Costs and Technology of Public Transit Systems in Italy:Some Insights to Face Inefficiency

This study provides fresh evidence about the characteristics of technology and cost structure of public transit systems in Italy. The aim is to suggest useful guidelines for facing detected inefficiencies. The analysis is carried out through the estimation of a translog variable cost function. The sample includes 45 Italian public companies. Firms are observed in the years 1996, 1997 and 1998, and operate both in the urban and extra-urban compartments. Results support previous evidence on the existence of natural monopoly at local level and stress the importance of the average speed of vehicles in explaining cost differences between companies. We conclude that cost benefits can be achieved by promoting mergers between firms (whenever possible), introducing some forms of "competition-for-the-market" (e.g., competitive tendering for the single license) and taking more care of the local traffic regulation.

Value co-creation in the video game industry

Purpose. The process of value creation is rapidly shifting from a product- and firm-centric view to personalized consumer experiences. Networked and active consumers are increasingly co-creating value with the firm. This paper aims at contributing to the evidence on unpaid competing complementors and on network effects by asking how a form of creation that is user-driven and not motivated by sales incentives, impacts on producers\u2019 sales. The video game industry, where the so-called \u201cmodders\u201d provide free contents (\u201cmods\u201d) that improve the video game experience, provides an excellent field of study. Methodology. The video games demand function and the supply of new mods, in the retail video game market, are modelled. A system of equations is estimated by applying an instrumental-variables approach to account for possible endogeneity biases and uncover causal relationship. Findings. The creation of new mods increases video game retail sales. The more popular is a video game title, the higher are the sales. The video game demand elasticity is attenuated by the continuous creation of new mods. Practical implications This paper shows that direct and indirect network effects between video games and mods take place even with unpaid competing complementors and that (even) traditional distribution outlets can benefit from them. Originality/value. The paper quantifies the effect that the creation of mods exerts on sales and on price elasticity. Weekly (instead of monthly) time periods provide a period short enough to capture the short development cycles of mods and small and rapid responses of user demand

The Costs of Disposal and Recycling. An Application to Italian Municipal Solid Waste Services

The paper investigates the costs of waste disposal and recycling services by using a well-behaved Composite cost function model. Our estimates on a unique sample of more than 500 Italian municipalities highlight that the refuse collection technology exhibits constant returns to scale as well as scope economies between disposal and recycling. As far as the size of the municipality increases, scope economies rise up to 14%, but they are accompanied with overall diseconomies of scale. Our findings suggest that, on the one hand, joint management of disposal and recycling should be encouraged, and, on the other hand, that strategies aimed at increasing the share of waste sent for recycling would not imply a considerable increase in total costs.Solid waste, recycling, cost functions

The Costs of Disposal and Recycling. An Application to Italian Municipal Solid Waste Services

The paper investigates the costs of waste disposal and recycling services by using a well-behaved Composite cost function model. Our estimates on a unique sample of more than 500 Italian municipalities highlight that the refuse collection technology exhibits constant returns to scale as well as scope economies between disposal and recycling. As far as the size of the municipality increases, scope economies rise up to 14%, but they are accompanied with overall diseconomies of scale. Our findings suggest that, on the one hand, joint management of disposal and recycling should be encouraged, and, on the other hand, that strategies aimed at increasing the share of waste sent for recycling would not imply a considerable increase in total costs.solid waste, recycling, cost functions

The Local Public Transport in Italy: Determinants of Cost Structure

The aim of the present study is to provide fresh evidence about the characteristics of cost structure of public transit systems in Italy. The analysis is carried out by comparing the productive performance (average costs and productivity) of small, medium and large-sized companies providing both urban and extra-urban transport service. The sample includes observations of 47 Italian firms operating during the period 1996-1998. In an attempt to analyze the composite nature of costs, we separate components closely related to the physical production of output from those concerning the general organization of transport service and selling activities. The results highlight the role played by input prices and labor and capital productivity in explaining the observed cost differences between companies. The findings also show that inefficiency varies with firm size, network density, the average speed of vehicles and the regulatory context (in terms of the different subsidization mechanisms) that companies have to face.

Personal or product reputation? Optimizing revenues in the sharing economy

The emergence of peer-to-peer platforms, known as the sharing economy, has empowered people to market their own products and services. However, there are information asymmetries that make it difficult to evaluate the reputation of the seller a priori. This article examines how sellers have to enhance their personal reputation to optimize revenues. The study proposes a revenue model where, given a frontier that depends on the shared assets, the maximization of revenues depends on reputational factors of the person and of the product. An empirical validation of the framework has been conducted in the context of Airbnb, a popular sharing economy travel platform. The sample comprises 981 establishments across five European cities. The findings suggest the crucial importance of personal reputation along with some distinctive reputational attributes of the product itself. These results emphasize the role of trust and personal branding strategies in peer-to-peer platforms