Competitive prices as profit-maximizing cartel prices

OpenAIRE

Houba, H.E.D.; Motchenkova, E.I.; Wen, Q.

2010-01-01

This discussion paper has resulted in a publication in Economics Letters, 114, 39-42. Even under antitrust enforcement, firms may still form a cartel in an infinitely-repeated oligopoly model when the discount factor is sufficiently close to one. We present a linear oligopoly model where the profit-maximizing cartel price converges to the competitive equilibrium price as the discount factor goes to one. We then identify a set of necessary conditions for this seemingly counter-intuitive result.

Market fundamentals, competition and natural-gas prices

International Nuclear Information System (INIS)

Hulshof, Daan; Maat, Jan-Pieter van der; Mulder, Machiel

2016-01-01

After the liberalisation of the gas industry, trading hubs have emerged in Europe. Although these hubs appear to be liquid market places fostering gas-to-gas competition, the efficiency of the gas market remains a topic of interest as a fair share of gas is still traded through long-term contracts with prices linked to the oil price while the number of gas suppliers to the European market is limited. In order to assess the efficiency of the gas market, we analyse the day-ahead spot price at the Dutch gas hub over the period 2011–2014. We find that the oil price had a small positive impact on the gas price. Changes in the concentration on the supply side did not affect the movement in gas prices. The availability of gas in storages and the outside temperature negatively influenced the gas price. We also find that the gas price was related to the production of wind electricity. Overall, we conclude that the day-ahead gas prices are predominantly determined by gas-market fundamentals. Policies to further integrate gas markets within Europe may extend this gas-to-gas competition to a larger region. - Highlights: •We analyse the development of the day-ahead spot price at TTF over 2011–2014. •The oil price had a small impact on the gas price, while the coal price had no effect. •Changes in the concentration on the supply side did not affect the gas prices. •The gas prices are predominantly determined by weather and storage availability. •Policies to integrate gas markets foster gas-to-gas competition.

Pricing and competition in the private dental market in Finland.

Science.gov (United States)

Widström, E; Väisänen, A; Mikkola, H

2011-06-01

To investigate how the prices were set in private dental care, which factors determined prices and whether the recent National Dental Care Reform had increased competition in the dental care market in Finland. A questionnaire to all full time private dentists (n = 1,121) in the ten largest cities. Characteristics of the practice, prices charged, price setting, perceived competition and expectations for the practices were requested. The response rate was 59.6%. Correlation analysis (Pearson's) was used to study relationships between the prices of different treatment items. Linear regression analysis was used to study determinants of the price of a one surface filling. Most dentists' fee schedules were based on the price of a one surface filling and updated annually. Changes in practice costs calculated by the dentists' professional association and information on average prices charged on dental treatments in the country influenced pricing. High price levels were associated with specialisation, working in a group practice, working close to many other practices or in a town with a dental school. Less than half of the respondents had faced competition in dental services and price competition was insignificant. Price setting followed traditional patterns and private markets in dental services were not found to be very competitive.

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

OpenAIRE

Lei Zhang; David Levinson; Shanjiang Zhu

2007-01-01

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) Rep...

Price and quality in spatial competition

OpenAIRE

Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune

2010-01-01

We study the relationship between competition and quality within a spatial competition framework where firms compete in prices and quality. We generalise existing literature on spatial price–quality competition along several dimensions, including utility functions that are non-linear in income and cost functions that are non-separable in output and quality. Our main message is that the scope for a positive relationship between competition and quality is underestimated in the existing literatu...

Location-Price Competition in Airline Networks

Directory of Open Access Journals (Sweden)

H. Gao

2014-01-01

Full Text Available This paper addresses location-then-price competition in airline market as a two-stage game of n players on the graph. Passenger’s demand distribution is described by multinomial logit model. Equilibrium in price game is computed through best response dynamics. We solve location game using backward induction, knowing that airlines will choose prices from equilibrium for the second-stage game. Some numerical results for airline market under consideration are presented.

Price competition among Dutch sickness funds

OpenAIRE

Varkevisser, Marco; Geest, Stéphanie

2003-01-01

textabstractIn general, competition enhances efficiency. On the market for health insurance free market competition, however, has unwanted side-effects. The existence of asymmetrical information can lead to adverse selection and cream skimming. Adequate risk-adjustment removes the incentives for cream skimming and balances the negative consequences of adverse selection. In an attempt to enhance efficiency, the Dutch government in 1992 introduced price competition between social health insurer...

Pricing of electricity tariffs in competitive markets

International Nuclear Information System (INIS)

Keppo, J.; Raesaenen, M.

1999-01-01

In many countries electricity supply business has been opened for competition. In this paper we analyze the problem of pricing of electricity tariffs in these open markets, when both the customers' electricity consumption and the market price are stochastic processes. Specifically, we focus on regular tariff contracts which do not have explicit amounts of consumption units defined in the contracts. Therefore the valuation process of these contracts differs from the valuation of electricity futures and options. The results show that the more there is uncertainty about the customer's consumption, the higher the fixed charge of the tariff contract should be. Finally, we analyze the indication of our results to the different methods for estimating the customer's consumption in the competitive markets. Since the consumption uncertainties enter into the tariff prices, the analysis indicates that the deterministic standard load curves do not provide efficient methods for evaluating the customers' consumption in competitive markets

Carbon pricing and the competitiveness of nuclear power

International Nuclear Information System (INIS)

Keppler, J.H.; Marcantonini, C.

2011-01-01

A recent NEA study entitled Carbon Pricing, Power Markets and the Competitiveness of Nuclear Energy assesses the competitiveness of nuclear power against coal- and gas-fired power generation in liberalised electricity markets with either CO 2 trading or carbon taxes. It uses daily price data for electricity, gas, coal and carbon from 2005 to 2010, which encompasses the first years of the European Emissions Trading System (EU ETS), the world's foremost carbon trading framework. The study shows that even with modest carbon pricing, competition for new investment in electricity markets will take place between nuclear energy and gas-fired power generation, with coal-fired power struggling to be profitable. The data and analyses contained in the study provide a robust framework for assessing cost and investment issues in liberalised electricity markets with carbon pricing, even in the post-Fukushima context. A summary of the publication main elements is provided in this paper

Market responses to HMOs: price competition or rivalry?

Science.gov (United States)

McLaughlin, C G

1988-01-01

Although competition for consumers is increasing in the health care sector, there is disagreement about whether it is resulting in cost containment, as its supporters have argued it would. In part this stems from a confusion between price competition, which under ideal circumstances leads to the production of services at the lowest possible cost, and nonprice competition--or rivalry--which under many circumstances will lead to increased costs. In this paper, I examine the evidence about the competitive response to the growing presence of health maintenance organizations in the health care marketplace. The available evidence suggests that providers are responding not with classical cost-containing price competition but, instead, with cost-increasing rivalry, characterized by increased expenditures to promote actual or perceived product differentiation.

Pharmaceutical pricing: an empirical study of market competition in Chinese hospitals.

Science.gov (United States)

Wu, Jing; Xu, Judy; Liu, Gordon; Wu, Jiuhong

2014-03-01

High pharmaceutical prices and over-prescribing of high-priced pharmaceuticals in Chinese hospitals has long been criticized. Although policy makers have tried to address these issues, they have not yet found an effective balance between government regulation and market forces. Our objective was to explore the impact of market competition on pharmaceutical pricing under Chinese government regulation. Data from 11 public tertiary hospitals in three cities in China from 2002 to 2005 were used to explore the effect of generic and therapeutic competition on prices of antibiotics and cardiovascular products. A quasi-hedonic regression model was employed to estimate the impact of competition. The inputs to our model were specific attributes of the products and manufacturers, with the exception of competition variables. Our results suggest that pharmaceutical prices are inversely related to the number of generic and therapeutic competitors, but positively related to the number of therapeutic classes. In addition, the product prices of leading local manufacturers are not only significantly lower than those of global manufacturers, but are also lower than their non-leading counterparts when other product attributes are controlled for. Under the highly price-regulated market in China, competition from generic and therapeutic competitors did decrease pharmaceutical prices. Further research is needed to explore whether this competition increases consumer welfare in China's healthcare setting.

Pricing local distribution services in a competitive market

International Nuclear Information System (INIS)

Duann, D.J.

1995-12-01

Unbundling and restructuring of local distribution services is the focus of the natural gas industry. As a result of regulatory reforms, a competitive local distribution market has emerged, and the validity of traditional cost-based regulation is being questioned. One alternative is to completely unbundle local distribution services and transform the local distribution company into a common carrier for intrastate transportation services. Three kinds of alternative pricing mechanisms are examined. For firm intrastate transportation services, cost-based pricing is the preferred method unless it can be shown that a competitive secondary market can be established and maintained. Pricing interruptible transportation capacity is discussed

77 FR 65279 - Domestic Competitive Products Pricing and Mailing Standards Changes

Science.gov (United States)

2012-10-26

... POSTAL SERVICE 39 CFR Part 111 Domestic Competitive Products Pricing and Mailing Standards Changes... and mailing standards for the following competitive products: Express Mail[supreg], Priority Mail.... SUPPLEMENTARY INFORMATION: This final rule describes new prices and product features for competitive products...

Pricing Policy and the College Choice Process.

Science.gov (United States)

Chapman, Randall G.

1979-01-01

A marketing management paradigm for academe is discussed along with aspects of the pricing policy process. The two most important factors affecting the college choice process are shown to be college quality and price-related considerations. Implications for marketing are discussed. (Author/LBH)

Do higher-priced generic medicines enjoy a competitive advantage under reference pricing?

Science.gov (United States)

Puig-Junoy, Jaume

2012-11-01

In many countries with generic reference pricing, generic producers and distributors compete by means of undisclosed discounts offered to pharmacies in order to reduce acquisition costs and to induce them to dispense their generic to patients in preference over others. The objective of this article is to test the hypothesis that under prevailing reference pricing systems for generic medicines, those medicines sold at a higher consumer price may enjoy a competitive advantage. Real transaction prices for 179 generic medicines acquired by pharmacies in Spain have been used to calculate the discount rate on acquisition versus reimbursed costs to pharmacies. Two empirical hypotheses are tested: the discount rate at which pharmacies acquire generic medicines is higher for those pharmaceutical presentations for which there are more generic competitors; and, the discount rate at which pharmacies acquire generic medicines is higher for those pharmaceutical forms for which the consumer price has declined less in relation to the consumer price of the brand drug before generic entry (higher-priced generic medicines). An average discount rate of 39.3% on acquisition versus reimbursed costs to pharmacies has been observed. The magnitude of the discount positively depends on the number of competitors in the market. The higher the ratio of the consumer price of the generic to that of the brand drug prior to generic entry (i.e. the smaller the price reduction of the generic in relation to the brand drug), the larger the discount rate. Under reference pricing there is intense price competition among generic firms in the form of unusually high discounts to pharmacies on official ex-factory prices reimbursed to pharmacies. However, this effect is highly distorting because it favours those medicines with a higher relative price in relation to the brand price before generic entry.

Trends in prices to commercial energy consumers in the competitive Texas electricity market

International Nuclear Information System (INIS)

Zarnikau, Jay; Fox, Marilyn; Smolen, Paul

2007-01-01

To date, the price of electricity to commercial or business energy consumers has generally increased at greater rates in the areas of Texas where retail competition has been introduced than in areas that do not enjoy competition. Trends in commercial competitive prices have largely mirrored trends in residential prices. Market restructuring has tended to increase the sensitivity of retail electricity prices to changes in the price of natural gas, the marginal fuel used for generation in Texas. Consequently, the rapid increases in the commodity price of natural gas following restructuring led to increases in competitive electric rates which exceeded the increases in areas not exposed to restructuring, where the fuel component of electric rates tend to reflect a weighted average of the utilities' fuel costs. There is some evidence that pricing behavior by competitive retailers changed when the retailers affiliated with the incumbent utilities were permitted some pricing flexibility, resulting in a reduction in prices. (author)

Oligopolistic price competition with informed and uninformed buyers

Czech Academy of Sciences Publication Activity Database

Ostatnický, Michal

-, č. 413 (2010), s. 1-34 ISSN 1211-3298 Institutional research plan: CEZ:MSM0021620846 Keywords : oligopoly * price competition * price dispersion Subject RIV: AH - Economic s http://www.cerge-ei.cz/pdf/wp/Wp413.pdf

Meeting competition through negotiated pricing

International Nuclear Information System (INIS)

Keith, D.M.; Raper, J.W.

1990-01-01

A fundamental premise of negotiated pricing as a demand-side management (DSM) tool is that price determines cost. As the ultimate objective of energy efficiency is to increase electromotive work while conserving resources, negotiated prices can have a significant impact as a DSM tool to force costs down. Three examples are offered of the effect of negotiated pricing as a DSM tool. The examples are a small hydroelectric company and an electric utility authority owned, a utility-to-customer example of negotiated pricing with the Public Service Company of Oklahoma's (PSO) system, and a large paper mill on PSO's system. Some of the major problems associated with negotiated pricing, outside of the human effort of finding and training knowledgeable and skilled negotiators, are: obtaining enough information about the customer or potential customer to be able to determine that in negotiating prices the utility is not giving away more benefits than the utility will gain; developing a pricing plan that fits both the customer's and utility's existing and potential future mode of operation; assuring that other customers who cannot negotiate on their own behalf are not adversely affected by utility revenue shortfalls; making such negotiated prices available to all similarly situated customers, so as not to inadvertently create unfair competitive advantages among them; and defining the shared benefits before and after the fact as a result of having negotiated prices in the first place

The Price Normalization Problem in Imperfect Competition and the Objective of the Firm

DEFF Research Database (Denmark)

Dierker, Egbert; Grodal, Birgit

for the Nash equilibria. In this paper we show that, given a firm has chosen a particular profit function as its objective, profit maximization can be expressed in such a way that it depends on relative prices only. However, the choice of such an objective function need not be in the interest...... of the shareholders. This problem is overcome by relating the profits of a firm to the aggregate demand of its shareholders. We propose a definition of the objective of a firm, called maximization of shareholders' real wealth, which does not depend on any price normalizaion. Real wealth maxima are shown to exist...... under certain conditions. Moreover, we consider an oligopolistic market and prove the existence of a Nash equilibrium in which each firm maximizes the real wealth of its shareholders. As a consequence, there is no need for absolute prices in the theory of imperfect competition...

What drives customer choice in competitive power markets? Final report

International Nuclear Information System (INIS)

Cates, S.

1998-12-01

Understanding what drives customer choice is a crucial first step toward meeting customer needs in competitive power markets. To understand the key drivers of customer choice, Research Triangle Institute (RTI) conducted in-depth telephone interviews with 150 customers in California, Pennsylvania, and Rhode Island and with 12 energy service providers (ESPs) serving these states. Because it is a qualitative study, the number of interviews is small; however, these interviews provide a first look at actual choice behavior in the US. This study also drew on previous EPRI research on customer choice and switching intentions, the US pilot program experience, actual customer choice behavior in international markets, and lessons learned in other deregulated industries. This study identified by customer sector--residential, small and medium commercial and industrial (C/I), and large C/I--the factors customers consider when choosing an electricity supplier, customers' reasons for switching electricity supplier, and customers' reasons for not switching. One of the key findings of the study is that the key driver for switching electricity supplier is the desire to save money. In markets where energy service providers can offer significant savings, customers are switching; but, in markets where no price incentives exist, customers are reluctant to switch

Budget Constraints Affect Male Rats' Choices between Differently Priced Commodities.

Science.gov (United States)

van Wingerden, Marijn; Marx, Christine; Kalenscher, Tobias

2015-01-01

Demand theory can be applied to analyse how a human or animal consumer changes her selection of commodities within a certain budget in response to changes in price of those commodities. This change in consumption assessed over a range of prices is defined as demand elasticity. Previously, income-compensated and income-uncompensated price changes have been investigated using human and animal consumers, as demand theory predicts different elasticities for both conditions. However, in these studies, demand elasticity was only evaluated over the entirety of choices made from a budget. As compensating budgets changes the number of attainable commodities relative to uncompensated conditions, and thus the number of choices, it remained unclear whether budget compensation has a trivial effect on demand elasticity by simply sampling from a different total number of choices or has a direct effect on consumers' sequential choice structure. If the budget context independently changes choices between commodities over and above price effects, this should become apparent when demand elasticity is assessed over choice sets of any reasonable size that are matched in choice opportunities between budget conditions. To gain more detailed insight in the sequential choice dynamics underlying differences in demand elasticity between budget conditions, we trained N=8 rat consumers to spend a daily budget by making a number of nosepokes to obtain two liquid commodities under different price regimes, in sessions with and without budget compensation. We confirmed that demand elasticity for both commodities differed between compensated and uncompensated budget conditions, also when the number of choices considered was matched, and showed that these elasticity differences emerge early in the sessions. These differences in demand elasticity were driven by a higher choice rate and an increased reselection bias for the preferred commodity in compensated compared to uncompensated budget conditions

Budget Constraints Affect Male Rats’ Choices between Differently Priced Commodities

Science.gov (United States)

Kalenscher, Tobias

2015-01-01

Demand theory can be applied to analyse how a human or animal consumer changes her selection of commodities within a certain budget in response to changes in price of those commodities. This change in consumption assessed over a range of prices is defined as demand elasticity. Previously, income-compensated and income-uncompensated price changes have been investigated using human and animal consumers, as demand theory predicts different elasticities for both conditions. However, in these studies, demand elasticity was only evaluated over the entirety of choices made from a budget. As compensating budgets changes the number of attainable commodities relative to uncompensated conditions, and thus the number of choices, it remained unclear whether budget compensation has a trivial effect on demand elasticity by simply sampling from a different total number of choices or has a direct effect on consumers’ sequential choice structure. If the budget context independently changes choices between commodities over and above price effects, this should become apparent when demand elasticity is assessed over choice sets of any reasonable size that are matched in choice opportunities between budget conditions. To gain more detailed insight in the sequential choice dynamics underlying differences in demand elasticity between budget conditions, we trained N=8 rat consumers to spend a daily budget by making a number of nosepokes to obtain two liquid commodities under different price regimes, in sessions with and without budget compensation. We confirmed that demand elasticity for both commodities differed between compensated and uncompensated budget conditions, also when the number of choices considered was matched, and showed that these elasticity differences emerge early in the sessions. These differences in demand elasticity were driven by a higher choice rate and an increased reselection bias for the preferred commodity in compensated compared to uncompensated budget

Robust policy choice under Calvo and Rotemberg pricing

OpenAIRE

Sienknecht, Sebastian

2012-01-01

This paper examines the robustness of welfare-based policy choices across the nonlinear Calvo and Rotemberg pricing assumptions. Comparisons between simple interest rate rules turn out to be robust and independent of the price dispersion inherent in the Calvo setting. This robustness is violated if there is a policy alternative that controls for price dispersion.

Essays on Stock Exchange Competition and Pricing

OpenAIRE

Andersen, Atso

2005-01-01

This study deals with the industrial structure, the nature of competition and the pricing of stock exchange trading services in Europe. Specific for the study is that exchanges are considered to be profit-maximizing institutions that face competition. A conventional analysis of concentration ratios shows that the concentration of European stock exchanges is low. When the nature of competition is measured in more detail, regression results indicate that exchanges operate in monopolistic o...

[Policies encouraging price competition in the generic drug market: Lessons from the European experience].

Science.gov (United States)

Puig-Junoy, Jaume

2010-01-01

To describe alternative policies aimed at encouraging price competition in generic drug markets in countries with strict price regulation, and to present some case studies drawn from the European experience. Systematic literature review of articles and technical reports published after 1999. The shortcomings in consumer price competition observed in some European generic markets, including Spain, may be reduced through three types of public reimbursement or financing reforms: policies aimed at improving the design of current maximum reimbursement level policies; policies aimed at monitoring competitive prices in order to reimburse real acquisition cost to pharmacies; and, more radical and market-oriented policies such as competitive tendering of public drug purchases. The experience of recent reforms adopted in Germany, Belgium, Holland, Norway, and Sweden offers a useful guide for highly price-regulated European countries, such as Spain, currently characterized by limited consumer price competition and the high discounts offered to pharmacy purchases. Direct price regulation and/or the generic reference pricing systems used to reduce generic drug prices in many European countries can be successfully reformed by adopting measures more closely aimed at encouraging consumer price competition in generic drug markets. Copyright 2009 SESPAS. Published by Elsevier Espana. All rights reserved.

Electricity prices in a competitive environment: Marginal cost pricing of generation services and financial status of electric utilities. A preliminary analysis through 2015

International Nuclear Information System (INIS)

1997-08-01

The emergence of competitive markets for electricity generation services is changing the way that electricity is and will be priced in the United States. This report presents the results of an analysis that focuses on two questions: (1) How are prices for competitive generation services likely to differ from regulated prices if competitive prices are based on marginal costs rather than regulated open-quotes cost-of-serviceclose quotes pricing? (2) What impacts will the competitive pricing of generation services (based on marginal costs) have on electricity consumption patterns, production costs, and the financial integrity patterns, production costs, and the financial integrity of electricity suppliers? This study is not intended to be a cost-benefit analysis of wholesale or retail competition, nor does this report include an analysis of the macroeconomic impacts of competitive electricity prices

A uniform price auction with locational price adjustments for competitive electricity markets

International Nuclear Information System (INIS)

Ethier, R.; Mount, T.; Schulze, W.; Zimmerman, R.; Thomas, R.

1999-01-01

Competitive electricity markets which rely on centralized dispatch require a mechanism to solicit offers from competing generators. Ideally, such an auction mechanism, provides incentives to submit offers equal to the marginal cost of generation for each generator. Economic theory suggests that the Uniform Price auction is an appropriate institution. However, an efficient implementation of this auction in an electricity context requires that the offers used in the auction reflect the appropriate locational price adjustments for transmission losses and congestion. This paper describes a uniform price auction that incorporates locational price adjustments on a Web-based platform suitable for experimentation. Preliminary results show dramatically different price and revenue results when compared with a simple continuous Discriminative auction. (author)

Electricity prices in a competitive environment: Marginal cost pricing of generation services and financial status of electric utilities. A preliminary analysis through 2015

Energy Technology Data Exchange (ETDEWEB)

NONE

1997-08-01

The emergence of competitive markets for electricity generation services is changing the way that electricity is and will be priced in the United States. This report presents the results of an analysis that focuses on two questions: (1) How are prices for competitive generation services likely to differ from regulated prices if competitive prices are based on marginal costs rather than regulated {open_quotes}cost-of-service{close_quotes} pricing? (2) What impacts will the competitive pricing of generation services (based on marginal costs) have on electricity consumption patterns, production costs, and the financial integrity patterns, production costs, and the financial integrity of electricity suppliers? This study is not intended to be a cost-benefit analysis of wholesale or retail competition, nor does this report include an analysis of the macroeconomic impacts of competitive electricity prices.

Strategic wholesale pricing for an incumbent supplier facing with a competitive counterpart.

Science.gov (United States)

Sun, Jianwu

2014-01-01

We introduce a wholesale pricing strategy for an incumbent supplier facing with a competitive counterpart. We propose a profit function which considers both the present loss and future loss from a wholesale price and then study the optimal wholesale prices for different objectives about this profit function for the incumbent supplier. First, we achieve an optimal wholesale price for the incumbent supplier to maximize his expected profit. Then, to reduce the risk originating from the fluctuation in the competitive supplier's wholesale price, we integrate the conditional value-at-risk (CVaR) measure in financial risk management into this study and derive an optimal wholesale price to maximize CVaR about profit for the incumbent supplier. Besides, the properties of the two optimal wholesale prices are discussed. Finally, some management insights are suggested for the incumbent supplier in a competitive setting.

Value-based pricing: A success factor in the competitive struggle

Directory of Open Access Journals (Sweden)

Netseva-Porcheva Tatyana

2011-01-01

Full Text Available Over the past decade, the view that the main purpose of market oriented organizations is not to satisfy the consumer, but to create values has dominated. Exactly the values, their creation, retention and increase, are the main sources of competitive advantage of the company. The purpose of the present report is to present the price formation, based on product value, as a source of competitive advantage. In connection with the so-defined objective, the value and the product price for the customer are derived as key factors for success of the company in the competitive struggle; the role of the value of the product in the marketing and pricing is revealed; and theory clarifies the two basic approaches for determining the price of the product on the basis of value - customer value modeling (CVM and economic value modeling (EVM, their nature, scope of application, advantages and disadvantages.

Assessment of emission trading impacts on competitive electricity market price

DEFF Research Database (Denmark)

Singh, S.N.; Saxena, D.; Østergaard, Jacob

2011-01-01

analyzes the impact of electricity prices in the competitive electricity markets having a uniform market clearing price mechanism. Findings - It is found that the electricity prices depend on the system loading, generation mix, etc. at a particular hour. Various emission trading instruments are discussed...... side emission trading impact on electricity prices in the competitive power market. Design/methodology/approach - Various schemes are suggested and are being implemented to achieve this objective. It is expected that electricity price will increase due to imposition of emission taxes. This paper...... with a special emphasis on the European market. Research limitations/implications - Block bidding of the suppliers is considered whereas the demand is assumed to be inelastic. Originality/value - The emission trading impacts are analyzed on a simple example....

High Generic Drug Prices and Market Competition: A Retrospective Cohort Study.

Science.gov (United States)

Dave, Chintan V; Kesselheim, Aaron S; Fox, Erin R; Qiu, Peihua; Hartzema, Abraham

2017-08-01

Prices for some generic drugs have increased in recent years, adversely affecting patients who rely on them. To determine the association between market competition levels and the change in generic drug prices in the United States. Retrospective cohort study. Prescription claims from commercial health plans between 2008 and 2013. The 5.5 years of data were divided into 11 study periods of 6 months each. The Herfindahl-Hirschman Index (HHI)-calculated by summing the squares of individual manufacturers' market shares, with higher values indicating a less competitive market-and average drug prices were estimated for the generic drugs in each period. The HHI value estimated in the baseline period (first half of 2008) was modeled as a fixed covariate. Models estimated price changes over time by level of competition, adjusting for drug shortages, market size, and dosage forms. From 1.08 billion prescription claims, a cohort of 1120 generic drugs was identified. After adjustment, drugs with quadropoly (HHI value of 2500, indicating relatively high levels of competition), duopoly (HHI value of 5000), near-monopoly (HHI value of 8000), and monopoly (HHI value of 10 000) levels of baseline competition were associated with price changes of -31.7% (95% CI, -34.4% to -28.9%), -11.8% (CI, -18.6% to -4.4%), 20.1% (CI, 5.5% to 36.6%), and 47.4% (CI, 25.4% to 73.2%), respectively, over the study period. Study findings may not be generalizable to drugs that became generic after 2008. Market competition levels were associated with a change in generic drug prices. Such measurements may be helpful in identifying older prescription drugs at higher risk for price change in the future. None.

Strategic Wholesale Pricing for an Incumbent Supplier Facing with a Competitive Counterpart

Directory of Open Access Journals (Sweden)

Jianwu Sun

2014-01-01

Full Text Available We introduce a wholesale pricing strategy for an incumbent supplier facing with a competitive counterpart. We propose a profit function which considers both the present loss and future loss from a wholesale price and then study the optimal wholesale prices for different objectives about this profit function for the incumbent supplier. First, we achieve an optimal wholesale price for the incumbent supplier to maximize his expected profit. Then, to reduce the risk originating from the fluctuation in the competitive supplier’s wholesale price, we integrate the conditional value-at-risk (CVaR measure in financial risk management into this study and derive an optimal wholesale price to maximize CVaR about profit for the incumbent supplier. Besides, the properties of the two optimal wholesale prices are discussed. Finally, some management insights are suggested for the incumbent supplier in a competitive setting.

New Evidence on the Price Effects of Cigarette Tax Competition.

Science.gov (United States)

Carpenter, Christopher S; Mathes, Michael T

2016-05-01

Multiple studies have shown that cigarette taxes are more than fully passed through to cigarette prices and that access to a nearby state with a lower cigarette tax also reduces local cigarette prices. We study two other sources of tax competition: nearby Native American reservations and online sales. Using quarterly data on local cigarette prices from 1976-2003, we show that the opening of a Native American casino within 25 miles of a city center is associated with a $0.016-$0.027 lower per-pack price, while a 50 percentage point increase in internet penetration is associated with a $0.22-$0.25 per-pack price reduction. These effects are not observed for other local prices for which there is no potential tax savings. Our results further our understanding of how tax competition affects local cigarette prices and provide context to studies linking Native American reservations and internet penetration to cigarette smuggling.

Competitive pricing within pharmaceutical classes: evidence on "follow-on" drugs in Germany 1993-2008.

Science.gov (United States)

Mueller, Michael T; Frenzel, Alexander

2015-01-01

Competition from "follow-on" drugs has been a highly controversial issue. Manufacturers launching new molecules in existing drug classes have often been criticized for inflating health systems' expenses, but it has been argued that such drugs increase therapeutic options. Economic theory suggests that follow-on drugs induce price competition. We contribute to this discussion by addressing the topic of pricing at market entry and price development in the German market. We measure determinants of price strategies of follow-on drugs using regression analyses, considering all new molecules launched in the German market from 1993 to 2008. Prices of products are standardized on defined daily dosages controlling for sales volumes based on data from the IMS Health DPM database and for the therapeutic quality of a new product using ratings by Fricke/Klaus as a proxy for innovation. We identify prices correlating with therapeutic value at market entry. While the first two molecules engage in quality competition, price discounts below the market price can be observed from the third entrant on. Price discounts are even more distinct in development races with several drugs entering the market within 2 years and in classes with a low degree of therapeutic differentiation. Prices remain relatively constant over time. This study contributes to assessments of competition in pharmaceutical markets focusing on price strategies of new market entrants. After an initial phase of market building, further follow-on products induce price competition. Largely unchanged prices after 4 years may be interpreted as quality competition and can be attributed to prices in Germany being anchor points for international price referencing.

Competition among hospitals for HMO business: effect of price and nonprice attributes.

Science.gov (United States)

Young, Gary J; Burgess, James E; Valley, Danielle

2002-10-01

To investigate patterns of competition among hospitals for the business of health maintenance organizations (HMOs). The study focused on the relative importance of hospital price and nonprice attributes in the competition for HMO business. The study capitalized on hospital cost reports from Florida that are unique in their inclusion of financial data regarding HMO business activity. The time frame was 1992 to 1997. The study was designed as an observational investigation of acute care hospitals. Results indicated that a hospital's share of HMO business was related to both its price and nonprice attributes. However, the importance of both price and nonprice attributes diminished as the number of HMOs in a market increased. Hospitals that were market share leaders in terms of HMO business (i.e., 30 percent or more market share) were superior, on average, to their competitors on both price and nonprice attributes. Study results indicate that competition among hospitals for HMO business involves a complex set of price and nonprice attributes. The HMOs do not appear to focus on price alone. Hospitals likely to be the most attractive to HMOs are those that can differentiate themselves on the basis of nonprice attributes while being competitive on price as well.

FUNGIBILITY AND CONSUMER CHOICE: EVIDENCE FROM COMMODITY PRICE SHOCKS*

OpenAIRE

Hastings, Justine S.; Shapiro, Jesse M.

2013-01-01

We formulate a test of the fungibility of money based on parallel shifts in the prices of different quality grades of a commodity. We embed the test in a discrete-choice model of product quality choice and estimate the model using panel microdata on gasoline purchases. We find that when gasoline prices rise, consumers substitute to lower octane gasoline, to an extent that cannot be explained by income effects. Across a wide range of specifications, we consistently reject the null hypothesis t...

Non-Price Competition in the Port Sector: A Case Study of Ports in Turkey

Directory of Open Access Journals (Sweden)

Soner Esmer

2016-03-01

Full Text Available Although the port sector has been facing increasing competition, there is limited research on how ports compete using non-price competition strategies. There are a few studies on non-price competition in the port sector. However they mainly focus on the marketing aspect. This paper seeks to fill this gap in the literature, especially from a combined marketing-economic perspective. Especially the paper's main objective is to identify the determinants of non-price competition in the port sector and evaluate their effect on various aspects of non-price competition. We start with a general conceptual framework to explain how competition in the sector can be affected by various factors and then propose an analytical framework on non-price competition. The analytical model is then used to support the design of a survey questionnaire. Next, hypothesis tests are conducted using exploratory factor analysis (EFA and structural equation modeling (SEM and data collected from a survey of Turkish ports. Based on the analysis results, the implications for port management and future research are also discussed.

Non-Price Competition in the Port Sector: A Case Study of Ports in Turkey

OpenAIRE

Soner Esmer; Hong-Oanh Nguyen, Ph.D.; Yapa Mahinda Bandara, Ph.D.; Kazim Yeni, Ph.D.

2016-01-01

Although the port sector has been facing increasing competition, there is limited research on how ports compete using non-price competition strategies. There are a few studies on non-price competition in the port sector. However they mainly focus on the marketing aspect. This paper seeks to fill this gap in the literature, especially from a combined marketing-economic perspective. Especially the paper's main objective is to identify the determinants of non-price competition in the port sector...

ON PRICE CHOICE AT SELLING OF INFORMATION RESOURCES

Directory of Open Access Journals (Sweden)

O. S. Ivanova

2015-05-01

Full Text Available The paper considers the problem of the pricing policy determination in the company, selling information resource at the market. The problem of the optimal price determination for an information resource is solved depending on the time for the case when the seller-company has no competitors in the market, the market is saturated, and buyers are not able to further spread of the resource. Conditions for the optimal choice of information resource price have been obtained; the maximum possible income of the company has been calculated for linear demand function, and conditions, determining the duration and volume of sales, providing the maximum of average income of the company, have been obtained as well. The problem of optimal price choice is solved by macrosystem approach that has made it possible to reduce it to the isoperimetric kind. It is shown that the optimal price dependence on time for a linear demand function should provide a linearly increasing rate of sales. Conditions have been derived under which the sales proceedings for an information resource are positive, relationship is determined between volume of sales and timeline at which the average income during the sales reaches its maximum. The results are given in dimensionless form, thereby reducing the number of independent parameters. These results are usable for the pricing analysis of software and other information products.

Non-price competition in the regional high-rise construction market

Directory of Open Access Journals (Sweden)

Ganebnykh Elena

2018-01-01

Full Text Available The article analyzes the market of high-rise residential construction in the city of Kirov (Russia. A minimal significance of price factors has been revealed in the process of the market analysis. This suggests that a lower price does not guarantee an increase in consumer demand. Thus, factors of non-price competition are of great importance in the market in question. The expert survey has identified the factors of non-price competition which influence consumer perceptions. A perceptual map has been constructed on the basis of the identified factors by means of the factor analysis to determine the positioning of each high-rise building relative to the consumer requirements. None of the high-rise residential buildings in the market in question meets the consumers’ expectations of an “ideal facility”.

Non-price competition in the regional high-rise construction market

Science.gov (United States)

Ganebnykh, Elena; Burtseva, Tatyana; Gurova, Ekaterina; Polyakova, Irina

2018-03-01

The article analyzes the market of high-rise residential construction in the city of Kirov (Russia). A minimal significance of price factors has been revealed in the process of the market analysis. This suggests that a lower price does not guarantee an increase in consumer demand. Thus, factors of non-price competition are of great importance in the market in question. The expert survey has identified the factors of non-price competition which influence consumer perceptions. A perceptual map has been constructed on the basis of the identified factors by means of the factor analysis to determine the positioning of each high-rise building relative to the consumer requirements. None of the high-rise residential buildings in the market in question meets the consumers' expectations of an "ideal facility".

Prospects for the Competitive Export Price of SMART

International Nuclear Information System (INIS)

Lee, Man Ki; Jeong, Ki Ho

2012-01-01

SMART is an integral type pressurized water reactor with a thermal capacity of 330MW. Its design development is in the final stage preparing getting a design certificate. SMART has been developed by KAERI for the purpose of exporting it. The objective of this study is to estimate the probable price range of SMART in the exporting market. The estimation of competitive exporting price of SMART in advance is believed to be helpful in the establishment of the development strategy of SMART. Exporting price of SMART in this study means the construction cost of it. It is because the construction cost is a decisive factor determining the exporting price of SMART

Existence of nash equilibrium in competitive nonlinear pricing games with adverse selection

OpenAIRE

Monteiro, P. K.

2003-01-01

We show that for a large class of competitive nonlinear pricing games with adverse selection, the property of better-reply security is naturally satisfied - thus, resolving via a result due to Reny (1999) the issue of existence of Nash equilibrium for a large class of competitive nonlinear pricing games.

The impact of competition on quality and prices in the English care homes market.

Science.gov (United States)

Forder, Julien; Allan, Stephen

2014-03-01

This study assesses the impact of competition on quality and price in the English care/nursing homes market. Considering the key institutional features, we use a theoretical model to assess the conditions under which further competition could increase or reduce quality. A dataset comprising the population of 10,000 care homes was used. We constructed distance/travel-time weighted competition measures. Instrumental variable estimations, used to account for the endogeneity of competition, showed quality and price were reduced by greater competition. Further analyses suggested that the negative quality effect worked through the effect on price - higher competition reduces revenue which pushes down quality. Copyright © 2013 Elsevier B.V. All rights reserved.

Value-based pricing: A success factor in the competitive struggle

OpenAIRE

Netseva-Porcheva Tatyana

2011-01-01

Over the past decade, the view that the main purpose of market oriented organizations is not to satisfy the consumer, but to create values has dominated. Exactly the values, their creation, retention and increase, are the main sources of competitive advantage of the company. The purpose of the present report is to present the price formation, based on product value, as a source of competitive advantage. In connection with the so-defined objective, the value and the product price for the custo...

The Spectrum Sharing in Cognitive Radio Networks Based on Competitive Price Game

Directory of Open Access Journals (Sweden)

Y. B. Li

2012-09-01

Full Text Available The competitive price game model is used to analyze the spectrum sharing problem in the cognitive radio networks, and the spectrum sharing problem with the constraints of available spectrum resource from primary users is further discussed in this paper. The Rockafeller multiplier method is applied to deal with the constraints of available licensed spectrum resource, and the improved profits function is achieved, which can be used to measure the impact of shared spectrum price strategies on the system profit. However, in the competitive spectrum sharing problem of practical cognitive radio network, primary users have to determine price of the shared spectrum without the acknowledgement of the other primary user’s price strategies. Thus a fast gradient iterative calculation method of equilibrium price is proposed, only with acknowledgement of the price strategies of shared spectrum during last cycle. Through the adaptive iteration at the direction with largest gradient of improved profit function, the equilibrium price strategies can be achieved rapidly. It can also avoid the predefinition of adjustment factor according to the parameters of communication system in conventional linear iteration method. Simulation results show that the proposed competitive price spectrum sharing model can be applied in the cognitive radio networks with constraints of available licensed spectrum, and it has better convergence performance.

Price vector effects in choice experiments: an empirical test

International Nuclear Information System (INIS)

Hanley, Nick; Wright, Robert E.; Adamowicz, Wiktor

2005-01-01

This paper investigates whether the preference and willingness-to-pay estimates obtained from the choice experiment method of estimating non-market values are sensitive to the vector of prices used in the experimental design. We undertake this test in the context of water quality improvements under the European Union's new Water Framework Directive. Using a mixed logit model, which allows for differing scale between the two samples, we find no significant impact of changing the price vector on estimates of preferences or willingness-to-pay. (author) (Choice modelling; Non-market valuation; Design effects; Water Framework Directive)

Value for money or making the healthy choice: the impact of proportional pricing on consumers' portion size choices.

Science.gov (United States)

Vermeer, Willemijn M; Alting, Esther; Steenhuis, Ingrid H M; Seidell, Jacob C

2010-02-01

Large food portion sizes are determinants of a high caloric intake, especially if they have been made attractive through value size pricing (i.e. lower unit prices for large than for small portion sizes). The purpose of the two questionnaire studies that are reported in this article was to assess the impact of proportional pricing (i.e. removing beneficial prices for large sizes) on people's portion size choices of high caloric food and drink items. Both studies employed an experimental design with a proportional pricing condition and a value size pricing condition. Study 1 was conducted in a fast food restaurant (N = 150) and study 2 in a worksite cafeteria (N = 141). Three different food products (i.e. soft drink, chicken nuggets in study 1 and a hot meal in study 2) with corresponding prices were displayed on pictures in the questionnaire. Outcome measures were consumers' intended portion size choices. No main effects of pricing were found. However, confronted with proportional pricing a trend was found for overweight fast food restaurant visitors being more likely to choose small portion sizes of chicken nuggets (OR = 4.31, P = 0.07) and less likely to choose large soft drink sizes (OR = 0.07, P = 0.04). Among a general public, proportional pricing did not reduce consumers' size choices. However, pricing strategies can help overweight and obese consumers selecting appropriate portion sizes of soft drink and high caloric snacks. More research in realistic settings with actual behaviour as outcome measure is required.

Carbon Pricing, Power Markets and the Competitiveness of Nuclear Power

International Nuclear Information System (INIS)

2011-01-01

This study assesses the competitiveness of nuclear power against coal- and gas-fired power generation in liberalized electricity markets with either CO 2 trading or carbon taxes. It uses daily price data for electricity, gas, coal and carbon from 2005 to 2010, which encompasses the first years of the European Emissions Trading System (EU ETS), the world's foremost carbon trading framework. The study shows that even with modest carbon pricing, competition for new investment in electricity markets will take place between nuclear energy and gas-fired power generation, with coal-fired power struggling to be profitable. The data and analyses contained in this study provide a robust framework for assessing cost and investment issues in liberalized electricity markets with carbon pricing. (authors)

Do follow-on therapeutic substitutes induce price competition between hospital medicines? Evidence from the Danish hospital sector

DEFF Research Database (Denmark)

Hostenkamp, Gisela

2013-01-01

Objective The pricing of follow-on drugs, that offer only limited health benefits over existing therapeutic alternatives, is a recurring health policy debate. This study investigates whether follow-on therapeutic substitutes create price competition between branded hospital medicines. Methods New...... pioneer products were significantly reduced as a reaction to competition from follow-on drugs. Conclusion Competition between patented therapeutic substitutes did not seem to increase price competition and containment of pharmaceutical expenditures in the Danish hospital market. Strengthening hospitals......’ incentives to consider the price of alternative treatment options paired with a more active formulary management may increase price competition between therapeutic substitutes in the Danish hospital sector in the future....

Modelling prices in competitive electricity markets

International Nuclear Information System (INIS)

Bunn, D.W.

2004-04-01

Electricity markets are structurally different to other commodities, and the real-time dynamic balancing of the electricity network involves many external factors. Because of this, it is not a simple matter to transfer conventional models of financial time series analysis to wholesale electricity prices. The rationale for this compilation of chapters from international authors is, therefore, to provide econometric analysis of wholesale power markets around the world, to give greater understanding of their particular characteristics, and to assess the applicability of various methods of price modelling. Researchers and professionals in this sector will find the book an invaluable guide to the most important state-of-the-art modelling techniques which are converging to define the special approaches necessary for unravelling and forecasting the behaviour of electricity prices. It is a high-quality synthesis of the work of financial engineering, industrial economics and power systems analysis, as they relate to the behaviour of competitive electricity markets. (author)

The Dynamics of Bertrand Price Competition with Cost-Reducing Investments

DEFF Research Database (Denmark)

Iskhakov, Fedor; Rust, John; Schjerning, Bertel

We present a dynamic extension of the classic static model of Bertrand price competition that allows competing duopolists to undertake cost-reducing investments in an attempt to “leapfrog” their rival to attain low-cost leadership – at least temporarily. We show that leapfrogging occurs in equili......We present a dynamic extension of the classic static model of Bertrand price competition that allows competing duopolists to undertake cost-reducing investments in an attempt to “leapfrog” their rival to attain low-cost leadership – at least temporarily. We show that leapfrogging occurs...... in equilibrium, resolving the Bertrand investment paradox., i.e. leapfrogging explains why firms have an ex ante incentive to undertake cost-reducing investments even though they realize that simultaneous investments to acquire the state of the art production technology would result in Bertrand price competition...... leader. We show that the equilibrium involves investment preemption only when the firms invest in a deterministically alternating fashion and technological progress is deterministic. We prove that when technological progress is deterministic and firms move in an alternating fashion, the game has a unique...

Analysis of electricity price in Danish competitive electricity market

DEFF Research Database (Denmark)

Hu, Weihao; Chen, Zhe; Bak-Jensen, Birgitte

2012-01-01

electricity markets in some ways, is chosen as the studied power system. 10 year actual data from the Danish competitive electricity market are collected and analyzed. The relationship among the electricity price (both the spot price and the regulation price), the consumption and the wind power generation...... in an electricity market is investigated in this paper. The spot price and the regulation price generally decrease when the wind power penetration in the power system increases or the consumption of the power system decreases. The statistical characteristics of the spot price and the regulation price for different...... consumption periods and wind power penetration are analyzed. Simulation results show that the findings of this paper are useful for wind power generation companies to make the optimal bidding strategy so that the imbalance cost of trading wind power on the electricity market could be reduced....

Pricing scheme choice: how process affects outcome

Czech Academy of Sciences Publication Activity Database

Shestakova, Natalia

2010-01-01

Roč. 20, č. 2 (2010), s. 99-129 ISSN 1211-3298 R&D Projects: GA MŠk(CZ) LC542 Institutional research plan: CEZ:MSM0021620846 Keywords : choice process * heuristics * price discrimination Subject RIV: AH - Economics http://www.cerge-ei.cz/pdf/wp/Wp411.pdf

Price competition, level-k theory and communication

DEFF Research Database (Denmark)

Wengström, Erik Roland

2008-01-01

This paper analyzes communication in a price competition game using the level-$k$ theory of bounded rationality. The level-k analysis predicts prices to be higher with communication than without. Our experimental evidence lends support to the view that communication affects subjects in a way...... that is compatible with the level-k model, indicating that people lie in order to fool other players that they believe do less thinking. Moreover, the results indicate that the predictive power of the level-k model does crucially depend on the possibility for high level players to form homogenous beliefs about...

The impact of South Korea's new drug-pricing policy on market competition among off-patent drugs.

Science.gov (United States)

Kwon, Hye-Young; Kim, Hyungmin; Godman, Brian; Reich, Michael R

2015-01-01

A new pricing policy was introduced in Korea in April 2012 with the aim of strengthening competition among off-patent drugs by eliminating price gaps between originators and generics. Examine the effect of newly implemented pricing policy. Retrospectively examining the effects through extracting from the National Health Insurance claims data a 30-month panel dataset (January 2011-June 2013) containing consumption data in four major therapeutic classes (antihypertensives, lipid-lowering drugs, antiulcerants and antidepressants). Proxies for market competition were examined before and after the policy. The new pricing policy did not enhance competition among off-patent drugs. In fact, price dispersion significantly decreased as opposed to the expected change. Originator-to-generic utilization increased 6.12 times (p = 0.000) after the new policy. The new pricing policy made no impact on competition among off-patent drugs. Competition in the off-patent market cannot be enhanced unless both supply and demand side measures are coordinated.

Competition and quality in a physiotherapy market with fixed prices.

Science.gov (United States)

Pekola, Piia; Linnosmaa, Ismo; Mikkola, Hennamari

2017-01-01

Our study focuses on competition and quality in physiotherapy organized and regulated by the Social Insurance Institution of Finland (Kela). We first derive a hypothesis with a theoretical model and then perform empirical analyses of the data. Within the physiotherapy market, prices are regulated by Kela, and after registration eligible firms are accepted to join a pool of firms from which patients choose service providers based on their individual preferences. By using 2SLS estimation techniques, we analyzed the relationship among quality, competition and regulated price. According to the results, competition has a statistically significant (yet weak) negative effect (p = 0.019) on quality. The outcome for quality is likely caused by imperfect information. It seems that Kela has provided too little information for patients about the quality of the service.

Dynamic Pricing of New Products in Competitive Markets: A Mean-Field Game Approach

OpenAIRE

Chenavaz, Régis; Paraschiv, Corina; Turinici, Gabriel

2017-01-01

Dynamic pricing of new products has been extensively studied in monopolistic and oligopolistic markets. But, the optimal control and differential game tools used to investigate the pricing behavior on markets with a finite number of firms are not well-suited to model competitive markets with an infinity of firms. Using a mean-field games approach, this paper examines dynamic pricing policies in competitive markets, where no firm exerts market power. The theoretical setting is based on a diffu...

Probabilistic Electricity Price Forecasting Models by Aggregation of Competitive Predictors

Directory of Open Access Journals (Sweden)

Claudio Monteiro

2018-04-01

Full Text Available This article presents original probabilistic price forecasting meta-models (PPFMCP models, by aggregation of competitive predictors, for day-ahead hourly probabilistic price forecasting. The best twenty predictors of the EEM2016 EPF competition are used to create ensembles of hourly spot price forecasts. For each hour, the parameter values of the probability density function (PDF of a Beta distribution for the output variable (hourly price can be directly obtained from the expected and variance values associated to the ensemble for such hour, using three aggregation strategies of predictor forecasts corresponding to three PPFMCP models. A Reliability Indicator (RI and a Loss function Indicator (LI are also introduced to give a measure of uncertainty of probabilistic price forecasts. The three PPFMCP models were satisfactorily applied to the real-world case study of the Iberian Electricity Market (MIBEL. Results from PPFMCP models showed that PPFMCP model 2, which uses aggregation by weight values according to daily ranks of predictors, was the best probabilistic meta-model from a point of view of mean absolute errors, as well as of RI and LI. PPFMCP model 1, which uses the averaging of predictor forecasts, was the second best meta-model. PPFMCP models allow evaluations of risk decisions based on the price to be made.

When and How Is the Internet Likely to Decrease Price Competition?

OpenAIRE

Rajiv Lal; Miklos Sarvary

1999-01-01

Conventional wisdom seems to claim that, by lowering the cost of distribution and by making search easier for consumer, the introduction of the Internet is likely to intensify price competition. This paper intends to challenge this view by asking: When and how is the Internet likely to decrease the level of price competition between firms? To answer this question, we develop an analytic model with the following characteristics. On the demand side, consumers need to gather information on two t...

Pharmaceutical pricing in emerging markets: effects of income, competition, and procurement.

Science.gov (United States)

Danzon, Patricia M; Mulcahy, Andrew W; Towse, Adrian K

2015-02-01

This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across countries. We focus on drugs to treat HIV/AIDS, TB, and malaria in middle and low-income countries (MLICs), with robustness checks to other therapeutic categories and the full income range of countries. We examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the drugs are sold to retail pharmacies versus tendered procurement by non-government organizations. The cross-national income elasticity of prices is 0.27 across the full income range of countries but is 0.0-0.10 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Although generics are priced roughly 30% lower than originators on average, the variance is large. Additional generic competitors only weakly affect prices, plausibly because generic quality uncertainty leads to competition on brand rather than price. Tendered procurement that imposes quality standards attracts multinational generic suppliers and significantly reduces prices of originator and generic drugs, compared with their respective prices to retail pharmacies. © 2013 The Authors Health Economics Published by John Wiley & Sons Ltd.

Non-price competition in NHS secondary care contracting: empirical results.

Science.gov (United States)

Gray, Keith; Bailey, Mark F

2008-01-01

The purpose of this paper is, for English acute NHS hospitals, to investigate how they operate their governance systems in the area of secondary care contracting and identify the key determinants of relationship building within the contacting/commissioning of secondary care focusing upon non-price competitive behaviour. A survey instrument was designed and mailed to a sample of all acute NHS hospitals in England of whom 35 per cent responded. This survey was then analysed using logit techniques. The analysis suggests that: those NHS Trusts offering volume discounts, non-price competitive incentives or having a strong belief in performance being by "payment by results" criteria are significantly more likely to offer augmented services to secondary care purchasers over and above contractual minima; those NHS Trusts strongly believing in the importance of non-price factors (such as contract augmentation or quality) in the contracting process are more likely to offer customisation of generic services; and those NHS Trusts using cost-sharing agreements to realign contracts when negotiating contracts or who strongly believe in the importance of service augmentation in strengthening relationships, or that increased hospital efficiency is the most important aspect of recent NHS reform are more likely to utilise default measures to help realign contracts. This paper fills a gap in the area of non-price competition in English NHS acute secondary care contracting.

The Effects of Brand Loyalty on Competitive Price Promotional Strategies

OpenAIRE

Jagmohan S. Raju; V. Srinivasan; Rajiv Lal

1990-01-01

This paper analyzes the role played by brand loyalty in determining optimal price promotional strategies used by firms in a competitive setting. (Loyalty is operationalized as the minimum price differential needed before consumers who prefer one brand switch to another brand.) Our objective is to examine how loyalties toward the competing brands influence whether or not firms would use price promotions in a product category. We also examine how loyalty differences lead to variations in the de...

Instantaneous and cumulative influences of competition on impulsive choices in domestic chicks.

Directory of Open Access Journals (Sweden)

Hidetoshi eAmita

2011-09-01

Full Text Available This study examined instantaneous and cumulative effects of competitive interactions on impulsiveness in the inter-temporal choices in domestic chicks. Chicks were trained to peck colored beads to gain delayed food rewards (1 or 6 grains of millet delivered after a delay ranging between 0–4.5 s, and were tested in binary choices between a small-short delay option (SS and a large-long delay alternative (LL. To examine whether competitive foraging instantaneously changes impulsiveness, we intraindividually compared choices between two consecutive tests in different contexts, one with competitors and another without. We found that (1 the number of the choice of LL was not influenced by competition in the tests, but (2 the operant peck latency was shortened by competition, suggesting a socially enhanced incentive for food. To further examine the lasting changes, two groups of chicks were consecutively trained and tested daily for 2 weeks according to a behavioral titration procedure, one with competitors and another without. Inter-group comparisons of the choices revealed that (3 choice impulsiveness gradually decreased along development, while (4 the chicks trained in competition maintained a higher level of impulsiveness. These results suggest that competitive foraging causes impulsive choices not by direct/contextual modification. Causal link between the instantaneous enhancement of incentive and the gradual effects on impulsivity remains to be examined. Some (yet unspecified factors may be indirectly involved.

Less Physician Practice Competition Is Associated With Higher Prices Paid For Common Procedures.

Science.gov (United States)

Austin, Daniel R; Baker, Laurence C

2015-10-01

Concentration among physician groups has been steadily increasing, which may affect prices for physician services. We assessed the relationship in 2010 between physician competition and prices paid by private preferred provider organizations for fifteen common, high-cost procedures to understand whether higher concentration of physician practices and accompanying increased market power were associated with higher prices for services. Using county-level measures of the concentration of physician practices and county average prices, and statistically controlling for a range of other regional characteristics, we found that physician practice concentration and prices were significantly associated for twelve of the fifteen procedures we studied. For these procedures, counties with the highest average physician concentrations had prices 8-26 percent higher than prices in the lowest counties. We concluded that physician competition is frequently associated with prices. Policies that would influence physician practice organization should take this into consideration. Project HOPE—The People-to-People Health Foundation, Inc.

Switching gains and health plan price elasticities: 20 years of managed competition reforms in The Netherlands.

Science.gov (United States)

Douven, Rudy; Katona, Katalin; T Schut, Frederik; Shestalova, Victoria

2017-11-01

In this paper we estimate health plan price elasticities and financial switching gains for consumers over a 20-year period in which managed competition was introduced in the Dutch health insurance market. The period is characterized by a major health insurance reform in 2006 to provide health insurers with more incentives and tools to compete, and to provide consumers with a more differentiated choice of products. Prior to the reform, in the period 1995-2005, we find a low number of switchers, between 2 and 4% a year, modest average total switching gains of 2 million euros per year and short-term health plan price elasticities ranging from -0.1 to -0.4. The major reform in 2006 resulted in an all-time high switching rate of 18%, total switching gains of 130 million euros, and a high short-term price elasticity of -5.7. During 2007-2015 switching rates returned to lower levels, between 4 and 8% per year, with total switching gains in the order of 40 million euros per year on average. Total switching gains could have been 10 times higher if all consumers had switched to one of the cheapest plans. We find short-term price elasticities ranging between -0.9 and -2.2. Our estimations suggest substantial consumer inertia throughout the entire period, as we find degrees of choice persistence ranging from about 0.8 to 0.9.

Manufacturer Suggested Retail Prices, Loss Aversion and Competition

NARCIS (Netherlands)

Fabrizi, Simona; Lippert, Steffen; Puppe, Clemens; Rosenkranz, S.

2016-01-01

We study a model of vertical relations with imperfect retail competition in which a fraction of the consumers display reference-dependent demand with respect to the manufacturer’s suggested retail price. We demonstrate that in equilibrium the suggestion will either be undercut or complied with by

INCOME AND PRICE AS A BARRIER TO ORGANIC FOOD CHOICE

OpenAIRE

Aschemann-Witzel, Jessica; Zielke, Stephan; Thøgersen, John

2014-01-01

From the barriers said to potentially hamper the further development of the sector, the consumer demand side and herein the high prices are handled as crucial. We reviewed the literature since 2000 regarding the role of perceived price and income. We find that self-report based studies nearly unequivocally find price is the primary barrier to choice, deviations from this appear to occur when researching organic consumers and developed organic markets. There are mixed findings regarding income...

Competition in the health system: good news and bad news.

Science.gov (United States)

Miller, R H

1996-01-01

Competition among health plans, hospitals, and physicians has taken place in fifteen health care markets primarily on the basis of price and secondarily on network breadth and style of care. In most markets, competition resulted in lower (or slowly growing) premium prices. Within a type of plan product, competition was leading to similar prices and networks and was reducing product differentiation among health plans. Competition was not taking place on the basis of measured and reported quality of care, which limited the capacity of employers and enrollees to make informed health plan choices. As a result, there was a substantial gap between competition as envisioned by the architects of the managed competition model and competition as it is evolving today.

Short-term electricity prices forecasting in a competitive market: A neural network approach

International Nuclear Information System (INIS)

Catalao, J.P.S.; Mariano, S.J.P.S.; Mendes, V.M.F.; Ferreira, L.A.F.M.

2007-01-01

This paper proposes a neural network approach for forecasting short-term electricity prices. Almost until the end of last century, electricity supply was considered a public service and any price forecasting which was undertaken tended to be over the longer term, concerning future fuel prices and technical improvements. Nowadays, short-term forecasts have become increasingly important since the rise of the competitive electricity markets. In this new competitive framework, short-term price forecasting is required by producers and consumers to derive their bidding strategies to the electricity market. Accurate forecasting tools are essential for producers to maximize their profits, avowing profit losses over the misjudgement of future price movements, and for consumers to maximize their utilities. A three-layered feedforward neural network, trained by the Levenberg-Marquardt algorithm, is used for forecasting next-week electricity prices. We evaluate the accuracy of the price forecasting attained with the proposed neural network approach, reporting the results from the electricity markets of mainland Spain and California. (author)

Ownership Restrictions, Tax Competition and Transfer Pricing Policy

NARCIS (Netherlands)

Diaw, K.

2004-01-01

This paper analyzes tax/subsidy competition and transfer pricing regulation between governments involved in trade through a multinational firm and a joint venture using an input provided by the former.The paper takes into account the fact that in absence of bargaining, any model of such JV is

DEFINITION OF COMPETITIVE PRICE OF HOUSES PROCEEDING FROM THEIR CONSUMER PROPERTIES

Directory of Open Access Journals (Sweden)

Хакимзян Амирович Фасхиев

2016-11-01

Full Text Available The method of determination of competitive prices of individual houses, which is based on the price depending on the customer value of the object to the decision maker. Line «red price» compared to residential houses built on the basis of an assessment of their quality aggregate-decomposition method. The price of the test at home is determined by the line «red price» for its calculated level of quality. The technique can be used in the valuation of real estate activities. An example of determining the price of an apartment house, located in the suburbs of a large city.

Competition with Variety Seeking and Habitual Consumption: Price Commitment or Quality Commitment?

Directory of Open Access Journals (Sweden)

Liyang Xiong

2017-01-01

Full Text Available This paper investigates price and quality competition in a market where consumers seek variety and habit formation. Variety seeking is modeled as a decrease in the willingness to pay for product purchased on the previous occasion while habitual consumption may increase future marginal utility. We compare two competing strategies: price commitment and quality commitment. With a three-stage Hotelling-type model, we show that variety seeking intensifies while habitual consumption softens the competition. With price commitment, firms supply lower quality levels in period 1 and higher quality levels in period 2, while, with quality commitment, firms charge higher prices in period 1 and lower prices in period 2. However, the habitual consumption brings the opposite effect. In addition, with quality commitment variety seeking leads to a lower profit and a higher consumer surplus, while habitual consumption leads to the opposite results. On the other side, with price commitment these behaviors have no effect on the consumer surplus, although they still lower down the firm profits. Finally, we also identify conditions under which one strategy outperforms the other.

Sellers’ Pricing Policy in Spatial Competition Models (a case study of the Russian rolled product market

Directory of Open Access Journals (Sweden)

Torbenko A. M.

2011-12-01

Full Text Available The article views competition in the rolled section market. The hypotheses about price discrimination, competition according to Cournot or Hotelling being present at this market, have been tested. The dependence of rolled section prices in the region on the distance between the region and rolled section producers’ location, as well as on other factors, has been tested. It is concluded that the Russian rolled section market is characterized by Hotelling competition without using price discrimination

Pricing of prescription drugs and its impact on physicians' choice behavior.

Science.gov (United States)

Miao-Sheng, Chen; Yu-Ti, Shih

2008-09-01

This research presents an analysis of Taiwan's health care market with the focus on the pricing of prescription drugs and its impact on physicians' choice behavior. Since the advent of Taiwan's national health insurance, with the competent authority being Bureau of National Health Insurance (BNHI), hospitals are allowed to sell prescription drugs to patients at prices above the purchasing prices, so each prescription drug has two prices: one at which drugs are sold to hospitals; the other which BNHI reimbursement to hospitals. The margin between the different prices is the sales discount that pharmaceutical companies offer to the hospitals. We find that sales discount has a great impact on physicians' choice behavior: i.e., physicians are price-sensitive to prescription drugs. In addition, it is found that too high a sales discount of a prescription drug would result in a too low weighted average price of that drug sold; thus BNHI would be more likely to adjust downward the rate it reimbursement to the hospital. This presents a sales strategy problem to pharmaceutical companies. To solve this, we use the distribution of physicians' evaluations of prescription drugs to establish a profit maximization model in hopes of helping companies to price drugs and find the optimal promotion expending. Ten popular prescription drugs are used in this research as examples.

FUNGIBILITY AND CONSUMER CHOICE: EVIDENCE FROM COMMODITY PRICE SHOCKS*

Science.gov (United States)

Hastings, Justine S.; Shapiro, Jesse M.

2015-01-01

We formulate a test of the fungibility of money based on parallel shifts in the prices of different quality grades of a commodity. We embed the test in a discrete-choice model of product quality choice and estimate the model using panel microdata on gasoline purchases. We find that when gasoline prices rise consumers substitute to lower octane gasoline, to an extent that cannot be explained by income effects. Across a wide range of specifications, we consistently reject the null hypothesis that households treat “gas money” as fungible with other income. We compare the empirical fit of three psychological models of decision-making. A simple model of category budgeting fits the data well, with models of loss aversion and salience both capturing important features of the time series. PMID:26937053

FUNGIBILITY AND CONSUMER CHOICE: EVIDENCE FROM COMMODITY PRICE SHOCKS.

Science.gov (United States)

Hastings, Justine S; Shapiro, Jesse M

2013-11-01

We formulate a test of the fungibility of money based on parallel shifts in the prices of different quality grades of a commodity. We embed the test in a discrete-choice model of product quality choice and estimate the model using panel microdata on gasoline purchases. We find that when gasoline prices rise consumers substitute to lower octane gasoline, to an extent that cannot be explained by income effects. Across a wide range of specifications, we consistently reject the null hypothesis that households treat "gas money" as fungible with other income. We compare the empirical fit of three psychological models of decision-making. A simple model of category budgeting fits the data well, with models of loss aversion and salience both capturing important features of the time series.

Creating Competitive Advantage by Rethinking B2B Software Pricing

OpenAIRE

Adelstrand, Carl; Brostedt, Emil

2016-01-01

The choice of pricing model for software products is a complex procedure due to the different characteristics compared to physical products. This thesis investigates and compares software pricing models in a B2B setting, and describes how KAM plays a role in executing a pricing model. The research has been conducted as an opportunist case study on Adebro, a technology company in the B2B sector. The thesis have come to the following conclusions, with data from interviews and literature: Perpet...

Preferences and choices for care and health insurance

NARCIS (Netherlands)

Berg, B. van den; Dommelen, P. van; Stam, P.; Laske-Aldershof, T.; Buchmueller, T.; Schut, F.T.

2008-01-01

Legislation that came into effect in 2006 has dramatically altered the health insurance system in the Netherlands, placing greater emphasis on consumer choice and competition among insurers. The potential for such competition depends largely on consumer preferences for price and quality of service

Gas price and oil price: a new level of competition; Gaspreis und Oelpreis. Eine neue Stufe des Wettbewerbs

Energy Technology Data Exchange (ETDEWEB)

Hahn, Wolfgang; Poepperl, Claudia [Energie Consulting GmbH, Kehl (Germany)

2012-01-15

With a marked delay relative to electricity the gas market has now too come under the reign of competition. The dissociation of gas prices from oil prices was not only the result of successive deregulation but was also catalysed by the drop in demand attending the economic slump in 2008 and 2009. In response to the changing market environment the procurement processes of industrial and commercial customers have undergone lasting changes in the course of the past three years. At the same time, fierce competition has developed between the two energy carriers crude oil and natural gas.

Customer response to day-ahead market hourly pricing: Choices and performance

International Nuclear Information System (INIS)

Hopper, Nicole; Goldman, Charles; Bharvirkar, Ranjit; Neenan, Bernie

2006-01-01

Real-time pricing (RTP) has been advocated to address extreme price volatility and market power in electricity markets. This study of Niagara Mohawk Power Corporation's largest customers analyzes their choices and performance in response to day-ahead, default-service RTP. Overall price response is modest: 119 customers are estimated to reduce their peak demand by about 10% at high prices. Manufacturing customers are most responsive with a price elasticity of 0.16, followed by government/education customers (0.11), while commercial/retail, healthcare and public works customers are, at present, relatively unresponsive. Within market segments, individual customer response varies significantly. (author)

CO2 Price Impacts on Nuclear Power Plant Competitiveness in Croatia

International Nuclear Information System (INIS)

Tomsic, Z.; Pasicko, R.

2010-01-01

Long term power system planning faces growing number of concerns and uncertainties, which is especially true for nuclear power plants due to their high investment costs and financial risk. In order to analyze competitiveness of nuclear power plants and optimize energy mix, existing models are not sufficient anymore and planners need to think differently in order to face these challenges. Croatia will join EU ETS (European Emission Trading Scheme) with accession to EU (probably in 2012). Thus, for Croatian electrical system it is very important to analyze possible impacts of CO 2 emissions. Analysis presented in this paper is done by electricity market simulation model PLEXOS which was used for modelling Croatian electrical system during development of the Croatian Energy Strategy in 2008. Paper analyzes impacts of CO 2 price on competitiveness of nuclear power plant within Croatian power system between 2020 and 2025. Analyzes are focused on how nuclear power plant influences total emission from the power system regarding coal and gas prices, average electricity price regarding CO 2 , coal and gas prices price. Results of this paper are showing that with emissions from Energy strategy development scenario with two new coal power plants (600 MW each) and two new gas power plants (400 MW each) until 2020, Croatia does not meet Kyoto target due to this emissions from power system. On the other side, introduction of nuclear power plants presented in this paper (1000 MW instead of one coal and one gas power plant) means nearly 6.5 Mt CO 2 emissions less annually and gives possibility to achieve Kyoto target (as this reduced amount represents nearly 22 % of Croatian Kyoto target). Results are also showing how increase in CO 2 price is enhancing competitiveness of a nuclear power plant.(author).

Electricity prices in a competitive market: a preliminary analysis of the deregulated Thai electricity industry

International Nuclear Information System (INIS)

Pipattanasomporn, M.; Ongsakul, W.; Pacudan, R.; Lefevre, T.

2000-01-01

The electricity industry throughout the world is currently undergoing a significant transition towards restructuring and deregulation. Following this new legislation, Thailand has initiated an institutional and structural reform with a belief that this could be the best way forward for the Thai electricity supply industry (ESI) to improve efficiency, lower electricity prices, and tackle financial debts. This paper presents an analysis of the extent to which prices for generation services in a competitive market may differ from regulated electricity prices, if competitive prices are based on marginal costs and regulated prices are based on average costs, by using Thailand as a case study. (Author)

Strategic Wholesale Pricing for an Incumbent Supplier Facing with a Competitive Counterpart

OpenAIRE

Sun, Jianwu

2014-01-01

We introduce a wholesale pricing strategy for an incumbent supplier facing with a competitive counterpart. We propose a profit function which considers both the present loss and future loss from a wholesale price and then study the optimal wholesale prices for different objectives about this profit function for the incumbent supplier. First, we achieve an optimal wholesale price for the incumbent supplier to maximize his expected profit. Then, to reduce the risk originating from the fluctuati...

Dynamic Pricing Competition with Strategic Customers Under Vertical Product Differentiation

OpenAIRE

Qian Liu; Dan Zhang

2013-01-01

We consider dynamic pricing competition between two firms offering vertically differentiated products to strategic customers who are intertemporal utility maximizers. We show that price skimming arises as the unique pure-strategy Markov perfect equilibrium in the game under a simple condition. Our results highlight the asymmetric effect of strategic customer behavior on quality-differentiated firms. Even though the profit of either firm decreases as customers become more strategic, the low-qu...

Price-Matching leads to the Cournot Outcome

DEFF Research Database (Denmark)

Batsaikhan, Mongoljin; Tumennasan, Norovsambuu

Bertrand competition that the market price in the presence of a price-matching option ranges from the monopolistic price to the Bertrand price. Our result suggests that the effect of price-matching depends on whether the output is a choice variable for the firms.......We study the effects of price-matching in a duopoly setting in which each firm selects both its price and output, simultaneously. We show that the availability of a pricematching option leads to the Cournot outcome in this setting. This result is a stark contrast to the one obtained in the standard...

Pricing of payment cards, competition, and efficiency : A possible guide for SEPA

NARCIS (Netherlands)

Bolt, Wilko; Schmiedel, Heiko

2013-01-01

This paper analyzes equilibrium pricing of payment cards and welfare consequences of payment card competition. In particular, we model competition between debit and credit cards. The paper argues that optimal consumer and merchant fees must take safety, income uncertainty, default risk, and the

Statistical Studies of Non-price Competition in the Structure of Public Procurement in the Russian Federation

OpenAIRE

Svetlana Aleksandrovna Sergeeva; Alexander Alexandrovich Arionchik

2016-01-01

The principle of securing competition is one of the basic principles of the contract system in public procurement in the Russian Federation. The law on the contract system in procurement stipulates that the contract system in procurement is aimed at creating equal conditions to ensure competition between the parties to procurement. An important aspect is that the competition for procurement should be based on compliance with the principle of fair price and non-price competition. The purpose o...

The price effects of enhancing services sector competition in a large open economy

NARCIS (Netherlands)

P.A.D. Cavelaars

2003-01-01

textabstractThis paper studies the price e?ects of shocks to the degree of competition. It is motivated by initiatives to enhance competition in services in the European Union. The paper shows that a higher degree of competition in the nontradable goods sector may have adverse implications for

Finding the right RoPax vessel size and freight price. A coste and mode choice model

Energy Technology Data Exchange (ETDEWEB)

Morales Fusco, P.; Grau Sala, M.; Sauri Marchan, S.

2016-07-01

Motorways of the sea operated as RoPax services are natural competitors with only-road freight haulage transportation. Cost, time and quality perceived are the determinants that make transporters and shippers use one route or another. This research considers the role that shipping companies and their ship deployment and pricing strategy have in the equation, as incentives for modal shift from road to sea. A model of the ships and transporter costs is developed considering different business models for the transporter (accompanied versus unaccompanied cargo) followed with a discrete choice model that, once calibrated, allows to test the influence that variables such as frequency, ship size and commercial speed might play into the competitiveness of a shipping line. As a result, different pricing strategies for the shipping line are developed and the characteristics of the optimal shipping line for each of them are found, to either maximize the profit of the shipping company or the modal shift. (Author)

The Effect of Price on Surgeons' Choice of Implants: A Randomized Controlled Survey.

Science.gov (United States)

Wasterlain, Amy S; Melamed, Eitan; Bello, Ricardo; Karia, Raj; Capo, John T

2017-08-01

Surgical costs are under scrutiny and surgeons are being held increasingly responsible for cost containment. In some instances, implants are the largest component of total procedure cost, yet previous studies reveal that surgeons' knowledge of implant prices is poor. Our study aims to (1) understand drivers behind implant selection and (2) assess whether educating surgeons about implant costs affects implant selection. We surveyed 226 orthopedic surgeons across 6 continents. The survey presented 8 clinical cases of upper extremity fractures with history, radiographs, and implant options. Surgeons were randomized to receive either a version with each implant's average selling price ("price-aware" group), or a version without prices ("price-naïve" group). Surgeons selected a surgical implant and ranked factors affecting implant choice. Descriptive statistics and univariate, multivariable, and subgroup analyses were performed. For cases offering implants within the same class (eg, volar locking plates), price-awareness reduced implant cost by 9% to 11%. When offered different models of distal radius volar locking plates, 25% of price-naïve surgeons selected the most expensive plate compared with only 7% of price-aware surgeons. For cases offering different classes of implants (eg, plate vs external fixator), there was no difference in implant choice between price-aware and price-naïve surgeons. Familiarity with the implant was the most common reason for choosing an implant in both groups (35% vs 46%). Price-aware surgeons were more likely to rank cost as a factor (29% vs 21%). Price awareness significantly influences surgeons' choice of a specific model within the same implant class. Merely including prices with a list of implants leads surgeons to select less expensive implants. This implies that an untapped opportunity exists to reduce surgical expenditures simply by enhancing surgeons' cost awareness. Economic/Decision Analyses I. Copyright © 2017 American

Duopoly price competition on markets with agricultural products

Directory of Open Access Journals (Sweden)

Marie Prášilová

2011-01-01

Full Text Available A situation, in which two firms compete, is in the economic theory described by duopoly models. Market equilibrium on the duopoly market is formed in a reciprocal adjustment process of market prices and materialized market opportunities. The goal of the analysis is to find out whether the agricultural products market is significantly influenced by appearance of duopolies, what form they have and if they can fundamentally influence the price level of food. That food chain stores endeavour to mutually adapt food product prices is generally known; it is set especially by the inelastic demand for the mentioned goods on the side of consumers, i.e., by the need to demand basic food. Duopoly reactions to price competition in food chain stores are particularly strong in the case of commodities of milk and tomatoes, where the reactions and approximation of prices can be clearly seen. Based on statistical research it is obvious that the reactions are most reflected on sales of the food chain stores Billa and Albert. To identify specific reactions of price duopoly at retail chains the ANOVA statistical method was used. The firm’s duopoly behaviour as such on the food market need not be a subject for applying punishment from the antimonopoly bureau, if it does not have the cartel agreement character. An example can be the identical potato prices inquiry in the supermarkets of food chain stores.

ASPECTS OF REGIONAL COMPETITIVENESS THROUGH DYNAMIC PRICES OF PETROLEUM PRODUCTS

Directory of Open Access Journals (Sweden)

Daniela\tENACHESCU

2015-06-01

Full Text Available This paper presents aspects regarding the dynamics of prices of petroleum products: gasoline and diesel in Romania in the period 2003(2007-2014. Both focus on relationship-price raw material and finished product by the impact of market prices. Given that the price of fuel is a key factor in economic development but also in the living of population, this paper has proposed to analyze some aspects of the dynamics of prices of petroleum products in correlation with commodity prices in a competitive market in 2003 -2014. In the analized period, price of oil barrel has a dynamics substantially influenced by the global political turbulences but also by lower oil demand due to consumption reduction, especially lately. Increases and decreases were abrupt and unpredictable in the early years of the first decade of the XXI century. Political crises in the Middle East, the economic crisis started in 2007 and especially the crisis in Ukraine and policies adopted by the EU and the US have led to extremely large fluctuations in oil prices from one period to another . This dynamic will only cover the price of petroleum products namely gazoline and diesel for vehicles.

Influence of Market Competition on Tetracycline Pricing and Impact of Price Increases on Clinician Prescribing Behavior.

Science.gov (United States)

Barbieri, John S; Margolis, David J; Brod, Bruce A

2017-12-01

Oral tetracyclines are commonly used for acne and other conditions. Recent generic price increases threaten access to these medications. Using the OptumInsight Clinformatics DataMart, we retrospectively evaluated the underlying factors behind these price increases for oral tetracylines using the framework of a competitive market and evaluated the impact of these price increases on prescribing practices. Between 2011 and 2013, the mean cost of doxycycline hyclate prescriptions increased from $7.16 to $139.89 and the mean out-of-pocket cost increased by $9.69. A comparable cost increase was not observed for doxycycline monohydrate or minocycline. There was no significant association between the cost of doxycycline hyclate and market concentration as assessed by the Herfindahl-Hirschman index (β = 0.030, 95% confidence interval -0.019 to 0.079, P = 0.213) and the market was highly concentrated throughout the study period. The percentage of prescriptions for doxycycline hyclate decreased by 1.9% from 2011 to 2013. This dramatic increase in the cost of doxycycline hyclate is not easily explained using the framework of a competitive market, suggesting that noncompetitive market forces may be responsible. In addition, clinicians have not altered their prescribing behavior in response to this price increase, suggesting that clinician or pharmacy level interventions could potentially increase the use of less costly substitutes. Copyright © 2017 The Authors. Published by Elsevier Inc. All rights reserved.

Competitive Pricing by a Price Leader

OpenAIRE

Abhik Roy; Dominique M. Hanssens; Jagmohan S. Raju

1994-01-01

We examine the problem of pricing in a market where one brand acts as a price leader. We develop a procedure to estimate a leader's price rule, which is optimal given a sales target objective, and allows for the inclusion of demand forecasts. We illustrate our estimation procedure by calibrating this optimal price rule for both the leader and the follower using data on past sales and prices from the mid-size sedan segment of the U.S. automobile market. Our results suggest that a leader-follow...

INTRA-PROCESSOR PRICE-SPREAD BEHAVIOR: IS THE U.S. CATFISH PROCESSING INDUSTRY COMPETITIVE?

OpenAIRE

Hudson, Darren

1998-01-01

An analysis was conducted of price-spread behavior in the catfish-processing sector of the United States. A model of imperfect competition using conjectural variations was used to test for significant deviations from competition. Results show no significant deviation from competitive behavior, suggesting that catfish processor behave competitively. However, this result is limited by the assumption of equal market shares by each catfish-processing firm.

The challenge for gas: get price-competitive with coal-fired electricity

International Nuclear Information System (INIS)

Gill, Len

1999-01-01

The challenge for the gas industry is to become price competitive with coal-fired electricity if it wants a larger share of the energy market. Returning to the issue of greater use of gas for electricity generation, the author points out that although electricity prices were rising they were still below the point where gas-fired electricity generation was viable. Copyright (1999) The Australian Gas Journal

Price competition and equilibrium analysis in multiple hybrid channel supply chain

Science.gov (United States)

Kuang, Guihua; Wang, Aihu; Sha, Jin

2017-06-01

The amazing boom of Internet and logistics industry prompts more and more enterprises to sell commodity through multiple channels. Such market conditions make the participants of multiple hybrid channel supply chain compete each other in traditional and direct channel at the same time. This paper builds a two-echelon supply chain model with a single manufacturer and a single retailer who both can choose different channel or channel combination for their own sales, then, discusses the price competition and calculates the equilibrium price under different sales channel selection combinations. Our analysis shows that no matter the manufacturer and retailer choose same or different channel price to compete, the equilibrium price does not necessarily exist the equilibrium price in the multiple hybrid channel supply chain and wholesale price change is not always able to coordinate supply chain completely. We also present the sufficient and necessary conditions for the existence of equilibrium price and coordination wholesale price.

Organic vs. Non-Organic Food Products: Credence and Price Competition

Directory of Open Access Journals (Sweden)

Yi Wang

2017-04-01

Full Text Available We analyze the organic and non-organic production choices of two firms by considering customers’ trust in organic food products. In the context of customers’ possible willingness to pay a premium price and their mistrust in organic food products, two firms first make choices on offering organic and non-organic food products. If offering organic products, a firm can further invest in the credence system to increase customers’ trust in their organic products. At the final stage, two firms determine prices. We provide serval insights. First, we characterize the market conditions in which only one firm, both firms or neither firm will choose to offer organic food products. We find that the higher the production costs or credence investment costs for organic food products are, the more likely firms are to choose to produce non-organic food products. Second, if it is expensive enough to invest in organic credence, offering organic food products may still be uncompetitive, even if organic production cost appears to have no disadvantage compared to non-organic food products. Third, we highlight how the prices of organic food products in equilibrium are affected by market parameters. We show that when only one firm offers organic food products, this firm tends to offer a relatively low price if organic credence investment is expensive. Fourth, we highlight how one firm’s credence investment decision in equilibrium can be affected by the product type choice of the other firm. We find that the investment in organic credence is lower when both firms offer organic food products compared with the case when only one firm offers organic food products.

Renewable generation technology choice and policies in a competitive electricity supply industry

Science.gov (United States)

Sarkar, Ashok

Renewable energy generation technologies have lower externality costs but higher private costs than fossil fuel-based generation. As a result, the choice of renewables in the future generation mix could be affected by the industry's future market-oriented structure because market objectives based on private value judgments may conflict with social policy objectives toward better environmental quality. This research assesses how renewable energy generation choices would be affected in a restructured electricity generation market. A multi-period linear programming-based model (Resource Planning Model) is used to characterize today's electricity supply market in the United States. The model simulates long-range (2000-2020) generation capacity planning and operation decisions under alternative market paradigms. Price-sensitive demand is used to simulate customer preferences in the market. Dynamically changing costs for renewables and a two-step load duration curve are used. A Reference Case represents the benchmark for a socially-optimal diffusion of renewables and a basis for comparing outcomes under alternative market structures. It internalizes externality costs associated with emissions of sulfur dioxide (SOsb2), nitrous oxides (NOsbx), and carbon dioxide (COsb2). A Competitive Case represents a market with many generation suppliers and decision-making based on private costs. Finally, a Market Power Case models the extreme case of market power: monopoly. The results suggest that the share of renewables would decrease (and emissions would increase) considerably in both the Competitive and the Market Power Cases with respect to the Reference Case. The reduction is greater in the Market Power Case due to pricing decisions under existing supply capability. The research evaluates the following environmental policy options that could overcome market failures in achieving an appropriate level of renewable generation: COsb2 emissions tax, SOsb2 emissions cap, renewable

Forecasting loads and prices in competitive power markets

International Nuclear Information System (INIS)

Bunn, D.W.

2000-01-01

This paper provides a review of some of the main methodological issues and techniques which have become innovative in addressing the problem of forecasting daily loads and prices in the new competitive power markets. Particular emphasis is placed upon computationally intensive methods, including variable segmentation, multiple modeling, combinations, and neural networks for forecasting the demand side, and strategic simulation using artificial agents for the supply side

Electricity market competition and nuclear power

International Nuclear Information System (INIS)

Varley, C.; Paffenbarger, J.

1999-01-01

Throughout the world, the Organization for Economic Cooperation and Development (OECD) member countries' governments are promoting competitive electricity markets. In particular, there is a move away from administrative price-setting by government institutions to market price-setting through the introduction of competition. Today this is often focused on competition in generation. However, competition among final electricity suppliers and distributors to provide effective consumer choice is a further step that governments are likely to pursue as experience with market reform grows. This competitive environment will undoubtedly impact upon the nuclear generation industry. Competition will provide an opportunity to reinvigorate nuclear power; it will improve the transparency of energy policy-making and the policy framework for nuclear power; it will spur innovation in existing plants and help prospects for new plant build; and provide a strong impetus for cost reduction and innovation. This paper discusses these issues in detail. It looks at the potential benefits and challenges to the nuclear generation industry arising from an increasingly competitive market. (author)

The impacts of price responsiveness on strategic equilibrium in competitive electricity markets

Energy Technology Data Exchange (ETDEWEB)

Bompard, Ettore; Ma, Yuchao; Napoli, Roberto [Department of Electrical Engineering, Politecnico di Torino, C.so Duca degli Abruzzi, 24, 10129 Torino (Italy); Abrate, Graziano; Ragazzi, Elena [Ceris-CNR, Via Real Collegio, 30, 10024 Moncalieri (Italy)

2007-06-15

One of the most important aspects that may affect market welfare is that related to the low demand responsiveness to price. This situation may greatly impact the market performance causing low efficiency, high prices and a disproportional allocation of surpluses. The structure of electricity markets is usually oligopolistic; producers may bid prices higher than their marginal costs to the short run wholesale market, inducing outcome deviations from the perfect competitive benchmark. The possibility of gaming the market is amplified in the presence of low demand responsiveness to price. This paper proposes a model to assess the role of demand elasticity in mitigating the effects of supply side strategic bidding behavior. We model the supply side in a conjectural supply function (CSF) framework, which allows incorporation of exogenous changes in demand elasticity and different levels of competition in a given market. The impacts of demand responsiveness on the market performances are assessed through a set of proposed indices that are applied to a model of the Italian market. (author)

The impacts of price responsiveness on strategic equilibrium in competitive electricity markets

International Nuclear Information System (INIS)

Bompard, Ettore; Ma, Yuchao; Napoli, Roberto; Abrate, Graziano; Ragazzi, Elena

2007-01-01

One of the most important aspects that may affect market welfare is that related to the low demand responsiveness to price. This situation may greatly impact the market performance causing low efficiency, high prices and a disproportional allocation of surpluses. The structure of electricity markets is usually oligopolistic; producers may bid prices higher than their marginal costs to the short run wholesale market, inducing outcome deviations from the perfect competitive benchmark. The possibility of gaming the market is amplified in the presence of low demand responsiveness to price. This paper proposes a model to assess the role of demand elasticity in mitigating the effects of supply side strategic bidding behavior. We model the supply side in a conjectural supply function (CSF) framework, which allows incorporation of exogenous changes in demand elasticity and different levels of competition in a given market. The impacts of demand responsiveness on the market performances are assessed through a set of proposed indices that are applied to a model of the Italian market. (author)

THE ROLE OF COMPETITION ON THE PRICING DECISION OF AN ORGANISATION AND THE ATTAINMENT OF THE ORGANISATIONAL OBJECTIVE

Directory of Open Access Journals (Sweden)

IMOLEAYO OBIGBEMI

2010-01-01

Full Text Available Pricing decision has been a crucial decision made by all business enterprises at all levels and has posed a great challenge for Small and Medium Enterprises in Nigeria. This research work treats the role of competition on the pricing decision of an organisation and the attainment of the Organisational Objective, a study of SMEs in Nigeria. The methodology adopted was the survey and empirical approach, with the administration of questionnaires to some SMEs in Nigeria, evaluating the effect competition has on pricing decision (change in product price and its overall effect on the attainment of organizational objective (profitability. Primary and secondary sources were used in collecting data. It was discovered that competition plays a major role in pricing decision and that there is a relationship between pricing decision and the attainment of organizational objective. Recommendations were made for the close monitoring of SMEs and that SMEs should employ the service of price experts when making pricing decisions.

Chimpanzee choice rates in competitive games match equilibrium game theory predictions.

Science.gov (United States)

Martin, Christopher Flynn; Bhui, Rahul; Bossaerts, Peter; Matsuzawa, Tetsuro; Camerer, Colin

2014-06-05

The capacity for strategic thinking about the payoff-relevant actions of conspecifics is not well understood across species. We use game theory to make predictions about choices and temporal dynamics in three abstract competitive situations with chimpanzee participants. Frequencies of chimpanzee choices are extremely close to equilibrium (accurate-guessing) predictions, and shift as payoffs change, just as equilibrium theory predicts. The chimpanzee choices are also closer to the equilibrium prediction, and more responsive to past history and payoff changes, than two samples of human choices from experiments in which humans were also initially uninformed about opponent payoffs and could not communicate verbally. The results are consistent with a tentative interpretation of game theory as explaining evolved behavior, with the additional hypothesis that chimpanzees may retain or practice a specialized capacity to adjust strategy choice during competition to perform at least as well as, or better than, humans have.

The entry of Colombian-sourced heroin into the US market: the relationship between competition, price, and purity.

Science.gov (United States)

Rosenblum, Daniel; Unick, George Jay; Ciccarone, Daniel

2014-01-01

There have been large structural changes in the US heroin market over the past 20 years. Colombian-sourced heroin entered the market in the mid-1990s, followed by a large fall in the price per pure gram and the exit of Asian heroin. By the 2000s, Colombian-sourced heroin had become a monopoly on the east coast and Mexican-sourced heroin a monopoly on the west coast with competition between the two in the middle. We estimate the relationship between these changes in competitive market structure on retail-level heroin price and purity. We find that the entry of Colombian-sourced heroin is associated with less competition and a lower price per pure gram of heroin at the national level. However, there is wide variation in changes in market concentration across the US. Controlling for the national fall in the heroin price, more competition in a region or city is associated with a lower price per pure gram. Copyright © 2013 Elsevier B.V. All rights reserved.

Price drop and increasing competition; Sinkende Preise und mehr Wettbewerb

Energy Technology Data Exchange (ETDEWEB)

Berner, Joachim

2012-01-06

Competition in the German PV sector is getting harder. German wholesale providers are dropping their prices, strengthening their marketing activities and expanding their range of services. This is the result of an enquiry made by SONNE WIND and WAeRME in November 2011.

Oil production responses to price changes. An empirical application of the competitive model to OPEC and non-OPEC countries

International Nuclear Information System (INIS)

Ramcharran, Harri

2002-01-01

Falling oil prices over the last decade, accompanied by over-production by some OPEC members and the growth of non-OPEC supply, warrant further empirical investigation of the competitive model to ascertain production behavior. A supply function, based on a modification of Griffin's model, is estimated using data from 1973-1997. The sample period, unlike Griffin's, however, includes phases of price increase (1970s) and price decrease (1980s-1990s), thus providing a better framework for examining production behavior using the competitive model. The OPEC results do not support the competitive hypothesis; instead, a negative and significant price elasticity of supply is obtained. This result offers partial support for the target revenue theory. For most of the non-OPEC members, the estimates support the competitive model. OPEC's loss of market share and the drop in the share of oil-based energy should signal adjustments in price and quantity based on a competitive world market for crude oil

Sustainability Analysis and Buy-Back Coordination in a Fashion Supply Chain with Price Competition and Demand Uncertainty

Directory of Open Access Journals (Sweden)

Fan Wang

2016-12-01

Full Text Available Supply chain sustainability has become significantly important in the fashion industry, and more and more fashion brands have invested in developing sustainable supply chains. We note that dual channel system comprising a brand-owned direct channel and retail outsourcing channel is quite common in the fashion industry, and in the latter, buy-back contract is popular between brands and retailers. Therefore, we build a stylized dual channel model with price competition and demand uncertainty to characterize the main properties of a fashion supply chain. Our foci are the sustainability analysis and the channel coordination mechanism. We first design a buy-back contract with return cost to coordinate the channel. We then study supply chain sustainability and examine the effect of two key influencing factors, i.e., price competition and demand uncertainty. Interestingly, we find that a fiercer price competition will lead to a more sustainable supply chain. From the perspective of supply chain managers, we conclude that (1 if managers care about environmental sustainability, fierce price competition is not a suggested strategy; (2 if managers care about economic sustainability, fierce price competition is an advantageous strategy. We also find that high demand uncertainty results in a less sustainable supply chain, in both an environmental and economic sustainability sense.

PRICE VS QUALITY COMPETITION AND THE SPATIAL PATTERN OF AVERAGE PRICES IN INTERNATIONAL TRADE

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Mattoscio Nicola

2012-07-01

Full Text Available This work investigates the relationship between the average export prices and the distance between the origin and the destination market in international trade. Distance between trading partners obviously stands at the core of I international trade literature and is strictly related with the issue of how countries and firms compete on export markets when transport costs become increasingly stiff. Heterogeneous-Firm Trade (HFT models predict that only most competitive firms are able to export on distant markets, where it is more difficult to recover from freight costs. However, this simple concept does not lead to unambiguous predictions on the spatial pattern of average export f.o.b. prices. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\r\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\

Effect of price and information on the food choices of women university students in Saudi Arabia: An experimental study.

Science.gov (United States)

Halimic, Aida; Gage, Heather; Raats, Monique; Williams, Peter

2018-04-01

To explore the impact of price manipulation and healthy eating information on intended food choices. Health information was provided to a random half of subjects (vs. information on Saudi agriculture). Each subject chose from the same lunch menu, containing two healthy and two unhealthy entrees, deserts and beverages, on five occasions. Reference case prices were 5, 3 and 2 Saudi Arabian Reals (SARs). Prices of healthy and unhealthy items were manipulated up (taxed) and down (subsidized) by 1 SAR in four menu variations (random order); subjects were given a budget enabling full choice within any menu. The number of healthy food choices were compared with different price combinations, and between information groups. Linear regression modelling explored the effect of relative prices of healthy/unhealthy options and information on number of healthy choices controlling for dietary behaviours and hunger levels. University campus, Saudi Arabia, 2013. 99 women students. In the reference case, 49.5% of choices were for healthy items. When the price of healthy items was reduced, 58.5% of selections were healthy; 57.2% when the price of unhealthy items rose. In regression modelling, reducing the price of healthy items and increasing the price of unhealthy items increased the number of healthy choices by 5% and 6% respectively. Students reporting a less healthy usual diet selected significantly fewer healthy items. Providing healthy eating information was not a significant influence. Price manipulation offers potential for altering behaviours to combat rising youth obesity in Saudi Arabia. Copyright © 2018 Elsevier Ltd. All rights reserved.

The Dynamics of Bertrand Price Competition with Cost-Reducing Investments

DEFF Research Database (Denmark)

Iskhakov, Fedor; Rust, John; Schjerning, Bertel

2018-01-01

We extend the classic Bertrand duopoly model of price competition to a dynamic setting where competing duopolists invest in a stochastically improving production technology to “leapfrog” their rival and attain temporary low cost leadership. We find a huge multiplicity of Markov perfect equilibria...

Legal and policy foundations for global generic competition: Promoting affordable drug pricing in developing societies.

Science.gov (United States)

Zapatero Miguel, Pablo

2015-01-01

The so-called 'TRIPS flexibilities' restated in 2001 by the World Trade Organization's Doha Declaration on TRIPS and Public Health offer a variety of policy avenues for promoting global price-based competition for essential medicines, and thus for improving access to affordable medicines in the developing world. In recent years, developing countries and international organisations alike have begun to explore the potentialities of global generic markets and competition generally, and also of using compulsory licensing to remedy anti-competitive practices (e.g. excessive pricing) through TRIPS-compatible antitrust enforcement. These and other 'pro-competitive' TRIPS flexibilities currently available provide the critical leverage and policy space necessary to improve access to affordable medicines in the developing world.

Network Competition and Entry Deterrence

OpenAIRE

Calzada, Joan; Valletti, Tommaso

2005-01-01

We develop a model of logit demand that extends to a multi-firm industry the traditional duopoly framework of network competition with access charges. Firstly, we show that, when incumbents do not face the threat of entry and compete in prices, they inefficiently establish the reciprocal access charge below cost. This inefficiency disappears if incumbents compete in utilities instead of prices. Secondly, we study how incumbents change their choices under the threat of entry when they determin...

Organic vs. Non-Organic Food Products: Credence and Price Competition

OpenAIRE

Yi Wang; Zhanguo Zhu; Feng Chu

2017-01-01

We analyze the organic and non-organic production choices of two firms by considering customers’ trust in organic food products. In the context of customers’ possible willingness to pay a premium price and their mistrust in organic food products, two firms first make choices on offering organic and non-organic food products. If offering organic products, a firm can further invest in the credence system to increase customers’ trust in their organic products. At the final stage, two firms deter...

Focal point pricing: A challenge to the successful implementation of Section 10a (introduced by the Competition Amendment Act

Directory of Open Access Journals (Sweden)

Mike Holland

2015-08-01

Full Text Available The Competition Amendment Act introduced section 10A, which provides the Competition Commission with the powers to investigate complex monopoly conduct in a market and allows the Competition Tribunal, under certain conditions, to prohibit such behaviour. Although more than five years have elapsed since the Competition Amendment Act was promulgated, this provision has yet to come into force. However, when it eventually does so, it will mark a significant change in South African competition law, as it seeks to regulate firms’ consciously parallel conduct. This is coordinated conduct that occurs without communication or agreement, but results in the prevention or substantial lessening of competition. Examples of horizontal tacit coordination practices include price leadership and facilitating practices, such as information exchanges and price signaling. The successful implementation of the amendment poses problems for the competition authorities in assessing the competitive effects of complex monopoly conduct and in providing effective remedies. Oligopoly markets result in mutual interdependent decision-making by firms, which can lead to market outcomes similar to explicit collusion. However, a further and little noticed issue is that firms in oligopolistic markets have opportunities to use focal points to determine coordinated strategies. This paper explores the nature and role of focal point pricing, which can lead to prices that are above competitive levels. The South African banking industry is used as an example. We find that focal point pricing is difficult to control, making the successful implementation of section 10A even more problematic. Moreover, the proposed amendment provides scope for the imposition of structural remedies by the Competition Tribunal, a function that the Competition Tribunal is ill-suited to perform.

Essays on price cap regulation and yardstick competition

Science.gov (United States)

Noronha, Vernon Andrew

This dissertation presents three papers on the regulation of monopoly firms in the same industry using yardstick competition to determine prices. In the first paper, "Yardstick Competition for Diversified Firms," we extend Shleifer's (1985) model to the case of diversified firms, and find that the social optimum, in which firms would need to produce at lower marginal cost than in Shleifer's model, is unlikely to be attained through profit maximization. In the second paper, "Cost Reduction under a Regression-Based Revenue Cap Regime," we identify certain hitherto unexplored and potentially undesirable properties for the form of yardstick competition that is widely applied. Allowed revenue totals for monopoly utility firms are determined by a regression of all firms' current costs on their cost drivers. It is shown that this mechanism induces firms to invest less in cost-reducing technology than if prices are determined purely exogenously, and that such cost-distorting behavior is not uniform across the industry. In particular, firms whose sizes are most different from the industry-mean elevate their costs proportionately much more than firms of similar size to the mean. However, this distortion vanishes as the number of firms grows large. In the third paper, "Predicted Cost-Distorting Conduct by UK Electricity Distribution Firms," by undertaking numerical examples using data on the UK electricity distribution industry, we discover that although the currently employed system of yardstick competition may have theoretical shortcomings, in practice, these are of slight consequence. There is found to be relatively little predicted distortion of costs for the majority of firms. In fact, this system is shown to generate greater social welfare than a similar system in which firms would not have any incentive to distort costs, unless consumer surplus enjoys a very high weight relative to industry profits. It is also shown that mergers within the industry could have an

Modeling HIV/AIDS drug price determinants in Brazil: is generic competition a myth?

Science.gov (United States)

Meiners, Constance; Sagaon-Teyssier, Luis; Hasenclever, Lia; Moatti, Jean-Paul

2011-01-01

Brazil became the first developing country to guarantee free and universal access to HIV/AIDS treatment, with antiretroviral drugs (ARVs) being delivered to nearly 190,000 patients. The analysis of ARV price evolution and market dynamics in Brazil can help anticipate issues soon to afflict other developing countries, as the 2010 revision of the World Health Organization guidelines shifts demand towards more expensive treatments, and, at the same time, current evolution of international legislation and trade agreements on intellectual property rights may reduce availability of generic drugs for HIV care. Our analyses are based on effective prices paid for ARV procurement in Brazil between 1996 and 2009. Data panel structure was exploited to gather ex-ante and ex-post information and address various sources of statistical bias. In-difference estimation offered in-depth information on ARV market characteristics which significantly influence prices. Although overall ARV prices follow a declining trend, changing characteristics in the generic segment help explain recent increase in generic ARV prices. Our results show that generic suppliers are more likely to respond to factors influencing demand size and market competition, while originator suppliers tend to set prices strategically to offset compulsory licensing threats and generic competition. In order to guarantee the long term sustainability of access to antiretroviral treatment, our findings highlight the importance of preserving and stimulating generic market dynamics to sustain developing countries' bargaining power in price negotiations undertaken with originator companies.

Modeling HIV/AIDS drug price determinants in Brazil: is generic competition a myth?

Directory of Open Access Journals (Sweden)

Constance Meiners

Full Text Available BACKGROUND: Brazil became the first developing country to guarantee free and universal access to HIV/AIDS treatment, with antiretroviral drugs (ARVs being delivered to nearly 190,000 patients. The analysis of ARV price evolution and market dynamics in Brazil can help anticipate issues soon to afflict other developing countries, as the 2010 revision of the World Health Organization guidelines shifts demand towards more expensive treatments, and, at the same time, current evolution of international legislation and trade agreements on intellectual property rights may reduce availability of generic drugs for HIV care. METHODS AND FINDINGS: Our analyses are based on effective prices paid for ARV procurement in Brazil between 1996 and 2009. Data panel structure was exploited to gather ex-ante and ex-post information and address various sources of statistical bias. In-difference estimation offered in-depth information on ARV market characteristics which significantly influence prices. Although overall ARV prices follow a declining trend, changing characteristics in the generic segment help explain recent increase in generic ARV prices. Our results show that generic suppliers are more likely to respond to factors influencing demand size and market competition, while originator suppliers tend to set prices strategically to offset compulsory licensing threats and generic competition. SIGNIFICANCE: In order to guarantee the long term sustainability of access to antiretroviral treatment, our findings highlight the importance of preserving and stimulating generic market dynamics to sustain developing countries' bargaining power in price negotiations undertaken with originator companies.

THE MODEL CONSTRUCTIONS OF PRICE FORMING OF BUILDING MATERIALS MANUFACTURE IN BASHKORTOSTAN

Directory of Open Access Journals (Sweden)

H.N. Gizatullin

2007-06-01

Full Text Available In this work attempt has been done analyze the influence of the environmental factors, as outward, as inside to choice of the strategy and the pricing of the industry of the building materials of Bashkortostan. This article examines the competitive surroundings of enterprises and branches in a aspect of the regional market of the building industry’s production. The evaluation of the compatibility is given of the price and competitive strategy. As a result of the research and pricing majority of industry’s enterprises had no official document stating their per pose in a pricing area. In reason of analysis the general situation of the industry building materials the enterprises of Bashkortostan, the conception of pricing is determined on functional level.

Using the market to regulate health care price: why heart hospitals will have a competitive advantage in the world of post-diagnostic related group pricing.

Science.gov (United States)

McLean, Thomas R

2004-01-01

For the past 20 years, the federal government has reimbursed hospital services by administrating pricing. Simply put, under such a system the government dictated the prices of medical services. Not only has administrative pricing failed to control medical inflation, but such failure could have been predicted from a review of basic economics. Accordingly, to eliminate the deleterious effects of administrative pricing, it is not surprising that the government is gathering information on hospital quality and cost in anticipation of a return to a system in which the price for hospital services is determined by the market. For some hospitals, this will be good news because they will be able to negotiate a more favorable rate of reimbursement. Unfortunately, for some hospitals a market system will be bad news because the government is not going to negotiate a provider contract with every hospital. In short, when the government returns to a market system for pricing of hospital services, competition among hospitals is going to become even more competitive.

Competitive electricity markets around the world: approaches to price risk management

International Nuclear Information System (INIS)

Masson, G.S.

1999-01-01

This chapter focuses on wholesale electricity markets, and traces the histories of the US and UK power industries. Risk management in the new electricity market is examined covering price risk, location basis risk, volume risk, and margin and cross-commodity risk. Specific competitive market systems that have been implemented around the world including mandatory pools, voluntary pools, and bilateral markets are discussed. Panels describing the functions of ancillary services, electricity price volatility, and the problems of capacity payments and the UK pool are presented

Strategies to enhance price and quality competition in health care: lessons learned from tracking local markets.

Science.gov (United States)

Lesser, Cara S; Ginsburg, Paul B

2006-06-01

Drawing on observations from tracking changes in local health care markets over the past ten years, this article critiques two Federal Trade Commission and Department of Justice recommendations to enhance price and quality competition. First, we take issue with the notion that consumers, acting independently, will drive greater competition in health care markets. Rather we suggest an important role remains for trusted agents who can analyze inherently complex price and quality information and negotiate on consumers' behalf. With aggregated information identifying providers who deliver cost-effective care, consumers would be better positioned to respond to financial incentives about where to seek care and thereby drive more meaningful competition among providers to reduce costs and improve quality. Second, we take issue with the FTC/DOJ recommendation to provide more direct subsidies to prevent distortions in competition. In the current political environment, it is not practical to provide direct subsidies for all of the unfunded care that exists in health care markets today; instead, some interference with competition may be necessary to protect cross subsidies. Barriers can be reduced, though, by revising pricing policies that have resulted in marked disparities in the relative profitability of different services.

Children's purchase behavior in the snack market: Can branding or lower prices motivate healthier choices?

Science.gov (United States)

Hartmann, Monika; Cash, Sean B; Yeh, Ching-Hua; Landwehr, Stefanie C; McAlister, Anna R

2017-10-01

Children's dietary-related diseases and their associated costs have expanded dramatically in many countries, making children's food choice a policy issue of increasing relevance. As children spend a considerable amount of money on energy-dense, nutrient-poor (EDNP) products, a better understanding of the main drivers of children's independent food purchase decisions is crucial to move this behavior toward healthier options. The objective of the study is to investigate the role of branding and price in motivating children to choose healthier snack options. The study investigates snack choices of children ages 8 to 11, using a survey and a purchase experiment. The research took place in after-school programs of selected schools in the Boston area. Participants included 116 children. Products in the choice experiment differed on three factors: product type, brand, and price. Data were analyzed using aggregated and mixed logit models. Children's purchase decisions are primarily determined by product type (Importance Value (IV) 56.6%), while brand (IV 22.8%) and price (IV 20.6%) prove to be of less relevance. Only those children who state that they like the familiar brand reveal a preference for the branded product in their purchase decision. Price is a significant predictor of choice when controlling for whether or not children obtain an allowance. It is not simple brand awareness but a child's liking of the brand that determines whether a brand is successful in motivating a child to choose a product. The extent of children's experience with money influences their price responsiveness. To the extent that children who receive an allowance are primarily the ones buying food snacks, higher prices for EDNP snacks could be successful in motivating children to choose a healthier option. Copyright © 2017 Elsevier Ltd. All rights reserved.

The Effectiveness of Competition Policy and the Price-Cost Margin: Evidence from Panel Data

OpenAIRE

Patrick McCloughan; Seán Lyons; William Batt

2007-01-01

This paper presents robust panel data econometric evidence suggesting that more effective competition policy curtails the exercise of market power because countries in which competition policy is judged to be more effective are characterised by lower market price-cost margins, controlling for other factors, including market growth, import penetration and spare capacity. The measure of competition policy effectiveness incorporated into our analysis is the annual survey-based ratings of nationa...

``Power pricing`` in a competitive environment - from a cost-plus calculation to market oriented pricing; Strom-Pricing im Wettbewerb - Von der Kosten-Plus- zur marktfaehigen Preispolitik

Energy Technology Data Exchange (ETDEWEB)

Laker, M.; Herr, S. [Unternehmensberatung Simon Kucher und Partners, Bonn (Germany)]|[Strategy and Marketing Consultants GmbH, Cambridge, MA (United States)

1998-06-29

The days when electricity contracts were standardized with few modifications catered to customer needs are over. In liberalized electricity markets, pricing has become significantly more important. Survival in this competitive environment hinges not only on the absolute price level, but in particular on opportunities for price differentiation. The following article focuses on measures to create flexible pricing and contractual schemes. (orig.) [Deutsch] Die Zeiten einheitlicher Stromvertraege mit geringen Modifikationen sind vorbei. Durch die Liberalisierung des Strommarktes ist die Bedeutung des Preises drastisch gestiegen. Um im Wettbewerb ueberleben zu koennen, spielen nicht nur die absolute Preishoehe, sondern vor allem die Moeglichkeiten zur Preisdifferenzierung eine entscheidende Rolle. Erfolgversprechende Massnahmen zur flexiblen Preis- und Vertragsgestaltung stehen im Mittelpunkt dieses Aufsatzes. (orig.)

Competencia y precios en el mercado farmacéutico mexicano Competition and prices in the Mexican pharmaceutical market

Directory of Open Access Journals (Sweden)

Raúl E Molina-Salazar

2008-01-01

Full Text Available Las formas que asume la competencia en el mercado definen el nivel de precios. El mercado farmacéutico contiene submercados con diferente grado de competencia; por un lado existen productos innovadores con patente y, por el otro, genéricos con marca comercial o sin ella. Por lo general, los medicamentos innovadores con patente tienen precios monopólicos, pero a su vencimiento éstos bajan al enfrentar la competencia de alternativas terapéuticas. La marca permite conservar las rentas económicas del monopolio. En México los precios de los medicamentos en el mercado privado son elevados, de acuerdo con las estimaciones agregadas y para medicamentos específicos, lo cual refleja las limitaciones de la competencia en el mercado y el poder de la marca comercial. En el segmento público se obtienen precios competitivos con la estrategia de los medicamentos esenciales de la Organización Mundial de la Salud, con base en el listado de productos del Cuadro Básico.The forms of market competition define prices. The pharmaceutical market contains submarkets with different levels of competition; on the one hand are the innovating products with patents, and on the other, generic products with or without trade names. Innovating medicines generally have monopolistic prices, but when the patents expire prices drop because of competition from therapeutic alternatives. The trade name makes it easier to maintain monopolistic prices. In Mexico, medicine prices in the private market are high -according to aggregated estimates and prices for specific medicines- which reflect the limitations of pharmaceutical market competition and the power of the trade name. The public segment enjoys competitive prices using the WHO strategy for essential medicines on the basis of the Essential List.

Managing Disease Risks from Trade: Strategic Behavior with Many Choices and Price Effects.

Science.gov (United States)

Chitchumnong, Piyayut; Horan, Richard D

2018-03-16

An individual's infectious disease risks, and hence the individual's incentives for risk mitigation, may be influenced by others' risk management choices. If so, then there will be strategic interactions among individuals, whereby each makes his or her own risk management decisions based, at least in part, on the expected decisions of others. Prior work has shown that multiple equilibria could arise in this setting, with one equilibrium being a coordination failure in which individuals make too few investments in protection. However, these results are largely based on simplified models involving a single management choice and fixed prices that may influence risk management incentives. Relaxing these assumptions, we find strategic interactions influence, and are influenced by, choices involving multiple management options and market price effects. In particular, we find these features can reduce or eliminate concerns about multiple equilibria and coordination failure. This has important policy implications relative to simpler models.

Gas prices and price process

International Nuclear Information System (INIS)

Groenewegen, G.G.

1992-01-01

On a conference (Gas for Europe in the 1990's) during the Gasexpo '91 the author held a speech of which the Dutch text is presented here. Attention is paid to the current European pricing methods (prices based on the costs of buying, transporting and distributing the natural gas and prices based on the market value, which is deducted from the prices of alternative fuels), and the transparency of the prices (lack of information on the way the prices are determined). Also attention is paid to the market signal transparency and gas-gas competition, which means a more or less free market of gas distribution. The risks of gas-to-gas competition for a long term price stability, investment policies and security of supply are discussed. Opposition against the Third Party Access (TPA), which is the program to implement gas-to-gas competition, is caused by the fear of natural gas companies for lower gas prices and lower profits. Finally attention is paid to government regulation and the activities of the European Commission (EC) in this matter. 1 fig., 6 ills., 1 tab

Portfolio choice and asset pricing with endogenous beliefs and skewness preference

NARCIS (Netherlands)

Karehnke, P.

2014-01-01

This thesis studies portfolio choice and asset pricing with preferences which go beyond the standard expected utility and mean-variance preferences. The first part of this thesis analyses a decision model in which the decision maker forms endogenous beliefs given his anticipation utility and his

Direct access tariffs and barriers to choice

International Nuclear Information System (INIS)

Levson, D.

1999-01-01

The current situation of the power market in Alberta was reviewed. Based on this review is was concluded that the province is a long way from being a competitive, liquid power market. Further, it was predicted that unless large power purchasers get actively involved in managing their options, identify realistic and competitive supply options and actively campaign for the removal of barriers to choice, they will experience significant cost increases in the year 2001 and beyond, due in large measure to the market power exercised by the four major utilities (TAU, EPCOR, APL and Powerex). Barriers to new supply such as the high cost of standby, uncertainties about transmission and natural gas prices, the delays to cogeneration caused by low oil prices, and the design of direct access tariffs by utilities, were also explored. The cumulative contribution of these factors to uncertainties in pool price, fixed price and transmission and distribution costs were outlined

Unfair and excessive prices in the energy sector

International Nuclear Information System (INIS)

Van der Woude, M.

2008-01-01

The concept of competition refers to a process where firms dispute the favour of their customers by proposing better products at the lowest possible price. This consumer welfare creating process is to a large extent Darwinian in nature: those who cannot compete must die. The law of supply and demand is ruthless and so is competition law. Principles of fairness and justice are extraneous to competition law: the lion eats the deer. Still, EC competition law is not amoral, as illustrated by the very first example of abusive conduct given by Article 82 EC: 'directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions' can constitute an abuse. The concept of fairness as a constituent element of EC competition law may disturb those who analyze the competitive process through a scientific lens. Fairness does not relate to economic effects and cannot be measured or quantified. It is a concept that appeals to ethics and norms. The dichotomy between competition as an amoral welfare creating process, that can be the subject of economic research, and the normative concept of fairness does not necessarily lead to a contradiction. Fairness becomes relevant where the competitive process has ceased to play its welfare creating role: i.e. where monopolies prevail over perfect competition. When confronted to a monopoly, abstention is the customer's only choice and for some goods, such as food, clothing and housing, abstention is not considered as a realistic choice. In scenarios where the monopolist faces an inelastic demand curve, fairness is probably the customer's only safety buoy. The energy sector is one of the sectors where these situations occur. In our modern societies, customers expect the light to go on, when they turn the switch, and their houses to be heated, when activating their boilers. Candles and jumpers not offering realistic alternatives, demand is close to inelastic, at least on the short term. Moreover, the energy sector

Sexual Selection on male cuticular hydrocarbons via male-male competition and female choice.

Science.gov (United States)

Lane, S M; Dickinson, A W; Tregenza, T; House, C M

2016-07-01

Traditional views of sexual selection assumed that male-male competition and female mate choice work in harmony, selecting upon the same traits in the same direction. However, we now know that this is not always the case and that these two mechanisms often impose conflicting selection on male sexual traits. Cuticular hydrocarbons (CHCs) have been shown to be linked to both social dominance and male attractiveness in several insect species. However, although several studies have estimated the strength and form of sexual selection imposed on male CHCs by female mate choice, none have established whether these chemical traits are also subject to sexual selection via male-male competition. Using a multivariate selection analysis, we estimate and compare sexual selection exerted by male-male competition and female mate choice on male CHC composition in the broad-horned flour beetle Gnatocerus cornutus. We show that male-male competition exerts strong linear selection on both overall CHC abundance and body size in males, while female mate choice exerts a mixture of linear and nonlinear selection, targeting not just the overall amount of CHCs expressed but the relative abundance of specific hydrocarbons as well. We discuss the potential implications of this antagonistic selection with regard to male reproductive success. © 2016 The Authors. Journal of Evolutionary Biology published by John Wiley & Sons Ltd on behalf of European Society for Evolutionary Biology.

Price Formation and Competition in the Swedish Electricity Market. Main findings of ER 2006:13

International Nuclear Information System (INIS)

2006-11-01

The Nordic electricity market can be divided into a Nordic wholesale market - the producer market - and the, national, retail markets. Nord Pool organises a 24-hour market for the physical trade of electricity, the spot market. Nord Pool also has a market place for so-called financial trade where players can (among other things) hedge themselves against price risks. Thus, the trade at Nord Pool represents the basis for trading with electricity throughout the entire Nordic market. In addition to the trade at Nord Pool, there is also bilateral trading between buyers and sellers. The report has been arranged as follows. Initially the functioning of the wholesale market is analysed, the issues addressed include the price formation in the spot market, the functioning of the financial market, as well as the price development in the spot market. The section ends with an analysis of the competitive situation in the Nordic wholesale market with a focus on Sweden. The next section focuses on how a potential introduction of Elspot areas in Sweden might affect the conditions for competition. The third section looks at certain conditions in the Swedish retail market and on certain consequences for households and electricity-intensive industry due to the price increases in recent years. The report concludes with the Energy Markets Inspectorate's deliberations on the need for measures to be undertaken in the Swedish and Nordic electricity market. The concentration on the Nordic electricity market is at a level where the authorities monitoring competition need to counteract changes that lead to further concentration. The present structure of the market, with an increasingly high concentration and co-ownership of power stations, also places demands on the authorities responsible for monitoring competition to implement measures designed to detect and to prevent the possible abuse of market power. There is a substantial need for research on competition and efficiency on the

Electricity contract choices of Finnish residential customers. A choice based conjoint analysis

Energy Technology Data Exchange (ETDEWEB)

Rouvinen, S.; Matero, J. (Univ. of Eastern Finland, Joensuu (Finland), School of Forest Sciences), e-mail: seppo.rouvinen@uef.fi, e-mail: jukka.matero@uef.fi

2010-07-01

Our aim is to examine how different environmental attributes of electricity contracts affect the residential customer choices when heterogeneity in customer preferences and motivations is taken into account. The data was acquired by a mail questionnaire to random sample of Finnish people in October-November 2009 with a response rate of 38 %. In addition to conventional questions, like questions on socio-demographic and agreements of energy related statements, the discrete choice experiment (DCE) of electricity contracts was included. The choice sets in the DCE had three electricity contract alternatives with varying levels of predetermined attributes (including unit price, supplier type, frequency of power outages, energy source and CO{sub 2} emissions). In this paper, we present the findings of our DCE design. Modeling respondent choices resulted in implicit prices for various electricity contract attributes that provide guidance for green marketing strategies of electricity suppliers and energy related informational activities of public institutions. We conclude that currently the potential for increasing demand-based environmental competitiveness from the wood electricity differentiation remains limited as we did not find any significant market segment of residential customers with strong preferences for wood over other sources of electricity (including 'mixture'). (orig.)

Joint Dynamic Pricing of Multiple Perishable Products Under Consumer Choice

OpenAIRE

Yalç{\\i}n Akçay; Harihara Prasad Natarajan; Susan H. Xu

2010-01-01

In response to competitive pressures, firms are increasingly adopting revenue management opportunities afforded by advances in information and communication technologies. Motivated by these revenue management initiatives in industry, we consider a dynamic pricing problem facing a firm that sells given initial inventories of multiple substitutable and perishable products over a finite selling horizon. Because the products are substitutable, individual product demands are linked through consume...

Effects of calorie labeling and value size pricing on fast food meal choices: Results from an experimental trial

OpenAIRE

Jeffery Robert W; Story Mary T; Oakes J Michael; French Simone A; Harnack Lisa J; Rydell Sarah A

2008-01-01

Abstract Background Although point-of-purchase calorie labeling at restaurants has been proposed as a strategy for improving consumer food choices, a limited number of studies have evaluated this approach. Likewise, little research has been conducted to evaluate the influence of value size pricing on restaurant meal choices. Methods To examine the effect of point-of-purchase calorie information and value size pricing on fast food meal choices a randomized 2 × 2 factorial experiment was conduc...

Pricing Policy and the College Choice Process. AIR Forum Paper 1978.

Science.gov (United States)

Chapman, Randall G.

A presentation of a conceptual framework for viewing the admissions management process in higher education institutions and a discussion of the pricing policy process, particularly of private colleges and universities, precedes an examination of the stochastic utility model, a statistical model of the college choice process. Using student choice…

Factors influencing food choice of athletes at international competition events.

Science.gov (United States)

Pelly, Fiona E; Burkhart, Sarah J; Dunn, Peter

2018-02-01

Although the nutrient requirements and dietary intake of athletes have been thoroughly investigated, little is known about the influences on their food choice, particularly prior to and during competition. This study sought to investigate factors that influence food selection of athletes at two similar international competition events: the Melbourne 2006 and Delhi 2010 Commonwealth Games. A secondary aim was to explore differences in these factors between at each event given the culturally diverse locations. A survey developed for this study was distributed to athletes in the village dining hall at both events. Athletes scored a selection of factors influencing food choice on a scale of 1 (not important) to 5 (very important). A total of 769 individuals completed the questionnaire in total, with 351 (46%) from Delhi and 418 (54%) from Melbourne. Overall, athletes rated nutrient composition (M = 4.22), stage of competition (M = 4.09), time of day (M = 4.02) and familiarity of the food (M = 4.07) higher than sensory properties (smell M = 3.88; visual appearance M = 3.22) when making a food selection. Visual appearance (p = 0.01), stage of competition (p food (p motives for food section of athletes from a range of sports and cultures is warranted. Copyright © 2017 Elsevier Ltd. All rights reserved.

Impact of Heterogeneous Consumers on Pricing Decisions under Dual-Channel Competition

Directory of Open Access Journals (Sweden)

Ying Wei

2015-01-01

Full Text Available This paper studies impact of heterogeneous consumer behavior on optimal pricing decisions under dual channel supply chain competition, which consists of one manufacturer and one retailer. The manufacturer is market leader with two sales channels: one is direct channel facing consumers directly and the other is indirect channel facing the retailer. Consumers decide whether to buy and from which channel to buy products. Purchasing decisions are based on considerations of prices posted on different channels, preference or loyalty to specific channels, and degree of rationality in decision-making process. Due to the complexity of heterogeneous consumer decision behavior, traditional mathematical analysis to the pricing problem becomes quite challenging. An agent-based modeling and simulation approach is then proposed and implemented. Simulation results reveal that consumer behavior influences both prices and profits. When consumers are increasingly loyal to the retailing channel, the retailer can make a higher selling price and more benefits. On the other hand, when consumers are increasingly loyal to the direct channel, the number of purchases from the direct channel increases and the manufacturer is better off. It is also interesting to note that as rationality level increases, selling prices for both channels slightly decrease.

Delegating Pricing Decisions

OpenAIRE

Pradeep Bhardwaj

2001-01-01

An outstanding problem in marketing is why some firms in a competitive market delegate pricing decisions to agents and other firms do not. This paper analyzes the impact of competition on the delegation decision and, in turn, the impact of delegation on prices and incentives. The theory builds on the simplest framework of competition in two dimensions: prices and (sales agents') effort. Specifically, we are interested in answering the following questions: (1) Does competition affect the price...

Towards a competitive european market of the natural gas: uncertainties and tariff choices

International Nuclear Information System (INIS)

2001-04-01

This document reveals that, by reason of external supply and contract pregnancy, the gas market deregulation will not present the same effects as for the electricity market. The first part deals with the competition in Europe in the natural gas sector (prices policy, transportation prices, administrative procedures). The second part deals with the tariffing in France and the access to the LNG networks and installations. (A.L.B.)

Price competition between an expert and a non-expert

OpenAIRE

Bouckaert, J.M.C.; Degryse, H.A.

1998-01-01

This paper characterizes price competition between an expert and a non-expert. In contrast with the expert, the non-expert’s repair technology is not always successful. Consumers visit the expert after experiencing an unsuccessful match at the non-expert. This re-entry affects the behaviour of both sellers. For low enough probability of successful repair at the non-expert, all consumers first visit the non-expert, and a ‘timid-pricing’ equilibrium results. If the non-expert’s repair technolog...

Aspects of Price Competitiveness in the Context of Preparing for Accession to the Euro Zone. New Challenges for Entrepreneurs. Romania’s Case

Directory of Open Access Journals (Sweden)

Lucian Claudiu ANGHEL

2014-12-01

Full Text Available In the process of preparing a state for the accession to the Euro Zone it is essential to analyze the price competitiveness of that state’s economy and the challenges that entrepreneurs will have to face in the new economic environment. In the present paper the authors want to capture some aspects of the competitiveness of the Romanian economy and implicit its entrepreneurs with emphasis on price competitiveness, whereas accession to the Euro Zone implies giving up to the independence of exchange rate policy, with a huge impact on price competitiveness. For this purpose this study will highlight a few elements on the relative importance of price competitiveness of entrepreneurs’ exports performance. The process of accessing Euro Zone creates significant changes in the existing way of conducting business and impacts significantly entire business environment – and this will become evident also for Romania.

Role of expendable income and price in food choice by low income families.

Science.gov (United States)

Burns, Cate; Cook, Kay; Mavoa, Helen

2013-12-01

The public health literature suggests that the cheapness of energy-dense foods is driving the obesity epidemic. We examined food purchases in low-income families and its relationship to the price of food and availability of funds. In-depth interviews were conducted with 22 parents with children less than 15 years of age whose major source of income was a government pension. A photo taxonomy, where participants sorted 50 photos of commonly purchased foods, was used to explore food choice. The most common food groupings used by the participants were: basic, emergency, treat and comfort. The process of food purchase was described by participants as weighing up the attributes of a food in relation to price and money available. Shoppers nominated the basic unit of measurement as quantity per unit price and the heuristic for food choice when shopping as determining "value for money" in a process of triage relating to food purchase decisions. Participants stated satiation of hunger to be the most common "value" relative to price. Given that the foods nominated as filling tended to be carbohydrate-rich staples, we suggest that public health initiatives need to acknowledge this triage process and shape interventions to promote nutrition over satiation. Copyright © 2013 Elsevier Ltd. All rights reserved.

Pricing of General Insurance and the Impact of Asymmetric Information

DEFF Research Database (Denmark)

Englund, Martin

To set the insurance premium correctly is of outmost importance on a competitive insurance market. Hence the overall objective of this thesis is to improve the pricing, first by using individual claims information, and second by using information about the individuals choice of coverage. Regarding...

The competitive landscape of air transport in Europe

NARCIS (Netherlands)

Lieshout, R.; Malighetti, P.; Redondi, R.; Burghouwt, G.

2016-01-01

Competition between airlines and airports increased significantly since the deregulation of the intra-European air transport market in 1997. The passenger has a wider choice in terms of routings and departure airports than twenty-five years ago and pays a lower price. In this paper we investigate in

A framework for cost-based pricing of transmission and ancillary services in competitive electric power markets

International Nuclear Information System (INIS)

Zobian, A.; Ilic, M.D.

1995-01-01

In this paper the authors propose a framework for accurate cost determination and pricing of transmission and ancillary services in competitive electric power markets. The proposed framework is based on their anticipation of the evolving environment and industry structure. They envision the future as a competitive energy market with a centralized control entity that coordinates system activities, prices transmission and ancillary services and controls various system resources. This control entity has control over a certain (pre-defined) geographical area. It is proposed that the system operation and control be kept as they are currently done in control centers, no major change in these functions is required for the proposed pricing strategy. The pricing strategy is divided into two main classes based on time scale separation and firmness, short and long term, firm and interruptible contracts. The approach is based on superposition of different transaction on the network, and a three-part tariff design. The charges are directly related to the impact of each transaction on the system

Unfair and excessive prices in the energy sector

Energy Technology Data Exchange (ETDEWEB)

Van der Woude, M. [Erasmus University, Rotterdam (Netherlands)

2008-05-15

The concept of competition refers to a process where firms dispute the favour of their customers by proposing better products at the lowest possible price. This consumer welfare creating process is to a large extent Darwinian in nature: those who cannot compete must die. The law of supply and demand is ruthless and so is competition law. Principles of fairness and justice are extraneous to competition law: the lion eats the deer. Still, EC competition law is not amoral, as illustrated by the very first example of abusive conduct given by Article 82 EC: 'directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions' can constitute an abuse. The concept of fairness as a constituent element of EC competition law may disturb those who analyze the competitive process through a scientific lens. Fairness does not relate to economic effects and cannot be measured or quantified. It is a concept that appeals to ethics and norms. The dichotomy between competition as an amoral welfare creating process, that can be the subject of economic research, and the normative concept of fairness does not necessarily lead to a contradiction. Fairness becomes relevant where the competitive process has ceased to play its welfare creating role: i.e. where monopolies prevail over perfect competition. When confronted to a monopoly, abstention is the customer's only choice and for some goods, such as food, clothing and housing, abstention is not considered as a realistic choice. In scenarios where the monopolist faces an inelastic demand curve, fairness is probably the customer's only safety buoy. The energy sector is one of the sectors where these situations occur. In our modern societies, customers expect the light to go on, when they turn the switch, and their houses to be heated, when activating their boilers. Candles and jumpers not offering realistic alternatives, demand is close to inelastic, at least on the short term. Moreover

The Pricing Strategy of Oligopolistic Competition Food Firms with the Asymmetric Information and Scientific Uncertainty

Directory of Open Access Journals (Sweden)

Li Zhao

2017-01-01

Full Text Available The arguments for and against genetically modified (GM food focus on the characteristics of the scientific uncertainty and asymmetric information for the GM food. How do these two factors affect the competition and pricing strategy of food firms that separate GM food and conventional food conforming to consumer’s right to know? We explore the issue of pricing strategies between two firms producing horizontally and vertically differentiated foods in the context of asymmetric information and scientific uncertainty. The theoretical results show that there are two separating perfect Bayesian equilibria in which the prices of the conventional food and GM food are strategic complements and the profits of two types of firms are both increasing in the price of GM food. The numerical example shows that a decrease of the expected potential net damage as the most sensitive parameter leads to an increase of the profits of the two firms. Additionally, an increase in product differentiation helps to increase the two firms’ profits. Finally, the decrease in risk aversion as the second sensitive parameter helps to increase both products’ prices and quantities and both firms’ profits. This paper contributes by combining food safety regulation with market mechanisms and competition.

Price Recall, Bertrand Paradox and Price Dispersion With Elastic Demand

NARCIS (Netherlands)

Carvalho, M.

2009-01-01

This paper studies the consequence of an imprecise recall of the price by the consumers in the Bertrand price competition model for a homogeneous good. It is shown that firms can exploit this weakness and charge prices above the competitive price. This markup increases for rougher recall of the

Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model

Directory of Open Access Journals (Sweden)

Francisco Álvarez

2014-01-01

Full Text Available Recent psychological research indicates that consumers that search exhaustively for the best option of a market product—known as maximizers—eventually feel worse than consumers who just look for something good enough—called satisficers. We formulate a time allocation model to explore the relationship between different distributions of prices of the product and the satisficing behavior and the related welfare of the consumer. We show numerically that, as the number of options becomes large, the maximizing behavior produces less and less welfare and eventually leads to choice paralysis—these are effects of choice overload—whereas satisficing conducts entail higher levels of satisfaction and do not end up in paralysis. For different price distributions, we provide consistent evidence that maximizers are better off for a low number of options, whereas satisficers are better off for a sufficiently large number of options. We also show how the optimal satisficing behavior is affected when the underlying price distribution varies. We provide evidence that the mean and the dispersion of a symmetric distribution of prices—but not the shape of the distribution—condition the satisficing behavior of consumers. We also show that this need not be the case for asymmetric distributions.

Customer prime s choice between quality and price of electric service. Denryoku hinshitsu to kakaku ni taisuru juyoka no sentaku. ; Ogata computerter dot user ni okeru back-up dengen kiki sentaku no suryo bunseki

Energy Technology Data Exchange (ETDEWEB)

Fujii, Y.; Matsukawa, I.

1990-03-01

This study is done for the purpose of numerically analyzing how customers react to make their choice between quality and price, as well as to evaluating the marketability of the new electric service differentiated by quality, on the assumption that electric utility is capable of providing the multi-product of the service with various combinations instead of the conventional single product between price and quality. An analysis was made for the customers like the large-scale computer users those who attach importance to quality. As for the method of the analysis, the choice (the introduction of emergency power source or uninterruptible power system) which have been actually done by the customers for the following two conditions, were used as the model of the analysis: The one was the standard of the requirements for the quality of electric power, of which requirements were composed of the two factors, such as the reliability on power supply and momentary voltage drop; The other was the cost (purchased power price plus investment by consumers for back-up power system) necessary to maintain the quality. Consequently, it was found that in order to heighten the competitiveness for the competition in electricity market, electric utility had to establish their service rate corresponding to the load, as well as that the quality was a important strategic factor for them. 30 refs., 10 figs., 9 tabs.

Overcoming consumer biases in the choice of pricing schemes: a lab experiment

Czech Academy of Sciences Publication Activity Database

Shestakova, Natalia

-, č. 418 (2010), s. 1-42 ISSN 1211-3298 R&D Projects: GA MŠk LC542 Grant - others:GA UK(CZ) 60010 Institutional research plan: CEZ:MSM0021620846 Keywords : heuristics * price discrimination * consumers' choice Subject RIV: AH - Economics http://www.cerge-ei.cz/pdf/wp/Wp418.pdf

Paying for Express Checkout: Competition and Price Discrimination in Multi-Server Queuing Systems

Science.gov (United States)

Deck, Cary; Kimbrough, Erik O.; Mongrain, Steeve

2014-01-01

We model competition between two firms selling identical goods to customers who arrive in the market stochastically. Shoppers choose where to purchase based upon both price and the time cost associated with waiting for service. One seller provides two separate queues, each with its own server, while the other seller has a single queue and server. We explore the market impact of the multi-server seller engaging in waiting cost-based-price discrimination by charging a premium for express checkout. Specifically, we analyze this situation computationally and through the use of controlled laboratory experiments. We find that this form of price discrimination is harmful to sellers and beneficial to consumers. When the two-queue seller offers express checkout for impatient customers, the single queue seller focuses on the patient shoppers thereby driving down prices and profits while increasing consumer surplus. PMID:24667809

Paying for express checkout: competition and price discrimination in multi-server queuing systems.

Directory of Open Access Journals (Sweden)

Cary Deck

Full Text Available We model competition between two firms selling identical goods to customers who arrive in the market stochastically. Shoppers choose where to purchase based upon both price and the time cost associated with waiting for service. One seller provides two separate queues, each with its own server, while the other seller has a single queue and server. We explore the market impact of the multi-server seller engaging in waiting cost-based-price discrimination by charging a premium for express checkout. Specifically, we analyze this situation computationally and through the use of controlled laboratory experiments. We find that this form of price discrimination is harmful to sellers and beneficial to consumers. When the two-queue seller offers express checkout for impatient customers, the single queue seller focuses on the patient shoppers thereby driving down prices and profits while increasing consumer surplus.

Effects of calorie labeling and value size pricing on fast food meal choices: results from an experimental trial.

Science.gov (United States)

Harnack, Lisa J; French, Simone A; Oakes, J Michael; Story, Mary T; Jeffery, Robert W; Rydell, Sarah A

2008-12-05

Although point-of-purchase calorie labeling at restaurants has been proposed as a strategy for improving consumer food choices, a limited number of studies have evaluated this approach. Likewise, little research has been conducted to evaluate the influence of value size pricing on restaurant meal choices. To examine the effect of point-of-purchase calorie information and value size pricing on fast food meal choices a randomized 2 x 2 factorial experiment was conducted in which participants ordered a fast food meal from one of four menus that varied with respect to whether calorie information was provided and whether value size pricing was used. Study participants included 594 adolescents and adults who regularly ate at fast food restaurants. Study staff recorded the foods ordered and consumed by each participant. Participants also completed surveys to assess attitudes, beliefs and practices related to fast food and nutrition. No significant differences in the energy composition of meals ordered or eaten were found between menu conditions. The average energy content of meals ordered by those randomized to a menu that included calorie information and did not include value size pricing was 842 kcals compared with 827 kcals for those who ordered their meal from a menu that did not include calorie information but had value size pricing (control menu). Results were similar in most analyses conducted stratified by factors such as age, race and education level. Additional research is needed to better evaluate the effects of calorie labeling and value size pricing on fast food meal choices. Studies in which participants are repeatedly exposed to these factors are needed since long term exposure may be required for behavior change.

The anti-competitive agreements in the prospective of the law on competition protection - An inside in the Albanian practices and legal framework

Directory of Open Access Journals (Sweden)

Rezana Konomi Perolla

2015-07-01

Full Text Available In Albania legislation on competition was developed only after the 90s and this is natural depending on the economic development and market model, which before the 90s had spaces of a free and competitive development. Competition is an economic phenomenon that refers to such a state of a free market economy, where companies compete independently in order to benefit as many buyers so as to meet the objectives to increase profits and expansion of markets. In this way free competition is both beneficial for business development and profitable for consumers themselves, who should benefit from the prices set based on the demand–offer ratio. Competition should be perceived as a necessary mechanism that promotes increase of welfare in general, by providing enterprises with greater opportunities for profit and therefore better quality for consumers, a major benefit in the range of choices lower prices. Encouraged by the existence of competition, enterprises as market players should be motivated to be always on the alert and perhaps in uncertainty in order to be as much active in the way they compete with their competitors by providing investments and aggressive strategies as a reply to their, but also potential rivals. In competitive markets, the companies are motivated to gain market power in order to strengthen their positions in the markets where they operate and thereby they have an impact in the fulfillment of the growing needs of the consumer, which brings increase of welfare. Nevertheless, quite often companies have such an attitude that they may cause limitation of competition, such as the agreements, whose object or consequence is price fixing, market shares or the establishment of a market structure where competitors join (in case of concentrations. Price fixing is a classic element to all cases of cartels. By means of such behavior competitors try to avoid price competition between them to the detriment of the consumer, by applying higher

The impact of choice context on consumers' choice heuristics

DEFF Research Database (Denmark)

Mueller Loose, Simone; Scholderer, Joachim; Corsi, Armando M.

2012-01-01

Context effects in choice settings have received recent attention but little is known about the impact of context on choice consistency and the extent to which consumers apply choice heuristics. The sequence of alternatives in a choice set is examined here as one specific context effect. We compare...... how a change from a typical price order to a sensory order in wine menus affects consumer choice. We use pre-specified latent heuristic classes to analyse the existence of different choice processes, which begins to untangle the ‘black box’ of how consumers choose. Our findings indicate...... that in the absence of price order, consumers are less price-sensitive, pay more attention to visually salient cues, are less consistent in their choices and employ other simple choice heuristics more frequently than price. Implications for consumer research, marketing and consumer policy are discussed....

Pricing behaviour of nonprofit insurers in a weakly competitive social health insurance market.

Science.gov (United States)

Douven, Rudy C H M; Schut, Frederik T

2011-03-01

In this paper we examine the pricing behaviour of nonprofit health insurers in the Dutch social health insurance market. Since for-profit insurers were not allowed in this market, potential spillover effects from the presence of for-profit insurers on the behaviour of nonprofit insurers were absent. Using a panel data set for all health insurers operating in the Dutch social health insurance market over the period 1996-2004, we estimate a premium model to determine which factors explain the price setting behaviour of nonprofit health insurers. We find that financial stability rather than profit maximisation offers the best explanation for health plan pricing behaviour. In the presence of weak price competition, health insurers did not set premiums to maximize profits. Nevertheless, our findings suggest that regulations on financial reserves are needed to restrict premiums. Copyright © 2011 Elsevier B.V. All rights reserved.

Patient Awareness of Local Drug Price Variation and the Factors That Influence Pharmacy Choice: A Cross-sectional Survey Study

Science.gov (United States)

Brodsky, Spencer D; Awosika, Olabola D; Eleryan, Misty G; Rengifo-Pardo, Monica; Kuang, Xiangyu; Amdur, Richard L; Ehrlich, Alison

2017-12-01

BACKGROUND: High out-of-pocket drug expenditures are increasingly common in dermatology. Patients may not be aware that prices vary among pharmacies and consequently may not shop for the lowest cost. OBJECTIVE: To determine what factors influence pharmacy choice and the effect of providing local prescription prices on pharmacy selection. We hypothesized that patients do not "shop around" due to lack of knowledge of price variation and would choose a pharmacy based on costs if educated on price disparity. METHODS: Between July and August 2016, we administered a cross-sectional anonymous survey to adults visiting four outpatient clinics at an academic tertiary care center in Washington, D.C. Participants answered questions before and after viewing a list of prescription drug prices from local pharmacies. RESULTS: 287 surveys were administered to a convenience sample of adults (age ≥ 18 and literate in English). Of the 287 participants, 218 fully completed the survey; 55.1% were women and 40.5% were over age 40. When considering a cost savings of $10-25, 65% would switch pharmacies if the distance were the same, and 21.3% would switch if the distance were 45-minutes further. After price education, fewer participants felt that drug price knowledge would ultimately influence pharmacy choice (P less than 0.0001). However, respondents' intended frequency of researching price online, calling a pharmacy to ask about price, and comparing price between pharmacies before filling a prescription all increased, compared to prior self-reported frequencies (P less than 0.001). Specifically, participants with $75,000-$99,999 income were more likely to compare prices than those with income below $45,000 (odds ratio [OR], 4.62; 95% confidence interval [CI], 1.24-17.28). CONCLUSION: In this study, pharmacy choice was more influenced by convenience than cost prior to drug price education. However, price education ultimately impacted intent to research prescription drug prices before

Empirical effects of policy induced competition in the electricity industry : the case of district heat pricing in Finland 1996-2002

International Nuclear Information System (INIS)

Peltola-Ojala, P.; Linden, L.

2007-01-01

Following open-market competition in Finland's household electricity markets, the Electricity Market Authority began regulation of electricity and distribution networks to limit unreasonable pricing and to separate the different business units, notably production, distribution and sales. The district heating industry in Finland is regulated through general Competition Laws. The district heating industry is considered to have a regional monopoly within its distribution network and the level of public ownership within the industry is high. This paper presented the results of a study that analyzed how the policy induced competition in the electricity industry in Finland has affected the district heating industry. Both the electricity and district heating industries compete in the same household heating markets. The impact of competition was studied through pricing behaviour using panel data models. The data was gathered from 76 district district heating companies in Finland from 1996 to 2002. It was shown that the price of district heating decreased slightly as a result of electricity market reform, but the effect was short-term. The price decrease was stronger in apartment buildings than in small houses. The results suggest that the district heat markets are non-competitive and some evidence which supports regulatory threat hypothesis can be found. It was suggested that large and market dominant firms are more responsive to policy reform compared to small firms. 16 refs., 5 tabs., 2 figs., 3 appendices

Product differentiation, competition and prices in the retail gasoline industry

Science.gov (United States)

Manuszak, Mark David

This thesis presents a series of studies of the retail gasoline industry using data from Hawaii. This first chapter examines a number of pricing patterns in the data and finds evidence that gasoline stations set prices which are consistent with a number of forms of price discrimination. The second chapter analyzes various patterns of cross-sectional, cross-market and intertemporal variation in the data to investigate their suitability for use in structural econometric estimation. The remainder of the dissertation consists of specification and estimation of a structural model of supply and demand for retail gasoline products sold at individual gasoline stations. This detailed micro-level analysis permits examination of a number of important issues in the industry, most notably the importance of spatial differentiation in the industry. The third chapter estimates the model and computes new equilibria under a number of asymmetric taxation regimes in order to examine the impact of such tax policies on producer and consumer welfare as well as tax revenue. The fourth chapter examines whether there is any evidence of tacitly collusive behavior in the Hawaiian retail gasoline industry and concludes that, in fact, conduct is fairly competitive in this industry and market.

Asymmetric Price Effects of Competition

NARCIS (Netherlands)

Lach, S.; Moraga Gonzalez, J.L.

2017-01-01

When price dispersion is prevalent, a relevant question is what happens to the whole distribution of equilibrium prices when the number of firms changes. Using data from the gasoline market in the Netherlands, we find, first, that markets with N competitors have price distributions that first-order

Asymmetric price effects of competition

NARCIS (Netherlands)

Lach, S.; Moraga González, José

2017-01-01

When price dispersion is prevalent, a relevant question is what happens to the whole distribution of equilibrium prices when the number of firms changes. Using data from the gasoline market in the Netherlands, we find, first, that markets with N competitors have price distributions that first‐order

Pricing and Trust

DEFF Research Database (Denmark)

Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert

-competitive (monopolistic) markets. We then introduce a regulated intermediate price above the oligopoly price and below the monopoly price. The effect in monopolies is more or less in line with standard intuition. As price falls volume increases and so does quality, such that overall efficiency is raised by 50%. However......We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non...

Long term fuel price elasticity: effects on mobility tool ownership and residential location choice - Final report

Energy Technology Data Exchange (ETDEWEB)

Erath, A.; Axhausen, K. W.

2010-04-15

This comprehensive final report for the Swiss Federal Office of Energy (SFOE) examines the long-term effects of fuel price elasticity. The study analyses how mobility tool usage and ownership as well as residence location choice are affected by rising fuel costs. Based on econometric models, long-term fuel price elasticity is derived. The authors quote that the demand reactions to higher fuel prices mainly observed are the reduction of mileage and the consideration of smaller-engined and diesel-driven cars. As cars with natural gas powered engines and electric drives were hardly considered in the survey, the results of the natural gas model can, according to the authors, only serve as a trend. No stable model could be estimated for the demand and usage of electric cars. A literature overview is presented and the design of the survey is discussed, whereby socio-demographical variables and the effects of price and residence changes are discussed. Modelling of mobility tool factors and results obtained are looked at. Finally, residence choice factors are modelled and discussed. Several appendices complete the report.

Developing a new stochastic competitive model regarding inventory and price

Science.gov (United States)

Rashid, Reza; Bozorgi-Amiri, Ali; Seyedhoseini, S. M.

2015-09-01

Within the competition in today's business environment, the design of supply chains becomes more complex than before. This paper deals with the retailer's location problem when customers choose their vendors, and inventory costs have been considered for retailers. In a competitive location problem, price and location of facilities affect demands of customers; consequently, simultaneous optimization of the location and inventory system is needed. To prepare a realistic model, demand and lead time have been assumed as stochastic parameters, and queuing theory has been used to develop a comprehensive mathematical model. Due to complexity of the problem, a branch and bound algorithm has been developed, and its performance has been validated in several numerical examples, which indicated effectiveness of the algorithm. Also, a real case has been prepared to demonstrate performance of the model for real world.

Effects of calorie labeling and value size pricing on fast food meal choices: Results from an experimental trial

Directory of Open Access Journals (Sweden)

Jeffery Robert W

2008-12-01

Full Text Available Abstract Background Although point-of-purchase calorie labeling at restaurants has been proposed as a strategy for improving consumer food choices, a limited number of studies have evaluated this approach. Likewise, little research has been conducted to evaluate the influence of value size pricing on restaurant meal choices. Methods To examine the effect of point-of-purchase calorie information and value size pricing on fast food meal choices a randomized 2 × 2 factorial experiment was conducted in which participants ordered a fast food meal from one of four menus that varied with respect to whether calorie information was provided and whether value size pricing was used. Study participants included 594 adolescents and adults who regularly ate at fast food restaurants. Study staff recorded the foods ordered and consumed by each participant. Participants also completed surveys to assess attitudes, beliefs and practices related to fast food and nutrition. Results No significant differences in the energy composition of meals ordered or eaten were found between menu conditions. The average energy content of meals ordered by those randomized to a menu that included calorie information and did not include value size pricing was 842 kcals compared with 827 kcals for those who ordered their meal from a menu that did not include calorie information but had value size pricing (control menu. Results were similar in most analyses conducted stratified by factors such as age, race and education level. Conclusion Additional research is needed to better evaluate the effects of calorie labeling and value size pricing on fast food meal choices. Studies in which participants are repeatedly exposed to these factors are needed since long term exposure may be required for behavior change.

Essays on pricing dynamics, price dispersion, and nested logit modelling

Science.gov (United States)

Verlinda, Jeremy Alan

The body of this dissertation comprises three standalone essays, presented in three respective chapters. Chapter One explores the possibility that local market power contributes to the asymmetric relationship observed between wholesale costs and retail prices in gasoline markets. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of highly detailed station and local market-level characteristics to determine the extent to which spatial differentiation influences price-response asymmetry. I find that brand identity, proximity to rival stations, bundling and advertising, operation type, and local market features and demographics each influence a station's predicted asymmetric relationship between prices and wholesale costs. Chapter Two extends the existing literature on the effect of market structure on price dispersion in airline fares by modeling the effect at the disaggregate ticket level. Whereas past studies rely on aggregate measures of price dispersion such as the Gini coefficient or the standard deviation of fares, this paper estimates the entire empirical distribution of airline fares and documents how the shape of the distribution is determined by market structure. Specifically, I find that monopoly markets favor a wider distribution of fares with more mass in the tails while duopoly and competitive markets exhibit a tighter fare distribution. These findings indicate that the dispersion of airline fares may result from the efforts of airlines to practice second-degree price discrimination. Chapter Three adopts a Bayesian approach to the problem of tree structure specification in nested logit modelling, which requires a heavy computational burden in calculating marginal likelihoods. I compare two different techniques for estimating marginal likelihoods: (1) the Laplace approximation, and (2) reversible jump MCMC. I apply the techniques to both a simulated and a travel mode

Obtaining fruit and vegetables for the lowest prices: pricing survey of different outlets and geographical analysis of competition effects.

Science.gov (United States)

Pearson, Amber L; Winter, Pieta R; McBreen, Ben; Stewart, Georgia; Roets, Rianda; Nutsford, Daniel; Bowie, Christopher; Donnellan, Niamh; Wilson, Nick

2014-01-01

Inadequate fruit and vegetable (F&V) consumption is an important dietary risk factor for disease internationally. High F&V prices can be a barrier to dietary intake and so to improve understanding of this topic we surveyed prices and potential competition between F&V outlet types. Over a three week early autumn period in 2013, prices were collected bi-weekly for 18 commonly purchased F&Vs from farmers' markets (FM) selling local produce (n = 3), other F&V markets (OFVM) (n = 5), supermarkets that neighbored markets (n = 8), and more distant supermarkets (n = 8), (in urban Wellington and Christchurch areas of New Zealand). Prices from an online supermarket were also collected. A total of 3120 prices were collected. Most F&Vs (13/18) were significantly cheaper at OFVMs than supermarkets. Over half of the F&Vs (10/18) were significantly cheaper at nearby compared to distant supermarkets, providing evidence of a moderate 'halo effect' in price reductions in supermarkets that neighbored markets. Weekend (vs midweek) prices were also significantly cheaper at nearby (vs distant) supermarkets, supporting evidence for a 'halo effect'. Ideal weekly 'food basket' prices for a two adult, two child family were: OFVMs (NZ$76), online supermarket ($113), nearby supermarkets ($124), distant supermarkets ($127), and FMs ($138). This represents a savings of $49 per week (US$26) by using OFVMs relative to (non-online) supermarkets. Similarly, a shift from non-online supermarkets to the online supermarket would generate a $13 saving. In these locations general markets appear to be providing some substantially lower prices for fruit and vegetables than supermarkets. They also appear to be depressing prices in neighboring supermarkets. These results, when supplemented by other needed research, may help inform the case for interventions to improve access to fruit and vegetables, particularly for low-income populations.

Obtaining fruit and vegetables for the lowest prices: pricing survey of different outlets and geographical analysis of competition effects.

Directory of Open Access Journals (Sweden)

Amber L Pearson

Full Text Available AIMS: Inadequate fruit and vegetable (F&V consumption is an important dietary risk factor for disease internationally. High F&V prices can be a barrier to dietary intake and so to improve understanding of this topic we surveyed prices and potential competition between F&V outlet types. METHODS: Over a three week early autumn period in 2013, prices were collected bi-weekly for 18 commonly purchased F&Vs from farmers' markets (FM selling local produce (n = 3, other F&V markets (OFVM (n = 5, supermarkets that neighbored markets (n = 8, and more distant supermarkets (n = 8, (in urban Wellington and Christchurch areas of New Zealand. Prices from an online supermarket were also collected. RESULTS: A total of 3120 prices were collected. Most F&Vs (13/18 were significantly cheaper at OFVMs than supermarkets. Over half of the F&Vs (10/18 were significantly cheaper at nearby compared to distant supermarkets, providing evidence of a moderate 'halo effect' in price reductions in supermarkets that neighbored markets. Weekend (vs midweek prices were also significantly cheaper at nearby (vs distant supermarkets, supporting evidence for a 'halo effect'. Ideal weekly 'food basket' prices for a two adult, two child family were: OFVMs (NZ$76, online supermarket ($113, nearby supermarkets ($124, distant supermarkets ($127, and FMs ($138. This represents a savings of $49 per week (US$26 by using OFVMs relative to (non-online supermarkets. Similarly, a shift from non-online supermarkets to the online supermarket would generate a $13 saving. CONCLUSIONS: In these locations general markets appear to be providing some substantially lower prices for fruit and vegetables than supermarkets. They also appear to be depressing prices in neighboring supermarkets. These results, when supplemented by other needed research, may help inform the case for interventions to improve access to fruit and vegetables, particularly for low-income populations.

Towards equitable access to medicines for the rural poor: analyses of insurance claims reveal rural pharmacy initiative triggers price competition in Kyrgyzstan.

Science.gov (United States)

Waning, Brenda; Maddix, Jason; Tripodis, Yorghos; Laing, Richard; Leufkens, Hubert Gm; Gokhale, Manjusha

2009-12-14

A rural pharmacy initiative (RPI) designed to increase access to medicines in rural Kyrgyzstan created a network of 12 pharmacies using a revolving drug fund mechanism in 12 villages where no pharmacies previously existed. The objective of this study was to determine if the establishment of the RPI resulted in the unforeseen benefit of triggering medicine price competition in pre-existing (non-RPI) private pharmacies located in the region. We conducted descriptive and multivariate analyses on medicine insurance claims data from Kyrgyzstan's Mandatory Health Insurance Fund for the Jumgal District of Naryn Province from October 2003 to December 2007. We compared average quarterly medicine prices in competitor pharmacies before and after the introduction of the rural pharmacy initiative in October 2004 to determine the RPI impact on price competition. Descriptive analyses suggest competitors reacted to RPI prices for 21 of 30 (70%) medicines. Competitor medicine prices from the quarter before RPI introduction to the end of the study period decreased for 17 of 30 (57%) medicines, increased for 4 of 30 (13%) medicines, and remained unchanged for 9 of 30 (30%) medicines. Among the 9 competitor medicines with unchanged prices, five initially decreased in price but later reverted back to baseline prices. Multivariate analyses on 19 medicines that met sample size criteria confirm these findings. Fourteen of these 19 (74%) competitor medicines changed significantly in price from the quarter before RPI introduction to the quarter after RPI introduction, with 9 of 19 (47%) decreasing in price and 5 of 19 (26%) increasing in price. The RPI served as a market driver, spurring competition in medicine prices in competitor pharmacies, even when they were located in different villages. Initiatives designed to increase equitable access to medicines in rural regions of developing and transitional countries should consider the potential to leverage medicine price competition as a means

Towards equitable access to medicines for the rural poor: analyses of insurance claims reveal rural pharmacy initiative triggers price competition in Kyrgyzstan

Directory of Open Access Journals (Sweden)

Leufkens Hubert GM

2009-12-01

Full Text Available Abstract Background A rural pharmacy initiative (RPI designed to increase access to medicines in rural Kyrgyzstan created a network of 12 pharmacies using a revolving drug fund mechanism in 12 villages where no pharmacies previously existed. The objective of this study was to determine if the establishment of the RPI resulted in the unforeseen benefit of triggering medicine price competition in pre-existing (non-RPI private pharmacies located in the region. Methods We conducted descriptive and multivariate analyses on medicine insurance claims data from Kyrgyzstan's Mandatory Health Insurance Fund for the Jumgal District of Naryn Province from October 2003 to December 2007. We compared average quarterly medicine prices in competitor pharmacies before and after the introduction of the rural pharmacy initiative in October 2004 to determine the RPI impact on price competition. Results Descriptive analyses suggest competitors reacted to RPI prices for 21 of 30 (70% medicines. Competitor medicine prices from the quarter before RPI introduction to the end of the study period decreased for 17 of 30 (57% medicines, increased for 4 of 30 (13% medicines, and remained unchanged for 9 of 30 (30% medicines. Among the 9 competitor medicines with unchanged prices, five initially decreased in price but later reverted back to baseline prices. Multivariate analyses on 19 medicines that met sample size criteria confirm these findings. Fourteen of these 19 (74% competitor medicines changed significantly in price from the quarter before RPI introduction to the quarter after RPI introduction, with 9 of 19 (47% decreasing in price and 5 of 19 (26% increasing in price. Conclusions The RPI served as a market driver, spurring competition in medicine prices in competitor pharmacies, even when they were located in different villages. Initiatives designed to increase equitable access to medicines in rural regions of developing and transitional countries should consider the

Study on Complex Advertising and Price Competition Dual-Channel Supply Chain Models Considering the Overconfidence Manufacturer

Directory of Open Access Journals (Sweden)

Junhai Ma

2016-01-01

Full Text Available In order to explore how the manufacturers make decisions when two manufacturers compete for local advertising investment, we examine two noncooperative models (Stackelberg and Nash game and propose a cost sharing contract to investigate channel competition of dual-channel supply chain. The dominant power between manufacturer and retailer and the effect of channel competition strategy on price are mainly discussed. In addition, dynamic system concepts are integrated into Stackelberg game model based on bounded rational mechanism. We analyze the local stability and find that the stability level of the dual-channel supply chains depends crucially on the price adjustment speed, the level of demand uncertainty, and the risk preference. The outcome shows that, under the master-slave game model, the profits of manufacturers are greater than that under decentralized decision-making mode, and the profits of retailers under master-slave game model are less than that under decentralized decision-making mode. The profits of manufacturers and retailers in the stable region are greater than that in unstable region. Finally, the delay feedback control method is utilized and effectively controls the chaotic behavior of dual-channel supply chain model. The results have theoretical and practical significance for the game models in terms of advertising and price competition.

Input price risk and optimal timing of energy investment: choice between fossil- and biofuels

Energy Technology Data Exchange (ETDEWEB)

Murto, Pauli; Nese, Gjermund

2002-05-01

We consider energy investment, when a choice has to be made between fossil fuel and biomass fired production technologies. A dynamic model is presented to illustrate the effect of the different degrees of input price uncertainty on the choice of technology and the timing of the investment. It is shown that when the choice of technology is irreversible, it may be optimal to postpone the investment even if it would otherwise be optimal to invest in one or both of the plant types. We provide a numerical example based on cost, estimates of two different power plant types. (author)

Input price risk and optimal timing of energy investment: choice between fossil- and biofuels

International Nuclear Information System (INIS)

Murto, Pauli; Nese, Gjermund

2002-01-01

We consider energy investment, when a choice has to be made between fossil fuel and biomass fired production technologies. A dynamic model is presented to illustrate the effect of the different degrees of input price uncertainty on the choice of technology and the timing of the investment. It is shown that when the choice of technology is irreversible, it may be optimal to postpone the investment even if it would otherwise be optimal to invest in one or both of the plant types. We provide a numerical example based on cost, estimates of two different power plant types. (author)

An Introduction to Retail Electricity Choice in the United States

Energy Technology Data Exchange (ETDEWEB)

Zhou, Shengru [National Renewable Energy Laboratory (NREL), Golden, CO (United States)

2017-10-04

Retail electricity choice in the United States allows end-use customers (including industrial, commercial, and residential customers) to buy electricity from competitive retail suppliers. This brochure offers an overview of retail electricity choice in the United States, and its impact on prices and renewable energy procurement. It concludes with three lessons learned from the U.S. retail market experience that may serve as a reference for other countries and regions taking steps towards retail electricity market liberalization.

Pricing Policies in Green Supply Chains with Vertical and Horizontal Competition

Directory of Open Access Journals (Sweden)

Shan Chen

2017-12-01

Full Text Available The paper explores the pricing policies and green strategies in a duopoly green supply chain with vertical and horizontal competition, which includes a green manufacturer, a traditional manufacturer and a common retailer. The purpose of the paper is to address the following research problems: (1 How manufacturers’ market power influences the pricing policies and green strategies of supply chain members in a green supply chain? (2 What conditions do first-mover advantage and green competitive advantage be effective simultaneously? We establish the linear demand functions of the duopoly green supply chain and obtain the players’ optimal decisions under channel members’ different market power. Further, we conduct sensitivity analysis and numerical examples of players’ optimal decisions about consumer’s environmental awareness and greening cost effector. Based on the theoretical and numerical analysis, we find that green manufacturer would benefit from the increment of consumer’s environmental awareness but be depressed by the increase of greening cost, which is contrary to the traditional manufacturer. Additionally, correlations of retailer’ optimal decisions and profits between consumer’s environmental awareness and greening cost effector are related to the manufacturers’ market power structures. Furthermore, we find that the green competitive advantage is more effective than first-mover advantage while first-mover advantage does not always effective in the duopoly green supply chain. Specially, traditional manufacturer always prefers to be the follower competing with the green manufacturer, no matter with the variety of consumer’s environmental awareness and greening cost effector, while green manufacturer would like to be the leader only when the consumer’s environmental awareness is relatively high or the greening cost effector is relatively low.

Hourly rate of direct labor - contributions to its applicability in the pricing process inserted in a competitive market

Directory of Open Access Journals (Sweden)

Antonio Benedito Silva Oliveira

2016-12-01

Full Text Available The detailed cost analysis is currently required as a result of increasingly competitive markets. The strategic cost management, analyzed from the optic of the target costing, can be a powerful tool for companies to keep themselves competitive. In this way, this study aimed to present a meticulous analysis of the hourly rate of direct labor in the pricing process of a new product, in order to understand if its use is appropriate in a pricing process. We used the deductive method supported in a case study, and the result achieved is that the hourly rate of direct current labor cannot be used in the pricing process, otherwise will be determined unrealistic costs to the product. It is important to highlight that this analysis applies to micro and small until large corporations.

Assessing competition in hospital care markets: the importance of accounting for quality differentiation.

Science.gov (United States)

Tay, Abigail

2003-01-01

Quality differentiation is especially important in the hospital industry, where the choices of Medicare patients are unaffected by prices. Unlike previous studies that use geographic market concentration to estimate hospital competitiveness, this article emphasizes the importance of quality differentiation in this spatially differentiated market. I estimate a random-coefficients discrete-choice model that predicts patient flow to different hospitals and find that demand responses to both distance and quality are substantial. The estimates suggest that patients do not substitute toward alternative hospitals in proportion to current market shares, implying that geographic market concentration is an inappropriate measure of hospital competitiveness.

Embracing the challenge of competition

International Nuclear Information System (INIS)

MacDonald, C.

1998-01-01

The new and creative solutions that Edmonton Power is using to meet the challenges of deregulation, competition and demand for customer choice in the electric power industry are discussed. Among these creative initiatives, in 1997 Edmonton Power extended account management services to 850 accounts to deliver commercial and operational analysis of energy consumption and management. Another major focus of effort has been the introduction of time of use (TOU) pricing options to commercial and industrial customers above 150 kWh. This required the installation of the latest hourly metering technology and the establishment of new price plans and contracts. Two major challenges were highlighted: (1) the mismatch between the prices utilities pay at the power pool and what the customer pays at the meter, and (2) the increased volatility of hour to hour price changes are just some of the risks that will have to be resolved under the new market structure

Effects of asymmetric medical insurance subsidy on hospitals competition under non-price regulation.

Science.gov (United States)

Wang, Chan; Nie, Pu-Yan

2016-11-15

Poor medical care and high fees are two major problems in the world health care system. As a result, health care insurance system reform is a major issue in developing countries, such as China. Governments should take the effect of health care insurance system reform on the competition of hospitals into account when they practice a reform. This article aims to capture the influences of asymmetric medical insurance subsidy and the importance of medical quality to patients on hospitals competition under non-price regulation. We establish a three-stage duopoly model with quantity and quality competition. In the model, qualitative difference and asymmetric medical insurance subsidy among hospitals are considered. The government decides subsidy (or reimbursement) ratios in the first stage. Hospitals choose the quality in the second stage and then support the quantity in the third stage. We obtain our conclusions by mathematical model analyses and all the results are achieved by backward induction. The importance of medical quality to patients has stronger influence on the small hospital, while subsidy has greater effect on the large hospital. Meanwhile, the importance of medical quality to patients strengthens competition, but subsidy effect weakens it. Besides, subsidy ratios difference affects the relationship between subsidy and hospital competition. Furthermore, we capture the optimal reimbursement ratio based on social welfare maximization. More importantly, this paper finds that the higher management efficiency of the medical insurance investment funds is, the higher the best subsidy ratio is. This paper states that subsidy is a two-edged sword. On one hand, subsidy stimulates medical demand. On the other hand, subsidy raises price and inhibits hospital competition. Therefore, government must set an appropriate subsidy ratio difference between large and small hospitals to maximize the total social welfare. For a developing country with limited medical resources

A Choice Prediction Competition for Market Entry Games: An Introduction

Directory of Open Access Journals (Sweden)

Ido Erev

2010-05-01

Full Text Available A choice prediction competition is organized that focuses on decisions from experience in market entry games (http://sites.google.com/site/gpredcomp/ and http://www.mdpi.com/si/games/predict-behavior/. The competition is based on two experiments: An estimation experiment, and a competition experiment. The two experiments use the same methods and subject pool, and examine games randomly selected from the same distribution. The current introductory paper presents the results of the estimation experiment, and clarifies the descriptive value of several baseline models. The experimental results reveal the robustness of eight behavioral tendencies that were documented in previous studies of market entry games and individual decisions from experience. The best baseline model (I-SAW assumes reliance on small samples of experiences, and strong inertia when the recent results are not surprising. The competition experiment will be run in May 2010 (after the completion of this introduction, but they will not be revealed until September. To participate in the competition, researchers are asked to E-mail the organizers models (implemented in computer programs that read the incentive structure as input, and derive the predicted behavior as an output. The submitted models will be ranked based on their prediction error. The winners of the competition will be invited to publish a paper that describes their model.

Medicamentos: o preço da saúde / Drugs: The Health Price

Directory of Open Access Journals (Sweden)

Joedson de Souza Delgado

2016-05-01

Full Text Available Purpose – This paper analyzes the structure of government control in drug prices between sector agents, to facilitate its reach to the population in the face of fierce competition for brand positioning in relation to generic manufacturers produced and developed in Brazil. Methodology – Based on empirical data and making use of a literature review, the paper discusses the model of maximum pricing in pharmacies, records the changes of the regulatory environment of the Brazilian pharmaceutical industry, describes the branded drug access policy and discusses the effectiveness and efficiency of intervention. Findings – The state interference in the drug market denotes the search for the containment of economic and social disparities by expanding the opportunity of choice and the offer of prices that are more competitive. Even so, there are still discussions about the quantum to be paid for effective and innovative drugs under patent protection. Practical implications – The critical discussion reveals the need for good sectorial regulation in order to maximize the welfare of society and consumers by increasing competition between laboratories.

Competitive nonlinear pricing and bundling

OpenAIRE

Armstrong, Mark; Vickers, John

2006-01-01

We examine the impact of multiproduct nonlinear pricing on profit, consumer surplus and welfare in a duopoly. When consumers buy all their products from one firm (the one-stop shopping model), nonlinear pricing leads to higher profit and welfare, but often lower consumer surplus, than linear pricing. By contrast, in a unit-demand model where consumers may buy one product from one firm and another product from another firm, bundling generally acts to reduce profit and welfare and to boost cons...

Transmission : roadway to a competitive electricity market

Energy Technology Data Exchange (ETDEWEB)

Thon, S. [AltaLink L.P., AB (Canada)

2002-07-01

Having a variety of suppliers, marketers and retailers is the key to developing a successful electricity market which is more competitive on pricing, with less price volatility, more innovative customer products and higher levels of customer services. Some areas of Alberta are developing their own power markets with limited capacity to interact. These include Pincher Creek, Empress, Calgary, Edmonton, and Fort McMurray. It was noted that increasing transmission capacity is the key to ensuring a bigger and more competitive electricity market. Transmission constraints only encourage a small number of suppliers to control the market. The current cost of transmission capacity accounts for less than 5 per cent of an average residential customer's bill, but it plays a major role in providing more choice to competitive electricity suppliers. Developing more transmission capacity will create an even more competitive market that benefits both consumers and suppliers. Prices in Alberta have been very volatile in the past couple of years because of supply and demand issues, and there is a need to increase market liquidity. Alberta's Transmission Administrator is looking to expand the transmission network to alleviate constraints and to lower the cost of power generation, regardless of location. These expansions are not expected to affect customers' bills by more than 2 to 3 per cent. Such transmission concerns are being felt all over North America. The Federal Energy Regulatory Commission (FERC) in the United States also recognizes the link between transmission and creating a competitive electricity market.

The price of electricity from private power producers: Stage 2, Expansion of sample and preliminary statistical analysis

Energy Technology Data Exchange (ETDEWEB)

Comnes, G.A.; Belden, T.N.; Kahn, E.P.

1995-02-01

The market for long-term bulk power is becoming increasingly competitive and mature. Given that many privately developed power projects have been or are being developed in the US, it is possible to begin to evaluate the performance of the market by analyzing its revealed prices. Using a consistent method, this paper presents levelized contract prices for a sample of privately developed US generation properties. The sample includes 26 projects with a total capacity of 6,354 MW. Contracts are described in terms of their choice of technology, choice of fuel, treatment of fuel price risk, geographic location, dispatchability, expected dispatch niche, and size. The contract price analysis shows that gas technologies clearly stand out as the most attractive. At an 80% capacity factor, coal projects have an average 20-year levelized price of $0.092/kWh, whereas natural gas combined cycle and/or cogeneration projects have an average price of $0.069/kWh. Within each technology type subsample, however, there is considerable variation. Prices for natural gas combustion turbines and one wind project are also presented. A preliminary statistical analysis is conducted to understand the relationship between price and four categories of explanatory factors including product heterogeneity, geographic heterogeneity, economic and technological change, and other buyer attributes (including avoided costs). Because of residual price variation, we are unable to accept the hypothesis that electricity is a homogeneous product. Instead, the analysis indicates that buyer value still plays an important role in the determination of price for competitively-acquired electricity.

Decision Analysis of Advertising and Price for Bilateral Competing Supply Chain

Directory of Open Access Journals (Sweden)

Cheng-Tang Zhang

2013-01-01

Full Text Available The outcome of centralized equilibrium, prisoner's dilemma equilibrium, and decentralized equilibrium under different decision models has been provided with regards to bilateral competing supply chain system, either side of which is composed of one manufacturer and one retailer. Theoretical analysis indicates a positive correlation between price and one's own advertising investment level and a negative correlation between price and the opponent's advertising investment level. Through analysis of numerical examples, the results reveal a first mover advantage that leads to prisoner's dilemma in the system as well as the impact that price and advertising competition intensity has on the supply chain's choice of decision model.

Competition compliant wholesale electricity prices. An examination of the regulation on the integrity and transparency of wholesale energy market

International Nuclear Information System (INIS)

Konar, Selma

2015-01-01

The development of wholesale electricity prices showed in recent years a very fluctuating course. The starting point for ensuring competitive compliant electricity prices have uniform rules that establish effective competition in the overall wholesale electricity, ensure greater transparency in the market and prohibit market abuse influence exercised on the wholesale price. The REMIT regulation creates a first union-law rules to this standardized specifications. The volume first examines the transparency, competitiveness, and supervisory structures in the wholesale electricity before legislating a regulation. It is clear, as the transparency and supervisory structures should be designed from the wholesale electricity ideally. On this basis, the work is dealing with the REMIT regulation. The author works out to market participants relevant notification and publication requirements, the follow-up demands on the company as well as the now existing prohibitions on market abuse and the related penalty catalog and analyze the supervisory structures newly created in the wholesale electricity. Here, the work also identified the weaknesses of the regulation and shows suitable solution approaches. [de

Reducing greenhouse gas emissions: a duopoly market pricing competition and cooperation under the carbon emissions cap.

Science.gov (United States)

Jian, Ming; He, Hua; Ma, Changsong; Wu, Yan; Yang, Hao

2017-05-17

This article studies the price competition and cooperation in a duopoly that is subjected to carbon emissions cap. The study assumes that in a departure from the classical Bertrand game, there is still a market for both firms' goods regardless of the product price, even though production capacity is limited by carbon emissions regulation. Through the decentralized decision making of both firms under perfect information, the results are unstable. The firm with the lower maximum production capacity under carbon emissions regulation and the firm with the higher maximum production capacity both seek market price cooperation. By designing an internal carbon credits trading mechanism, we can ensure that the production capacity of the firm with the higher maximum production capacity under carbon emissions regulation reaches price equilibrium. Also, the negotiation power of the duopoly would affect the price equilibrium.

A choice modelling analysis on the similarity between distribution utilities’ and industrial customers’ price and quality preferences

DEFF Research Database (Denmark)

Söderberg, Magnus

2008-01-01

The Swedish Electricity Act states that electricity distribution must comply with both price and quality requirements. In order to maintain efficient regulation it is necessary to firstly, define quality attributes and secondly, determine a customer's priorities concerning price and quality...... to evaluate the same twelve choice situations in which price and four specific quality attributes are varied. The preferences expressed by the utilities, and estimated by a random parameter logit, correspond quite well with the preferences expressed by the largest industrial customers. The preferences...

Reference pricing system and competition: case study from Portugal.

Science.gov (United States)

Portela, Conceiçăo

2009-10-01

To characterize the patterns of competition for a sample of drugs in the Portuguese pharmaceutical market before (January 2002-March 2003) and after (April 2003-June 2003) the introduction of the reference pricing system (RPS). We performed a descriptive, retrospective, longitudinal analysis, with monthly observations from January 2002 until June 2003 of 15 homogeneous groups. The groups represented the upper limit of public pharmaceutical expenditure in the RPS segment in 2003 (n=270). Measures of competition were: 1) number of presentations; 2) prescriptions' concentration in the generic and originator (brand) segments, using Herfindahl-Hirschman Index (HHI); and 3) dominant positions of market leader in the homogeneous group. A correlation analysis between the number of presentations, the HHI, and the dominant position of the market leader was performed using Pearson coefficient of correlation. The structure of the market changed with the introduction of RPS. We found an increasing number of generic presentations (from 4+/-3 to 7+/-4; mean+/-standard deviation) and a decrease in the HHI for the generics market segment (from 0.7+/-0.2 to 0.6+/-0.3). There was a negative correlation between those variables that increased after the introduction of RPS (from -0.6 to -0.8). The HHI for brands and the dominant positions remained unchanged. After the implementation of RPS, the increased competition was mainly driven by economic and social agents in the generics market segment but not in the brands market segment.

The effects of price competition and reduced subsidies for uncompensated care on hospital mortality.

Science.gov (United States)

Volpp, Kevin G M; Ketcham, Jonathan D; Epstein, Andrew J; Williams, Sankey V

2005-08-01

To determine whether hospital mortality rates changed in New Jersey after implementation of a law that changed hospital payment from a regulated system based on hospital cost to price competition with reduced subsidies for uncompensated care and whether changes in mortality rates were affected by hospital market conditions. State discharge data for New Jersey and New York from 1990 to 1996. Study Design. We used an interrupted time series design to compare risk-adjusted in-hospital mortality rates between states over time. We compared the effect sizes in markets with different levels of health maintenance organization penetration and hospital market concentration and tested the sensitivity of our results to different approaches to defining hospital markets. The study sample included all patients under age 65 admitted to New Jersey or New York hospitals with stroke, hip fracture, pneumonia, pulmonary embolism, congestive heart failure, hip fracture, or acute myocardial infarction (AMI). Mortality among patients in New Jersey improved less than in New York by 0.4 percentage points among the insured (p=.07) and 0.5 percentage points among the uninsured (p=.37). There was a relative increase in mortality for patients with AMI, congestive heart failure, and stroke, especially for uninsured patients with these conditions, but not for patients with the other four conditions we studied. Less competitive hospital markets were significantly associated with a relative decrease in mortality among insured patients. Market-based reforms may adversely affect mortality for some conditions but it appears the effects are not universal. Insured patients in less competitive markets fared better in the transition to price competition.

Vehicle type choice under the influence of a tax reform and rising fuel prices

DEFF Research Database (Denmark)

Mabit, Stefan Lindhard

2014-01-01

change in new vehicle purchases toward more diesel vehicles and more fuel-efficient vehicles. The paper analyses to what extent a vehicle tax reform similar to the Danish 2007 reform may explain changes in purchasing behaviour. The paper investigates the effects of a tax reform, fuel price changes......, and technological development on vehicle type choice using a mixed logit model. The model allows a simulation of the effect of car price changes that resemble those induced by the tax reform. This effect is compared to the effects of fuel price changes and technology improvements. The simulations show...... that the effect of the tax reform on fuel efficiency is similar to the effect of rising fuel prices while the effect of technological development is much larger. The conclusion is that while the tax reform appeared in the same year as a large increase in fuel efficiency, it seems likely that it only explains...

Marketplace pricing

International Nuclear Information System (INIS)

Anon.

1991-01-01

As discussed in this chapter, interest in marketplace pricing has been increasing in recent years, reflecting the societal trend toward substituting competition for regulation where appropriate. Competition is valuable because it encourages utilities to make efficient decisions with a minimum of regulatory intervention. It enhances efficiency through the incentive for innovation by the regulated companies and by increasing the likelihood they will come forward with proposals for better services, lower prices or both. Ultimately, consumers are beneficiaries. Marketplace pricing is emblematic of the view that the degree of regulation should reflect the degree of market power, that workably competitive markets should be allowed to operate with as little regulatory interference as possible. The Edison Electric Institute has made perhaps the most detailed proposal on marketplace pricing. It and others perceive numerous benefits from this method of pricing transmission services. Given the undeniable market power resulting from line ownership, FERC has emphasized the need to find a workably competitive market before approving such proposals. The ability to make this distinction without a full-blown antitrust review for every transaction is questionable, and FERC has yet to provide generic guidance. Finally, FERC's legal ability to depart from cost-based standards is questionable

Electric power prices, price control and competition on the European domestic electric power market. Stromtarife, Preisaufsicht und Wettbewerb im Europaeischen Binnenmarkt fuer Strom

Energy Technology Data Exchange (ETDEWEB)

Weigt, N

1993-01-01

If one speaks of electric power prices and price control in the year 1992, this subject has a different dimension than it did two or three years ago, when the new federal rate scale for electric power (ETO Elt) was drawn up and put into practice. Since the beginning of this year, a draft for guidelines which was drawn up by the EC Commission exists which, going on the assumption that the European domestic electric power market will set an example, does away with territorial protection and in the name of third party access (TPA) allows for electric power-line transit, thus introducing at least partial competition to the electric power market. We no longer think in terms of closed systems with clear-cut responsibilities in regard to power supply, which form the basis for the laws on electric power prices, the cartel laws, the practices of the electric power control board and the cartel authorities. Thus, using the new federal rate scale for electric power and its principles as formulated in Article 1 as a point of departure, developments will go in the direction of a competitive system in accordance with the ideas of the EC Commission and German free-enterprise theoreticians, as laid down for example by the deregulation commission. Thus developments will lead us away from the status quo in the direction of possible reforms, if not to say revolutionary structural changes and the consequnces which they will bring for price and cartel laws. (orig.)

Oligopolistic Competition in Price and Quality

NARCIS (Netherlands)

A. Dubovik (Andrei); M.C.W. Janssen (Maarten)

2008-01-01

textabstractWe consider an oligopolistic market where firms compete in price and quality and where consumers are heterogeneous in knowledge: some consumers know both the prices and quality of the products offered, some know only the prices and some know neither. We show that two types of signalling

Access pricing on gas networks and capacity release markets: Lessons from North American and European experiences

International Nuclear Information System (INIS)

David, L.; Percebois, J.

2004-01-01

An evaluation of different access fee systems in North America and Europe in relation to normative prices is discussed. Among available alternatives the entry-exit pricing system as it is currently applied in the United Kingdom, the Netherlands, Italy and France, was judged to be the best solution to increased competition. Canadian and American experiences highlight the influence of the market power of shippers with regard to the efficacy of capping the market. Whether or not to cap the price on a capacity release market is a choice between the protection of shippers against market abuses and the promotion of secondary market liquidity, a choice that is linked to the level of congestion of a pipeline system. If there is much congestion, a price cap may be necessary; if there is little congestion, the need for market value given by an uncapped price may be more important than the market power of shippers. 15 refs., 2 tabs

Two-echelon competitive integrated supply chain model with price and credit period dependent demand

Science.gov (United States)

Pal, Brojeswar; Sankar Sana, Shib; Chaudhuri, Kripasindhu

2016-04-01

This study considers a two-echelon competitive supply chain consisting of two rivaling retailers and one common supplier with trade credit policy. The retailers hope that they can enhance their market demand by offering a credit period to the customers and the supplier also offers a credit period to the retailers. We assume that the market demand of the products of one retailer depends not only on their own market price and offering a credit period to the customers, but also on the market price and offering a credit period of the other retailer. The supplier supplies the product with a common wholesale price and offers the same credit period to the retailers. We study the model under a centralised (integrated) case and a decentralised (Vertical Nash) case and compare them numerically. Finally, we investigate the model by the collected numerical data.

Competitive closed-loop supply chain network design with price-dependent demands

DEFF Research Database (Denmark)

Rezapour, Shabnam; Farahani, Reza Zanjirani; Fahimnia, Behnam

2015-01-01

Abstract This paper presents a bi-level model for the strategic reverse network design (upper level) and tactical/operational planning (lower level) of a closed-loop single-period supply chain operating in a competitive environment with price-dependent market demand. An existing supply chain (SC...... for the supply of new and remanufactured products. The performance behaviors of both SCs are evaluated with specific focus placed on investigating the impacts of the strategic facility location decisions of the new SC on the tactical/operational transport and inventory decisions of the overall network. The bi...

Quantity precommitment and price matching

DEFF Research Database (Denmark)

Tumennasan, Norovsambuu

We revisit the question of whether price matching is anti-competitive in a capacity constrained duopoly setting. We show that the effect of price matching depends on capacity. Specifically, price matching has no effect when capacity is relatively low, but it benefits the firms when capacity...... is relatively high. Interestingly, when capacity is in an intermediate range, price matching benefits only the small firm but does not affect the large firm in any way. Therefore, one has to consider capacity seriously when evaluating if price matching is anti-competitive. If the firms choose their capacities...... simultaneously before pricing decisions, then the effect of price matching is either pro-competitive or ambiguous. We show that if the cost of capacity is high, then price matching can only (weakly) decrease the market price. On the other hand, if the cost of capacity is low, then the effect of price matching...

Dynamic Oligopoly Pricing: Evidence from the Airline Industry

OpenAIRE

Siegert, Caspar; Ulbricht, Robert

2014-01-01

We explore how pricing dynamics in the European airline industry vary with the competitive environment. Our results highlight substantial variations in pricing dynamics that are consistent with a theory of intertemporal price discrimination. First, the rate at which prices increase towards the scheduled travel date is decreasing in competition, supporting the idea that competition restrains the ability of airlines to price-discriminate. Second, the sensitivity to competition is substantially ...

STS pricing policy

Science.gov (United States)

Lee, C. M.; Stone, B.

1982-01-01

In 1977 NASA published Shuttle Reimbursement Policies for Civil U.S. Government, DOD and Commercial and Foreign Users. These policies were based on the principle of total cost recovery over a period of time with a fixed flat price for initial period to time to enhance transition. This fixed period was to be followed with annual adjustments thereafter, NASA is establishing a new price for 1986 and beyond. In order to recover costs, that price must be higher than the initial fixed price through FY 1985. NASA intends to remain competitive. Competitive posture includes not only price, but other factors such as assured launch, reliability, and unique services. NASA's pricing policy considers all these factors.

Summary of FY17 ParaChoice Accomplishments

Energy Technology Data Exchange (ETDEWEB)

Levinson, Rebecca Sobel [Sandia National Lab. (SNL-NM), Albuquerque, NM (United States); West, Todd H. [Sandia National Lab. (SNL-NM), Albuquerque, NM (United States)

2017-09-01

As part of analysis support for FCTO, Sandia assesses the factors that influence the future of FCEVs and Hydrogen in the US vehicle fleet. Using ParaChoice, we model competition between FCEVs, conventional vehicles, and other alternative vehicle technologies in order to understand the drivers and sensitivities of adoption of FCEVs. ParaChoice leverages existing tools such as Autonomie (Moawad et al., 2016), AEO (U.S. Energy Information Administration, 2016), and the Macro System Model (Ruth et al., 2009) in order to synthesize a complete picture of the co-evolution of vehicle technology development, energy price evolution, and hydrogen production and pricing, with consumer demand for vehicles and fuel. We then assess impacts of FCEV market penetration and hydrogen use on green- house gas (GHG) emissions and petroleum consumption, providing context for the role of policy, technology development, infrastructure, and consumer behavior on the vehicle and fuel mix through parametric and sensitivity analyses.

The Impact of Free Riding on Price and Service Competition in the Presence of E-Commerce Retailers

OpenAIRE

Steven Strauss

2002-01-01

An extensive literature has focused on price competition and the Internet; however, little attention has been given to the Internet's impact on service competition. Services include activities such as the provision of product information, repairs, faster checkout, after-sales advice/information, retail advertising, certification of products by limiting the available assortment size, and the ability to examine/test merchandise. A consumer "free rides" when the customer uses services at one ret...

Electricity prices in France. From reality to perspectives in competition

International Nuclear Information System (INIS)

Leban, R.

1999-01-01

The French system of electricity pricing is based upon the principle of 'sale at development cost' or 'marginal long-term cost'. Drawing up prices is based upon a calculation of the marginal production costs carried out from time to time on the margins of the network for the years to come in accordance with demand forecasts and based upon a statistical but detailed appreciation of marginal transport costs. Gradually refined in order to take account of changes in demand and increases in the capacity of clients to respond to price signals, the system today appears to be highly complex. On the other hand this system possesses unequaled properties to encourage clients to consume wisely and boasts a recognised theoretical force. The long-term failure of the network to adapt may lead to an increasing focus on marginal short-term real costs, with as consequence the drastic reduction of seasonal variations. The difference with development cost pricing is fairly imperceptible in fine if, in order for a stable signal to exist, the short-term costs are averaged over future years. The continued existence of non-eligible customer segments and the existence (at least for several years) of dominant positions in those open to competition mean that there is a risk of cross-subsidies and predatory pricing being employed, risk that the regulator must restrict. The idea of avoiding cross-subsidies by imposing prices at marginal development costs as the ceiling for the prices charged to non-eligible clients, the use of the marginal short-term real costs of the operator to define the variable costs below which there is a predatory situation, and the use of the above mentioned marginal development costs to specify the total supply costs above which a predatory situation is no longer applicable appears tempting for three reasons. These costs always make sense on a legal and economic level, they may be determined easily due to the pricing decisions agreed with the EDF and the mechanisms

Electricity to natural gas competition under customer-side technological change: a marginal cost pricing analysis

International Nuclear Information System (INIS)

Gulli', Francesco

2004-01-01

This paper aims at evaluating the impact of technological change (on the customer side of the meter) on the network energy industry (electricity and natural gas). The performances of the small gas fired power technologies and the electrical reversible heat pumps have improved remarkably over the last ten years, making possible (or more viable) two opposite technological trajectories: the fully gas-based system, based on the use of small CHP (combined heat and power generation) plants, which would involve a wide decentralisation of energy supply; the fully electric-based system, based on the use of reversible electric heat pumps, which would imply increasing centralisation of energy supply. The analysis described in this paper attempts to evaluate how these two kinds of technological solutions can impact on inter-service competition when input prices are ste equals to marginal costs of supply in each stage of the electricity and natural gas industries. For this purpose, unbundled prices over time and over space are simulated. In particular the paper shows that unbundling prices over space in not very important in affecting electricity to natural gas competition and that, when prices are set equal to long-run marginal costs, the fully electric-based solution (the reversible heat pump) is by far preferable to the fully gas-based solution (the CHP gas fired small power plant). In consequence, the first best outcome of the technological change would involve increasing large power generation and imported (from the utility grid) electricity consumption. Given this framework, we have to ask ourselves why operators, regulators and legislators are so optimistic about the development of the fully gas-based solutions. In this respect, the paper suggests that market distortions (such as market power, energy taxation and inefficient pricing regulation) might have give an ambiguous representation of the optimal technological trajectory, inducing to overestimate the social value

Why do oil prices jump (or fall)?

International Nuclear Information System (INIS)

Wirl, Franz

2008-01-01

This paper discusses theories that can explain the zig-zags of oil prices in general and in particular the recent jump. More precisely, the following explanations are discussed: Homo oeconomicus (pure profit maximization if demand is dynamic and convex), price reaction function (price increases and respectively declines depend on capacity utilization), cartelization contingent on output or revenues of which the latter can lead to backward bending supply segments and multiple equilibria, statistical descriptions (mean reversion), homo politicus, i.e., arguments for price hikes that are rational (Public Choice) despite the (long-run) economic loss. Finally two approaches are presented that emphasize demand uncertainty: one extending the above-mentioned dynamic demand framework and the other considers a dynamic game of non-competitive suppliers with lumpy investments. Summing up, a demand shock seems to be the most suitable explanation of today's high prices (indeed a shock given that International Energy Agency (IEA) and Department of Energy (DoE) were promising just a couple of years ago that we are going to have lots of oil at low prices), while others and in particular politics have surprisingly little or no explanatory power. (author)

Consumers' choice of drinking water: Is it dependent upon perceived quality, convenience, price and attitude?

Science.gov (United States)

Wahid, Nabsiah Abdul; Cheng, Patrick Tan Foon; Abustan, Ismail; Nee, Goh Yen

2017-10-01

Tap water is one of the many sources of water that the public as consumers can choose for drinking. This study hypothesized that perceived quality, convenience, price and environmental attitude would determine consumers's choice of drinking water following the Attribution Theory as the underlying model. A survey was carried out on Malaysia's public at large. From 301 usable data, the PLS analysis revealed that only perceived quality, convenience and price attributed towards the public's choice of drinking water while attitude was not significant. The findings are beneficial for the water sector industry, particularly for drinking water operators, state governments, and alternative drinking water manufacturers like bottled water companies. The ability to identify factors for why consumers in the marketplace choose the source of their drinking water would enable the operators to plan and strategize tactics that can disseminate accurate knowledge about the product that can motivate marketability of drinking water in Malaysia.

Local and global dynamics in a duopoly with price competition and market share delegation

International Nuclear Information System (INIS)

Fanti, Luciano; Gori, Luca; Mammana, Cristiana; Michetti, Elisabetta

2014-01-01

This paper aims at studying a nonlinear dynamic duopoly model with price competition and horizontal product differentiation augmented with managerial firms, where managers behave according to market share delegation contracts. Ownership and management are then separate and managers are paid through adequate incentives in order to achieve a competitive advantage in the market. In this context, we show that complexity arises, related both to the structure of the attractors of the system and the structure of their basins, as multistability occurs. The study is conducted by combining analytical and numerical techniques, and aims at showing that slight different initial conditions may cause very different long-term outcomes

Robust Color Choice for Small-size League RoboCup Competition

Directory of Open Access Journals (Sweden)

Qiang Zhou

2004-10-01

Full Text Available In this paper, the problem of choosing a set of most separable colors in a given environment is discussed. The proposed method models the process of generating theoretically computed best colors, printing of these colors through a color printer, and imaging the printed colors through a camera into an integrated framework. Thus, it provides a feasible way to generate practically best separable colors for a given environment with a set of given equipment. A real world application (robust color choice for small-size league RoboCup competition is used as an example to illustrate the proposed method. Experimental results on this example show the competitiveness of the colors learned from our algorithm compared to the colors adopted by other teams which are chosen via an extensive trial and error process using standard color papers.

A choice modelling analysis on the similarity between distribution utilities' and industrial customers' price and quality preferences

International Nuclear Information System (INIS)

Soederberg, Magnus

2008-01-01

The Swedish Electricity Act states that electricity distribution must comply with both price and quality requirements. In order to maintain efficient regulation it is necessary to firstly, define quality attributes and secondly, determine a customer's priorities concerning price and quality attributes. If distribution utilities gain an understanding of customer preferences and incentives for reporting them, the regulator can save a lot of time by surveying them rather than their customers. This study applies a choice modelling methodology where utilities and industrial customers are asked to evaluate the same twelve choice situations in which price and four specific quality attributes are varied. The preferences expressed by the utilities, and estimated by a random parameter logit, correspond quite well with the preferences expressed by the largest industrial customers. The preferences expressed by the utilities are reasonably homogenous in relation to forms of association (private limited, public and trading partnership). If the regulator acts according to the preferences expressed by the utilities, smaller industrial customers will have to pay for quality they have not asked for. (author)

Competitive targeted advertising with price discrimination

OpenAIRE

Esteves, Rosa Branca; Resende, Joana

2013-01-01

This paper investigates the effects of price discrimination by means of targeted advertising in a duopolistic market where the distribution of consumers’ preferences is discrete and where advertising plays two major roles. It is used by firms as a way to transmit relevant information to otherwise uninformed consumers and it is used as a price discrimination device. We compare the firms’ optimal marketing mix (advertising and pricing) when they adopt mass advertising/non-discrimination strateg...

Brand-Supermarket Demand for Breakfast Cereals and Retail Competition

OpenAIRE

Benaissa Chidmi; Rigoberto A. Lopez

2007-01-01

The Berry, Levinsohn, and Pakes (1995) market equilibrium model is extended to the supermarket chain level to examine consumer choices and retail competition for thirty-seven brands of breakfast cereals in Boston. Estimated taste parameters for product characteristics vary significantly across consumers. Although consumers are price-sensitive with respect to their chosen cereals, they exhibit strong brand and supermarket loyalty. Retail markups increase and marginal costs decrease with grocer...

Natural gas contracts in an emerging competitive market

International Nuclear Information System (INIS)

Sutherland, R.J.

1992-01-01

Natural gas is being viewed by many as the fuel of the 1990s and beyond because of its environmental qualities, relatively low cost and significant domestic resource base. However, in the Fall of 1991, a group of electric utility executives met with then Deputy Secretary of Energy Henson Moore and asserted that an inability to obtain long term gas contracts meant that supplies are unreliable and construction of gas-fueled generating stations is being discouraged. This study was requested by the Deputy Secretary to address the issues surrounding long-term gas contracts and supply reliability. The relationship between supply reliability and contracts is explained in terms of the number of buyers and sellers in a market. With the appropriate state regulatory policies, utilities can contract for gas and obtain reliable supplies at competitive market prices. Public utility commissioners are encouraged to permit utilities a free choice in signing gas contracts, but to allow only competitive market prices to be reflected in allowable fuel costs

Natural gas contracts in an emerging competitive market

Energy Technology Data Exchange (ETDEWEB)

Sutherland, R.J.

1992-11-01

Natural gas is being viewed by many as the fuel of the 1990s and beyond because of its environmental qualities, relatively low cost and significant domestic resource base. However, in the Fall of 1991, a group of electric utility executives met with then Deputy Secretary of Energy Henson Moore and asserted that an inability to obtain long term gas contracts meant that supplies are unreliable and construction of gas-fueled generating stations is being discouraged. This study was requested by the Deputy Secretary to address the issues surrounding long-term gas contracts and supply reliability. The relationship between supply reliability and contracts is explained in terms of the number of buyers and sellers in a market. With the appropriate state regulatory policies, utilities can contract for gas and obtain reliable supplies at competitive market prices. Public utility commissioners are encouraged to permit utilities a free choice in signing gas contracts, but to allow only competitive market prices to be reflected in allowable fuel costs.

Natural gas contracts in an emerging competitive market

Energy Technology Data Exchange (ETDEWEB)

Sutherland, R.J.

1992-01-01

Natural gas is being viewed by many as the fuel of the 1990s and beyond because of its environmental qualities, relatively low cost and significant domestic resource base. However, in the Fall of 1991, a group of electric utility executives met with then Deputy Secretary of Energy Henson Moore and asserted that an inability to obtain long term gas contracts meant that supplies are unreliable and construction of gas-fueled generating stations is being discouraged. This study was requested by the Deputy Secretary to address the issues surrounding long-term gas contracts and supply reliability. The relationship between supply reliability and contracts is explained in terms of the number of buyers and sellers in a market. With the appropriate state regulatory policies, utilities can contract for gas and obtain reliable supplies at competitive market prices. Public utility commissioners are encouraged to permit utilities a free choice in signing gas contracts, but to allow only competitive market prices to be reflected in allowable fuel costs.

Marginal Cost Pricing in a World without Perfect Competition: Implications for Electricity Markets with High Shares of Low Marginal Cost Resources

Energy Technology Data Exchange (ETDEWEB)

Frew, Bethany A. [National Renewable Energy Lab. (NREL), Golden, CO (United States); Clark, Kara [National Renewable Energy Lab. (NREL), Golden, CO (United States); Bloom, Aaron P. [National Renewable Energy Lab. (NREL), Golden, CO (United States); Milligan, Michael [National Renewable Energy Lab. (NREL), Golden, CO (United States)

2017-12-02

A common approach to regulating electricity is through auction-based competitive wholesale markets. The goal of this approach is to provide a reliable supply of power at the lowest reasonable cost to the consumer. This necessitates market structures and operating rules that ensure revenue sufficiency for all generators needed for resource adequacy purposes. Wholesale electricity markets employ marginal-cost pricing to provide cost-effective dispatch such that resources are compensated for their operational costs. However, marginal-cost pricing alone cannot guarantee cost recovery outside of perfect competition, and electricity markets have at least six attributes that preclude them from functioning as perfectly competitive markets. These attributes include market power, externalities, public good attributes, lack of storage, wholesale price caps, and ineffective demand curve. Until (and unless) these failures are ameliorated, some form of corrective action(s) will be necessary to improve market efficiency so that prices can correctly reflect the needed level of system reliability. Many of these options necessarily involve some form of administrative or out-of-market actions, such as scarcity pricing, capacity payments, bilateral or other out-of-market contracts, or some hybrid combination. A key focus with these options is to create a connection between the electricity market and long-term reliability/loss-of-load expectation targets, which are inherently disconnected in the native markets because of the aforementioned market failures. The addition of variable generation resources can exacerbate revenue sufficiency and resource adequacy concerns caused by these underlying market failures. Because variable generation resources have near-zero marginal costs, they effectively suppress energy prices and reduce the capacity factors of conventional generators through the merit-order effect in the simplest case of a convex market; non-convexities can also suppress prices.

Price competition in procurement

International Nuclear Information System (INIS)

Keisler, J.M.; Buehring, W.A.

1996-07-01

When creating a private market to provide a public good, government agencies can influence the market's competitive characteristics. Markets have predictable, but often counterintuitive, behaviors. To succeed in applying available controls, and thereby reduce future costs, agencies must understand the behavior of the market. A model has been constructed to examine some issues in establishing competition for a structure in which there are economies of scale and government is obligated to purchase a fixed total quantity of a good. This model is used to demonstrate a way to estimate the cost savings from several alternative plans for a buyer exploring competitive procurement. The results are not and cannot be accurate for budgeting purposes; rather, they indicate the approximate magnitude of changes in cost that would be associated with changes in the market structure within which procurement occurs

Costing and competition.

Science.gov (United States)

Bates, K; Brignall, S

1994-01-01

Working for patients established a new system of contracts between providers and purchasers of healthcare, with prices based on full costs, avoiding cross-subsidization. The new regime necessitates greatly improved costing systems, to improve the efficiency of service provision by creating price competition between providers. Ken Bates and Stan Brignall argue that non-price competition also occurs, with providers 'differentiating' on quality of service/product, flexibility or innovation.

Electricity between monopoly and competition. Selling at the marginal cost. The rational guidance of electric energy consumption by tariffs

International Nuclear Information System (INIS)

Boiteux, Marcel

2015-10-01

Within the perspective of the introduction of competition, the first article comments the issues related to the different professions: distribution (which solutions as multiple grids would be too expensive?), interconnection and transport grids (same questions), and production. The author outlines some characteristics of electricity: it cannot be stored, is a rigid product, has a price elasticity almost null on the short term. Then he discusses different problems to be solved: transport tolls, competition for production, difference between customers (big clients, households, handicraft). In the second article, the author discusses the issue of pricing (why selling at cost price or at marginal cost price?) and discusses the definition of this marginal cost. In the third article, the author comments the common use of tariffs by electricity distribution companies as an incentive for a rational use of electric energy by consumers. He describes how prices are factors of economic choice, the implication of selling at cost price and at marginal cost price. He discusses the relationship between marginal cost price and budget balance, and the practical adaptation of tariffs

Non-price competition in credit card markets through bundling and bank level benefits

OpenAIRE

Akin, Guzin Gulsun; Aysan, Ahmet Faruk; Kara, Gazi Ishak; Yildiran, Levent

2008-01-01

The attempts to explain the high and sticky credit card rates have given rise to a vast literature on credit card markets. This paper endeavors to explain the rates in the Turkish market using measures of non-price competition. In this market, issuers compete monopolistically by differentiating their credit card products. The fact that credit cards and all other banking services are perceived as a bundle by consumers allows banks to deploy also bank level characteristics to differentiate thei...

Starting point anchoring effects in choice experiments

DEFF Research Database (Denmark)

Ladenburg, Jacob; Olsen, Søren Bøye

of preferences in Choice Experiments resembles the Dichotomous Choice format, there is reason to suspect that Choice Experiments are equally vulnerable to anchoring bias. Employing different sets of price levels in a so-called Instruction Choice Set presented prior to the actual choice sets, the present study...... subjectivity in the present study is gender dependent, pointing towards, that female respondents are prone to be affected by the price levels employed. Male respondents, on the other hand, are not sensitive towards these prices levels. Overall, this implicates that female respondents, when employing a low......-priced Instruction Choice Set, tend to express lower willingness-to-pay than when higher prices are employed....

Price Strategies in Banking Marketing

Directory of Open Access Journals (Sweden)

Iuliana Cetina

2007-01-01

Full Text Available All organizations must settle a price for the services they offer. The price for services is an important element of the marketing mix, being an important income source for the organization. The settlement of a correct price, both for the market and the competition, is a significant element for the sector of financial - banking services. Another important factor to take into consideration is the fact that the banks do not settle only the prices for individual services, but also coordinate their prices for service packages. As the competition in the financial - banking services has intensified, the settlement of correct prices has become an essential element for the marketing strategy. Nevertheless it is important to remind that the price is not a central element. There are other significant grounds, the price being only one of the elements of the marketing mix. Although in Romania many customers may be sensitive in present to the price, as the competition will increase, the quality of the services will become more important to the customers, and the demand will be complex.

Price and Service Competition of Dual-Channel Supply Chain with Consumer Returns

Directory of Open Access Journals (Sweden)

Lili Ren

2014-01-01

Full Text Available Products returned by consumers are common in the retail industry and result in additional costs to both the manufacturer and the retailer. This paper proposes dual-channel supply chain models involving consumer returns policies. Also, the price and service competition between retail channel and direct channel is considered in the models. According to the models, we analyze the optimal decisions in both centralized and decentralized scenarios. Then we design a new contract, coordinate the dual-channel supply chain, and enable both the retailer and the manufacturer to be a win-win.

Spanish, French and British consumers' acceptability of Uruguayan beef, and consumers' beef choice associated with country of origin, finishing diet and meat price.

Science.gov (United States)

Realini, C E; Font i Furnols, M; Sañudo, C; Montossi, F; Oliver, M A; Guerrero, L

2013-09-01

The effect of country of origin (local, Switzerland, Argentina, Uruguay), finishing diet (grass, grass plus concentrate, concentrate), and price (low, medium, high) on consumer's beef choice and segmentation was evaluated in Spain, France and United Kingdom. Sensory acceptability of Uruguayan beef from different production systems was also evaluated and contrasted with consumers' beef choices. Origin was the most important characteristic for the choice of beef with preference for meat produced locally. The second most important factor was animal feed followed by price with preference for beef from grass-fed animals and lowest price. The least preferred product was beef from Uruguay, concentrate-fed animals and highest price. Sensory data showed higher acceptability scores for Uruguayan beef from grass-fed animals with or without concentrate supplementation than animals fed concentrate only. Consumer segments with distinct preferences were identified. Foreign country promotion seems to be fundamental for marketing beef in Europe, as well as the development of different marketing strategies to satisfy each consumer segment. Copyright © 2013 Elsevier Ltd. All rights reserved.

The effects of recent volatility in international petroleum markets on Canadian wholesale and retail gasoline prices : a report prepared for the Competition Bureau

International Nuclear Information System (INIS)

Roseman, F.

2005-03-01

This report addresses concern over high retail prices of gasoline and the low margins earned on gasoline sales in the Greater Toronto Area and in Ottawa, Ontario. The focus of this report was to understand reasons behind fluctuating prices, and to ascertain whether or not escalations in price were in fact anti-competitive acts that the Competition Bureau would have authority to take action over. Information requests were made by the author to all principal petroleum companies and to importers and marketers of gasoline. Detailed information on pricing was provided. Issues of supply and demand were responsible for spikes in prices. Information on petroleum refining and retailing of gasoline was reviewed, as well as information provided from dialogue and shareholder reports. Average refinery and retail margins in Ontario were discussed. It was concluded that fluctuating prices are the result of the petroleum industry's struggle to meet high demand. Any unscheduled maintenance or unanticipated increases in demand resulted in temporary shortfalls in supply, which led to higher prices. Exports were not a factor in increases in retail prices. In addition, domestic supply and the high cost of meeting environmental regulations with regard to sulphur levels in gasoline and diesel may have also played a role. It was also suggested that prices in Canada reflect overall pricing trends in the United States. tabs., figs

PERCEIVED RISK, PRICE AND ONLINE TRAVEL AGENCIES: DOES PRICE ALWAYS MATTER?

Directory of Open Access Journals (Sweden)

Patricea Elena BERTEA

2011-01-01

Full Text Available The present study analyzes the influence of price level in the case of onlineshopping for travel services. The methodology used is a quasi experimentdeveloped in the online environment. The analysis is made within groups andfollows three scenarios which depend on the level of brand awareness.Inside each scenario price takes two levels: similar to competition andsmaller than competition. Results show that price does not have an influenceon all types of perceived risk and that its influence depends also on the brandawareness component.

Consumer choice between ethanol and gasoline: Lessons from Brazil and Sweden

Energy Technology Data Exchange (ETDEWEB)

Pacini, Henrique, E-mail: henrique.pacini@energy.kth.se; Silveira, Semida, E-mail: semida.silveira@energy.kth.se

2011-11-15

The introduction of flex-fuel vehicles since 2003 has made possible for Brazilian drivers to choose between high ethanol blends or gasoline depending on relative prices and fuel economies. In Sweden, flex-fuel fleets were introduced in 2005. Prices and demand data were examined for both Brazil and Sweden. Bioethanol has been generally the most cost-efficient fuel in Brazil, but not for all states. In any case, consumers in Brazil have opted for ethanol even when this was not the optimal economic choice. In Sweden, a different behavior was observed when falling gasoline prices made E85 uneconomical in late 2008. In a context of international biofuels expansion, the example of E85 in Sweden indicates that new markets could experience different consumer behavior than Brazil: demand falls rapidly with reduced price differences between ethanol and gasoline. At the same time, rising ethanol demand and lack of an international market with multiple biofuel producers could lead to higher domestic prices in Brazil. Once the limit curve is crossed, the consumer might react by shifting back to the usage of gasoline. - Research Highlights: > Brazil and Sweden both have infrastructure for high fuel ethanol blends. > Flex-fuel vehicles enable competition between ethanol and gasoline in fuel markets. > Data suggests that consumers make their fuel choice based mainly on prices. > Consumers in Sweden appear to be more price-sensitive than their Brazilian counterparts. > In the absence of international markets, high ethanol prices may drive consumers back to gasoline.

Short-term electricity prices forecasting in a competitive market by a hybrid intelligent approach

Energy Technology Data Exchange (ETDEWEB)

Catalao, J.P.S. [Department of Electromechanical Engineering, University of Beira Interior, R. Fonte do Lameiro, 6201-001 Covilha (Portugal); Center for Innovation in Electrical and Energy Engineering, Instituto Superior Tecnico, Technical University of Lisbon, Av. Rovisco Pais, 1049-001 Lisbon (Portugal); Pousinho, H.M.I. [Department of Electromechanical Engineering, University of Beira Interior, R. Fonte do Lameiro, 6201-001 Covilha (Portugal); Mendes, V.M.F. [Department of Electrical Engineering and Automation, Instituto Superior de Engenharia de Lisboa, R. Conselheiro Emidio Navarro, 1950-062 Lisbon (Portugal)

2011-02-15

In this paper, a hybrid intelligent approach is proposed for short-term electricity prices forecasting in a competitive market. The proposed approach is based on the wavelet transform and a hybrid of neural networks and fuzzy logic. Results from a case study based on the electricity market of mainland Spain are presented. A thorough comparison is carried out, taking into account the results of previous publications. Conclusions are duly drawn. (author)

Short-term electricity prices forecasting in a competitive market by a hybrid intelligent approach

International Nuclear Information System (INIS)

Catalao, J.P.S.; Pousinho, H.M.I.; Mendes, V.M.F.

2011-01-01

In this paper, a hybrid intelligent approach is proposed for short-term electricity prices forecasting in a competitive market. The proposed approach is based on the wavelet transform and a hybrid of neural networks and fuzzy logic. Results from a case study based on the electricity market of mainland Spain are presented. A thorough comparison is carried out, taking into account the results of previous publications. Conclusions are duly drawn. (author)

Implications for Firms with Limited Information to Take Advantage of Reference Price Effect in Competitive Settings

Directory of Open Access Journals (Sweden)

Junhai Ma

2017-01-01

Full Text Available This paper studies internal reference price effects when competitive firms face reference price effects and make decisions based on partial information, where their decision-making mechanism is modeled by a dynamic adjustment process. It is shown that the evolution of this dynamic adjustment goes to stabilization if both adjustment speeds are small and the complexity of this evolution increases in adjustment speeds. It is proved that the necessary condition for flip bifurcation or Neimark-Sacker bifurcation will occur with the increase of adjustment speed in two special cases. What is more, numerical simulations show that these bifurcations do occur. Then, the impacts of parameters on stability and profits are investigated and some management insights for firms with limited information to take advantage of reference price effects are provided.

Marketing environment dynamics and implications for pricing strategies: the case of home health care.

Science.gov (United States)

Ponsford, B J; Barlow, D

1999-01-01

This research reviews the factors affecting the pricing or rate schedules of home health care agencies. A large number of factors affect costs and thus rate structures. The major factors include reimbursement structures with accompanying discount structures, administrative burdens, and risks. Channel issues include bargaining power, competition, and size. Staffing issues affect pricing and product through the provider level, productivity, and quality outcomes. Physician and patient issues include quality concerns and choices. These factors are discussed in light of overall marketing strategy and the interaction of pricing with other marketing controllables such as product, place/distribution, and promotion. Economic and accounting principles are also reviewed with consideration to understanding direct and indirect costs in order to enable negotiators to effectively price health care services.

Delivered Pricing, FOB Pricing, and Collusion in Spatial Markets

OpenAIRE

Maria Paz Espinosa

1992-01-01

This article examines price discrimination and collusion in spatial markets. The problem is analyzed in the context of a repeated duopoly game. I conclude that the prevailing pricing systems depend on the structural elements of the market. Delivered pricing systems emerge in equilibrium in highly monopolistic and highly competitive industries, while FOB is used in intermediate market structures. The fact driving this result is that delivered pricing policies allow spatial price discrimination...

Analyzing the effects of past prices on reference price formation

NARCIS (Netherlands)

R.D. van Oest (Rutger); R. Paap (Richard)

2004-01-01

textabstractWe propose a new reference price framework for brand choice. In this framework, we employ a Markov-switching process with an absorbing state to model unobserved price recall of households. Reference prices result from the prices households are able to remember. Our model can be used to

75 FR 76472 - Biologics Price Competition and Innovation Act of 2009; Meetings on User Fee Program for...

Science.gov (United States)

2010-12-08

... DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2010-N-0602] Biologics Price Competition and Innovation Act of 2009; Meetings on User Fee Program for Biosimilar and Interchangeable Biological Product Applications; Request for Notification of Stakeholder Intention To Participate...

ANALYSIS OF COMPETITION INDUSTRIAL ENTERPRISES

Directory of Open Access Journals (Sweden)

A. O. Egorova

2014-01-01

Full Text Available The paper analyzed and systematized the definition of "competition" proposed by domestic and foreign scholars in the field of strategic management, based on these discovered and refined essence of the concept of "competition". We consider the price and non-price competition. Examples are given of the methods of competition used in the practice of industrial activities. Substantiated that the forms and methods of competition must be constantly improved through the search for new competitive advantages.

Analyzing the effects of past prices on reference price formation

OpenAIRE

van Oest, R.D.; Paap, R.

2004-01-01

textabstractWe propose a new reference price framework for brand choice. In this framework, we employ a Markov-switching process with an absorbing state to model unobserved price recall of households. Reference prices result from the prices households are able to remember. Our model can be used to learn how many prices observed in the past are used for reference price formation. Furthermore, we learn to what extent households have sufficient price knowledge to form an internal reference price...

Hospital non-price competition under the Global Budget Payment and Prospective Payment Systems.

Science.gov (United States)

Chen, Wen-Yi; Lin, Yu-Hui

2008-06-01

This paper provides theoretical analyses of two alternative hospital payment systems for controlling medical cost: the Global Budget Payment System (GBPS) and the Prospective Payment System (PPS). The former method assigns a fixed total budget for all healthcare services over a given period with hospitals being paid on a fee-for-service basis. The latter method is usually connected with a fixed payment to hospitals within a Diagnosis-Related Group. Our results demonstrate that, given the same expenditure, the GBPS would approach optimal levels of quality and efficiency as well as the level of social welfare provided by the PPS, as long as market competition is sufficiently high; our results also demonstrate that the treadmill effect, modeling an inverse relationship between price and quantity under the GBPS, would be a quality-enhancing and efficiency-improving outcome due to market competition.

The Role of Demand Response in Default Service Pricing

International Nuclear Information System (INIS)

Barbose, Galen; Goldman, Charles; Neenan, Bernie

2006-01-01

In designing default service for competitive retail markets, demand response has been an afterthought at best. But that may be changing, as states that initiated customer choice in the past five to seven years reach an important juncture in retail market design and consider an RTP-type default service for large commercial and industrial customers. The authors describe the experience to date with RTP as a default service, focusing on its role as an instrument for cultivating price-responsive demand. (author)

Regulated and unregulated Nordic retail prices

DEFF Research Database (Denmark)

Olsen, Ole Jess; Johnsen, Tor Arnt

2011-01-01

in Sweden but higher than in Norway and Finland. Because of market design Norwegian default contracts are competitive whereas Swedish contracts provide the retailer with some market power. We interpret the low Finnish margins as a result of municipal retailers continuing traditional pricing from...... competitive prices....... default prices are regulated whereas default prices in the other countries are unregulated. Systematic price differences exist among the Nordic countries. However, as wholesale prices sometimes differ the gross margin is a more relevant indicator. Regulated gross margins are lower in Denmark than...

Structural and behavioural foundations of competitive electricity prices

International Nuclear Information System (INIS)

Bunn, D.W.

2004-01-01

This chapter presents a basic introduction to price formation in the new electricity markets and examines power system economics and electricity market liberalisation. Topics discussed include wholesale electricity prices, the case of gas, the effect of the instantaneous nature of the electricity product, spot markets for electricity, and the ability of industrial companies to influence prices. Market fundamentals are reviewed, and institutional reform and strategic evolution are explored. British daily average power and gas prices, monthly forward prices on the British power and gas markets, seasonal demand profile, electricity demand UK 98/00, annual cost of each plant, price formation in 1997, and monthly demand and wholesale prices in England and Wales 1990-1998 are among the graphs provided

Gas pricing in Europe. Pt. 1. Wholesale markets

International Nuclear Information System (INIS)

Donath, R.

1996-01-01

The article investigates gas pricing in the European procurement market and the wholesale markets of the most important EU consumer markets. It demonstrates that value-oriented pricing principles override cost-oriented pricing principles. For one thing, and independently of pricing principles, two- or three-part demand price systems or basic price systems are common. For another, the frequently encountered opportunities for the differentiation of prices show that as long as there is merely substitution competition instead of direct competition, gas suppliers have a certain degree of freedom in fixing their prices. By contrast, the introduction of direct competition in Great Britain has reduced suppliers' individual price fixing margins, because short-term supply and demand variations in the now created spot market are decisive for gas pricing. (orig.) [de

Analysis on learning curves of end-use appliances for the establishment of price-sensitivity load model in competitive electricity market

Energy Technology Data Exchange (ETDEWEB)

Hwang, Sung Wook; Kim, Jung Hoon [Hongik University (Korea); Song, Kyung Bin [Keimyung University (Korea); Choi, Joon Young [Jeonju University (Korea)

2001-07-01

The change of the electricity charge from cost base to price base due to the introduction to the electricity market competition causes consumer to choose a variety of charge schemes and a portion of loads to be affected by this change. Besides, it is required the index that consolidate the price volatility experienced on the power exchange with gaming and strategic bidding by suppliers to increase profits. Therefore, in order to find a mathematical model of the sensitively-responding to-price loads, the price-sensitive load model is needed. And the development of state-of- the-art technologies affects the electricity price, so the diffusion of high-efficient end-uses and these price affect load patterns. This paper shows the analysis on learning curves algorithms which is used to investigate the correlation of the end-uses' price and load patterns. (author). 6 refs., 4 figs., 4 tabs.

Steady Increase In Prices For Oral Anticancer Drugs After Market Launch Suggests A Lack Of Competitive Pressure.

Science.gov (United States)

Bennette, Caroline S; Richards, Catherine; Sullivan, Sean D; Ramsey, Scott D

2016-05-01

The cost of treating cancer has risen to unprecedented heights, putting tremendous financial pressure on patients, payers, and society. Previous studies have documented the rising prices of cancer drugs at launch, but less critical attention has been paid to the cost of these drugs after launch. We used pharmacy claims for commercially insured individuals to examine trends in postlaunch prices over time for orally administered anticancer drugs recently approved by the Food and Drug Administration (FDA). In the period 2007-13, inflation-adjusted per patient monthly drug prices increased 5 percent each year. Certain market changes also played a role, with prices rising an additional 10 percent with each supplemental indication approved by the FDA and declining 2 percent with the FDA's approval of a competitor drug. Our findings suggest that there is currently little competitive pressure in the oral anticancer drug market. Policy makers who wish to reduce the costs of anticancer drugs should consider implementing policies that affect prices not only at launch but also later. Project HOPE—The People-to-People Health Foundation, Inc.

Study on Competitive Exporting Price-forecast of the SMART in the U.S

International Nuclear Information System (INIS)

Kim, In Su; Kim, Tae Ryong

2014-01-01

In line with this, the U.S. has a renewed interest in SMRs rather than large reactors. Nothing, however, has been implemented yet. The only SMRs under construction are in Russia: the first floating nuclear plants. For the most part, the primary candidates to be the first land-based counterparts of Russia's are the SMART (System integrated Modular Advanced Reactor) reactors. The Korean SMART has been developed and licensed for standard design. In addition, the SMART reactor may be suited to countries, which have a small grid capacity, low population density, and decentralization power system such as the U.S. Therefore, the purpose of this paper is to develop a target price for the SMR market opportunities in the U.S., competing against the CCGT (Combined Cycle Gas Turbine) which is currently a very attractive option for generating due to the shale innovation. Even though detailed cost estimates are not available, target price can be derived based on generally determining market price. This paper demonstrates the target exporting price of the SMART in the U.S. ranging from 3,091 - 4,011$/kWe depending on the scaling factor and carbon tax, assuming that discount rates are fixed. This value could be a target cost of construction, developing the U.S market whose demand of the SMART is potentially 4 units 2015 - 2035. Sensitivity analysis shows that the price goes up in proportion to the gas price, the capacity factor of the SMART, the overnight cost of CCGT, etc. More than anything else, this study reveals that carbon tax does not have much influence on the target price compared with those listed above. On the other hand, the price goes up in inverse proportion to the interest of the SMART, the capacity factor of CCGT, O and M costs of the SMART, and so on. For the price competitiveness, construction cost should first be reduced because construction cost is the largest component of LCOE as well as the effect of interest rate is the most sensitive for target price

Study on Competitive Exporting Price-forecast of the SMART in the U.S

Energy Technology Data Exchange (ETDEWEB)

Kim, In Su; Kim, Tae Ryong [KEPCO International Nuclear Graduate School, Ulsan (Korea, Republic of)

2014-10-15

In line with this, the U.S. has a renewed interest in SMRs rather than large reactors. Nothing, however, has been implemented yet. The only SMRs under construction are in Russia: the first floating nuclear plants. For the most part, the primary candidates to be the first land-based counterparts of Russia's are the SMART (System integrated Modular Advanced Reactor) reactors. The Korean SMART has been developed and licensed for standard design. In addition, the SMART reactor may be suited to countries, which have a small grid capacity, low population density, and decentralization power system such as the U.S. Therefore, the purpose of this paper is to develop a target price for the SMR market opportunities in the U.S., competing against the CCGT (Combined Cycle Gas Turbine) which is currently a very attractive option for generating due to the shale innovation. Even though detailed cost estimates are not available, target price can be derived based on generally determining market price. This paper demonstrates the target exporting price of the SMART in the U.S. ranging from 3,091 - 4,011$/kWe depending on the scaling factor and carbon tax, assuming that discount rates are fixed. This value could be a target cost of construction, developing the U.S market whose demand of the SMART is potentially 4 units 2015 - 2035. Sensitivity analysis shows that the price goes up in proportion to the gas price, the capacity factor of the SMART, the overnight cost of CCGT, etc. More than anything else, this study reveals that carbon tax does not have much influence on the target price compared with those listed above. On the other hand, the price goes up in inverse proportion to the interest of the SMART, the capacity factor of CCGT, O and M costs of the SMART, and so on. For the price competitiveness, construction cost should first be reduced because construction cost is the largest component of LCOE as well as the effect of interest rate is the most sensitive for target price

Carbon pricing. Mobilizing non-state actors on a global issue with local implications

International Nuclear Information System (INIS)

Afriat, Marion; Vaidyula; Manasvini; Alberola, Emilie

2016-09-01

An effective carbon price should send economic and political signals that shift public and private investment to increase the competitiveness of low-carbon solutions (fuels switching, deployment of renewable energy, etc.) and stay below the 2 deg. C trajectory. In 2016, over 40 countries and 20 provinces and cities have established an explicit price on carbon through carbon taxes or emissions trading systems. The choice of the carbon pricing instrument depends largely on the national or local circumstances and priorities. Carbon pricing should not be a stand-alone policy and should be part of a coherent energy and climate policy framework in order to achieve an effective low-carbon transition in all economic sectors. In 2015, $26 billion in government revenue was generated in the world through carbon pricing initiatives. These revenues can be leveraged to yield economic and environmental benefits at the national and local level. The Paris Agreement provides the necessary framework to facilitate the uptake of carbon pricing

Moral Hazard, Adverse Selection and the Optimal Consumption-Leisure Choice under Equilibrium Price Dispersion

Directory of Open Access Journals (Sweden)

Sergey Malakhov

2017-09-01

Full Text Available The analysis of the optimal consumption-leisure choice under equilibrium price dispersion discovers the methodological difference between problems of moral hazard and adverse selection. While the phenomenon of moral hazard represents the individual behavioral reaction on the marginal rate of substitution of leisure for consumption proposed by the insurance policy, the adverse selection can take place on any imperfect market under equilibrium price dispersion and it looks like a market phenomenon of a natural selection between consumers with different income and different propensity to search. The analysis of health insurance where the propensity to search takes the form of the propensity to seek healthcare demonstrates that moral hazard takes place when the insurance policy proposes a suboptimal consumption-leisure choice and the increase in consumption of medical services with the reduction of leisure time represents not an unlimited demand for “free goods” but the simple process of the consumption-leisure optimization. The path of consumerism with consumer-directed plans can solve partly the problem of moral hazard because in order to eliminate moral hazard this trend should come to the re-sale of medical services under health vouchers like it takes place in the life settlement.

Impacts of government subsidies on pricing and performance level choice in Energy Performance Contracting: A two-step optimal decision model

International Nuclear Information System (INIS)

Lu, Zhijian; Shao, Shuai

2016-01-01

Highlights: • An ESCO optimal decision model considering governmental subsidies is proposed. • Optimal price and performance level are deduced via a two-stage model. • Demand, profit, and performance level increase with increasing subsidies. • ESCO’s market strategy should firstly focus on high energy consumption industries. • Governmental subsidies standard in different industries should be differentiated. - Abstract: Government subsidies generally play a crucial role in pricing and the choice of performance levels in Energy Performance Contracting (EPC). However, the existing studies pay little attention to how the Energy Service Company (ESCO) prices and chooses performance levels for EPC with government subsidies. To fill such a gap, we propose a joint optimal decision model of pricing and performance level in EPC considering government subsidies. The optimization of the model is achieved via a two-stage process. At the first stage, given a performance level, ESCOs choose the best price; and at the second stage, ESCOs choose the optimal performance level for the optimal price. Furthermore, we carry out a numerical analysis to illuminate such an optimal decision mechanism. The results show that both price sensitivity and performance level sensitivity have significant effects on the choice of performance levels with government subsidies. Government subsidies can induce higher performance levels of EPC, the demand for EPC, and the profit of ESCO. We suggest that ESCO’s market strategy should firstly focus on high energy consumption industries with government subsidies and that government subsidies standard adopted in different industries should be differentiated according to the market characteristics and energy efficiency levels of various industries.

Limited Memory, Categorization, and Competition

OpenAIRE

Yuxin Chen; Ganesh Iyer; Amit Pazgal

2010-01-01

This paper investigates the effects of a limited consumer memory on the price competition between firms. It studies a specific aspect of memory--namely, the categorization of available price information that the consumers may need to recall for decision making. This paper analyzes competition between firms in a market with uninformed consumers who do not compare prices, informed consumers who compare prices but with limited memory, and informed consumers who have perfect memory. Consumers, aw...

Estimating the long-run equilibrium relationship. The case of city-gate and residential natural gas prices

International Nuclear Information System (INIS)

Arano, Kathleen; Velikova, Marieta

2010-01-01

This paper examines market cointegration of city-gate and residential natural gas prices. Cointegration of gas prices across different segments of the industry provides evidence that deregulation has resulted into a more integrated, competitive natural gas industry where gas prices converge into a long-run equilibrium. Our results indicate prices further down the distribution line, the final two points of consumption, are cointegrated for a majority of the US states post open access and retail unbundling, although we find little evidence of perfect market integration. The two price series likewise converge to the long-run equilibrium faster post open access and retail unbundling. Results relative to state level unbundling (choice programs) reveal mixed outcomes with a few states without retail unbundling exhibiting market integration while some states with full unbundling exhibiting non-cointegration. (author)

Consumer choice between ethanol and gasoline: Lessons from Brazil and Sweden

International Nuclear Information System (INIS)

Pacini, Henrique; Silveira, Semida

2011-01-01

The introduction of flex-fuel vehicles since 2003 has made possible for Brazilian drivers to choose between high ethanol blends or gasoline depending on relative prices and fuel economies. In Sweden, flex-fuel fleets were introduced in 2005. Prices and demand data were examined for both Brazil and Sweden. Bioethanol has been generally the most cost-efficient fuel in Brazil, but not for all states. In any case, consumers in Brazil have opted for ethanol even when this was not the optimal economic choice. In Sweden, a different behavior was observed when falling gasoline prices made E85 uneconomical in late 2008. In a context of international biofuels expansion, the example of E85 in Sweden indicates that new markets could experience different consumer behavior than Brazil: demand falls rapidly with reduced price differences between ethanol and gasoline. At the same time, rising ethanol demand and lack of an international market with multiple biofuel producers could lead to higher domestic prices in Brazil. Once the limit curve is crossed, the consumer might react by shifting back to the usage of gasoline. - Research highlights: → Brazil and Sweden both have infrastructure for high fuel ethanol blends. → Flex-fuel vehicles enable competition between ethanol and gasoline in fuel markets. → Data suggests that consumers make their fuel choice based mainly on prices. → Consumers in Sweden appear to be more price-sensitive than their Brazilian counterparts. → In the absence of international markets, high ethanol prices may drive consumers back to gasoline.

Retail Price Model

Science.gov (United States)

The Retail Price Model is a tool to estimate the average retail electricity prices - under both competitive and regulated market structures - using power sector projections and assumptions from the Energy Information Administration.

Simulated Models Suggest That Price per Calorie Is the Dominant Price Metric That Low-Income Individuals Use for Food Decision Making.

Science.gov (United States)

Beheshti, Rahmatollah; Igusa, Takeru; Jones-Smith, Jessica

2016-11-01

The price of food has long been considered one of the major factors that affects food choices. However, the price metric (e.g., the price of food per calorie or the price of food per gram) that individuals predominantly use when making food choices is unclear. Understanding which price metric is used is especially important for studying individuals with severe budget constraints because food price then becomes even more important in food choice. We assessed which price metric is used by low-income individuals in deciding what to eat. With the use of data from NHANES and the USDA Food and Nutrient Database for Dietary Studies, we created an agent-based model that simulated an environment representing the US population, wherein individuals were modeled as agents with a specific weight, age, and income. In our model, agents made dietary food choices while meeting their budget limits with the use of 1 of 3 different metrics for decision making: energy cost (price per calorie), unit price (price per gram), and serving price (price per serving). The food consumption patterns generated by our model were compared to 3 independent data sets. The food choice behaviors observed in 2 of the data sets were found to be closest to the simulated dietary patterns generated by the price per calorie metric. The behaviors observed in the third data set were equidistant from the patterns generated by price per calorie and price per serving metrics, whereas results generated by the price per gram metric were further away. Our simulations suggest that dietary food choice based on price per calorie best matches actual consumption patterns and may therefore be the most salient price metric for low-income populations. © 2016 American Society for Nutrition.

Constructing Quality Adjusted Price Indexes: a Comparison of Hedonic and Discrete Choice Models

OpenAIRE

N. Jonker

2001-01-01

The Boskin report (1996) concluded that the US consumer price index (CPI) overestimated the inflation by 1.1 percentage points. This was due to several measurement errors in the CPI. One of them is called quality change bias. In this paper two methods are compared which can be used to eliminate quality change bias, namely the hedonic method and a method based on the use of discrete choice models. The underlying micro-economic fundations of the two methods are compared as well as their empiric...

Coordinating Channels Under Price and Nonprice Competition

OpenAIRE

Ganesh Iyer

1998-01-01

This paper analyzes how manufacturers should coordinate distribution channels when retailers compete in price as well as important nonprice factors such as the provision of product information, free repair, faster check-out, or after-sales service. Differentiation among retailers in price and nonprice service factors is a central feature of markets ranging from automobiles and appliances to gasoline and is especially observed in the coexistence of high-service retailers and lower price discou...

Simulating Price-Taking

Science.gov (United States)

Engelhardt, Lucas M.

2015-01-01

In this article, the author presents a price-takers' market simulation geared toward principles-level students. This simulation demonstrates that price-taking behavior is a natural result of the conditions that create perfect competition. In trials, there is a significant degree of price convergence in just three or four rounds. Students find this…

Guide to Alberta's competitive electricity industry

International Nuclear Information System (INIS)

2002-03-01

A crucial point was reached at the beginning of 2001 in the process of competitive electricity market in Alberta, when record high prices were reached in both the natural gas and electricity markets. In this document, the intent was to present, in a non-technical way, the new electricity market. It was designed to cover issues as they flow, from generator to consumer. Therefore, it began with a market model illustration going through each step of the process. Frequently asked questions, developed using the input from 160,000 Albertans, were answered in each section. The first section of the document dealt with a competitive market. In section 2, the electricity supply was discussed, followed by section 3 and the wholesale electricity market. In section, 4, the reader was invited to explore customer choice, and consumer information was provided in section 5. tabs., figs

Competitive bidding in Medicare: who benefits from competition?

Science.gov (United States)

Song, Zirui; Landrum, Mary Beth; Chernew, Michael E

2012-09-01

To conduct the first empirical study of competitive bidding in Medicare. We analyzed 2006-2010 Medicare Advantage data from the Centers for Medicare and Medicaid Services using longitudinal models adjusted for market and plan characteristics. A $1 increase in Medicare's payment to health maintenance organization (HMO) plans led to a $0.49 (P service plans included, higher Medicare payments increased bids less ($0.33 per dollar), suggesting more competition among these latter plans. As a market-based alternative to cost control through administrative pricing, competitive bidding relies on private insurance plans proposing prices they are willing to accept for insuring a beneficiary. However, competition is imperfect in the Medicare bidding market. As much as half of every dollar in increased plan payment went to higher bids rather than to beneficiaries. While having more insurers in a market lowered bids, the design of any bidding system for Medicare should recognize this shortcoming of competition.

Simulated Models Suggest That Price per Calorie Is the Dominant Price Metric That Low-Income Individuals Use for Food Decision Making123

Science.gov (United States)

2016-01-01

Background: The price of food has long been considered one of the major factors that affects food choices. However, the price metric (e.g., the price of food per calorie or the price of food per gram) that individuals predominantly use when making food choices is unclear. Understanding which price metric is used is especially important for studying individuals with severe budget constraints because food price then becomes even more important in food choice. Objective: We assessed which price metric is used by low-income individuals in deciding what to eat. Methods: With the use of data from NHANES and the USDA Food and Nutrient Database for Dietary Studies, we created an agent-based model that simulated an environment representing the US population, wherein individuals were modeled as agents with a specific weight, age, and income. In our model, agents made dietary food choices while meeting their budget limits with the use of 1 of 3 different metrics for decision making: energy cost (price per calorie), unit price (price per gram), and serving price (price per serving). The food consumption patterns generated by our model were compared to 3 independent data sets. Results: The food choice behaviors observed in 2 of the data sets were found to be closest to the simulated dietary patterns generated by the price per calorie metric. The behaviors observed in the third data set were equidistant from the patterns generated by price per calorie and price per serving metrics, whereas results generated by the price per gram metric were further away. Conclusions: Our simulations suggest that dietary food choice based on price per calorie best matches actual consumption patterns and may therefore be the most salient price metric for low-income populations. PMID:27655757

Using Labeled Choice Experiments to Analyze Demand Structure and Market Position among Seafood Products

DEFF Research Database (Denmark)

Nguyen, Thong Tien; Solgaard, Hans Stubbe; Haider, Wolfgang

2018-01-01

Understanding market competition and consumer preferences are important first steps in developing a business. In a competitive market, effectiveness of the various elements of a firm’s marketing mix depends not only on the absolute value of each element but also on the relative values......-employed consumers are the most sensitive to price. Four segments are identified and described in terms of both consumer characteristics and preferences. Our results are meaningful for producers and retailers to develop marketing strategies and production plan....... of the elements with respect to the firm’s position in the market. In this paper we analyze the demand structure and market positions for a variety of seafood products in the French retail market. We use a labeled choice experiment (LCE) to analyze twelve seafood species. The choice options are labeled...

Marketing channels and competitive advantage

Directory of Open Access Journals (Sweden)

Jovičić Dragoljub

2005-01-01

Full Text Available Issue that can already be seen and will be very clear in the future is that the central problem in the market of tube caps will not be the product or the price or promotion, but marketing channels. Therefore, the competitive advantage will most probably be built on marketing channels and not the production - as it has been so far, so, the questions of choice functioning and modification of marketing channels, as well as selection of the most appropriate members of channels will become more and more important. Accordingly, it may freely be said that the choice, i.e. the movement of marketing channels represents one of the strategic decisions which has to be made by a company management and which will subsequently very significantly influence the functioning and efficacy of not only the system of distribution, but also the entire business transactions.

Mexico's critical choices

International Nuclear Information System (INIS)

Marcos, E.

1990-01-01

In Mexico, the 1982 fall in international oil prices shook the national conscience and pushed the Mexican people in search of a new national image and toward the choices they must make to attain that image. But, according to the author of this paper, the country as a whole has already made critical choices for overall strategy and there are reasons for optimism. In the current economic environment of growing domestic demand and enhanced international competitiveness, the author sees PEMEX (the Mexican national oil company) facing not only the challenge of responding to the rapid changes taking place in the Mexican economy, but also making a significant contribution toward the solid and stable growth of the country. The relevant question is how PEMEX will live up to these expectations. This paper describes several steps PEMEX has taken already or is preparing to take in order to meet this challenge, including: investment in the domestic petrochemical industry; entry into the Eurobond market; development of new methods of project financing

Alaska North Slope crude oil price and the behavior of diesel prices in California

International Nuclear Information System (INIS)

Adrangi, B.; Chatrath, A.; Raffiee, K.; Ripple, R.

2001-01-01

In this paper we analyze the price dynamics of Alaska North Slope crude oil and L.A. diesel fuel prices. We employ VAR methodology and bivariate GARCH model to show that there is a strong evidence of a uni-directional causal relationship between the two prices. The L.A. diesel market is found to bear the majority of the burden of convergence when there is a price spread. This finding may be seen as being consistent with the general consensus that price discovery emanates from the larger, more liquid market where trading volume is concentrated. The contestability of the West Coast crude oil market tends to cause it to react relatively competitively, while the lack of contestability for the West Coast diesel market tends to limit its competitiveness, causing price adjustment to be slow but to follow the price signals of crude oil. Our findings also suggest that the derived demand theory of input pricing may not hold in this case. The Alaska North Slope crude oil price is the driving force in changes of L.A. diesel price

Resale Price Maintenance and Manufacturer Competition for Exclusive Dealerships.

OpenAIRE

Perry, Martin K; Besanko, David

1991-01-01

Two manufacturers distribute their brands through exclusive retail dealers and must compete for consumers indirectly by inducing retailers to carry their brands. The authors compare equilibrium outcomes with and without resale price maintenance. Maximum resale price maintenance lowers the retail price if manufacturers cannot employ franchise fees. Minimum retail price maintenance raises the retail price if manufacturers cannot set a wholesale price above marginal cost and must employ only a f...

Competition between health maintenance organizations and nonintegrated health insurance companies in health insurance markets.

Science.gov (United States)

Baranes, Edmond; Bardey, David

2015-12-01

This article examines a model of competition between two types of health insurer: Health Maintenance Organizations (HMOs) and nonintegrated insurers. HMOs vertically integrate health care providers and pay them at a competitive price, while nonintegrated health insurers work as indemnity plans and pay the health care providers freely chosen by policyholders at a wholesale price. Such difference is referred to as an input price effect which, at first glance, favors HMOs. Moreover, we assume that policyholders place a positive value on the provider diversity supplied by their health insurance plan and that this value increases with the probability of disease. Due to the restricted choice of health care providers in HMOs a risk segmentation occurs: policyholders who choose nonintegrated health insurers are characterized by higher risk, which also tends to favor HMOs. Our equilibrium analysis reveals that the equilibrium allocation only depends on the number of HMOs in the case of exclusivity contracts between HMOs and providers. Surprisingly, our model shows that the interplay between risk segmentation and input price effects may generate ambiguous results. More precisely, we reveal that vertical integration in health insurance markets may decrease health insurers' premiums.

Reliability and competitiveness of Canadian natural gas supply - discussion paper

International Nuclear Information System (INIS)

Anon.

1995-01-01

A summary of market evolution for the Canadian natural gas industry was provided. Canada's undisputed position as an important supplier of natural gas to domestic and United States consumers was reaffirmed. The industry has marketable potential of 582 trillion cubic feet of conventional natural gas, of which 254 trillion cubic feet is found in the Western Canada Sedimentary Basin. The role of the Free Trade Agreement of 1988, and the recent deregulation of the Canadian natural gas industry in allowing the gas market to evolve into a competitive, continental market were noted. The end result to consumers is a choice of suppliers, competitive prices, reliability and confidence. 7 refs., 2 tabs., 8 figs

The effect of counter-trading on competition in electricity markets

International Nuclear Information System (INIS)

Dijk, Justin; Willems, Bert

2011-01-01

In a competitive electricity market, nodal pricing is the most efficient way to manage congestion. Counter-trading is inefficient as it gives the wrong long term signals for entry and exit of power plants. However, in a non-competitive market, additional entry will improve the competitiveness of the market, and will increase social benefit by reducing price-cost margins. This paper studies whether the potential pro-competitive entry effects could make counter-trading more efficient than nodal pricing. We find that this is unlikely to be the case, and expect counter-trading to have a negative effect on overall welfare. The potential benefits of additional competition (more competitive prices and lower production cost) do not outweigh the distortions (additional investment cost for the entrant, and socialization of the congestion cost to final consumers). - Research highlights: → 'Counter-trading' and 'nodal pricing' manage congestion in electric grids. → Nodal pricing gives superior locational prices. → Counter-trading induces extra investments in regions with a production surplus. → Extra investments improve competition, but are expected to be socially inefficient.

Excessive prices as abuse of dominance?

DEFF Research Database (Denmark)

la Cour, Lisbeth; Møllgaard, Peter

2007-01-01

firm abused its position by charging excessive prices. We also test whether tightening of the Danish competition act has altered the pricing behaviour on the market. We discuss our results in the light of a Danish competition case against the dominant cement producer that was abandoned by the authority...

Electricity - A threat on competitiveness - Six answers to moderate price increase

International Nuclear Information System (INIS)

Dupin, L.; James, O.; Moragues, M.

2012-01-01

The fact that electricity price might increase of 30 per cent by 2016 in France is a bad news for the French industry. This increase is partly due to the increase of the cost of electricity produced by nuclear energy, but also to that of the specific tax (contribution to the electricity public service) which is supposed to finance the development of renewable energies. Until that moment, the French electricity is still competitive in Europe, but not in the world. Thus, the industry has several possibilities to moderate the impact of this increase: to secure electricity supplies, to become a hydroelectricity producer, to reduce their process' energy consumption, to regroup to be able to negotiate, to create an energy subsidiary company, and to exploit the production tool flexibility

Regulated and unregulated Nordic retail prices

International Nuclear Information System (INIS)

Johnsen, Tor Arnt; Olsen, Ole Jess

2011-01-01

Nordic residential electricity consumers can now choose among a number of contracts and suppliers. A large number of households have continued to purchase electricity from the incumbent supplier at default contract terms. In this paper, we compare the situation for such passive customers. Danish default prices are regulated whereas default prices in the other countries are unregulated. Systematic price differences exist among the Nordic countries. However, as wholesale prices sometimes differ the gross margin is a more relevant indicator. Regulated gross margins are lower in Denmark than in Sweden but higher than in Norway and Finland. Because of market design Norwegian default contracts are competitive whereas Swedish contracts provide the retailer with some market power. We interpret the low Finnish margins as a result of municipal retailers continuing traditional pricing from the monopoly period. Danish margins are higher than the competitive Norwegian margins but are earned from a much lower level of consumption. The annually margins earned per consumer are very close in the two countries, which indicates that the Danish regulation is achieving its objective of approaching competitive prices. - Highlights: → Prices of active and passive Nordic residential electricity consumers are compared. → Active consumers get lower prices in Sweden but not in Norway. → Prices of passive consumers differ considerably among the four Nordic countries. → Danish regulated prices compare well with unregulated prices in the other countries. → Passive consumers in Finland have low prices compared with the other countries.

Regulated and unregulated Nordic retail prices

Energy Technology Data Exchange (ETDEWEB)

Johnsen, Tor Arnt, E-mail: tor.a.johnsen@bi.no [Norwegian School of Management BI, NO-0442 Oslo (Norway); Olsen, Ole Jess, E-mail: ojo@ruc.dk [Department of Environmental, Social and Spatial Change (ENSPAC), Roskilde University, Building 10.1, Universitetsvej 1, DK-4000, Roskilde (Denmark)

2011-06-15

Nordic residential electricity consumers can now choose among a number of contracts and suppliers. A large number of households have continued to purchase electricity from the incumbent supplier at default contract terms. In this paper, we compare the situation for such passive customers. Danish default prices are regulated whereas default prices in the other countries are unregulated. Systematic price differences exist among the Nordic countries. However, as wholesale prices sometimes differ the gross margin is a more relevant indicator. Regulated gross margins are lower in Denmark than in Sweden but higher than in Norway and Finland. Because of market design Norwegian default contracts are competitive whereas Swedish contracts provide the retailer with some market power. We interpret the low Finnish margins as a result of municipal retailers continuing traditional pricing from the monopoly period. Danish margins are higher than the competitive Norwegian margins but are earned from a much lower level of consumption. The annually margins earned per consumer are very close in the two countries, which indicates that the Danish regulation is achieving its objective of approaching competitive prices. - Highlights: > Prices of active and passive Nordic residential electricity consumers are compared. > Active consumers get lower prices in Sweden but not in Norway. > Prices of passive consumers differ considerably among the four Nordic countries. > Danish regulated prices compare well with unregulated prices in the other countries. > Passive consumers in Finland have low prices compared with the other countries.

Bertrand Competition with an Asymmetric No-Discrimination Constraint

NARCIS (Netherlands)

Bouckaert, J.M.C.; Degryse, H.A.; van Dijk, T.

2012-01-01

Abstract: We study the competitive and welfare consequences when only one firm must commit to uniform pricing while the competitor’s pricing policy is left unconstrained. The asymmetric no-discrimination constraint prohibits both behaviour-based price discrimination within the competitive segment

Price competition among Dutch sickness funds

NARCIS (Netherlands)

M. Varkevisser (Marco); S.A. van der Geest (Stéphanie)

2003-01-01

textabstractIn general, competition enhances efficiency. On the market for health insurance free market competition, however, has unwanted side-effects. The existence of asymmetrical information can lead to adverse selection and cream skimming. Adequate risk-adjustment removes the incentives for

How competitive is nuclear energy?

International Nuclear Information System (INIS)

Keppler, J.H.

2010-01-01

The economic competitiveness of nuclear energy will be crucial for determining its future share in world electricity production. In addition, the widespread liberalization of power markets, in particular in OECD countries, reinforces the role of commercial criteria in technology selection . The recently published IEA/NEA study on Projected Costs of Generating Electricity: 2010 Edition (IEA/NEA, 2010) provides important indications regarding the relative competitiveness of nuclear energy in OECD member countries as well as in four non-OECD countries (Brazil, China, Russia and South Africa). The results highlight the paramount importance of discount rates and, to a lesser extent, carbon and fuel prices when comparing different technologies. Going beyond this general finding, the study also shows that the relative competitiveness of nuclear energy varies widely from one major region to another, and even from country to country. While the study provides a useful snapshot of the costs of generating electricity with different technologies, it does not provide an absolute picture of the competitiveness of nuclear energy. Like any study, Projected Costs of Generating Electricity makes a number of common assumptions about discount rates as well as carbon and fuel prices. In addition, its calculations are based on a methodology that is referred to as the levelised cost of electricity (LCOE), which assumes that all risks are included in the interest or discount rate, which determines the cost of capital. In other words, neither the electricity price risk for nuclear and renewables, nor the carbon and fuel price risk for fossil fuels such as coal and gas, receive specific consideration. The decisions of private investors, however, will depend to a large extent on their individual appreciations of these risks. The competitiveness of nuclear energy thus depends on three different factors which may vary greatly from market to market: interest rates, carbon and fuel prices, and

Using Priced Options to Solve the Exposure Problem in Sequential Auctions

Science.gov (United States)

Mous, Lonneke; Robu, Valentin; La Poutré, Han

This paper studies the benefits of using priced options for solving the exposure problem that bidders with valuation synergies face when participating in multiple, sequential auctions. We consider a model in which complementary-valued items are auctioned sequentially by different sellers, who have the choice of either selling their good directly or through a priced option, after fixing its exercise price. We analyze this model from a decision-theoretic perspective and we show, for a setting where the competition is formed by local bidders, that using options can increase the expected profit for both buyers and sellers. Furthermore, we derive the equations that provide minimum and maximum bounds between which a synergy buyer's bids should fall in order for both sides to have an incentive to use the options mechanism. Next, we perform an experimental analysis of a market in which multiple synergy bidders are active simultaneously.

Strategic Generation with Conjectured Transmission Price Responses in a Mixed Transmission Pricing System. Part 2. Application

International Nuclear Information System (INIS)

Wals, A.F.; Hobbs, B.F.; Rijkers, F.A.M.

2004-05-01

The conjectured transmission price response model presented in the first of this two-paper series considers the expectations of oligopolistic generators regarding how demands for transmission services affect the prices of those services. Here, the model is applied to northwest Europe, simulating a mixed transmission pricing system including export fees, a path-based auction system for between-country interfaces, and implicit congestion-based pricing of internal country constraints. The path-based system does not give credit for counterflows when calculating export capability. The application shows that this no-netting policy can exacerbate the economic inefficiencies caused by oligopolistic pricing by generators. The application also illustrates the effects of different generator conjectures regarding rival supply responses and transmission prices. If generators anticipate that their increased demand for transmission services will increase transmission prices, then competitive intensity diminishes and energy prices rise. In the example here, the effect of this anticipation is to double the price increase that results from oligopolistic (Cournot) competition among generators

MARKET ECONOMICS PRICING PARTICULARS

Directory of Open Access Journals (Sweden)

V. I. Parshin

2011-01-01

Full Text Available The price performs several economic functions: accounting, stimulation, distribution, demand and offer balancing, serving as production site rational choice criterion, information. Most important pricing principles are: price scientific and purpose-aimed substantiation, single pricing and price control process. Pricing process factors are external, internal, basic (independent on money-market, market-determined and controlling. Different pricing methods and models are to be examined, recommendations on practical application of those chosen are to be written.

Non-Price Competition and the Structure of the Online Information Industry: Q-Analysis of Medical Databases and Hosts.

Science.gov (United States)

Davies, Roy

1987-01-01

Discussion of the online information industry emphasizes the effects of non-price competition on its structure and the firms involved. Q-analysis is applied to data on medical databases and hosts, changes over a three-year period are identified, and an optimum structure for the industry based on economic theory is considered. (Author/LRW)

Competition policy for health care provision in Norway.

Science.gov (United States)

Brekke, Kurt R; Straume, Odd Rune

2017-02-01

Competition policy has played a very limited role for health care provision in Norway. The main reason is that Norway has a National Health Service (NHS) with extensive public provision and a wide set of sector-specific regulations that limit the scope for competition. However, the last two decades, several reforms have deregulated health care provision and opened up for provider competition along some dimensions. For specialised care, the government has introduced patient choice and (partly) activity (DRG) based funding, but also corporatised public hospitals and allowed for more private provision. For primary care, a reform changed the payment scheme to capitation and (a higher share of) fee-for-service, inducing almost all GPs on fixed salary contracts to become self-employed. While these reforms have the potential for generating competition in the Norwegian NHS, the empirical evidence is quite limited and the findings are mixed. We identify a set of possible caveats that may weaken the incentives for provider competition - such as the partial implementation of DRG pricing, the dual purchaser-provider role of regional health authorities, and the extensive consolidation of public hospitals - and argue that there is great scope for competition policy measures that could stimulate provider competition within the Norwegian NHS. Copyright © 2016 Elsevier Ireland Ltd. All rights reserved.

Firms’ behavior in conditions of imperfect competitive environments

Directory of Open Access Journals (Sweden)

Ján Kantor

2007-12-01

Full Text Available This article deals with the analysis of market structure on the imperfect competitive market, measuring market power, its effect on the price of products and reasons for origin of imperfect competition at the market. Described are the market conditions issues and possibilities of their manufacturing influence on the market price with graphical expressions. Prices are higher and capacity of production is lower. It characterizes monopoly, oligopoly, and monopolistic competition. With its content it expresses, that imperfect competitive environment differs from perfect competition environment disparity of demand curve and in the market economics it has a more frequent application.

Functional forms and price elasticities in a discrete continuous choice model of the residential water demand

Science.gov (United States)

Vásquez Lavín, F. A.; Hernandez, J. I.; Ponce, R. D.; Orrego, S. A.

2017-07-01

During recent decades, water demand estimation has gained considerable attention from scholars. From an econometric perspective, the most used functional forms include log-log and linear specifications. Despite the advances in this field and the relevance for policymaking, little attention has been paid to the functional forms used in these estimations, and most authors have not provided justifications for their selection of functional forms. A discrete continuous choice model of the residential water demand is estimated using six functional forms (log-log, full-log, log-quadratic, semilog, linear, and Stone-Geary), and the expected consumption and price elasticity are evaluated. From a policy perspective, our results highlight the relevance of functional form selection for both the expected consumption and price elasticity.

Market value-oriented gas pricing in Germany

International Nuclear Information System (INIS)

Eimermacher, T.

1996-01-01

In Germany, natural gas faces stiff competition from other types of energy. In many applications, natural gas is capable of replacing other fuels. In addition there is a growing gas-to-gas competition in some European countries, either through pipeline construction by a competitor as in Germany or by mandatory third-party access as in UK. Competition leads to market value-oriented energy pricing, which is particularly evident in Germany. For the consumer, this competitive situation ensures that natural gas can be obtained (and remains available in the long term) at competitive prices

The relationship between alcohol price and brand choice among underage drinkers: are the most popular alcoholic brands consumed by youth the cheapest?

Science.gov (United States)

Albers, Alison B; DeJong, William; Naimi, Timothy S; Siegel, Michael; Jernigan, David H

2014-11-01

We examined the influence of price on alcohol brand choice among underage youth. Using a national sample of 1,032 youth, ages 13-20, recruited from a national Internet panel in 2011-2012, we compared differences in mean prices between popular and unpopular brands, examined the association of price and brand popularity using logistic regression, and rank ordered the average price of top brands. Lower brand-specific prices were significantly associated with higher levels of past 30-day consumption prevalence. However, youth did not preferentially consume the cheapest brands. These findings indicate that youth have preferences for certain brands, even if those brands cost more than competing brands. Our study highlights the need for research on the impact of brand-specific alcohol marketing on underage drinking.

End user prices in liberalised energy markets

Energy Technology Data Exchange (ETDEWEB)

Lijesen, M.G. [Afdeling Energie en Grondstoffen, Centraal Planbureau CPB, Den Haag (Netherlands)

2002-12-01

As European energy markets move towards deregulation, energy prices shift from classic 'cost plus' prices towards market prices. We develop a model for the retail and wholesale energy markets in Europe, based on Bertrand competition in a two part pricing structure with switching costs. We use the model to forecast end user electricity and natural gas prices and find that the introduction of competition in energy retail and wholesale markets will decrease standing charges, lowering total costs for energy users. A larger number of entrants, a cost advantage for one of the suppliers, or lower switching costs reduces standing charges further.

Factors influencing passengers’ choice of transport mode to Warsaw Chopin Airport

Directory of Open Access Journals (Sweden)

Górecka Aleksandra

2016-10-01

Full Text Available Airport accessibility is an important factor for airport choice and therefore also for airport competition. When air passengers choose an itinerary, they reflect on the transport chain from door to door. Therefore, factors affecting the traveller’s decision for a particular option go beyond the price and quality of air services from airport to airport. The decision for or against a particular air service and a particular airport is to a certain extent dependent on the accessibility of the airport.

United Kingdom: 'competition can force prices up'

International Nuclear Information System (INIS)

Powe, I.

1992-01-01

The increased demand for natural gas and price considerations are examined. The recent undertaking of British Gas to place storage and transmission in a separate regulated division with transparent accounts is reported, and the possible rise in the price of gas when British Gas has to pay commercial rates to the separate division is considered. (UK)

Understanding gasoline pricing in Canada

International Nuclear Information System (INIS)

2001-04-01

This brochure is designed to help consumers understand how gasoline is priced and explained why prices increase, fluctuate and vary by location, city or region. The price of a litre of gasoline reflects the costs of crude oil, refining, retailing and taxes. Taxes are usually the largest single component of gasoline prices, averaging 40 to 50 per cent of the pump price. The cost of crude oil makes up another 35 to 45 per cent of the price. Refining costs make up 10 to 15 per cent while the remaining 5 to 10 per cent represents retail costs. Gasoline retailers make a profit of about 1 cent per litre. The latest network technology allows national and regional retail chains to constantly monitor price fluctuations to change their prices at gasoline stations at a moments notice to keep up with the competition and to protect their market shares. Several government studies, plus the Conference Board of Canada, have reported that competition is working in favour of Canadian motorists. This brochure also explained the drawbacks of regulating crude and pump prices with the reminder that crude prices were regulated in the 1970s with many negative consequences. 2 tabs., 1 fig

Crude oil pricing in Asia and future problems; Asia no gen`yu pricing to kongo no kadai

Energy Technology Data Exchange (ETDEWEB)

Kato, T. [The Institute of Energy Economics, Tokyo (Japan)

1997-01-30

This paper describes pricing factors of crude oil for Asia and future problems. Price of the Middle East crude oil for Asia is determined by linking the spot price of Dubayy crude oil using as a marker. Factors affecting the pricing of marker crude oil include the information dispatching functions for prices of spot market and paper market of marker crude oil, the presence of competitive crude oil, and the correlation between market of oil products and price of crude oil. The paper market of Dubayy crude oil with a small scale of trading provides poor impact and transparency. In Asia, there is no strong competitive crude oil except the Middle East crude oil. There is only a weak price linking between crude oil and products. These are the background that the price of Middle East crude oil stays at the high level and the price adjusting functions are hard to work. The marker crude oil should be changed to another except Dubayy crude oil, and information should be dispatched from purchasers based on the stable standard crude oil. The real paper market should be created, and the force of speaking to oil producing countries should be enhanced by concentrating forces of major oil consuming countries in Asia. It is necessary to find out competitive crude oils. 5 figs., 6 tabs.

A bid solicitation and selection method for developing a competitive spot priced electric market

International Nuclear Information System (INIS)

Ancona, J.J.

1997-01-01

The electric utility industry is in the beginning throes of a transformation from a cost-based regulated structure to a more market based less regulated system. Traditional unit commitment and economic dispatch methodologies can continue to provide reliable least-cost solutions, providing they are modified to accommodate a larger sphere of market participants. This paper offers a method for an entity such as an Independent System Operator (ISO) to solicit and evaluate bids for developing a spot priced electric market by replicating existing utility practices that are effective and efficient, while creating an open and equitable competitive marketplace for electricity

Introducing of Green Pricing in the Korean Electricity Sector

Energy Technology Data Exchange (ETDEWEB)

Boo, K.J. [Korea Energy Economics Institute, Euiwang (Korea)

2001-11-01

In recent years, the Korean electricity sector has been undergoing restructuring, represented by de-regulation and promotion of competition. Competition will, eventually, force electricity power producers to overly rely on cheap fuels such as coal and nuclear in order to reduce the cost of power generation, which is against the international Green Round, including the UNFCCC. Accordingly, some measures are needed not to let such an market failure discourage the efforts to protect the environment. Up to date, a number of policy measures have been worked out by the Korean government to promote the use of renewable energy in power generation. Such efforts, however, have not been quite successful. Innovative policy tools are called for to promote renewable energy-base power generation in the emerging competitive electricity market. Among various approaches that have been tried and worked out in the developed countries to adequately address this problem, a most popular approach is green pricing. Green pricing is to let the customers pay for the additional cost incurred from installing renewable energy-based generating facilities, consequently making it viable and promoting an increased use of renewables in the power generation. Accordingly, a market research to investigate the willingness to pay for this premium was conducted as a prerequisite to design a green pricing. The major findings of this market research are: First, while limited to the industrial and buildings sectors, awareness of environmental and green pricing is not so disappointing as compared with those in the develop countries(41.3%). Second, companies have not yet fully developed the concept of green pricing and are mainly motivated to purchase green power in the perspective of a great cause rather than in pursuit of direct and indirect economic benefits. Third, regarding fuel choice for power generation, respondents express a strong opposition to nuclear, coal, and oil, while they are more favorable to

The relationship between alcohol price and brand choice among underage drinkers: Are the most popular alcoholic brands consumed by youth the cheapest?

Science.gov (United States)

Albers, Alison Burke; DeJong, William; Naimi, Tim; Siegel, Michael; Jernigan, David H.

2014-01-01

We examined the influence of price on alcohol brand choice among underage youth. Using a national sample of 1,032 youth ages 13–20, recruited from a national internet panel in 2011–2012, we compared differences in mean prices between popular and unpopular brands; examined the association of price and brand popularity using logistic regression; and rank ordered the average price of top brands. Lower brand-specific prices were significantly associated with higher levels of past 30-day consumption prevalence. However, youth did not preferentially consume the cheapest brands. These findings indicate that youth have preferences for certain brands, even if those brands cost more than competing brands. Our study highlights the need for research on the impact of brand-specific alcohol marketing on underage drinking. PMID:25183436

Analysis on PV system sales price and subsidy through buy-back which make photovoltaics cost-competitive by 2030 in Japan

International Nuclear Information System (INIS)

Endo, E.; Ichinohe, M.

2004-01-01

The purpose of this paper is to analyze PV system sales price and subsidy through buy-back which make photovoltaics cost-competitive against other energy technologies and make the target for PV capacity achievable by 2030 in Japan under expected carbon tax. For the analysis energy system of Japan is modeled by using MARKAL. According to the results of analysis, under 6000 JPY/t-C carbon tax, photovoltaics needs subsidy for a while even if we taking both fuel savings and Green Credit into account. For attaining the national target for PV capacity in 2010, photovoltaics needs more expensive buy-back than that in present, but after 2010 necessary buy-back decreases gradually. If 120 JPY/W PV system sales price is attained by 2030, photovoltaics becomes cost-competitive without any supports. Subsidy through buy-back becomes almost need not in 2030, if we can reduce it less than 170 JPY/W. The total subsidy meets peak in 2025. It is much more than ongoing subsidy to capital cost of PV systems, but annual revenue of the assumed carbon tax can afford enough the annual total subsidy. This means if photovoltaics can attain the PV system sales price, we should support it for a while by spending carbon tax revenue effectively and efficiently. (authors)

PRICE REACTIONS AND ORGANIC PRICE PREMIUMS FOR PRIVATE LABEL AND BRANDED MILK

OpenAIRE

Zhuang, Yan; Dimitri, Carolyn; Jaenicke, Edward C.

2010-01-01

Using Nielsen Homescan data set from 52 markets in the United States, this paper assesses the price interactions among the four fluid milk categories (organic private label, organic national brand, non-organic private label and non-organic national brand), how demographic variables and product properties in a market affect milk prices, and the impacts of private label and organic milk market shares on milk prices. We find several types of price competition exist among the four milk categories...

Price expectations and price dynamics: the case of the rice sector in developing Asia

OpenAIRE

Thomas Barré

2011-01-01

Uncertainty is a crucial issue for producers who must make input decisions without knowing prices and without perfect knowledge of realized output. In this context, price expectations strongly determine the production choices and market prices that result from market-clearing conditions. This study analyzed the role that price expectations play in price dynamics, developing a theoretical model of trade in varieties following Armington (1969) and augmented with yield and price uncertainty to h...

Industrial Pricing: Theory and Managerial Practice

OpenAIRE

Peter M. Noble; Thomas S. Gruca

1999-01-01

We organize the existing theoretical pricing research into a new two-level framework for industrial goods pricing. The first level consists of four pricing situations: New Product, Competitive, Product Line, and Cost-based. The second level consists of the pricing strategies appropriate for a given situation. For example, within the new product pricing situation, there are three alternative pricing strategies: Skim, Penetration, and Experience Curve pricing. There are a total of ten pricing s...

Can local be the new organic? Food choice motives and willingness to pay

OpenAIRE

Roosen, Jutta; Kottl, Barbara; Hasselbach, Johanna

2012-01-01

Due to growth and changing distribution channels for organic food in Germany, there is some concern that organic food will lose against local food in the competition for conscious consumers. In this paper we will present the results of a survey in Bavaria searching for consumer motives and label recognition. A choice experiment using different prices, brands and labels is conducted for bread, beer and milk. Results show the importance of local production to the surveyed consumers, similarly f...

Choice of electricity provider in California after deregulation

Science.gov (United States)

Keanini, Rasa Ilze

Surveys often ask consumers how much they are willing to pay for certain goods and services, without requiring the consumer to actually pay for the good or service. Such surveys, termed stated preference studies, find that consumers value renewable electricity. This result is in contrast to actual experiences in recently deregulated electricity markets in several states, including California. When given the opportunity to choose in California, only one to two percent of the population opted for renewable electricity products. This dissertation used data from residential customers who chose an alternative electricity product in California's deregulated electricity market to determine the value placed on the renewable attribute of electricity products. This dissertation begins by taking a historical look at the electricity market of the nation and specifically California. From 1998 through 2001, California's electricity market was deregulated to include retail competition. This dissertation used data from electric service providers to reveal the factors influencing residential customer's choice of electricity product. Discrete choice models were used to determine the factors influencing electricity product choice. The results indicated that both price and renewable content had an effect on choice of product. Additionally, a more complicated model jointly estimating the discrete choice of electricity product with the continuous choice of electricity consumption (kWh) was specified and estimated.

Competitive Effects of Mass Customization

OpenAIRE

Oksana Loginova

2010-01-01

Earlier theoretical literature on mass customization maintains that customization reduces product differentiation and intensifies price competition. In contrast, operations management studies argue that customization serves primarily to differentiate a company from its competitors. Interactive involvement of the customer in product design creates an affective relationship with the firm, relaxing price competition. This paper provides a model that incorporates consumer involvement to explain t...

Customer Strategies for Responding to Day-Ahead Market HourlyElectricity Pricing

Energy Technology Data Exchange (ETDEWEB)

Goldman, Chuck; Hopper, Nicole; Bharvirkar, Ranjit; Neenan,Bernie; Boisvert, Dick; Cappers, Peter; Pratt, Donna; Butkins, Kim

2005-08-25

Real-time pricing (RTP) has been advocated as an economically efficient means to send price signals to customers to promote demand response (DR) (Borenstein 2002, Borenstein 2005, Ruff 2002). However, limited information exists that can be used to judge how effectively RTP actually induces DR, particularly in the context of restructured electricity markets. This report describes the second phase of a study of how large, non-residential customers' adapted to default-service day-ahead hourly pricing. The customers are located in upstate New York and served under Niagara Mohawk, A National Grid Company (NMPC)'s SC-3A rate class. The SC-3A tariff is a type of RTP that provides firm, day-ahead notice of hourly varying prices indexed to New York Independent System Operator (NYISO) day-ahead market prices. The study was funded by the California Energy Commission (CEC)'s PIER program through the Demand Response Research Center (DRRC). NMPC's is the first and longest-running default-service RTP tariff implemented in the context of retail competition. The mix of NMPC's large customers exposed to day-ahead hourly prices is roughly 30% industrial, 25% commercial and 45% institutional. They have faced periods of high prices during the study period (2000-2004), thereby providing an opportunity to assess their response to volatile hourly prices. The nature of the SC-3A default service attracted competitive retailers offering a wide array of pricing and hedging options, and customers could also participate in demand response programs implemented by NYISO. The first phase of this study examined SC-3A customers' satisfaction, hedging choices and price response through in-depth customer market research and a Constant Elasticity of Substitution (CES) demand model (Goldman et al. 2004). This second phase was undertaken to answer questions that remained unresolved and to quantify price response to a higher level of granularity. We accomplished these

Alternative pricing methodologies

International Nuclear Information System (INIS)

Anon.

1991-01-01

With the increased interest in competitive market forces and growing recognition of the deficiencies in current practices, FERC and others are exploring alternatives to embedded cost pricing. A number of these alternatives are discussed in this chapter. Marketplace pricing, discussed briefly here, is the subject of the next chapter. Obviously, the pricing formula may combine several of these methodologies. One utility of which the authors are aware is seeking a price equal to the sum of embedded costs, opportunity costs, line losses, value of service, FERC's percentage adder formula and a contract service charge

Three principles of competitive nonlinear pricing

OpenAIRE

Page Junior, Frank H.; Monteiro, P. K.

2002-01-01

We make three contributions to the theory of contracting under asymmetric information. First , we establish a competitive analog to the revelation principle which we call the implementation principle. This principle provides a complete characterization of all incentive compatible, indirect contracting mechanisms in terms of contract catalogs (or menus), and allows us to conclude that in competitive contracting situations, firms in choosing their contracting strategies can restrict attention, ...

Price elasticities in the German Statutory Health Insurance market before and after the health care reform of 2009.

Science.gov (United States)

Pendzialek, Jonas B; Danner, Marion; Simic, Dusan; Stock, Stephanie

2015-05-01

This paper investigates the change in price elasticity of health insurance choice in Germany after a reform of health insurance contributions. Using a comprehensive data set of all sickness funds between 2004 and 2013, price elasticities are calculated both before and after the reform for the entire market. The general price elasticity is found to be increased more than 4-fold from -0.81 prior to the reform to -3.53 after the reform. By introducing a new kind of health insurance contribution the reform seemingly increased the price elasticity of insured individuals to a more appropriate level under the given market parameters. However, further unintended consequences of the new contribution scheme were massive losses of market share for the more expensive sickness funds and therefore an undivided focus on pricing as the primary competitive element to the detriment of quality. Copyright © 2015 Elsevier Ireland Ltd. All rights reserved.

Price discrimination in two-sided markets

Directory of Open Access Journals (Sweden)

Kai Zhang

2016-03-01

Full Text Available The use of a price discrimination strategy is an important tool in competition. It can hurt firms and benefit consumers in a one-sided market. However, in two-sided markets, its primary goal is to attract more agents or increase profits. Here, the performance of a second-degree price discrimination strategy in the context of duopoly two-sided platforms is analysed. Two exogenous variables, which include the discount rate and the price discrimination threshold, are used in order to examine whether the price discrimination strategy could help two-sided platforms achieve their objective, which is to maximise their market value. Three cases are considered, and we demonstrate that the price discrimination strategy cannot attract more agents and at the same time increase the profits; a lower price discrimination threshold cannot ensure larger markets shares; a higher discount rate is detrimental to the profit of a platform. However, this is good for its market shares. Moreover, discriminative pricing increases the competition.

Applying mathematical finance tools to the competitive Nordic electricity market

OpenAIRE

Vehviläinen, Iivo

2004-01-01

This thesis models competitive electricity markets using the methods of mathematical finance. Fundamental problems of finance are market price modelling, derivative pricing, and optimal portfolio selection. The same questions arise in competitive electricity markets. The thesis presents an electricity spot price model based on the fundamental stochastic factors that affect electricity prices. The resulting price model has sound economic foundations, is able to explain spot market price mo...

Power transmission pricing: issues and international experience

International Nuclear Information System (INIS)

Bodenhoefer, H.J.; Wohlgemuth, N.

2001-01-01

A key aspect of electricity industry reorganization is transmission pricing because it heavily influences the degree of effective competition in 'liberalized' electricity markets. this paper presents an overview transmission pricing models, of issues related to an effective design of a transmission pricing approach, and presents approaches implemented internationally. A conclusion is that, due to the great number of institutional designs of electricity market organizations, particularly in Europe, it will be difficult to design/implement a model of cross-border transmission pricing that is capable of inducing a high degree of non-discriminatory international competition in electricity markets. (author)

Superiority: China Mobile in the competition

Institute of Scientific and Technical Information of China (English)

无

2007-01-01

The market share between China Mobile and China Unicom has stabilized since 2002.It is found that China Mobile has the superiority in the competition, for example, the scissors movement between its revenue and cost indicates that it has a strong profit generating ability and there is enough room for it to reduce the price.The ratio between its price (marginal income) and marginal cost indicates that there is a very distant limit for it to reduce the price.Its demand is obviously flexible with the price, but it does not use the price weapon abundantly.The reason for the stabilization of the market is that China Mobile withdrew from the competition.

Competition in health insurance markets: limitations of current measures for policy analysis.

Science.gov (United States)

Scanlon, Dennis P; Chernew, Michael; Swaminathan, Shailender; Lee, Woolton

2006-12-01

Health care reform proposals often rely on increased competition in health insurance markets to drive improved performance in health care costs, access, and quality. We examine a range of data issues related to the measures of health insurance competition used in empirical studies published from 1994-2004. The literature relies exclusively on market structure and penetration variables to measure competition. While these measures are correlated, the degree of correlation is modest, suggesting that choice of measure could influence empirical results. Moreover, certain measurement issues such as the lack of data on PPO enrollment, the treatment of small firms, and omitted market characteristics also could affect the conclusions in empirical studies. Importantly, other types of measures related to competition (e.g., the availability of information on price and outcomes, degree of entry barriers, etc.) are important from both a theoretical and policy perspective, but their impact on market outcomes has not been widely studied.

Domestic Price, (Expected) Foreign Price, and Travel Spending by Canadians in the United States

OpenAIRE

Jan Vilasuso; Fredric C. Menz

1998-01-01

In this paper, the authors develop and test a model to explain travel expenditures in the United States by Canadians. The model examines a consumer's choice problem where income is allocated between domestic and foreign consumption. Consumers do not know the foreign price level and base their spending in part on expected foreign price. In addition to expected foreign price, domestic price, exchange rates, income, and foreign price uncertainty influence travel spending. Empirically, each deter...

Price Collusion or Competition in US Higher Education

Science.gov (United States)

Gu, Jiafeng

2015-01-01

How geographical neighboring competitors influence the strategic price behaviors of universities is still unclear because previous studies assume spatial independence between universities. Using data from the National Center for Education Statistics college navigator dataset, this study shows that the price of one university is spatially…

Crude oil price dynamics: A study on effects of market expectation and strategic supply on price movements

Science.gov (United States)

Jin, Xin

Recent years have seen dramatic fluctuations in crude oil prices. This dissertation attempts to better understand price behavior. The first chapter studies the behavior of crude oil spot and futures prices. Oil prices, particularly spot and short-term futures prices, appear to have switched from I(0) to I(1) in early 2000s. To better understand this apparent change in persistence, a factor model of oil prices is proposed, where the prices are decomposed into long-term and short-term components. The change in the persistence behavior can be explained by changes in the relative volatility of the underlying components. Fitting the model to weekly data on WTI prices, the volatility of the persistent shocks increased substantially relative to other shocks. In addition, the risk premiums in futures prices have changed their signs and become more volatile. The estimated net marginal convenience yield using the model also shows changes in its behavior. These observations suggest that a dramatic fundamental change occurred in the period from 2002 to 2004 in the dynamics of the crude oil market. The second chapter explores the short-run price-inventory dynamics in the presence of different shocks. Classical competitive storage model states that inventory decision considers both current and future market condition, and thus interacts with spot and expected future spot prices. We study competitive storage holding in an equilibrium framework, focusing on the dynamic response of price and inventory to different shocks. We show that news shock generates response profile different from traditional contemporaneous shocks in price and inventory. The model is applied to world crude oil market, where the market expectation is estimated to experience a sharp change in early 2000s, together with a persisting constrained supply relative to demand. The expectation change has limited effect on crude oil spot price though. The world oil market structure has been studied extensively but no

Is healthy competition healthy? New evidence of the impact of hospital competition.

Science.gov (United States)

Gift, Thomas L; Arnould, Richard; DeBrock, Larry

2002-01-01

Competition among hospitals is commonly regarded as inefficient due to the medical arms race phenomenon, but most evidence for this hypothesis predates the Medicare prospective payment system and preferred provider legislation. Recent studies indicate hospital competition reduces costs and prices, but nearly all such research has focused on California. We add to the body of literature that analyzes the effects of competition in hospital markets. Using data from the state of Washington, we show that hospitals assume more risk in competitive markets by being more likely to accept prospective payment arrangements with insurers. If the arrangement is retrospective, the hospital is more likely to offer a discount as the number of competing hospitals increases. Both findings indicate that competitive forces operate the same in hospital markets as in most others: as the number of competitors increases, prices decrease and market power shifts from the suppliers to purchasers. The medical arms race hypothesis that favors more concentrated hospital markets no longer appears to be valid.

How Do Companies Use the Price Strategies

Institute of Scientific and Technical Information of China (English)

赵亚男; 赵翠玲

2011-01-01

@@ 1 .Introduction With the development of the globalization, companies face many challenges.Pricing strategy is a part of their marketing efforts.Price is the only element in the marketing mix that produces revenues; all other elements re present cost.So pricing and price competition is the number-one problem facing many marketing executives.To select an initial price, companies should using pricing

Best Practices for New Product Pricing: Impact on Market Performance and Price Level under Different Conditions

NARCIS (Netherlands)

Ingenbleek, P.T.M.; Frambach, R.T.; Verhallen, T.M.M.

2013-01-01

To date, research on new product pricing has predominantly been approached as a choice between market skimming and penetration pricing. Despite calls for research that addresses other complexities in new product pricing, empirical research responding to these calls remains scarce. This paper

40 CFR 35.6555 - Competition.

Science.gov (United States)

2010-07-01

... current and include enough qualified sources to ensure maximum open and free competition. Recipients must... transactions in a manner providing maximum full and open competition. (a) Restrictions on competition... bonding requirements; (3) Noncompetitive pricing practices between firms or between affiliated companies...

The Relationship of Competition and Choice to Innovation in Education Markets: A Review of Research on Four Cases.

Science.gov (United States)

Lubienski, Chris

Concerned about the deadening effects of standardization imposed by monopolistic education bureaucracies, policymakers in many different countries endorse economic-style mechanisms of consumer choice and competition between autonomous providers as the key elements of "market-driven" education. The reasoning behind this approach is that market…

Did residential electricity rates fall after retail competition? A dynamic panel analysis

International Nuclear Information System (INIS)

Swadley, Adam; Yücel, Mine

2011-01-01

A key selling point for the restructuring of electricity markets was the promise of lower prices. There is not much consensus in earlier studies on the effects of electricity deregulation in the U.S., particularly for residential customers. Part of the reason for not finding a consistent link with deregulation and lower prices was that the removal of transitional price caps led to higher prices. In addition, the timing of the removal of price caps coincided with rising fuel prices, which were passed on to consumers in a competitive market. Using a dynamic panel model, we analyze the effect of participation rates, fuel costs, market size, a rate cap and switch to competition for 16 states and the District of Columbia. We find that an increase in participation rates, price controls, a larger market, and high shares of hydro in electricity generation lower retail prices, while increases in natural gas and coal prices increase rates. We also find that retail competition makes the market more efficient by lowering the markup of retail prices over wholesale costs. The effects of a competitive retail electricity market are mixed across states, but generally appear to lower prices in states with high participation rates. - Highlights: ► We analyze the effects of retail competition in electricity markets on residential retail prices. ► Analysis carried out using a dynamic panel model; monthly data for 17 U.S. states. ► More customer participation and larger market lead to lower prices. ► Higher fuel costs increase retail prices, but with a lag. ► Retail competition leads to a more efficient electricity market.

How Readers and Advertisers Benefit from Local Newspaper Competition.

Science.gov (United States)

Everett, Shu-Ling Chen; Everett, Stephen E.

1989-01-01

Explores relations among three competitive schemes with respect to newspapers' price structures, including advertising rates and prices to consumers. Finds that readers get some benefit from greater competition, but that advertisers do not. (MM)

Equilibria in the competitive retail electricity market considering uncertainty and risk management

International Nuclear Information System (INIS)

Kharrati, Saeed; Kazemi, Mostafa; Ehsan, Mehdi

2016-01-01

In a medium term planning horizon, a retailer should determine its forward contracting and pool participating strategies as well as the selling price to be offered to the customers. Considering a competitive retail electricity market, the number of clients being supplied by any retailer is a function of the selling prices and some other characteristics of all the retailers. This paper presents an equilibrium problem formulation to model the retailer's medium term decision making problem considering the strategy of other retailers. Decision making of any single retailer is formulated as a risk constraint stochastic programming problem. Uncertainty of pool prices and clients' demands is modeled with scenario generation method and CVaR (conditional value at risk) is used as the risk measure. The resulting single retailer planning problem is a quadratic constrained programming problem which is solved using the Lagrangian relaxation method and the Nash equilibrium point of the competitive retailers is achieved by successive solving of this problem for all the retailers. The performance of the proposed method is demonstrated using a realistic case study of Texas electricity market. - Highlights: • Presenting an equilibrium problem formulation for the retailer's decision-making. • Modeling consumer's retail choice behavior with an econometric model. • Managing the retailer's risk caused by rivals' strategy through CVaR. • Approximating the nonlinear price-quota curve with a piecewise-linear function. • Decomposing the nonlinear optimization problem using Lagrangian relaxation method.

Will Hydrogen be Competitive in Europe without Tax-Favours?

DEFF Research Database (Denmark)

Hansen, Anders Chr.

2010-01-01

-fossil power-based hydrogen becomes the most cost competitive fuel. General fuel taxes lower the threshold at which the international oil price reverses this competitiveness order. The highest fuel tax rates applied in Europe lowers this threshold oil price considerably, whereas the lowest fuel taxes may...... production, the international oil price, and fuel taxes. At low oil prices, the highest per kilometre costs were found for non-fossil power-based hydrogen, the second highest for natural gas-based hydrogen, and the lowest for conventional fuels. At high oil prices, this ranking is reversed and non...... be insufficient to make hydrogen competitive without tax favours. Alternative adjustments of the EU minimum fuel tax rates with a view to energy efficiency and CO2-emissions are discussed...

47 CFR 1.774 - Pricing flexibility.

Science.gov (United States)

2010-10-01

... copies shall be served upon the Chief, Wireline Competition Bureau and the Chief, Pricing Policy Division... 47 Telecommunication 1 2010-10-01 2010-10-01 false Pricing flexibility. 1.774 Section 1.774..., and Reports Involving Common Carriers Tariffs § 1.774 Pricing flexibility. (a) Petitions. (1) A...

Price cap regulation: the case of natural gas transport in the UK; La reglementation par price cap: le cas du transport de gaz naturel au Royaume Uni

Energy Technology Data Exchange (ETDEWEB)

David, L. [ATER, Paris-1 Univ., 75 (France)

1999-09-01

The transport and storage activities of British Gas company are controlled by a distinct organization named Transco. The access charges paid by the suppliers for the use of Transco's network are regulated by a price cap since October 1, 1994. However, Ofgas, the office of gas supply which is the regulation authority in charge of the control of competition and of British Gas activities, considers this control system as inefficient and has chosen a RPI (retail price index)-X (expected productivity factor)-type price cap for the control of gas transport tariffs. This has led to a disagreement between Transco and Ofgas which has delayed the implementation of the new system up to February 1998. This article compares the choices made by Ofgas for the control of gas transport tariffs with the economical theory. It recalls first, the reasons why the price cap appears as more efficient than the service cost regulation, the alternate method used by regulation authorities to control the tariffs of natural monopolies. Then, the difficulties linked with the implementation of the price cap for the transport of natural gas in the UK are analyzed in order to explain the reasons that led Ofgas to change its formula. Finally, the bases of an optimum hybrid formula are proposed. (J.S.)

Endogenous versus exogenous generic reference pricing for pharmaceuticals.

Science.gov (United States)

Antoñanzas, F; Juárez-Castelló, C A; Rodríguez-Ibeas, R

2017-12-01

In this paper we carry out a vertical differentiation duopoly model applied to pharmaceutical markets to analyze how endogenous and exogenous generic reference pricing influence competition between generic and branded drugs producers. Unlike the literature, we characterize for the exogenous case the equilibrium prices for all feasible relevant reference prices. Competition is enhanced after the introduction of a reference pricing system. We also compare both reference pricing systems on welfare grounds, assuming two different objective functions for health authorities: (i) standard social welfare and (ii) gross consumer surplus net of total pharmaceutical expenditures. We show that regardless of the objective function, health authorities will never choose endogenous reference pricing. When health authorities are paternalistic, the exogenous reference price that maximizes standard social welfare is such that the price of the generic drug is the reference price while the price of the branded drug is higher than the reference price. When health authorities are not paternalistic, the optimal exogenous reference price is such that the price of the branded drug is the reference price while the price of the generic drug is lower than the reference price.

The constitutional protection of trade secrets and patents under the Biologics Price Competition and Innovation Act of 2009.

Science.gov (United States)

Epstein, Richard A

2011-01-01

The Biologics Price Competition and Innovation Act of 2009 ("Biosimilars Act") is for the field of pharmaceutical products the single most important legislative development since passage of the Drug Price Competition and Patent Term Restoration Act of 1984 ("Hatch-Waxman Act"), on which portions of the Biosimilars Act are clearly patterned. Congress revised section 351 of the Public Health Service Act (PHSA) to create a pathway for FDA approval of "biosimilar" biological products. Each biosimilar applicant is required to cite in its application a "reference product" that was approved on the basis of a full application containing testing data and manufacturing information, which is owned and was submitted by another company and much of which constitutes trade secret information subject to constitutional protection. Because the Biosimilars Act authorizes biosimilar applicants to cite these previously approved applications, the implementation of the new legislative scheme raises critical issues under the Fifth Amendment of the Constitution, pursuant to which private property--trade secrets included--may not be taken for public use, without "just compensation." FDA must confront those issues as it implements the scheme set out in the Biosimilars Act. This article will discuss these issues, after providing a brief overview of the Biosimilars Act and a more detailed examination of the law of trade secrets.

Consumer Choice Between Hospital-Based and Freestanding Facilities for Arthroscopy: Impact on Prices, Spending, and Surgical Complications.

Science.gov (United States)

Robinson, James C; Brown, Timothy T; Whaley, Christopher; Bozic, Kevin J

2015-09-16

Hospital-based outpatient departments traditionally charge higher prices for ambulatory procedures, compared with freestanding surgery centers. Under emerging reference-based benefit designs, insurers establish a contribution limit that they will pay, requiring the patient to pay the difference between that contribution limit and the actual price charged by the facility. The purpose of this study was to evaluate the impact of reference-based benefits on consumer choices, facility prices, employer spending, and surgical outcomes for orthopaedic procedures performed at ambulatory surgery centers. We obtained data on 3962 patients covered by the California Public Employees' Retirement System (CalPERS) who underwent arthroscopy of the knee or shoulder in the three years prior to the implementation of reference-based benefits in January 2012 and on 2505 patients covered by CalPERS who underwent arthroscopy in the two years after implementation. Control group data were obtained on 57,791 patients who underwent arthroscopy and were not subject to reference-based benefits. The impact of reference-based benefits on consumer choices between hospital-based and freestanding facilities, facility prices, employer spending, and surgical complications was assessed with use of difference-in-differences multivariable regressions to adjust for patient demographic characteristics, comorbidities, and geographic location. By the second year of the program, the shift to reference-based benefits was associated with an increase in the utilization of freestanding ambulatory surgery centers by 14.3 percentage points (95% confidence interval, 8.1 to 20.5 percentage points) for knee arthroscopy and by 9.9 percentage points (95% confidence interval, 3.2 to 16.7 percentage points) for shoulder arthroscopy and a corresponding decrease in the use of hospital-based facilities. The mean price paid by CalPERS fell by 17.6% (95% confidence interval, -24.9% to -9.6%) for knee procedures and by 17

Pricing strategies of the supermarket sector

OpenAIRE

Leal, Joana Lobato da Fonseca Sáragga

2014-01-01

The food retail industry is a very competitive market. Supermarkets use a combination of price, quality of products and service to lure consumers and increase their profit. This work project draws upon both empirical and theoretical literatures to understand the different pricing strategies that the supermarket sector uses. Everyday Low Price, Promotional, Zone Pricing and Loyalty Programs are the most common pricing strategies in this industry. By using data from the Portuguese supermarket l...

Energy vectors - Perennial guidebook for energy choices; Vecteurs d'energie - Guide perenne pour les choix energetiques

Energy Technology Data Exchange (ETDEWEB)

Caseau, P.; Ruelle, G.; Bacher, P.; Bamberger, Y.; Castillon, P.; Decomps, B.; Dhers, J.; Jarry, B.; Lefaudeux, F.; Mudry, F.; Saunier, B. [Academie des Technologies, Grand Palais des Champs Elysees - Porte C - Avenue Franklin D. Roosevelt - 75008 Paris (France); Careme, F.; Rogeaux, B. [EdF, 22-30, avenue de Wagram 75008 Paris (France); Choux, G. [Total, 2, place Jean Millier La Defense 6, 92400 Courbevoie (France); Morel, H. [CNRS, 3 Rue Michel-Ange, 75016 Paris (France)

2011-11-17

Energy vector means the distributed form of energy which is paid by the end-user: the automotive fuel at the gas station, the electricity at the plug. Vectors are characterized by two essential properties: they are structured in networks allowing a large access to users and a geographical and time adjustment of the demand thanks to transport and storage facilities. The link they create between sources and needs allows to introduce both upstream and downstream competitions (what usage is the most profitable? What source or vector is the most economical?). These two properties of vectors allow to use the economical and ecological competitions to help the decision-makers in the choice of the energy mix. This book explores these competitions with a double compass: ecological (greenhouse gases abatement) and economical (the less cost). The parametrical structure of the study allows to use it according to various hypotheses concerning the future evolution of energy source and CO{sub 2} prices. Therefore, it represents a perennial guidebook of energy choices. (J.S.)

Brand the Pricing: Critical Critique

OpenAIRE

Alam Kazmi, Syed Hasnain

2015-01-01

Brand pricing decision models and established theories in the marketing and econometrics focus typically on assuming the symmetric competing businesses. The empirical generalities are key for strategic marketplace planning. The significance of pricing to customer store and brand choices are always regarded as a widely known truth among marketing scholars and explains consumer’s role responding to their psychological representations of price rather than price itself. Scholars have ...

Competition policy: consequences of restrictive trade practices and price-fixing provisions for medical practitioners in Australia and New Zealand.

Science.gov (United States)

Janes, Hanne

2006-05-01

Competition laws have only applied to many participants in the health care industry in Australia and New Zealand since the mid 1990s. Since then, the Australian Competition and Consumer Commission has considered a number of applications by medical practitioner associations and private hospitals to authorise potentially anti-competitive conduct, while the New Zealand Commerce Commission has successfully prosecuted a group of ophthalmologists. Amongst medical practitioners, however, there is still confusion and misunderstanding concerning the type of conduct caught by the Australian Trade Practices Act 1974 (Cth) and the New Zealand Commerce Act 1986 (NZ). This is of serious concern given the substantial penalties associated with price-fixing and restrictive trade practices. This article examines the provisions of these Acts most relevant to medical practitioners as well as a number of determinations and judicial decisions. To provide practical assistance to medical practitioners, the key lessons are extracted.

Research on choices of methods of internet of things pricing based on variation of perceived value of service

Directory of Open Access Journals (Sweden)

Wei Li

2013-03-01

Full Text Available Purpose: With the rapid progress of Internet of Things technology, the information service of IoT has got unprecedented development, and plays an increasingly important role in real life. For the increasing demand of information service, the pricing of information service becomes more important. This paper aims to analyze the strategic options and payoff function between information provider and intermediaries based on Stackelberg game. Firstly, we describe information service delivery method based on the Internet of Things specific function. Secondly, we calculate the consumer demand for the information service. Finally, we explain two kinds of strategic options by the game theory, and then discuss the optimal pricing method of information services based on profit maximization.Design/methodology/approach: To achieve this objective, Considering the consumer perceived value of Internet of Things Service changing, we establish a Stackelberg model in which the supplier is the leader followed by the middleman. Then, we compare the advantages of using individual pricing with that of bundling pricing.Findings: The results show that whether information providers adopt bundling pricing strategy or individual pricing strategy depends on the cost of perception equipment, if information providers want to adopt individual pricing strategy, the variation of consumers’ perception value of information services must meet certain conditions.Research limitations/implications: the providers make price for the information service, in addition to continuously improve the quality of information service, it also devotes resources to tapping and understanding market information, such as the sensor device price, the variation of perception value of information services and so on, so as to create competitive advantage. This paper is just a preliminary model, it does not take into account the effect of mixed bundling.Originality/value: In this research, a new model for

Going beyond best technology and lowest price: on renewable energy investors’ preference for service-driven business models

International Nuclear Information System (INIS)

Loock, Moritz

2012-01-01

Renewable energy is becoming increasingly important for economies in many countries. But still in an emerging industry, renewable energy requires supportive energy policy helping firms to develop and protect competitive advantages in global competition. As a guideline for designing such policy, we consult well-informed stakeholders within the renewable energy industry: investors. Their preferences serve as explorative indicator for assessing which business models might succeed in competition. To contribute to only limited research on renewable energy investors’ preferences, we ask, which business models investment managers for renewable energy prefer to invest in. We report from an explorative study of 380 choices of renewable energy investment managers. Based on the stated preferences, we modelled three generic business models to calculate the share of investors’ preferences. We find exiting evidence: a “customer intimacy” business model that proposes best services is much more preferred by investors than business models that propose lowest price or best technology. Policy-makers can use those insights for designing policy that supports service-driven business models for renewable energy with a scope on customer needs rather than technology or price. Additionally, we state important implications for renewable energy entrepreneurs, managers and research.

Optimal decisions of sharing rate and ticket price of different transportation modes in inter-city transportation corridor

Directory of Open Access Journals (Sweden)

Zhaoping Tang

2015-11-01

Full Text Available Purpose: The paper concerns competition of different transportation modes coexist in inter-city transportation corridor. The purpose of this paper is to express the competitive relationship by building mathematical model and obtain the best sharing rate and the optimal ticket price of different transportation modes. Design/methodology/approach: Firstly, analyzing influencing factors of passenger choice about transportation modes, we designed an utility function of transportation modes. Secondly, referring to the game theory and logit modle, a non-cooperative game model between railway and highway was built. Finally, the model was applied to Nanchang-Jiujiang transportation corridor in China for an empirical analysis. Findings: The results indicate that the proposed non-cooperative game model is rational and reliable, and it supplies a scientific method to determine the optimal ticket price and passenger sharing rate of different transportation modes, and can be applied to the competition study on different transportation modes in inter-city transportation corridor. Originality/value: The main contribution of this paper is to built the non-cooperative game model, which can consider the needs of different travelers, and achieve reasonable passenger divergence of different transportation modes and coordinated development of whole transport market.

Port pricing : principles, structure and models

OpenAIRE

Meersman, Hilde; Strandenes, Siri Pettersen; Van de Voorde, Eddy

2014-01-01

Price level and price transparency are input to shippers’ choice of supply chain and transport mode. In this paper, we analyse current port pricing structures in the light of the pricing literature and consider opportunities for improvement. We present a detailed overview of pricing criteria, who sets prices and who ultimately foots the bill for port-of-call charges, cargo-handling fees and congestion charges. Current port pricing practice is based on a rather linear structure and fails to in...

Competition on European energy markets

International Nuclear Information System (INIS)

Lijesen, M.; Speck, S; Mulder, M.

2003-01-01

The launch of the Directives on Electricity and Gas in the late 1990s was the starting point for creating common and competitive energy markets in the European Union. The main goal of this process was to increase efficiency of allocation of resources and, hence,enhance consumer welfare. More specifically, increasing competition within the energy markets should lead to a reduction of energy prices and to a convergence of prices among EU member states. Within a year from now, end-users in the Netherlands will be free to choose their own supplier, thus finalising the deregulation of Dutch energy markets. What lessons may be learned from the experience thus far? What are the results of the liberalisation process up to now? How have prices developed,and can these developments be explained? How afraid should we be for the lights to go out in a competitive electricity market?

Do Choice Experiments Generate Reliable Willingness to Pay Estimates Theory and Experimental Evidence

Science.gov (United States)

2015-01-01

the sample if they regard the price vector as high relative to the utility of non-status quo choices. Thus, the mathematics of combinatorial choice...option with the same attributes appearing in a choice set at a higher price , or an option with the same price but worse attributes appearing in the...25 of subjects making binary choices between alternative snack foods is consistent with an optimizing model of choice with error. Such choice errors

Preliminary Assessment of Spatial Competition in the Market for E85

Energy Technology Data Exchange (ETDEWEB)

Clinton, Bentley [National Renewable Energy Lab. (NREL), Golden, CO (United States)

2017-02-01

Anecdotal evidence suggests retail E85 prices may track retail gasoline prices rather than wholesale costs. This indicates E85 prices may be higher than they would be if priced on a cost basis hence limiting adoption by some price-sensitive consumers. Using publicly available and proprietary E83 and regular gasoline price data, we examine pricing behavior in the market for E85. Specifically, we assess the extent to which local retail competition in E85 markets decreases E85 retail prices. Results of econometric analysis suggest that higher levels of retail competition (measured in terms of station density) are associated with lower E85 prices at the pump. While more precise causal estimates may be produced from more comprehensive data, this study is the first to our knowledge that estimates the spatial competition dimension of E85 pricing behavior by firms. This is an initial presentation; a related technical report is also available.

Did the expiration of retail price caps affect prices in the restructured Texas electricity market?

International Nuclear Information System (INIS)

Kang, Linhong; Zarnikau, Jay

2009-01-01

On January 1, 2007, the Electric Reliability Council of Texas (ERCOT) market became the first restructured market in the US to completely remove caps on the prices which could be charged to residential energy consumers by the retailers associated with the traditional or incumbent utility service providers. Our analysis suggests that the expiration of the price-to-beat (PTB) price caps may have led to a reduction in the average prices charged by competitive retail electric providers (REPs). (author)

Logo competition

CERN Multimedia

Staff Association

2013-01-01

Award of the prizes The price ceremony for the Staff Association’s new logo competition which took place on Friday 1st March at 5 p.m. was a big success. The first prize, an Ezee Suisse electric bike, was won by Paulo Rios, from Portugal. In his absence, the bike was handed to his brother Vitor. The other five winners of the competition also received their prize: Go Sport vouchers. A peize draw was then organized to award 22 other participants with prizes offered by our commercial partners (Aquaparc, BCGE, L’Occitane, Passeport Gourmand, Sephora, Theater La Comédie de Genève), whom we would like to warmly thank. After all prices were distributed the evening continued with discussions around a friendly drink.

Oil transformation sector modelling: price interactions

International Nuclear Information System (INIS)

Maurer, A.

1992-01-01

A global oil and oil product prices evolution model is proposed that covers the transformation sector incidence and the final user price establishment together with price interactions between gaseous and liquid hydrocarbons. High disparities among oil product prices in the various consumer zones (North America, Western Europe, Japan) are well described and compared with the low differences between oil supply prices in these zones. Final user price fluctuations are shown to be induced by transformation differences and competition; natural gas market is also modelled

Price-Quantity Competition under Strategic Uncertainty

NARCIS (Netherlands)

Kopányi, D.

2014-01-01

We consider the market for a homogeneous good in which two firms simultaneously decide on both the price and the production level of the good. Firms have mean-variance preferences and they hold probabilistic conjectures about the actions of the other firm. We show that a pure-strategy equilibrium

COMPETITION AS MARKET MECHANISM

Directory of Open Access Journals (Sweden)

N. Ya. Kazhuro

2015-01-01

Full Text Available The essence of a competition as an objective law for development of the commodities production based on private ownership of the means of production and commodity exchange has been revealed in the paper. The paper presents an economic basis of market economy (private ownership which generates a corresponding production objective. Such purpose is a maximization of profit and a minimization of market subject expenses. Therefore, a struggle for the most favourable conditions on commodity production and sales is inevitable in such situation. The struggle is considered in the community with developed market economy as a competition.The competition is regarded not as an exogenic factor exerting its influence on market economic system from the outside, but as an objective phenomenon which is inherent to management market system in itself. Such treatment is substantiated by economic disintegration of individual commodity producers. Being an important engine of market economy, the competition does not establish its laws, and its role is to be an executive of data which are internally inherent in commodity production laws and firstly it concerns a profit maximization law which defines a purpose and guiding motif of economic entities in the given economy.The competition plays a contradictory role under conditions of market economy. On the one hand, it makes manufacturers constantly to aspire to expense reduction for the sake of profit increase. This has resulted in labour productivity increase, production cost decrease and a company receives an opportunity to reduce retail price for its products. Consequently, the competition acts as a potential factor for lowering of prices while increasing production efficiency. On the other hand, sellers have more freedom in price fixing under conditions of imperfect competition as they sell their products under the conditions of a monopolistic competition or an oligopoly. This is the main weakest point of the market

31 CFR 56.2 - Sales price.

Science.gov (United States)

2010-07-01

... 31 Money and Finance: Treasury 1 2010-07-01 2010-07-01 false Sales price. 56.2 Section 56.2 Money and Finance: Treasury Regulations Relating to Money and Finance DOMESTIC GOLD AND SILVER OPERATIONS SALE OF SILVER § 56.2 Sales price. Sales of silver will be at prices offered through the competitive...

Pharmaceutical pricing, price controls, and their effects on pharmaceutical sales and research and development expenditures in the European Union.

Science.gov (United States)

Vogel, Ronald J

2004-08-01

Each country in the European Union (EU) currently employs direct price controls or permutations of direct price controls, such as reference pricing or limitations on returns to capital. Some countries also use volume controls. A new proposal that is being discussed would have all of the countries in the EU adopt uniform pricing for each pharmaceutical. This paper analyzes the economic effects of free-market pricing individual-country price controls, and uniform EU price controls. Microeconomic and mathematical models were used to simulate and predict probable economic outcomes in a comparative static setting. Price controls may be in the form of price ceilings or price floors. Both forms of price control generate deadweight economic losses in the short run and long run. A uniform EU price for each pharmaceutical sold there would have elements of a price ceiling in some of the countries and of a price floor in other countries. The deadweight loss incurred would be a function of the level at which the uniform price was set by the EU and the price elasticity of demand for each pharmaceutical in each country. Economic efficiency is maximized in both the short run and long run when prices are set in freely competitive markets. An additional important dimension of Ramsey pricing within a competitive context is that it generates funds for investment in pharmaceutical research and development, which enhances economic efficiency in the long run.

The Drivers of E-tailers' Price Levels

NARCIS (Netherlands)

Sotgiu, Francesca; Ancarani, Fabio

2005-01-01

One of the most important topics in online pricing is understanding the drivers of online price levels for different types of retailers, in order to better understand competition across retail channels. We developed a conceptual framework and conducted an empirical analysis on price levels in the

Output Price Risk, Material Input Price Risk, and Price Margins: Evidence from the US Catfish Industry.

Directory of Open Access Journals (Sweden)

David Bouras

2017-07-01

Full Text Available Aim/purpose - To develop a conceptual model for analyzing the impact of output price risk and material input price risk on price margins. Design/methodology/approach - To analyze the combined effect of output price risk and material input risk on price margins, we use a series of comparative static analyses, GARCH models, and data ranging from 1990/01 to 2012/12. Findings - The theoretical results indicate that the impact of output price risk and the impact of material input price risk on price margins are ambiguous and, to a great extent, hinge on the correlation between output price and material input price. The empirical results show that whole frozen catfish price risk and live catfish price risk negatively affect the price margin for frozen catfish. The empirical results, however, indicate that the risk of the price of live catfish affects markedly the price margin for frozen whole catfish in contrast to the impact of the risk of the price of frozen whole catfish. Research implications/limitations - The empirical results have significant implications for managerial decision-making especially when crafting strategies for improving price margins. Accordingly, in order to beef up the price margin for frozen whole catfish, catfish processors may consider engaging in vertical integration. This paper has some limitations: first, it assumes that firms operate in competitive markets; second, it assumes that firms produce and sell a single product. Originality/value/contribution - Unlike earlier studies that focused solely on the effect of output price risk on price margins, this paper analyzes theoretically and empirically the impact of output price risk and material input price risk on price margins.

The Price-Concentration Relationship in Early Residential Solar Third-Party Markets

Energy Technology Data Exchange (ETDEWEB)

Pless, Jacquelyn [Univ. of Oxford (United Kingdom); Langheim, Ria [Center for Sustainable Energy, San Francisco, CA (United States); Machak, Christina [Center for Sustainable Energy, San Francisco, CA (United States); Hellow, Henar [Center for Sustainable Energy, San Francisco, CA (United States); Sigrin, Ben [National Renewable Energy Lab. (NREL), Golden, CO (United States)

2017-01-01

The market for residential solar photovoltaic (PV) systems in the United States has experienced tremendous growth over the past decade, with installed capacity more than doubling between 2014 and 2016 alone (SEIA, 2016). As the residential market continues to grow, it prompts new questions about the nature of competition between solar installers and how this competition, or lack thereof, affects the prices consumers are paying. It is often assumed that more competition leads to lower prices, but this is not universally true. For example, some studies have shown that factors such as brand loyalty could lead to a negative relationship between concentration and price in imperfectly competitive markets (Borenstein, 1985; Holmes, 1989). As such, the relationship between prices and market concentration is an open empirical question since theory could predict either a positive or negative relationship. Determining a relationship between prices and market concentration is challenging for several reasons. Most significantly, prices and market structure are simultaneously determined by each other -- the amount of competition a seller faces influences the price they can command, and prices determine a seller's market share. Previous studies have examined recent PV pricing trends over time and between markets (Davidson et al., 2015a; Davidson and Margolis 2015b; Nemet et al., 2016; Gillingham et al., 2014; Barbose and Darghouth 2015). While these studies of solar PV pricing are able to determine correlations between prices and market factors, they have not satisfactorily proven causation. Thus, to the best of our knowledge, there is little work to date that focuses on identifying the causal relationship between market structure and the prices paid by consumers. We use a unique dataset on third-party owned contract terms for the residential solar PV market in the San Diego Gas and Electricity service territory to better understand this relationship. Surprisingly, we find

Approach of optimum cross-section choice for cable lines in market prices conditions

International Nuclear Information System (INIS)

Guseva, S.; Petrichenko, L.

2012-01-01

In this paper an approach for choosing the optimum cross section for cable lines in conditions of incomplete and uncertain information is considered. The existing method economic current's density has the disadvantages connected with the assumptions and the lack of reliable information. In the work the modification of the economic intervals' method is offered under market conditions of prices. The method is based on search of minimum total annual costs for lines' construction. As example, 20, 110, 330 kV cable lines with copper vein are selected. Economic nomograms with different standard cross-sections are calculated and constructed for practical using of method. The choice of cross-sections by economic considerations is actual and for modern market conditions of economy. The graphics using MathCAD software are offered. (Authors)

Towards a competitive european market of the natural gas: uncertainties and tariff choices; Vers un marche europeen concurrentiel du gaz naturel: incertitudes et choix tarifaires

Energy Technology Data Exchange (ETDEWEB)

NONE

2001-04-01

This document reveals that, by reason of external supply and contract pregnancy, the gas market deregulation will not present the same effects as for the electricity market. The first part deals with the competition in Europe in the natural gas sector (prices policy, transportation prices, administrative procedures). The second part deals with the tariffing in France and the access to the LNG networks and installations. (A.L.B.)

Healthier food choices for children through menu pricing

OpenAIRE

Kellershohn, J.; Walley, K.; Vriesekoop, F.

2017-01-01

Purpose\\ud The purpose of this paper is to investigate the use of pricing (incentive and deterrent) to shift the purchase decision intent of parents when they order food for their child in a fast food restaurant.\\ud Design/methodology/approach\\ud A financial incentive and a deterrent pricing tactic was tested using an online quantitative approach with a sample of 400 Canadian parents, representative of the Canadian population based on geography, household income and education level.\\ud Findin...

The taxation effect on gasoline price asymmetry nexus: Evidence from both sides of the Atlantic

International Nuclear Information System (INIS)

Polemis, Michael L.; Fotis, Panagiotis N.

2014-01-01

This paper explores the degree of competition in various gasoline markets and infers possible causes of price asymmetry across the globe. For this purpose we use the Dynamic Ordinary Least Square method in order to estimate price asymmetry in twelve European countries and the United States for a sample of weekly observations which spans the period from June 1996 to August 2011. The results indicate the common perception that less competitive gasoline markets exhibit price asymmetry, while highly competitive gasoline markets follow a symmetric price adjustment path. Finally, the inclusion of taxes (VAT and excise tax) into retail gasoline prices, supports the existence of price asymmetry in many European countries. - Highlights: • We examine the possible causes of gasoline price asymmetry across the globe. • We investigate the effect of taxation on the retail gasoline price adjustments. • There is a symmetric gasoline price response in the EU wholesale level. • Less competitive gasoline markets exhibit price asymmetry. • The oligopolistic structure of the gasoline markets inflates price asymmetry

Achieving a competitive edge -- A comparison/contrast of two examples

International Nuclear Information System (INIS)

Scholl, P.L.; Ward, D.P.

1996-01-01

As the electric power industry moves from the regulated monopoly environment to one of open competition, the need to achieve and maintain a competitive advantage becomes critical. In the competitive market, having a competitive edge means having goods and services that the market prefers, i.e., buyers in the market prefer to purchase your goods and services rather than your competitors'. For electric power generating facilities, the market is the wholesale market, and because electric power is essentially a commodity, i.e., a megawatthour from one generating facility is the same as a megawatthour from another generating facility, the primary distinguishing factor in the market is price.d therefore, having a competitive edge in the market means having a lower price than the competition. This paper describes the basic elements of achieving a competitive edge and discusses how these elements are being used by two utilities with very different circumstances to improve their competitive positions

AN EMPIRICAL ANALYSIS OF VARIETY PRICE PREMIUM ...

African Journals Online (AJOL)

Location price difference was inversely related to distance from the central commodity market, and the seasonal price difference was attributed to storage technique. These show imperfect competitive market behaviour. Peu/drum with characteristics of brown colour, rough skin and large grain size had a price premium than ...

China's energy security and strategic choices

International Nuclear Information System (INIS)

Pellistrandi, J.

2010-01-01

Considering the present day international political and economical situation, China's energy security covers five important aspects: energy supplies security, energy prices security, environment security with respect to energy consumption, energy transport security, R and D security in the domain of energy resources exploration, exploitation and utilisation. Considering the above-mentioned aspects, China's strategic choices should include five major goals: counting on its own energy resources and giving priority to energy saving, participating to the international competition and implementing a national strategic reserves system, readjusting the energy consumption structure and promoting environment protection by developing nuclear energy, harmonizing China's relations with some countries and avoiding political and military conflicts, increasing investment in energy R and D, in particular in clean coal, nuclear, automotive, renewable energy and energy saving technologies. (J.S.)

Energy and competitiveness - Notes of the Economic Analysis Council, Nr. 6

International Nuclear Information System (INIS)

Bureau, Dominique; Fontagne, Lionel; Martin, Philippe

2013-05-01

This note aims at analyzing the impact of a possible increase of energy prices on the French competitiveness, and more particularly on the performance of exporting companies, while trying to make a distinction between short-term and long-term effects. A first part proposes a diagnosis of the French loss of competitiveness. The second part analyzes the energy prices in France for industries with comparisons with other countries (electricity price, tariffs and production cost). The next part addresses mechanisms relating competitiveness and energy price on a short, medium or long term. Then the authors try to assess at the enterprise level how exports react to energy price variations. The last part contains recommendations for an economic policy

Myth of energy competitiveness in energy producing countries

International Nuclear Information System (INIS)

Watanabe, Chihiro; Widayanti, Tjahya

1992-01-01

This paper examines the relative comparative advantage, focusing on energy prices, of an energy producing developing country (Indonesia) and a non-energy producing developed country (Japan). For energy producing developing countries, it is strategically important to increase the competitiveness of energy dependent industries, and encourage the development of value-added industries. Much work has been done on relative advantage analysis, but the effects of the energy price formation mechanisms on price competitiveness have not been analysed. In this paper a comprehensive approach, using production and cost functions and synchronized price formation by means of principal component analysis, is introduced. (Author)

Environmental Pricing: Studies in Policy Choices and Interactions

DEFF Research Database (Denmark)

areas of current practice that must be addressed. Empirical studies of policy strategies are discussed to illustrate the extent to which current climate change policy is integrated against the proposed successful policy combinations that are presented in this insightful book. Environmental pricing......Environmental taxes can be efficient tools for successful environmental policy. Their use, however, has been limited in many countries. This thoughtful book explores the scope of environmental pricing and examines a variety of national experiences in environmental policy integration, to identify...

Can competition reduce quality?

OpenAIRE

Brekke, Kurt; Siciliani, Luigi; Straume, Odd Rune

2017-01-01

In a spatial competition setting there is usually a non-negative relationship between competition and quality. In this paper we offer a novel mechanism whereby competition leads to lower quality. This mechanism relies on two key assumptions, namely that the providers are motivated and risk-averse. We show that the negative relationship between competition and quality is robust to any given number of firms in the market and whether quality and price decisions are simultaneous or sequential. We...

Pricing decisions from experience: the roles of information-acquisition and response modes.

Science.gov (United States)

Golan, Hagai; Ert, Eyal

2015-03-01

While pricing decisions that are based on experience are quite common, e.g., setting a selling price for a used car, this type of decision has been surprisingly overlooked in psychology and decision research. Previous studies have focused on either choice decisions from experience, or pricing decisions from description. Those studies revealed that pricing involves cognitive mechanisms other than choice, while experience-based decisions involve mechanisms that differ from description-based ones. Thus, the mutual effect of pricing and experience on decision-making remains unclear. To test this effect, we experimentally compared real-money pricing decisions from experience with those from description, and with choices from experience. The results show that the mode of acquiring information affects pricing: the tendency to underprice high-probability prospects and overprice low-probability ones is diminished when pricing is based on experience rather than description. The findings further reveal attenuation of the tendency to underweight rare events, which underlies choices from experience, in pricing decisions from experience. The difference occurs because the response mode affects the search effort and decision strategy in decisions from experience. Copyright © 2014 Elsevier B.V. All rights reserved.

Toward a new spacecraft optimal design lifetime? Impact of marginal cost of durability and reduced launch price

Science.gov (United States)

Snelgrove, Kailah B.; Saleh, Joseph Homer

2016-10-01

The average design lifetime of satellites continues to increase, in part due to the expectation that the satellite cost per operational day decreases monotonically with increased design lifetime. In this work, we challenge this expectation by revisiting the durability choice problem for spacecraft in the face of reduced launch price and under various cost of durability models. We first provide a brief overview of the economic thought on durability and highlight its limitations as they pertain to our problem (e.g., the assumption of zero marginal cost of durability). We then investigate the merging influence of spacecraft cost of durability and launch price, and we identify conditions that give rise cost-optimal design lifetimes that are shorter than the longest lifetime technically achievable. For example, we find that high costs of durability favor short design lifetimes, and that under these conditions the optimal choice is relatively robust to reduction in launch prices. By contrast, lower costs of durability favor longer design lifetimes, and the optimal choice is highly sensitive to reduction in launch price. In both cases, reduction in launch prices translates into reduction of the optimal design lifetime. Our results identify a number of situations for which satellite operators would be better served by spacecraft with shorter design lifetimes. Beyond cost issues and repeat purchases, other implications of long design lifetime include the increased risk of technological slowdown given the lower frequency of purchases and technology refresh, and the increased risk for satellite operators that the spacecraft will be technologically obsolete before the end of its life (with the corollary of loss of value and competitive advantage). We conclude with the recommendation that, should pressure to extend spacecraft design lifetime continue, satellite manufacturers should explore opportunities to lease their spacecraft to operators, or to take a stake in the ownership

The association between price, competition, and demand factors on private sector anti-malarial stocking and sales in western Kenya: considerations for the AMFm subsidy

Science.gov (United States)

2013-01-01

Background Households in sub-Saharan Africa are highly reliant on the retail sector for obtaining treatment for malaria fevers and other illnesses. As donors and governments seek to promote the use of artemisinin combination therapy in malaria-endemic areas through subsidized anti-malarials offered in the retail sector, understanding the stocking and pricing decisions of retail outlets is vital. Methods A survey of all medicine retailers serving Bungoma East District in western Kenya was conducted three months after the launch of the AMFm subsidy in Kenya. The survey obtained information on each anti-malarial in stock: brand name, price, sales volume, outlet characteristics and GPS co-ordinates. These data were matched to household-level data from the Webuye Health and Demographic Surveillance System, from which population density and fever prevalence near each shop were determined. Regression analysis was used to identify the factors associated with retailers’ likelihood of stocking subsidized artemether lumefantrine (AL) and the association between price and sales for AL, quinine and sulphadoxine-pyrimethamine (SP). Results Ninety-seven retail outlets in the study area were surveyed; 11% of outlets stocked subsidized AL. Size of the outlet and having a pharmacist on staff were associated with greater likelihood of stocking subsidized AL. In the multivariable model, total volume of anti-malarial sales was associated with greater likelihood of stocking subsidized AL and competition was important; likelihood of stocking subsidized AL was considerably higher if the nearest neighbour stocked subsidized AL. Price was a significant predictor of sales volume for all three types of anti-malarials but the relationship varied, with the largest price sensitivity found for SP drugs. Conclusion The results suggest that helping small outlets overcome the constraints to stocking subsidized AL should be a priority. Competition between retailers and prices can play an important

Ontario electricity rates and industrial competitiveness

International Nuclear Information System (INIS)

2006-01-01

Industrial electricity prices in Ontario rose significantly after the opening of the competitive Ontario electricity market in 2002, thereby widening the gap between industrial electricity prices in Ontario and those in other Canadian provinces. Navigant Consulting Ltd. conducted this study at the request of the Association of Major Power Consumers in Ontario (AMPCO) to research and compare current and historical electricity prices in Ontario and other jurisdictions in North America. The study provided an independent analysis of how industrial electricity prices in Ontario compare to those in other jurisdiction in which AMPCO members operate. It also formed the basis for comparing the impacts of electricity policy on the economic competitiveness of major power consumers in Ontario. The relative electricity intensity in the United States, Ontario and other Canadian provinces was reviewed for specific industries, including forest products, steel manufacturing, petroleum refining, chemical manufacturing and cement manufacturing. Publicly available aggregate data from Statistics Canada and the United States Bureau of the Census was then used to compare average electricity prices for industrial customers in Ontario. The data confirmed that Ontario has experienced a decline in its competitive price advantage in industrial electricity. Delivered industrial electricity prices in Ontario have increased by more than 60 per cent since 2001. Industrial electricity prices in Ontario rose above those in Quebec, Manitoba, British Columbia and New Brunswick. In addition, industrial electricity prices in Ontario rose above those in competing states such as Ohio and Illinois, in part due to the increase in the value of the Canadian dollar. It was concluded that the price increase may lead to a greater decline in economic output in Ontario compared to competing jurisdictions. 2 tabs., 14 figs., 1 appendix

Forecasting prices and price volatility in the Nordic electricity market

International Nuclear Information System (INIS)

2001-01-01

We develop a stochastic model for long term price forecasting in a competitive electricity market environment. It is demonstrated both theoretically and through model simulations that non-stochastic models may give biased forecasts both with respect to price level and volatility. In the paper, the model concept is applied on the restructured Nordic electricity market. It is specially in peak load hours that a stochastic model formulation provides significantly different results than an expected value model. (author)

78 FR 69553 - Domestic Competitive Products Pricing and Mailing Standards Changes

Science.gov (United States)

2013-11-20

... online intercept request. Retail customers who file their request through usps.com may add extra services... January 2012. The existing Commercial Base prices offer lower prices to customers who use online and other... $15.45. Commercial Base prices offer lower prices to customers who use online and other authorized...

After the oil price collapse

International Nuclear Information System (INIS)

Kohl, W.L.

1991-01-01

In this book, the authors focus on issues that include the extremely high prices following the second oil shock, the resulting decline in oil demand and the increase in non-OPEC production, reduced industry concentration, OPEC's subsequent attempt to regain market share; and the resulting free-for-all of competitive pricing

Price Intransparency, Consumer Decision Making and European Consumer Law

NARCIS (Netherlands)

W.H. van Boom (Willem)

2011-01-01

textabstractPrice comparison is a basic element of competition. For comparison to work, at least prices need to be transparent. Moreover, price is usually a focal point in consumer thinking and deciding on transactions. Hence, obfuscating prices can be detrimental to consumers. Therefore, it is

Can market forces and competition supplant regulation?

International Nuclear Information System (INIS)

Graham, D.

1998-01-01

The challenges facing regulators and governments as utilities and pipelines transform from regulated monopolies into competitive businesses were discussed. In the past, the absence of competition required that utility and pipeline companies be regulated by governments to ensure fair pricing and good performance. The question of whether or not competition can entirely replace regulation was examined. Although the focus was on the natural gas industry, the regulatory trends in other industries were also briefly considered. In 1985, the federal government agreed to allow the commodity price of natural gas to fluctuate in response to market forces. This began the process of deregulation in the Canadian natural gas industry. Direct purchasing introduced competition and ended the monopolies of local distribution companies in purchasing gas. The main benefits of the competitive market structure were that consumers could choose products and services from a range of competing companies at competitive prices. This was critical to the success of the Canadian economy since Canada is the third largest exporter of energy and the eighth largest consumer of energy. It was suggested that even in a competitive market abuse of market power is possible, therefore, there is an important role for government in ensuring the existence of a level playing field. A variety of issues involved in an effective transition to a competitive market were also discussed. 2 figs

Market, trading and coal price

International Nuclear Information System (INIS)

Muller, J.C.; Cornot-Gandolphe, S.; Labrunie, L.; Lemoine, St.; Vandijck, M.

2006-01-01

The coal world experienced a true upheaval in the past five years World coal consumption went up 28 % between 2000 and 2005, as a result of the strong growth in Chinese demand. The growth should continue in the coming years: electrical plant builders' orders are mainly for coal. The regained interest in coal is based on the constraints experienced by competing energies (increase in oil and natural gas prices, geopolitical uncertainties, supply difficulties) and by the abundant reserves of coal in the world and the competitiveness of its price. The strong growth in world coal demand comes with a change in rules governing steam coal trading. While long term bilateral agreements were most common until the late nineties, there has been a true revolution in coal marketing since 2000: spot contracts, stock exchange emergence and futures contracts, price indexes. In a few years, the steam coal market has become a true commodities market, overtaking many more goods. The price of coal has also gone through strong variations since 2003. Whereas the price had been stable for decades, in 2004 the strong increase in China' s demand for coal and iron ore resulting in transport shortage, caused a strong increase in CAF coal prices. Since then, prices have gone down, but remain higher than the Eighties and Nineties levels. In spite of the increase, coal remains available at more competitive prices than its competing energies. (authors)

Demand Uncertainty and Price Stabilization

OpenAIRE

E. Kwan Choi; Stanley R. Johnson

1987-01-01

Price stabilization is an important policy goal of government intervention in competitive markets. These policies are primarily directed at raising producer income and stabilizing market prices at levels acceptable to consumers and producers (Fox 1956, Turnovsky 1978, Newbery and Stiglitz 1979). Many of the stabilization policy results have been developed from the study of agricultural commodity markets. In these markets, prices tend to be highly variable due to uncertain and inelastic supply...

Carbon pricing, nuclear power and electricity markets

Energy Technology Data Exchange (ETDEWEB)

Cameron, R.; Keppler, J. H. [OECD Nuclear Energy Agency, 12, boulevard des Iles, 92130 Issy-les-Moulineaux (France)

2012-07-01

In 2010, the NEA in conjunction with the International Energy Agency produced an analysis of the Projected Costs of Electricity for almost 200 power plants, covering nuclear, fossil fuel and renewable electricity generation. That analysis used lifetime costs to consider the merits of each technology. However, the lifetime cost analysis is less applicable in liberalised markets and does not look specifically at the viewpoint of the private investor. A follow-up NEA assessment of the competitiveness of nuclear energy against coal- and gas-fired generation under carbon pricing has considered just this question. The economic competition in electricity markets is today between nuclear energy and gas-fired power generation, with coal-fired power generation not being competitive as soon as even modest carbon pricing is introduced. Whether nuclear energy or natural gas comes out ahead in their competition depends on a number of assumptions, which, while all entirely reasonable, yield very different outcomes. The analysis in this study has been developed on the basis of daily data from European power markets over the last five-year period. Three different methodologies, a Profit Analysis looking at historic returns over the past five years, an Investment Analysis projecting the conditions of the past five years over the lifetime of plants and a Carbon Tax Analysis (differentiating the Investment Analysis for different carbon prices) look at the issue of competitiveness from different angles. They show that the competitiveness of nuclear energy depends on a number of variables which in different configurations determine whether electricity produced from nuclear power or from CCGTs generates higher profits for its investors. These are overnight costs, financing costs, gas prices, carbon prices, profit margins (or mark-ups), the amount of coal with carbon capture and electricity prices. This paper will present the outcomes of the analysis in the context of a liberalised

Carbon pricing, nuclear power and electricity markets

International Nuclear Information System (INIS)

Cameron, R.; Keppler, J. H.

2012-01-01

In 2010, the NEA in conjunction with the International Energy Agency produced an analysis of the Projected Costs of Electricity for almost 200 power plants, covering nuclear, fossil fuel and renewable electricity generation. That analysis used lifetime costs to consider the merits of each technology. However, the lifetime cost analysis is less applicable in liberalised markets and does not look specifically at the viewpoint of the private investor. A follow-up NEA assessment of the competitiveness of nuclear energy against coal- and gas-fired generation under carbon pricing has considered just this question. The economic competition in electricity markets is today between nuclear energy and gas-fired power generation, with coal-fired power generation not being competitive as soon as even modest carbon pricing is introduced. Whether nuclear energy or natural gas comes out ahead in their competition depends on a number of assumptions, which, while all entirely reasonable, yield very different outcomes. The analysis in this study has been developed on the basis of daily data from European power markets over the last five-year period. Three different methodologies, a Profit Analysis looking at historic returns over the past five years, an Investment Analysis projecting the conditions of the past five years over the lifetime of plants and a Carbon Tax Analysis (differentiating the Investment Analysis for different carbon prices) look at the issue of competitiveness from different angles. They show that the competitiveness of nuclear energy depends on a number of variables which in different configurations determine whether electricity produced from nuclear power or from CCGTs generates higher profits for its investors. These are overnight costs, financing costs, gas prices, carbon prices, profit margins (or mark-ups), the amount of coal with carbon capture and electricity prices. This paper will present the outcomes of the analysis in the context of a liberalised

The impact of power market structure on CO2 cost pass-through to electricity prices under quantity competition. A theoretical approach

International Nuclear Information System (INIS)

Sijm, J.; Chen, Y.; Hobbs, B.F.

2012-01-01

We present a theoretical analysis of the impact of power market structure on the pass-through rate (PTR) of CO2 emissions trading (ET) costs on electricity prices. Market structure refers in particular to the number of firms active in the market and the intensity of oligopolistic competition as measured by the conjectural variation, as well as to the functional form of the power demand and supply curves. In addition, we analyse briefly the impact of other power market-related factors on the PTR of carbon costs to electricity prices. These include in particular the impact of ET-induced changes in the merit order of power generation technologies and the impact of pursuing other market strategies besides maximising generator profit, such as maximising market shares or sales revenues of power companies. Each of these factors can have a significant impact on the rate of passing-through carbon costs to electricity prices.

Coal and gas competition in global markets

Energy Technology Data Exchange (ETDEWEB)

NONE

2013-07-01

Global consumption of commercial energy totalled 18 Gt of coal equivalent in 2010. With a 28% share, coal ranked second after oil as one of the major sources of primary energy and natural gas (at 21%) ranked third. Gross power generation with coal was approximately 41% and gas 22%. Natural gas as a global commodity is growing rapidly with the advent of unconventional sources such as shale gas. Recently, gas has become the fuel of choice for new power generating plants in some countries. Overall production of coal has increased in the same time-frame. The share of coal in electricity production was constant in Europe from early 2000 but recently increased. This was due to the high cost of gas in Europe and a low emissions penalty levied by the regulator, making coal currently more competitive in Europe compared to gas. Coal utilisation continues to increase in Asia but is facing serious competition with gas in the USA, where the share of electricity generated with coal dropped in 2012. However, natural gas used to generate electricity in early 2013 was below the high level seen during the comparable 2012 period, when low natural gas prices led to significant displacement of coal by natural gas for power generation. The current consensus in the USA is that while coal may recover ground in the short term, it loses in the long term as coal plants are retired. The discovery, production and availability of significant amounts of gas have implications for not only the price of natural gas but also the price of coal as well as supply and demand, and utilisation of both fuels internationally. The interaction between coal and gas in the global markets today is investigated in this review and the near-term outlook and impact on both fuels is presented. In this report, reserves, production and trade, supply and demand, pricing, utilisation and consumption, public attitudes and finally near/short to medium-term prospects are discussed for both coal and gas.

Integrated assessment technology in management of competition efficiency in business corporations

Directory of Open Access Journals (Sweden)

Savel’eva Nadezhda

2017-01-01

Full Text Available To date, the banking sector is subsidized. the state co-finances players in the domestic banking sector against the background of reduced availability of foreign debt financing. on the one hand is an additional source of competitive advantages, on the other hand, the question is how commercial banks use their capabilities. In a fast growing sector of banking services, increased competition, rapid growth in the breadth and richness of banking service range it is necessary to use the entire arsenal of marketing tools that determine the competitiveness of services and effectiveness of company. The economic importance of technologies development for integrated assessment of competition efficiency is that banks have to be able to use different methods of competition for adaptation to ambient conditions changes and ensure competitive success. The article describes an integrated assessment approach to effectiveness of management of price and non-price competition in business corporations based on sample of banking market. The technology that proposed in article helps to identify the main target segments of consumers, investigate the influence and perception factors of price and non-price competition to the banking service consumers; to form the main ways and directions in management of competition efficiency; to evaluate the effectiveness of interventions.

Creative pricing strategies for medical services.

Science.gov (United States)

Tellis, G J

1987-01-01

This paper discusses the strategic role of the pricing of medical services. Strategic pricing is a creative process that can be a vital means of defining marketing segments, differentiating services, and gaining a competitive advantage. The central issue in strategic pricing is creatively using the principle of cross-subsidies or shared economies over consumer groups, service sets, or competitors. This principle yields a rich set of pricing strategies that can be used in response to various environments.

Supermarket Choice, Shopping Behavior, Socioeconomic Status, and Food Purchases.

Science.gov (United States)

Pechey, Rachel; Monsivais, Pablo

2015-12-01

Both SES and supermarket choice have been associated with diet quality. This study aimed to assess the contributions of supermarket choice and shopping behaviors to the healthfulness of purchases and social patterning in purchases. Observational panel data on purchases of fruit and vegetables and less-healthy foods/beverages from 2010 were obtained for 24,879 households, stratified by occupational social class (analyzed in 2014). Households' supermarket choice was determined by whether they ever visited market-defined high- or low-price supermarkets. Analyses also explored extent of use within supermarket choice groups. Shopping behaviors included trip frequency, trip size, and number of store chains visited. Households using low-price (and not high-price) supermarkets purchased significantly lower percentages of energy from fruit and vegetables and higher percentages of energy from less-healthy foods/beverages than households using high-price (and not low-price) supermarkets. When controlling for SES and shopping behaviors, the effect of supermarket choice was reduced but remained significant for both fruit and vegetables and less-healthy foods/beverages. The extent of use of low- or high-price supermarkets had limited effects on outcomes. More-frequent trips and fewer small trips were associated with healthier purchasing for both outcomes; visiting more store chains was associated with higher percentages of energy from fruit and vegetables. Although both supermarket choice and shopping behaviors are associated with healthfulness of purchases, neither appears to contribute to socioeconomic differences. Moreover, differences between supermarket environments may not be primary drivers of the relationship between supermarket choice and healthfulness of purchases. Copyright © 2015 American Journal of Preventive Medicine. Published by Elsevier Inc. All rights reserved.

Preliminary Assessment of Spatial Competition in the Market for E85: Presentation Supplement

Energy Technology Data Exchange (ETDEWEB)

Clinton, Bentley [National Renewable Energy Lab. (NREL), Golden, CO (United States); Johnson, Caley [National Renewable Energy Lab. (NREL), Golden, CO (United States); Moriarty, Kristi [National Renewable Energy Lab. (NREL), Golden, CO (United States); Newes, Emily [National Renewable Energy Lab. (NREL), Golden, CO (United States); Vimmerstedt, Laura [National Renewable Energy Lab. (NREL), Golden, CO (United States)

2017-02-01

Anecdotal evidence suggests retail E85 prices may track retail gasoline prices rather than wholesale costs. This indicates E85 prices may be higher than they would be if priced on a cost basis hence limiting adoption by some price-sensitive consumers. Using publicly available and proprietary E85 and regular gasoline price data, we examine pricing behavior in the market for E85. Specifically, we assess the extent to which local retail competition in E85 markets decreases E85 retail prices. Results of econometric analysis suggest that higher levels of retail competition (measured in terms of station density) are associated with lower E85 prices at the pump. While more precise causal estimates may be produced from more comprehensive data, this study is the first to our knowledge that estimates the spatial competition dimension of E85 pricing behavior by firms. This technical report elaborates on a related presentation.