, financing, Post Office Network, Global Approach

Increasing returns and perfect competition: The role of land

competition;land economics

Co-operation as a response to a turbulent environment

The objective of this study was to find out 'how SMEs perceive and respond to a turbulent environment'. We define a turbulent environment as an environment in which customer needs are rapidly changing. Based on this interpretation, we are interested in to what extent SMEs perceive these changes in customer needs and how they respond to these changes - particularly focussing on strategy and cooperation. The main conclusion of our research is that SMEs co-operate mainly to reduce costs or improve the competitive position, not to meet customer needs more adequately. SMEs do not realise the advantages of seeking cooperation in order to share means and expertise in delivering a custom or tailor-made product or service to their customer. With respect to their suppliers, SMEs often lack countervailing power, which is an obstacle for co-operation. SMEs in the retail sectors are unable to convince their suppliers of the need to respond to changes quickly. Regarding co-operation with the clients, one might question whether existing customisation strategies are really demand-driven. This research does not support the impression that SMEs really know their customers' wishes and needs. On the contrary, some businesses intentionally do not adjust their products to changing customer needs.

Optimal Nonlinear Pricing, Bundling Commodities and Contingent Services

In this paper, we propose to analyze optimal nonlinear pricing when a firm offers in a bundle a commodity and a contingent service. The paper studies a mechanism design where all private information can be captured in a single scalar variable in a monopoly context. We show that to propose the package for commodity and service is less costly for the consumer, the firm has lower consumers rent than the situation where it sells their good and contingent service under an independent pricing strategy. In fact, the possibility to use price discrimination via the supply of package is dominated by the fact that it is costly for the consumer to sign two contracts. Bundling energy and a contingent service is a profitable strategy for a energetician monopoly practising optimal nonlinear tariff. We show that the rates of the energy and the contingent service depend to the optional character of the contingent service and depend to the degree of complementarity between commodities and services.Bundling, Nonlinear pricing, Energy market

Climate policy: choosing the right instrument to reap an additional employment dividend

Climate protection should use environmental policy instruments that raise revenues, which can be used, for instance, to cut labour taxes to alleviate unemployment in economies suffering from high and persistent unemployment. This paper elaborates the possibilities of an employment dividend of climate policies and shows the potential importance of such a second dividend for a comprehensive cost-benefit analysis of climate policy. It is argued that national attempts to reap such a double dividend may be bound to fail if resource suppliers can respond in a way that leads to a large-scale international reallocation of environmental rents. Only a internationally coordinated uniform base tax on CO2 that complements already existing emission trading systems could keep revenues from climate policy in those countries bearing the cost of fighting global warming and thus leave them with the option on a second dividend. --Climate policy,double-dividend hypothesis,employment dividend,supplier responses