2,018 research outputs found
TAXATION, FINES, AND PRODUCER LIABILITY RULES: EFFICIENCY AND MARKET STRUCTURE IMPLICATIONS
This paper addresses the comparative efficiency of liability rules and regulatory policy in competitive equilibria with endogenous product safety. Pigouvian taxation fails to achieve long-run social optimality. A policy involving accident fines and safety subsidization can achieve efficiency, although the optimal policy may involve taxation, not subsidization, of product safety.Public Economics,
Slotting Allowances and Retail Product Variety under Oligopoly
Slotting fees are fixed charges paid by food manufacturers to retailers for access to the retail market. The role of the practice and its effects on market efficiency are highly controversial. To date, the literature has focused on the effect of the practice on retail prices; however, slotting allowances also have the potential to alter the range of products available to consumers. Our analysis reveals that the strategic use of slotting allowances by oligopoly firms leads to a superior allocation of product variety among retailers. Indeed, absent price effects, we show that slotting allowances lead to the socially optimal provision of product variety.Slotting fees, vertical contracts, monopolization., Agribusiness, Agricultural and Food Policy, Industrial Organization, Marketing, L13, L14, L42, D43,
BACKWARD IMPLICIT CONTRACTS, PRE-COMMITMENT AND MARKET POWER IN THE INTERNATIONAL DURUM WHEAT MARKET
We devise a formal test of market power that is applied to the international durum market. The model captures the asymmetric cost structure brought about the initial payment system of the Canadian Wheat Board. The model generates testable hypotheses about market conduct and optimal strategic positioning.Crop Production/Industries, Industrial Organization,
Tax Incidence Under Oligopoly: A Comparison of Policy Approaches
This paper presents a methodological approach for the analysis of tax incidence that encompasses familiar forms of taxation in a general and analytically convenient model. In oligopolistic industries, the performance of a tax depends on the sensitivity of the unit tax rate to changes in industry output. Output-elastic tax schedules are less likely to be over-shifted and have superior welfare properties relative to regulatory instruments that are less responsive to the equilibrium market quantity. For revenue neutral tax reforms, the finding of Delipalla and Keen (1992) that ad valorem taxes welfare-dominate specific taxes under oligopoly is derived as a special case of this general result
Research-Based Outreach: Albert Bandura\u27s Model
Knowledge based on research is the most distinctive resource that universities have to share. The traditional approach has been simply communicating the results of research. The psychologist Albert Bandura has participated in a far more sophisticated and efficacious form of outreach in which his pathbreaking research on influencing human behavior is reinforced by multi-disciplinary and multi-investigator research in aid of writers, actors, and communication specialists. Research identifies critical issues and illuminates the causes and conditions surrounding them, guides the planning of responses, and tests their efficacy. Research-based outreach requires the theoretical and methodological tools of a multi-disciplinary team
Spatial Competition in Private Labels
Previous studies find that private labels increase retailers' bargaining power with manufacturers and allow retailers to price discriminate. We use a spatial discrete choice model to show that retailers also use store brands to create market power through store differentiation, but not as a means of building market share.Marketing,
OBESITY AND HYPERBOLIC DISCOUNTING: AN EXPERIMENTAL ANALYSIS
Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, we develop a model of present bias and apparently hyperbolic discounting that is fully consistent with rational behavior. We construct an experiment to test our hypothesis and to determine whether discount rates differ for individuals who engage in behaviors that could endanger their health. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of short-term gratification, rather than taxing foods directly.addiction, discounting, experiments, hyperbolic, obesity, time-inconsistency, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, C91, D12, D91, I18,
How Does Advertising Affect Market Performance? The Case of Generic Advertising
The effect of advertising on market performance has been a long-standing debate. Advertising that increases the dispersion of consumers’ valuations for advertised goods raises the market power of firms, while advertising that decreases the dispersion of consumers’ valuations leads to narrower price-cost margins and superior performance in markets for advertised goods. Numerous challenges confound the empirical identification of advertising effects on market performance. This paper proposes a simple method that relies on the revealed preferences of firms participating in generic advertising programs. Generic advertising programs provide a unique window through which to observe advertising effects on market performance, because changes in the dispersion of consumers’ valuations systematically redistributes rents among firms according to observable characteristics on producer size. We examine producer attitudes towards generic advertising in the “Beef. It’s What’s for Dinner” campaign of the U.S. Beef Checkoff program and find the likelihood a producer favors an expansion of the advertising program increases in operating scale. This finding is consistent with advertising effects that have led to a decrease in the dispersion of consumers’ valuations for beef products and a commensurate increase in market performance.Advertising, Oligopoly, Marketing, L1, M37,
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