Does vertical integration increase product quality?

Numerous product quality scandals are caused by low-quality inputs. When input quality is not perfectly observed by downstream firms, upstream firms often have moral hazard problems. If vertical integration does not directly eliminate the moral hazard problems, does vertical integration still improve product quality? If so, under which conditions? We find that given the precision of monitoring technology used by downstream firms, when the level of public monitoring is very high or very low, downstream firms have no incentive to integrate upstream firms; when the level is intermediate, downstream firms have incentives to integrate and vertical integration increases product quality

Health Care Insurance Payment Policy when the Physician and Patient May Collude

This paper analyzes the three-party contracting problem among the payer, the patient and the physician when the patient and the physician may collude to exploit mutually beneficial opportunities. Under the hypothesis that side transfer is ruled out, we analyze the mechanism design problem when the physician and the patient submit the claim to the payer through a reporting game. To induce truth telling by the two agents, the weak collusion-proof insurance payment mechanism is such that it is sufficient that one of them tells the truth. Moreover, we identify trade-offs of a different nature faced by the payer according to whether incentives are placed on the patient or the physician. We also derive the optimal insurance scheme for the patient and the optimal payment for the physician. Moreover, we show that if the payer is able to ask the two parties to report the diagnosis sequentially, the advantage of the veto power of the second agent allows the payer to achieve the first-best outcome

Worried about Adverse Product Effects? Information Disclosure and Consumer Awareness

Whether consumers are aware of potentially adverse product effects, is key for private and social incentives to disclose information. To obtain a better understanding of this issue we propose a simple monopoly model that highlights the conceptual difference between consumer unawareness and consumer uncertainty. We show that total surplus may be larger in an environment in which consumers are unaware of the potentially adverse effect. We also show that disclosing information whether a particular ingredient is harmful or not increases consumer surplus, but mandatory disclosure of the level of this ingredient may make consumers worse off

Information Disclosure and Consumer Awareness

Whether consumers are aware of potentially adverse product effects is key to private and social incentives to disclose information about undesirable product characteristics. In a monopoly model with a mix of aware and unaware consumers, a larger share of unaware consumers makes information disclosure less likely to occur. Since the firm is not interested in releasing information to unaware consumers, a more precise targeting technology that allows the firm to better keep unaware consumers in the dark leads to more disclosure. A regulator may want to intervene in this market and impose mandatory disclosure rules

Worried about Adverse Product Effects? Information Disclosure and Consumer Awareness

Whether consumers are aware of potentially adverse product effects, is key for private and social incentives to disclose information. To obtain a better understanding of this issue we propose a simple monopoly model that highlights the conceptual difference between consumer unawareness and consumer uncertainty. We show that total surplus may be larger in an environment in which consumers are unaware of the potentially adverse effect. We also show that disclosing information whether a particular ingredient is harmful or not increases consumer surplus, but mandatory disclosure of the level of this ingredient may make consumers worse off

Health Care Insurance Payment Policy when the Physician and Patient May Collude

This paper analyzes the three-party contracting problem among the payer, the patient and the physician when the patient and the physician may collude to exploit mutually beneficial opportunities. Under the hypothesis that side transfer is ruled out, we analyze the mechanism design problem when the physician and the patient submit the claim to the payer through a reporting game. To induce truth telling by the two agents, the weak collusion-proof insurance payment mechanism is such that it is sufficient that one of them tells the truth. Moreover, we identify trade-offs of a different nature faced by the payer according to whether incentives are placed on the patient or the physician. We also derive the optimal insurance scheme for the patient and the optimal payment for the physician. Moreover, we show that if the payer is able to ask the two parties to report the diagnosis sequentially, the advantage of the veto power of the second agent allows the payer to achieve the first-best outcome

Bundling decisions in procurement auction with sequential tasks

Abstract This paper investigates the principal's bundling decision in procurement auction in the context of a project consisting of two sequential tasks, where task externality exists and information arrives sequentially. We show that although increasing in the number of bidders in the market of the second task always tilts the principal's choice towards unbundling, increasing in the number of consortium that can perform both tasks tilts the principal's choice towards unbundling if and only if the externality is positive

BDTS: Blockchain-based Data Trading System

Trading data through blockchain platforms is hard to achieve \textit{fair exchange}. Reasons come from two folds: Firstly, guaranteeing fairness between sellers and consumers is a challenging task as the deception of any participating parties is risk-free. This leads to the second issue where judging the behavior of data executors (such as cloud service providers) among distrustful parties is impractical in the context of traditional trading protocols. To fill the gaps, in this paper, we present a \underline{b}lockchain-based \underline{d}ata \underline{t}rading \underline{s}ystem, named BDTS. BDTS implements a fair-exchange protocol in which benign behaviors can get rewarded while dishonest behaviors will be punished. Our scheme requires the seller to provide consumers with the correct encryption keys for proper execution and encourage a rational data executor to behave faithfully for maximum benefits from rewards. We analyze the strategies of consumers, sellers, and dealers in the trading game and point out that everyone should be honest about their interests so that the game will reach Nash equilibrium. Evaluations prove efficiency and practicability.Comment: ICICS 2023 (Best Paper Award

Characterization and kinetic studies of poly(Vinylidene fluoride-co-hexafluoropropylene) polymer inclusion membrane for the malachite green extraction

Textile industry effluent contains a high amount of toxic colorants. These dyes are car-cinogenic and threats to the environment and living beings. In this study, poly(vinylidene fluoride-co-hexafluoropropylene) (PVDF-co-HFP) was used as the based polymer for PIMs with bis-(2-ethylhexyl) phosphate (B2EHP) and dioctyl phthalate (DOP) as the carrier and plasticizer. The fabricated PIMs were employed to extract the cation dye (Malachite Green; MG) from the feeding phase. PIMs were also characterized by scanning electron microscopy (SEM), atomic force micro-scope (AFM), contact angle, water uptake, Fourier-transform infrared spectroscopy (FTIR) and ions exchange capacity. The performance of the PIMs was investigated under various conditions such as percentage of carrier and initial dye concentration. With permeability and flux values of 0.1188 cm/min and 1.1913 mg cm/min, PIM produced with 18% w/w PVDF-co-HFP, 21% w/w B2EHP, 1% w/w DOP and 40% w/w THF and was able to achieve more than 97% of MG extraction. The experimental data were then fitted with a pseudo-second-order (PSO) model, and the calculated R2 value was ~0.99. This shows that the data has a good fit with the PSO model. PIM is a potential alternative technology in textile industry effluent treatment; however, the right formulation is crucial for developing a highly efficient membrane