The effect of competition among brokers on the quality and price of differentiated internet services

Price war, as an important factor in undercutting competitors and attracting customers, has spurred considerable work that analyzes such conflict situation. However, in most of these studies, quality of service (QoS), as an important decision-making criterion, has been neglected. Furthermore, with the rise of service-oriented architectures, where players may offer different levels of QoS for different prices, more studies are needed to examine the interaction among players within the service hierarchy. In this paper, we present a new approach to modeling price competition in (virtualized) service-oriented architectures, where there are multiple service levels. In our model, brokers, as the intermediaries between end-users and service providers, offer different QoS by adapting the service that they obtain from lower-level providers so as to match the demands of their clients to the services of providers. To maximize profit, players, i.e. providers and brokers, at each level compete in a Bertrand game while they offer different QoS. To maintain an oligopoly market, we then describe underlying dynamics which lead to a Bertrand game with price constraints at the providers' level. Numerical simulations demonstrate the behavior of brokers and providers and the effect of price competition on their market shares.This work has been partly supported by National Science Foundation awards: CNS-0963974, CNS-1346688, CNS-1536090 and CNS-1647084

Channel Management and differentiation strategies: A case study from the market for fresh produce

The paper analyses the current differentiation strategies in the market for fresh produce. First a short review of the literature on channel structure and product differentiation is presented, in order to identify, on a theoretical grounding the incentives for differentiation strategies. Second, a case study is drawn of a UK channel intermediary organisation carrying out differentiation policies in the fresh produce category (on behalf of UK multiple retailer customers) supplied by a dedicated Italian grower. Results show that in the fresh produce industry there is room for product differentiation, but with contradictory welfare effects.fresh produce, product differentiation, channel structure and management, Agribusiness, Marketing,

Urban Transport Pricing Reform With Two Levels Of Government

This paper analyses two challenges in the reform of urban transport pricing. The first challenge is the construction of an optimal package of urban transport pricing instruments assuming one benevolent government level that maximizes overall welfare. We examine the welfare gains from implementing in succession better parking prices, improved public transport prices and time varying tolling. It is found that parking and tolling are the most important elements of the optimal package and that the alternative policy instruments are sub-additive in their benefits. The second problem studied is the use of these pricing instruments by different government levels. We examine a case where an urban government controls parking fees and the regional government controls the tolling. Although both government levels have different objective functions, we find that the overall efficiency losses in the Nash and Stackelberg equilibria are limited.

Urban transport pricing reform with two levels of government.

Pricing; Transport; Working;

Evidence on Imperfect Competition and Strategic Trade Theory

Strategic trade theory shows that government intervention in markets with small numbers of traders can boost the welfare of a country relative to free trade. This survey critically assesses the empirical evidence regarding this possibility. One finding is that while many international food and agricultural markets are characterized by oligopoly, price-cost markups tend to be small, and the potential gains from intervention are modest at best. In turn, existing government interventions such as agricultural export subsidies are generally not optimal in a strategic trade sense. The evidence suggests that oligopoly by itself is not a sufficient rationale for deviating from free trade in international markets.

Canadian Chicken Industry: Consumer Preferences, Industry Structure and Producer Benefits from Investment in Research and Advertising

The Canadian chicken industry has operated under supply management since the mid-1970s. Canadian consumer preferences for chicken have grown dramatically since then possibly in response to concerns about health and the levels of fat and cholesterol in red meats. However Canadian consumers are also looking for convenience with their food purchases. Canadians are buying their chicken in frozen further processed forms, fresh by cut without skin and bone and in a variety of other different ways reflecting their unique willingness to pay for various attributes. There is also an increasing trend for retailers and processors to brand the fresh chicken product sold through grocery stores (for example, Maple Leaf Prime). The preferences Canadian consumer have for various chicken products, the prices they are comfortable paying and the strategies followed by processors/retailers can directly affect the outcomes of industry wide strategies such as investment in generic advertising and research or the impact of international market changes such as border closures. This research is an initial attempt to quantify Canadian consumer preferences – for fresh product by type – for product by level of processing – for chicken product by cut - for fresh chicken by brand - to examine the impact of substitutability on a variety of market shocks. The various different disaggregations of Canadian chicken consumption are used in a number of simulation models to illustrate how important preferences are to producer returns when there are market shocks. If Canadians found all chicken products available in the grocery store to be perfectly substitutable then previous policy analysis assuming chicken is one homogeneous product would be sufficient for industry policy analysis purposes. If Canadians view all the different chicken products as imperfectly substitutable and given that various chicken products are produced in relatively fixed proportions (white and dark meat, for example) further understanding of how consumers make their purchase decisions could enhance the industries ability to predict outcomes. For example, border closing to Canadian exports ( as a result of an Avian influenza outbreak, for example) would result in a significant increase in the dark meat products available for sale through Canadian grocery stores. The results presented in this research could provide a clue as to how much dark meat prices might decline while white meat prices might remain unaffected. The results reported suggest that at the consumer level, chicken fresh and frozen products are not perceived to be perfect substitutes, within a narrow category such as fresh chicken breasts, they are not perceived as even close substitutes, within the fresh category branded products such as those developed by Lilydale and Maple Leaf are not perceived as perfect substitutes. As well, an initial look at the demand for individual chicken products by household suggests that there is far from a common buying pattern across Canadian households, even within a single province. The results also suggest that health and convenience attributes are driving Canadian consumer preferences. Simulation results highlight the fact that pricing strategies followed by major processors/retailers within Canada can influence the returns to generic advertising and research. Further research could provide additional robust estimates of the chicken product substitutability existing in the Canadian market and an increased understanding of the market characteristics currently operating. The results presented here suggest that further work in this area is important for the chicken industry to pursue.consumer behaviour, chicken consumption, differentiated products, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Marketing, D12, Q11, Q18,

Mixed duopoly, privatization and the shadow costs of public funds

The purpose of this article is to investigate how the introduction of the shadow cost of public funds in the utilitarian measure of the economywide welfare affects the behavior of a welfare maximizer public firm in a mixed duopoly. We prove that when firms play simultaneously, the mixed-Nash equilibrium can dominate any Cournot equilibria implemented after a privatization, with or without efficiency gains. This can be true both in terms of welfare and of public firm's profit. When we consider endogenous timing, we show that either mixed- Nash, private leadership or both Stackelberg equilibria can result as subgameperfect Nash equilibria (SPNE). As a consequence, the sustainability of sequential equilibria enlarges the subspace of parameters such that the market performance with an inefficient public firm is better than the one implemented after a full-efficient privatization. Absent efficiency gains, privatization always lowers welfare