Cost savings of unit-based pricing of household waste: The case of the Netherlands

Using a panel data set for Dutch municipalities we estimate effects for weight-based, bag-based, frequency-based and volume-based pricing of household waste collection. Unit-based pricing shows to be effective in reducing solid and compostable and increasing recyclable waste. Pricing has no effect on the waste collected in surrounding municipalities (waste tourism). However, unit-based pricing may lead to illegal dumping. While empirical evidence is scarce, a social cost-benefit analysis shows that if the social valuation of illegal dumping is in line with the social costs for collecting and treating solid waste, the weight or bag-based systems are preferable.municipal waste management, social welfare, unit-based pricing systems

Marginal Social Cost Pricing on a Transportation Network: Comparison of Second-Best Policies

In this paper we evaluate and compare long-run economic effects of six road-pricing schemes aimed at internalizing social costs of transportation. In order to conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates decisions of residents, firms, and developers, integrated with a spatially-disaggregated strategic transportation planning model that features mode, time period, and route choice. The model is calibrated to the greater Washington, DC metropolitan area. We compare two social cost functions - one restricted to congestion alone and another that accounts for other external effects of transportation. We find that when the ultimate policy goal is a reduction in the complete set of motor vehicle externalities, cordon-like policies and variable-toll policies lose some attractiveness compared to policies based primarily on mileage. We also find that full social cost pricing requires very high toll levels and therefore is bound to be controversial.traffic congestion, social cost pricing, land use, welfare analysis, road pricing, general equilibrium, simulation, Washington DC

Analisis Perhitungan Harga Pokok Penjualan Dan Penentuan Harga Jual Produk Menggunkan Metode Cost Plus Pricing (Studi Kasus Pada Usah Home Industri Bahan Bangunan Pilar Jaya Di Sukadana Lampung Timur)

This study aims to analyze the calculation of cost of goods sold and determination of product selling prices using the cost plus pricing method in the Pilar Jaya building materials home industry business in Sukadana, East Lampung. This research uses a descriptive method with a qualitative approach. The results showed that there were differences in the results of the analysis of the calculation of cost of goods sold using the activity-based costing method and the determination of selling prices using the cost plus pricing method with the calculation of cost of goods sold and determining selling prices according to the company. Based on the results of the analysis and calculations that have been carried out, it can be concluded that the calculation of cost of goods sold using the activity-based costing method in the Pilar Jaya home industry obtained a result of Rp 57,283,362.97. This result is lower than the calculation of cost of goods sold according to the company. While the calculation of determining the selling price using the cost plus pricing method in the Pilar Jaya home industry obtained a pilar price of IDR 296,305, a lisplang price of IDR 144,956, a roster price of IDR 11,057, and a buis beton price of IDR 145,087. The selling price using the cost plus pricing method is lower than the selling price according to the company

Access Charges in the Presence of Call Externalities

We introduce call externalities in the standard model of network competition with termination-based price discrimination, and employ a simple graphical analysis to study the outcome of competition. In contrast to recent results in the literature, we find that even under linear pricing, access charges below marginal cost are used as a collusion device, while off-net prices are above on-net prices in equilibrium. Moreover, "bill and keep" arrangements may be welfare improving compared with cost-based access pricing.Access Charge, Call Externality, Interconnection, Telecommunications

Loss Leading as an Exploitative Practice

Large retailers, enjoying substantial market power in some local markets, often compete with smaller retailers who carry a narrower range of products in a more efficient way. We find that these large retailers can exercise their market power by adopting a loss-leading pricing strategy, which consists of pricing below cost some of the products also offered by smaller rivals, and raising the prices on the other products. In this way, the large retailers can better discriminate multi-stop shoppers from one-stop shoppers — and may even earn more profit than in the absence of the more efficient rivals. Loss leading thus appears as an exploitative device, designed to extract additional surplus from multi-stop shoppers, rather than as an exclusionary instrument to foreclose the market, although the small rivals are hurt as a by-product of exploitation. We show further that banning below-cost pricing increases consumer surplus, small rivals’ profits, and social welfare. Our insights apply generally to industries where a firm, enjoying substantial market power in one segment, competes with more efficient rivals in other segments, and procuring these products from the same supplier generates customer-specific benefits. They also apply to complementary products, such as platforms and applications. There as well, our analysis provides a rationale for below-cost pricing based on exploitation rather than exclusion.loss leading, exploitative practice, retail power

Loss Leading as an Exploitative Practice

Large retailers, enjoying substantial market power in some local markets, often compete with smaller retailers who carry a narrower range of products in a more efficient way. We find that these large retailers can exercise their market power by adopting a loss-leading pricing strategy, which consists of pricing below cost some of the products also offered by smaller rivals, and raising the prices on the other products. In this way, the large retailers can better discriminate multi-stop shoppers from one-stop shoppers — and may even earn more profit than in the absence of the more efficient rivals. Loss leading thus appears as an exploitative device, designed to extract additional surplus from multi-stop shoppers, rather than as an exclusionary instrument to foreclose the market, although the small rivals are hurt as a by-product of exploitation. We show further that banning below-cost pricing increases consumer surplus, small rivals' profits, and social welfare. Our insights apply generally to industries where a firm, enjoying substantial market power in one segment, competes with more efficient rivals in other segments, and procuring these products from the same supplier generates customer-specific benefits. They also apply to complementary products, such as platforms and applications. There as well, our analysis provides a rationale for below-cost pricing based on exploitation rather than exclusion.loss leading, exploitative practice, retail power

Stackelberg Network Pricing Games

We study a multi-player one-round game termed Stackelberg Network Pricing Game, in which a leader can set prices for a subset of $m$ priceable edges in a graph. The other edges have a fixed cost. Based on the leader's decision one or more followers optimize a polynomial-time solvable combinatorial minimization problem and choose a minimum cost solution satisfying their requirements based on the fixed costs and the leader's prices. The leader receives as revenue the total amount of prices paid by the followers for priceable edges in their solutions, and the problem is to find revenue maximizing prices. Our model extends several known pricing problems, including single-minded and unit-demand pricing, as well as Stackelberg pricing for certain follower problems like shortest path or minimum spanning tree. Our first main result is a tight analysis of a single-price algorithm for the single follower game, which provides a $(1+\epsilon) \log m$-approximation for any $\epsilon >0$. This can be extended to provide a $(1+\epsilon)(\log k + \log m)$-approximation for the general problem and $k$ followers. The latter result is essentially best possible, as the problem is shown to be hard to approximate within \mathcal{O(\log^\epsilon k + \log^\epsilon m). If followers have demands, the single-price algorithm provides a $(1+\epsilon)m^2$-approximation, and the problem is hard to approximate within \mathcal{O(m^\epsilon) for some $\epsilon >0$. Our second main result is a polynomial time algorithm for revenue maximization in the special case of Stackelberg bipartite vertex cover, which is based on non-trivial max-flow and LP-duality techniques. Our results can be extended to provide constant-factor approximations for any constant number of followers

Evaluating the impact of average cost based contracts on the industrial sector in the European emission trading scheme

The inception of the Emission Trading System in Europe (EU-ETS) has made power price more expensive. This affects the competitiveness of electricity intensive industrial consumers and may force them to leave Europe. Taking up of a proposal of the industrial sector, we explore the possible application of special contracts, based on the average cost pricing system, which would mitigate the impact of CO2 cost on their electricity price. The model supposes fixed generation capacities. A companion paper treats the case with capacity expansion. We first consider a reference model representing a perfectly competitive market where all consumers (households and industries) are price-takers and buy electricity at the short-run marginal cost. We then change the market design assuming that large industrial consumers pay power either at a single or at a nodal average cost price. The analysis of these problems is conducted with simulation models applied to the Northwestern European market. The equilibrium models developed are implemented in the GAMS environment.average cost pricing, complementarity conditions, EU-ETS, Northwestern Europe market.

Agent-Based Model of Price Competition and Product Differentiation on Congested Networks

Using consistent agent-based techniques, this research models the decision-making processes of users and infrastructure owner/operators to explore the welfare consequence of price competition, capacity choice, and product differentiation on congested transportation networks. Component models include: (1) An agent-based travel demand model wherein each traveler has learning capabilities and unique characteristics (e.g. value of time); (2) Econometric facility provision cost models; and (3) Representations of road authorities making pricing and capacity decisions. Different from small-network equilibrium models in prior literature, this agent-based model is applicable to pricing and investment analyses on large complex networks. The subsequent economic analysis focuses on the source, evolution, measurement, and impact of product differentiation with heterogeneous users on a mixed ownership network (with tolled and untolled roads). Two types of product differentiation in the presence of toll roads, path differentiation and space differentiation, are defined and measured for a base case and several variants with different types of price and capacity competition and with various degrees of user heterogeneity. The findings favor a fixed-rate road pricing policy compared to complete pricing freedom on toll roads. It is also shown that the relationship between net social benefit and user heterogeneity is not monotonic on a complex network with toll roads.Network dynamics, road pricing, autonomous links, privatization, price competition, product differentiation, agent-based transportation model