scholarly journals Consumer Welfare of Country-of-Origin Labelling and Traceability Policies

Agronomy ◽  
2021 ◽  
Vol 11 (5) ◽  
pp. 916
Author(s):  
Joel Bruneau ◽  
Albert I. Ugochukwu
Keyword(s):  
Market Failure ◽  
International Adoption ◽  
Country Of Origin ◽  
Consumer Surplus ◽  
Consumer Welfare ◽  
Free Rider ◽  
Free Rider Problem ◽  
Potential Market ◽  
International Trading ◽  
The Impact

Traceability regulations are a way to protect consumers by forcing firms to identify and track products step-by-step through all stages of production, processing, and distribution. Traceability is often used in conjunction with country-of-origin labelling where products explicitly identify where production takes place. However, such country-of-origin regulations can conflict with WTO provisions. This paper analyzes the impact on consumer welfare of traceability and country-of-origin in an international trading regime to assess whether such regulations actually improve consumer welfare. The paper constructs a theoretical model that highlights the potential market failure that arises from traceability. The paper then introduces a simple international trade regime to identify impacts on consumer surplus. The paper compares outcomes with, and without, traceability and country-of-origin regulations. Given the inherent free-rider problem, the paper shows that, as long as costs associated with traceability are low enough, mandatory regulations are welfare improving. Free trade, in the absence of foreign traceability, can lower consumer welfare so provides a rationale for country-of-origin rules. However, mandatory country-of-origin rules need not be welfare enhancing. We show that country-of-origin rules are similar to import barriers and so are third-best solutions. The better solution is international adoption and recognition of traceability rules which would make country-of-origin rules moot.

Sponsored Data: Smarter Data Pricing with Incomplete Information

2021 ◽  
Author(s):  
Xiaowei Mei ◽  
Hsing Kenneth Cheng ◽  
Subhajyoti Bandyopadhyay ◽  
Liangfei Qiu ◽  
Lai Wei
Keyword(s):  
Consumer Surplus ◽  
Mobile Network ◽  
Complete Information ◽  
Consumer Welfare ◽  
High Definition ◽  
Mobile Data ◽  
Data Intensive ◽  
Data Consumption ◽  
New Business ◽  
The Impact

With the development of data-intensive internet services, the world has witnessed explosive growth in mobile data consumption during the last couple of years. The upcoming generation of 5G-capable phones and networks will continue and even accelerate that process. At the same time, consumers are becoming more conscious about their data consumption because their monthly caps of mobile data plans can be easily exhausted by premium content, such as high-definition videos and virtual-reality games. In response, the mobile network operators (MNOs) have proposed a new business model, the so-called sponsored data plans, to subsidize consumers by transferring at least part of the data bills from consumers to content providers. Although industry practitioners claim that sponsored data plans increase consumer welfare, our analysis reveals that the impact of sponsored data on consumer surplus depends crucially on whether the MNO has complete information of the consumers’ valuation of mobile data. Our analysis helps provide a clearer picture of the impact of sponsored data on consumer surplus while reconciling the conflicting views from scholars, digital rights groups, and the network carriers.

The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust

2018 ◽  
Vol 63 (4) ◽  
pp. 455-493 ◽  
Author(s):  
Mark Glick
Keyword(s):  
Law And Economics ◽  
Consumer Surplus ◽  
Consumer Welfare ◽  
Business Strategies ◽  
Individual Level ◽  
Compensation Principle ◽  
Original Argument ◽  
The Individual ◽  
The Impact ◽  
Total Welfare

This is the first installment of a two-part commentary on the New Brandeis School (the “New Brandeisians”) in Antitrust. In this first part, I examine why the New Brandeisians are correct to reject the consumer welfare standard. Instead of arguing, as the New Brandeisians do, that the consumer welfare standard leads to unacceptable outcomes, I argue that the consumer or total welfare standard was theoretically flawed and unrigorous from the start. My basic argument is that antitrust law addresses the impact of business strategies in markets where there are winners and losers. For example, in the classical exclusionary monopolist case, the monopolist’s conduct is enjoined to increase competition in the affected market or markets. As a result of the intervention, consumers benefit, but the monopolist is worse off. One hundred years of analysis by the welfare economists themselves shows that in such situations “welfare” or “consumer welfare” cannot be used as a reliable guide to assess the results of antitrust policy. Pareto Optimality does not apply in these situations because there are losers. Absent an ability to divine “cardinal utility” from observations of market behavior, other approaches such as consumer surplus, and compensating and equivalent variation cannot be coherently extended from the individual level to markets. The Kaldor-Hicks compensation principle that is in standard use in law and economics was created to address problems of interpersonal comparisons of utility and the existence of winners and losers. However, the Kaldor-Hicks compensation principle is also inconsistent. Additional problems with the concept of welfare raised by philosophers, psychologists, and experimental economists are also considered. In light of this literature, the New Brandeisians are correct to reject Judge Bork’s original argument for adoption of the consumer welfare standard, but for deeper reasons than they have expressed thus far.

scholarly journals Competition in a Wholesale Fuel Market—The Impact of the Structural Changes Caused by COVID-19

Energies ◽  
2021 ◽  
Vol 14 (14) ◽  
pp. 4211
Author(s):  
Sylwester Bejger
Keyword(s):  
Crude Oil ◽  
Structural Changes ◽  
Consumer Surplus ◽  
Global Market ◽  
Liquid Fuels ◽  
Wholesale Market ◽  
Potential Market ◽  
Before And After ◽  
Energy Products ◽  
The Impact

Liquid fuels obtained in refining crude oil are one of the most important energies in economic activity. The domestic wholesale market for liquid fuels is of decisive importance for price formation in the national economy. The noncompetitive behavior of the market players at this level of the distribution chain can significantly affect all downstream price levels and the producer–consumer surplus balance. Therefore, the competitiveness of this market should be screened and assessed regularly, especially when significant external factors change. This article attempts to evaluate the impact of structural changes on the global market of crude oil and energy products after the outbreak of the COVID-19 pandemic on the competitiveness of the wholesale fuel market in Poland. Using asymmetry of the reaction of product prices to changes in the prices of inputs as a marker of noncompetitive behavior and the NARDL model as a test specification, the price paths of market players before and after the occurrence of structural changes in the inputs’ processes were examined. Significant changes in the competitive behavior of players were revealed after the occurrence of structural changes at the beginning of the pandemic period in the year 2020. These changes may indicate enhanced competition and mitigation of potential market power abuse.

scholarly journals Does Debt Diversification lead to a Discount in Firm Value?

2019 ◽  
Vol 8 ◽  
pp. 24-30 ◽  
Author(s):  
Nemiraja Jadiyappa ◽  
Namrata Saikia ◽  
Bhavik Parikh
Keyword(s):  
Empirical Analysis ◽  
Capital Markets ◽  
Firm Value ◽  
Free Rider ◽  
Multiple Sources ◽  
Free Rider Problem ◽  
A Value ◽  
Alternative Measures ◽  
Debt Holders ◽  
The Impact

Corporate firms access multiple sources of debt simultaneously. This study analyzes the impact of debt diversification on firm value. We argue that, when firms diversify their debt sources, the monitoring role played by debt holders decreases as a result of the free rider problem. Hence, such firms should experience a value discount in the capital markets. Our empirical analysis provides evidence for the existence of a value discount in the capital markets for firms accessing multiple sources of debt. Our results remain robust for alternative measures of debt diversification.

The impact of reforming municipal water tariff on water rationing and consumer welfare in Saudi Arabia

2016 ◽  
Vol 7 (4) ◽  
pp. 788-795 ◽  
Author(s):  
Safar Al Qahtani ◽  
Sobhy Ismaiel ◽  
Badr Sofian
Keyword(s):  
Saudi Arabia ◽  
Price Elasticity ◽  
Water Demand ◽  
Consumer Surplus ◽  
Consumer Welfare ◽  
Percentage Increase ◽  
Aggregated Data ◽  
Percentage Decrease ◽  
Municipal Water ◽  
The Impact

The objectives of this study were to estimate an aggregate price elasticity of demand for municipal water in Saudi Arabia, and to analyze the welfare impact of raising the municipal water tariff. The study utilized available aggregated data (Ministry of Water and Electricity, 1999–2008), and regression techniques to specify water demand functions within the frame of the increasing block tariff applied in Saudi Arabia. The estimated price elasticity of municipal water demand was about –0.39. The impact of an assumed 33% rise in the municipal water tariff was predicted to save about 11.121 cubic meters per household per month, which would lead to a total annual saving of about 128.544 million cubic meters. The percentage increase of the average equilibrium price would reach 12.7%. Therefore, the percentage decrease in consumer surplus per household amounts to 9.43%.

scholarly journals Ownership structure and performance: evidence from Portugal

2010 ◽  
Vol 7 (3) ◽  
pp. 25-32
Author(s):  
Inês Lisboa ◽  
José Paulo Esperança
Keyword(s):  
Financial Markets ◽  
Ownership Structure ◽  
Small Dimension ◽  
Free Rider ◽  
Ownership Concentration ◽  
Free Rider Problem ◽  
Low Levels ◽  
And Performance ◽  
The Impact ◽  
New Evidence

This paper provides new evidence on the impact of ownership over performance in small dimension markets. Analyzing the Portuguese firms we confirm the monitoring effect. Unlike previous studies, we also confirm the expropriation effect to low levels of ownership concentration. These results suggest that the free rider problem between the manager and the principal is significant in countries with small financial markets

scholarly journals Norm-Based Trade Union Membership: Evidence for Germany

2004 ◽  
Vol 5 (4) ◽  
pp. 481-504 ◽  
Author(s):  
Laszlo Goerke ◽  
Markus Pannenberg
Keyword(s):  
Panel Data ◽  
Labour Market ◽  
Trade Union ◽  
Union Membership ◽  
Union Density ◽  
Free Rider ◽  
Free Rider Problem ◽  
Social Custom ◽  
The Impact

Abstract In the absence of closed shops and discriminatory wage policies, union membership can be explained by the existence of social norms.We describe a model, incorporating institutional features of the German labour market, which explicitly allows for social custom effects in the determination of union membership. Using panel data for Germany, we find evidence for according effects which restrict freeriding. The impact of social norms tends to increase with net union density. Hence, observed reductions in the demand for union membership can weaken the impact of a norm and accentuate the free-rider problem.

scholarly journals An Analysis of Government Interventions in Addressing Market Failures Caused by Non-Excludable and Non-Rivalrous Public Goods Based on COVID-19 Vaccination Cases

2021 ◽  
Vol 4 (5) ◽  
pp. 89-92
Author(s):  
Wenqing Chen
Keyword(s):  
Public Goods ◽  
Market Failure ◽  
Free Rider ◽  
Market Failures ◽  
Vaccination Programs ◽  
Government Interventions ◽  
Private Goods ◽  
Free Rider Problem ◽  
Intervention Measures ◽  
The Government

The non-excludable and non-rivalrous characteristics of public goods distinguish them from private goods. The existence of these two characteristics leads to the “free rider problem” and the variation problem, making the market supply less than the actual demand, thus causing market failure. The government should therefore intervene against this impact. At the beginning of 2020, the global outbreak of the novel COVID-19 brought significant harm to various countries, races, and groups of people. In the second half of 2020, several companies developed vaccines, which are able to fundamentally block the transmission of the virus. However, as vaccines have been reducing the severity of the epidemic in certain regions, the situation somewhat reflects non-excludability and non-rivalry, in which before officially being listed in vaccination programs, the society may have the thought of “vaccination would reduce the risk of transmission; thus, I can enjoy the reduced risk of everyone being vaccinated without paying for it.” For this reason, most countries have been purchasing vaccines for the public through government appropriations to solve the free-rider problem. It can be said that in the face of market failure caused by public goods, the government should carry out timely intervention measures, including taxation and government appropriation, to avoid negative impacts from the characteristics of public goods.

scholarly journals Free‑Rider Problem in Classroom Games – Impact of Gender and Intergroup Conditions

2018 ◽  
Vol 66 (6) ◽  
pp. 1517-1525
Author(s):  
Soňa Kukučková ◽  
Pavel Žiaran
Keyword(s):  
Public Goods ◽  
Undergraduate Students ◽  
Social Dynamics ◽  
Teaching Experiment ◽  
Nonparametric Tests ◽  
Free Rider ◽  
Free Rider Problem ◽  
Significant Difference ◽  
Individual Strategies ◽  
The Impact

Behavioural experiments in the field of provision of public goods (including free rider problem) help to uncover the underlying processes and forces determining the nature of economy in the public sector. The objective of this paper is to determine the impact of gender and intergroup conditions on the extent of cooperation in standard linear public goods game using the voluntary contribution mechanism. Design of the teaching experiment is based on the methodology of Špalek (2011) with some modification. There were 80 undergraduate students of business participating in the classroom game, age range 20–22 years. Students were divided into three independent groups by 26 to 27 participants. Each group was playing independently, and individual strategies were recorded. We used the nonparametric tests (Mann‑Whitney U test and Kruskal‑Wallis Test) to analyse the differences between the gender and groups. Findings do not show statistically significant difference based on gender. On the other hand, the intergroup conditions determined by the social dynamics and discussion have significant influence on the distribution of goods. Results bring strong evidence on the importance of social and political factors influencing the pro‑social behaviour in the society.

Sign in / Sign up

Export Citation Format

Share Document