Economies of Scope, Entry Deterrence and Welfare

Abstract This paper develops a model where the incumbent may expand to a related market to signal economies of scope and deter entry in the former market. We show that the incumbent only expands when scope economies are large enough. Thus expansion is a signal of larger economies of scope and, for certain parameter values, leads to entry deterrence. Although our game is two-period, the expansion strategy creates a long-term advantage. We further investigate the implications of prohibiting an entry-deterrent expansion. A major finding is that, in our model, this prohibition always decreases consumer surplus. In terms of global welfare, the impact is ambiguous but negative for many parameter values.

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The Impact of Consolidation and Modernisation on Banking Scale and Scope Economies

International Journal of Economics and Finance ◽

10.5539/ijef.v8n5p169 ◽

2016 ◽

Vol 8 (5) ◽

pp. 169 ◽

Cited By ~ 1

Author(s):

Ali Awdeh ◽

Chawki EL-Moussawi ◽

Wafaa Nasser

Keyword(s):

Economies Of Scale ◽

Banking Sector ◽

Maximum Likelihood Method ◽

Physical Capital ◽

Likelihood Method ◽

Economies Of Scope ◽

Scope Economies ◽

The Past ◽

Production Factors ◽

The Impact

Lebanese banks recorded an enormous increase in size, customers’ base, and products variety over the past two decades, which suggests the development of economies of scale and scope in the Lebanese banking sector. This study aims at testing the presence of these economies of scale and scope in the Lebanese banking sector, particularly over the period 2000-2013. The estimation of a translogarithmic cost function by the maximum likelihood method shows that the Lebanese banks are – in general – characterised by the existence of increasing economies of scale. The analysis of economies of scope also reveals a complementarity between different outputs. Finally, the analysis of price elasticities of demand for production factors shows an important substitutability between labour and physical capital.

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Getting value today and incentivising for the future: Pharmaceutical development and healthcare policies

Nordic Journal of Health Economics ◽

10.5617/njhe.888 ◽

2015 ◽

Vol 5 (1) ◽

pp. 77-96

Author(s):

Kasper Munk Johannesen ◽

Martin Henriksson

Keyword(s):

New Technologies ◽

Consumer Surplus ◽

Decision Makers ◽

Demand Side ◽

International Reference ◽

Reference Pricing ◽

Clinical Practise ◽

The Impact ◽

Structured Approach

To manage the challenge of limited healthcare resources and unlimited demand for healthcare, decision makers utilise a variety of demand side policies, such as health technology appraisals and international reference pricing to regulate price and utilisation. By controlling price and utilisation demand side policies determine the earnings potential, and hence the incentives to invest in research and development (R&D) of new technologies. However, the impact of demand side policies on R&D incentives is seldom formally assessed.Based on the key assumption that intellectual property rights, i.e. patents, and expected rent are key drivers of pharmaceutical R&D, this work outlines a framework illustrating the link between demand side policies and pharmaceutical R&D incentives. By analysing how policies impact expected rent and consumer surplus, the framework is used to understand how commonly used demand side policies (including timing and length of reimbursement process, international reference pricing, parallel trade, and sequential adoption into clinical practice) may influence R&D incentives.The analysis demonstrates that delayed reimbursement decisions as well as sequential adoption into clinical practise may in fact reduce both expected rent and consumer surplus. It is also demonstrated how international reference pricing is likely to increase consumer surplus at the expense of lower rent and thus lower R&D incentives.Although this work illustrates the importance of considering how demand side policies may impact long-term R&D incentives, it is important to note that the purpose has not been to prescribe which demand side policies should be utilised or how. Rather, the main contribution is to illustrate the need for a structured approach to the analysis of the complex, and at times highly politicised question of how demand side policies ultimately influence population health, both in the short and in the long term.

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Economies of Scope and Local Government Expenditure: Evidence from Creation of Specially Authorized Cities in Japan

Sustainability ◽

10.3390/su13052684 ◽

2021 ◽

Vol 13 (5) ◽

pp. 2684

Author(s):

Takeshi Miyazaki

Keyword(s):

Local Governments ◽

Public Services ◽

Government Expenditure ◽

General Purpose ◽

Economies Of Scope ◽

Capita Expenditure ◽

Event Study Method ◽

The Impact ◽

Special Case

There is little evidence of either the existence or absence of economies of scope in public services provided by general-purpose local governments. This study uses difference-in-differences (DID) analysis and the event study method to estimate the impact on expenditure of the designation of cities as either core cities or special case cities, thereby giving them the authority to undertake a wider range of activities, and identify the magnitude of the economies of scope in local governments using panel data for Japanese municipalities during the period 1996–2015. The findings of this research are summarized as follows. First, in the provision of public services by general-local governments, economies of scope do not occur in the short term (2–3 years), but do appear in the mid to long term (more than 5 years for core city status). After the delegation of duties, per capita expenditure for core cities increases by 2.8% immediately after the designation, but then decreases by 0.6% annually. Second, the wider the range of extra activities delegated, the greater the economies of scope.

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Characterizing uncertainty in the hydraulic parameters of oil sands mine reclamation covers and its influence on water balance predictions

Hydrology and Earth System Sciences ◽

10.5194/hess-24-735-2020 ◽

2020 ◽

Vol 24 (2) ◽

pp. 735-759 ◽

Cited By ~ 1

Author(s):

M. Shahabul Alam ◽

S. Lee Barbour ◽

Mingbin Huang

Keyword(s):

Water Balance ◽

Oil Sands ◽

Monitoring Site ◽

Hydraulic Parameters ◽

Oil Sand ◽

Water Balance Components ◽

Area Index ◽

Parameter Values ◽

The Impact

Abstract. One technique to evaluate the performance of oil sands reclamation covers is through the simulation of long-term water balance using calibrated soil–vegetation–atmosphere transfer models. Conventional practice has been to derive a single set of optimized hydraulic parameters through inverse modelling (IM) based on short-term (<5–10 years) monitoring datasets. This approach is unable to characterize the impact of variability in the cover properties. This study utilizes IM to optimize the hydraulic properties for 12 soil cover designs, replicated in triplicate, at Syncrude's Aurora North mine site. The hydraulic parameters for three soil types (peat cover soil, coarse-textured subsoil, and lean oil sand substrate) were optimized at each monitoring site from 2013 to 2016. The resulting 155 optimized parameter values were used to define distributions for each parameter/soil type, while the progressive Latin hypercube sampling (PLHS) method was used to sample parameter values randomly from the optimized parameter distributions. Water balance models with the sampled parameter sets were used to evaluate variations in the maximum sustainable leaf area index (LAI) for five illustrative covers and quantify uncertainty associated with long-term water balance components and LAI values. Overall, the PLHS method was able to better capture broader variability in the water balance components than a discrete interval sampling method. The results also highlight that climate variability dominates the simulated variability in actual evapotranspiration and that climate and parameter uncertainty have a similar influence on the variability in net percolation.

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A case independent approach on the impact of climate change effects on combined sewer system performance

Water Science & Technology ◽

10.2166/wst.2009.520 ◽

2009 ◽

Vol 60 (6) ◽

pp. 1555-1564 ◽

Cited By ~ 27

Author(s):

M. Kleidorfer ◽

M. Möderl ◽

R. Sitzenfrei ◽

C. Urich ◽

W. Rauch

Keyword(s):

Climate Change ◽

System Structure ◽

Drainage Systems ◽

Climate Change Effects ◽

Sewer Systems ◽

Impervious Area ◽

Combined Sewer ◽

Parameter Values ◽

The Impact

Design and construction of urban drainage systems has to be done in a predictive way, as the average lifespan of such investments is several decades. The design engineer has to predict many influencing factors and scenarios for future development of a system (e.g. change in land use, population, water consumption and infiltration measures). Furthermore, climate change can cause increased rain intensities which leads to an additional impact on drainage systems. In this paper we compare the behaviour of different performance indicators of combined sewer systems when taking into account long-term environmental change effects (change in rainfall characteristics, change in impervious area and change in dry weather flow). By using 250 virtual case studies this approach is—in principle—a Monte Carlo Simulation in which not only parameter values are varied but the entire system structure and layout is changed in each run. Hence, results are more general and case-independent. For example the consideration of an increase of rainfall intensities by 20% has the same effect as an increase of impervious area of + 40%. Such an increase of rainfall intensities could be compensated by infiltration measures in current systems which lead to a reduction of impervious area by 30%.

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Suppressed, but Not Forgotten

Swiss Journal of Psychology ◽

10.1024/1421-0185/a000033 ◽

2011 ◽

Vol 70 (1) ◽

pp. 5-11 ◽

Cited By ~ 8

Author(s):

Beat Meier ◽

Anja König ◽

Samuel Parak ◽

Katharina Henke

Keyword(s):

Memory Trace ◽

Thought Suppression ◽

Test Phase ◽

Indirect Test ◽

Final Test ◽

Test Experiment ◽

And Control ◽

Cue Words ◽

The Impact

This study investigates the impact of thought suppression over a 1-week interval. In two experiments with 80 university students each, we used the think/no-think paradigm in which participants initially learn a list of word pairs (cue-target associations). Then they were presented with some of the cue words again and should either respond with the target word or avoid thinking about it. In the final test phase, their memory for the initially learned cue-target pairs was tested. In Experiment 1, type of memory test was manipulated (i.e., direct vs. indirect). In Experiment 2, type of no-think instructions was manipulated (i.e., suppress vs. substitute). Overall, our results showed poorer memory for no-think and control items compared to think items across all experiments and conditions. Critically, however, more no-think than control items were remembered after the 1-week interval in the direct, but not in the indirect test (Experiment 1) and with thought suppression, but not thought substitution instructions (Experiment 2). We suggest that during thought suppression a brief reactivation of the learned association may lead to reconsolidation of the memory trace and hence to better retrieval of suppressed than control items in the long term.

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