Cannibalization Effect Research Articles

Higher Taxes for Fiscal Consolidation? Expected and Unexpected Effects of Municipal Tax Policy

During episodes of fiscal consolidation in public budgets, there are different instruments to choose from. The literature shows broad consensus that expenditure cuts are preferred, whereas tax increases tend not to support the fiscal aim. The paper examines instruments for fiscal consolidation at the municipal level in Germany presenting theoretical and empirical findings in favor of revenue-based instruments, focusing on the case of municipalities in the Free State of Saxony. German municipalities can autonomously control several positions on both the expenditure side and the revenue side. Options for expenditure cuts are given both for voluntary and compulsory tasks. On the revenue side, municipalities have the opportunity to set assessment rates on both local trade taxes and property taxes. For this part of the consolidation process, the prevailing opinion is that higher taxes are offset by lower grants, which is not the case in reality. Nevertheless, there are cannibalization effects to consider that may induce primary effects in the short and medium term. Hence, the paper shows an updated view of the drawbacks and opportunities of revenue-based fiscal consolidation. The paper provides evidence for an economic and political discussion that predominantly focuses strongly on the harmful effects of tax increases on the economy.

The Economics of Variable Renewable Energy and Electricity Storage

The transformation of the electricity sector is a central element of the transition to a decarbonized economy. Conventional generators powered by fossil fuels have to be replaced by variable renewable energy (VRE) sources in combination with electricity storage and other options for providing temporal flexibility. We discuss the market dynamics of increasing VRE penetration and its integration in the electricity system. We describe the merit-order effect (the decline of wholesale electricity prices as VRE penetration increases) and the cannibalization effect (the decline of VRE value as its penetration increases). We further review the role of electricity storage and other flexibility options for integrating variable renewables and how storage can contribute to mitigating the two mentioned effects. We also use a stylized open-source model to provide some graphical intuition on these issues. While relatively high shares of VRE are achievable with moderate amounts of electricity storage, the role of long-duration storage increases as the VRE share approaches 100%.

The Effect of Online Channel Addition on Store Performance: Empirical Evidence from Chinese Chain Retailers

Abstract With the rapid development of e-Commerce and takeaway platforms, retailers have gradually developed multi-channel operations. However, limited empirical studies explored the effects of an online channel offered by takeaway platforms on the store performance. Does an online channel addition have a synergy effect or a cannibalization effect on store performance? We empirically investigate these effects by analyzing a large dataset including diverse samples collected from multiple retailers across various regions. The dataset includes 2115 stores across 25 retailers for 10 months that includes two types of retail formats and covers 16 provinces and 21 cities of China. We study the impacts of the newly introduced online channel on the incumbent offline channel and the overall store performance. The empirical results reveal that the online channel addition mainly has a synergy effect. Specifically, for the overall store, it has a positive effect on the sales and product variety, whereas it has a negative effect on the basket size. Surprisingly, an online channel addition also has a positive effect on the offline sales. Our study adds novel values to multi-channel retailing literature by empirically researching the cannibalization and synergy effect of a new type of online channel, offered by takeaway platforms. It can provide insights for retail enterprises who are interested in introducing O2O model.

Product-line planning under uncertainty

This study addresses a multi-period product-line-mix problem considering product interdependencies and uncertainties regarding price, demand, production cost, and the cannibalization effect of new products. The problem is modeled as a two-stage stochastic program. In the first-stage, decisions for the release times of new product-lines and capacity expansion are made without waiting for the realization of random events. Sales volumes are determined in the second-stage after more information about uncertainties is revealed. The solution approach employs a sample average approximation technique based on the Monte Carlo bounding, and multi-cut version of the L-shaped method to solve approximate problems efficiently. The model and solution approach are tested on different cases considering the value-of-stochastic-solution (VSS) and the expected-value-of-perfect-information (EVPI) as performance measures, under the assumption that the decision-maker is risk-neutral. Data collected through experimental studies are analyzed using ANOVA and Random Forest method to determine the impact of both deterministic and uncertain parameters on the performance of the stochastic approach, and to generate some rule-based inferences about the behavior of the proposed model. The results demonstrate the problem environments in which the stochastic model can generate the highest benefit to the business. It is mainly found the model can provide more expected profit than the mean-value solution in problems having uncertainties, particularly when selling prices and production costs are uncertain.

Airline revenue management with preference based flexible products

ABSTRACT Airlines apply the revenue management techniques of dynamic pricing and capacity control to maximize revenue. Traditional capacity control techniques assume that the airlines offer only specific products to customers, i.e. departure and arrival date and times are fixed. However, airlines may also offer flexible products by which, a passenger will come to know about the departure time at a later time and not while booking tickets. Flexible products though discussed in literature are not well researched and in this work an attempt is being made to address this literature gap. We develop a new class of product called flexible products with preferences; this class can be thought of as intermediate between specific and flexible products. These products are designed for customers who are flexible about the departure times but have preferences among them. We focus on the development of capacity control techniques when flexible products (including flexible products with preferences) are offered along with specific products. We develop a heuristic to determine a booking and seat allocation policy for all forms of flexible products. Such flexible products sold at lower prices will lead to more demand induction at the expense of cannibalizing the potential high fare demand. Hence we also evaluate the effect of demand induction and cannibalization on the capacity control and the revenue generated by the introduction of all forms of flexible products. Simulation experiments are performed to illustrate the techniques developed.

Interactions among exotic and native phytoseiids (Acari: Phytoseiidae) affect biocontrol of two-spotted spider mite on papaya

Intraguild interactions can be crucial for the success of biological control programs involving multiple natural enemies. The two-spotted spider mite (TSSM), Tetranychus urticae (Acari: Tetranychidae) is a major pest of papaya, Carica papaya, in south Florida, where a newly naturalized predator, Neoseiulus longispinosus (Acari: Phytoseiidae), has become the most abundant predator associated with this pest. Amblyseius largoensis and Neoseiulus californicus are other, less common, phytoseiid predators on papaya and the exotic predator, Amblyseius swirskii, is often released to control other mite and insect pests of this crop. We investigated intra- and interspecific interactions among these four predatory mite species and their effects on biological control of TSSM. Cannibalism and intraguild predation were evaluated in the laboratory for all four predator species in the absence and presence of TSSM. Neoseiulus longispinosus was the most cannibalistic species in the absence of spider mites, and A. largoensis when spider mites were available. Whereas A. swirskii was the most aggressive intraguild predator, N. longispinosus was the least aggressive and most often the intraguild prey of other predators. Single and combined releases of A. swirskii and N. longispinosus were evaluated to assess the effects of cannibalism and intraguild predation on biocontrol of TSSM on potted papaya plants. Single releases of N. longispinosus significantly suppressed TSSM populations but releases of A. swirskii alone or in combination with N. longispinosus resulted in gradual increases in TSSM populations. Our results showed that N. longispinosus has potential to control TSSM on papaya, but the level of control can be negatively affected by 1) high levels of cannibalism at low prey densities, 2) intraguild predation by other mite predators and 3) releases of aggressive intraguild predators like A. swirskii.

Cannibalism and Necrophagy Promote a Resource Loop and Benefit Larval Development in Insects of Temporary Waters.

Simple SummaryThe consumption of conspecific individuals by cannibalism (i.e., the killing and eating of conspecific individuals) and necrophagy (i.e., feeding on dead individuals of the same species) has been documented in several insect species. Selective advantages have been proposed to explain the persistence of these behaviors in natural populations. In this paper, we tested the hypothesis that cannibalism and necrophagy lead to a significant resource loop within an insect cohort, allowing individual survival and development. With this aim, we performed laboratory and semi-field experiments using the tiger mosquito Aedes albopictus. Larval stages of this species develop in small aquatic habitats, such as tree holes and artificial containers. These latter are highly ephemeral habitats, where resources are often scarce and of poor quality (mainly leaf litter, wood, and vegetal detritus). We first estimated the relative rate of cannibalism and necrophagy. Then, we analyzed the effects of cannibalism and necrophagy on larval survival and adult yield. Consistent with our hypothesis, we found that conspecifics consumed about 50% of the initial cohort. Furthermore, conspecific consumption significantly increased the rate of adult emergence and larval survival, which supports that cannibalism and necrophagy can positively affect insect populations in temporary waters.Temporary aquatic habitats are contingent on the allochthonous inputs of plant and animal detritus, whose quality and availability can significantly affect the species developing in these habitats. Although animal detritus (i.e., invertebrate carcasses) is a high-quality food, it is an unpredictable and variable resource. On the contrary, conspecific individuals (dead or alive) are a nutritionally high-quality food source that is always available. In this context, conspecifics consumption, by cannibalism or necrophagy, can be a good strategy to overcome nutrient limitation and allow individual maintenance and development. Here, we tested this hypothesis by using the tiger mosquito Aedes albopictus. By carrying out laboratory and semi-field experiments, we first estimated the relative rate of cannibalism and necrophagy, under different larval densities. Then, we analyzed the effects of cannibalism and necrophagy on larval survival and adult yield. Consistent with our hypothesis, we found that cannibalism and necrophagy occurred under all experimental conditions, and that conspecific consumption had positive effects on individual development, as it significantly increased the rate of adult emergence and larval survival. Interestingly, about 50% of the initial cohort was consumed by conspecifics, suggesting that cannibalism and necrophagy can drive an important resources loop in temporary aquatic habitats.

Preference-Based Revenue Optimization for App-Based Lifestyle Membership Plans

The demand for a product is rooted in the consumers’ needs and preferences. Therefore, a pricing optimization model will be more valid if the demand function is represented under this basic notion. A preference-based revenue optimization model for an app-based lifestyle membership program is developed and solved in this research. The model considers competitor products and cannibalization effect from products in other fare-class, where both are incorporated using a preference-based demand function. The demand function was derived through a randomized first choice simulation that converts individual utility values into personal choices based on the random parameter logit model. Cannibalizing products are considered as competing products in the simulation scenario. In the pricing optimization, two and three fare classes based on the membership period are considered. The corresponding pricing optimization problem is a mixed-integer nonlinear programming problem with a solution-dependent objective function. Using enumeration, the three-fare-class optimal prices of Rp420,000, Rp300,000, and Rp60,000 for 12-month, 6-month, and 1-month membership, respectively, are better than those of the two-fare-class. Under this policy, the estimated total revenue is Rp30.56 billion, 41.74% greater than that of the current condition.

A comparison between the wholesale model and the agency model with different launch strategies in the book supply chain

Electronic books’ pricing model and launch strategy are main issues concerned by the members of the book supply chain. Inspired by this fact, this paper establishes analytical models to investigate the publisher’s and the bookstore’s optimal decisions combined with pricing models (the agency model or the wholesale model) and launch strategies (the simultaneous launch strategy or the delaying launch strategy) of electronic books in a book supply chain. Additionally, we analyze the impacts of exogenous parameters on the publisher’s and the bookstore’s optimal strategies. Our findings illustrate that both the publisher and the bookstore can benefit from the agency model if they agree on a moderate proportion of e-books’ profit sharing. Moreover, we find that both the publisher and the bookstore can benefit from the delaying launch strategy when the product substitutability between electronic books and physical books is low and the cannibalization effect of delaying launch is significant. This finding is different from former study, which ignored the cannibalization rate caused by delaying launch strategy and showed that the delaying launch strategy always hurts the profits of publishers and bookstores.

Revenue and Cannibalization: The Effect of Interchangeable Design Confronted Remanufacturing Processing

Traditional wisdom suggests that the interchangeable design in process system engineering, such as modularity or commonality design, can lower the manufacturing cost and act as a revenue driver. Moreover, the interchangeable design will be efficient in both assembling for new production and disassembling for remanufacturing. As such, interchangeable design confronted remanufacturing processing often involves a balance of revenue from cost drivers and cannibalization effects from remanufacturing. Therefore, this paper studies how the original equipment manufacturers’ (OEMs’) interchangeable design impacts the remanufacturing decisions, as well as the economy and environment. Specifically, we develop two theoretical models, in which an OEM makes a strategic choice relating to design interchangeability when the remanufacturing operations are undertaken by itself (Model O) or outsourced to third-party remanufacturers (Model T). This study finds that, although the optimal level of interchangeability related to the product design in Model T is lower than that in Model O, the optimal quantity of remanufactured products in the latter scenario is always higher. This suggests that remanufacturing outsourcing deters the OEM’s strategic choice on design interchangeability, which may be consistent with the fact that Lexmark makes its products less interchangeable to avoid remanufacturing from third-party remanufacturers (TPRs). Conversely, although the OEM is always less likely to outsource its remanufacturing operations to independent remanufacturers, remanufacturing outsourcing may be more beneficial for the environment, industry, and society. These key insights on the environmental groups or agencies suggest that remanufacturing outsourcing may be more beneficial for the environment, industry, and society and depends on the OEMs’ attitudes towards its profitability loss. Furthermore, to eliminate the above contrasting effects between the OEMs’ profitability and other issues, two possible remedies, including a revenue-sharing contract and subsidy-incentive mechanism, are provided to achieve a “win-win” situation.

Product Line Flexibility for Agile and Adaptable Operations

Firms increasingly need to manage uncertainty and become more agile and adaptable. This study considers how a multi‐product firm can use its product mix, resource capacity allocation, and pricing decisions to manage challenges such as structural economic shifts or changes in consumers' willingness‐to‐pay. Firms that seek to develop and use such a product line face a fundamental trade‐off. On the one hand, multiple products compete for the demand externally (i.e., cannibalization effects), as well as for the limited resource capacity internally. On the other hand, a multi‐product firm does have the ability to change the product mix and to adjust the production quantity and pricing of each product in order to manipulate supply and demand as conditions change. In this study, we demonstrate that a multi‐product firm can become more agile and adaptable under consumer purchasing behavior uncertainty by employing postponement in product mix, quantity, and pricing decisions, and by allocating capacities appropriately. In particular, we show that a firm can use its product line flexibility to make strategic adjustments after understanding the realized economic conditions, and to decide whether to follow a focus or segmentation strategy. We also extend the model to look at the value of resource flexibility and find that it has little or no benefit above and beyond the product line flexibility studied here.

Synergistic and cannibalization effects in a partnership loyalty program

The implicit promise of a partnership in a loyalty program (LP) is that the partners will gain new customers and the LP will reinforce the loyalty to focal partners. Although customers may be encouraged to cross-purchase from partners (which may create positive synergies), they can also switch among partners without forfeiting rewards (which may lead to the cannibalization of sales among partners). To explore these cross-partner effects, we analyze the evolution of customer purchases in a partnership LP across 33 partners from 16 industry sectors. We find that cannibalizations arise more frequently than synergies among partners, contributing to a “rich-get-richer” effect for high-penetration partners; e.g., 10% increase in transactions at department stores reduce transactions at apparel partners (by .04% for new transactions and by 1.18% for recurring customers); but in turn, they attract positive synergies from apparel (.11% increase in transactions by new customers and .37% for recurring transactions).

Effect of egg cannibalism on mating preferences and reproductive fitness of Menochilus sexmaculatus Fabricius (Coleoptera: Coccinellidae)

• Mate preferences are plastic in nature and changes with changing environment and mates’ internal conditions. • Non-cannibalistic adults were preferred over cannibalistic adults as mates. • Time to commence mating lasted less for homogeneous diet pairs than heterogeneous diet pairs. • Longer copulation duration and higher fecundity were recorded for non-cannibal pairs. • Egg viability and total developmental durations of offspring were similar for all mating pairs. Cannibalism has been reported in a large proportion of coccinellids in fields as well as in laboratories but studies involving mate preferences and potential benefits of cannibalism on reproduction in Menochilus sexmaculatus Fabricius (Coleoptera: Coccinellidae) have yet not been done. Thus, we assessed the effect of conspecific egg cannibalism on mate preferences and reproductive outputs including offspring development. Higher mate preferences were recorded for non-cannibalistic mates (fed on A. craccivora ) than cannibalistic ones (fed on conspecific eggs). Mating parameters were significantly influenced by cannibalism. Time to commence mating lasted less for homogeneous diet pairs than heterogeneous diet pairs. Longer copulation duration and higher fecundity were recorded when one of the individuals in mating pair or both was a non-cannibal. Egg viability did not differ significantly in all the reciprocal crosses. In addition, the total developmental durations of offspring were similar for all mating pairs.

Bifurcation analysis of a diffusive predator-prey model with schooling behaviour and cannibalism in prey

In this paper, we study a predator-prey diffusion model, where we consider two very important factors, herd behaviour and cannibalism in prey. These strange behaviours may exist is some aquatic carnivorous living being such as tuna. Our main objective in this work is to highlight the effect of prey cannibalism on the interaction between predator and prey. In a first step, we make an analysis of the system in the absence of diffusion, where the stability of the equilibrium states and the Hopf bifurcation are treated. Then, the effect of the presence of spatial diffusion is investigated by studying the global stability of the free equilibrium of cannibalism, the Hopf bifurcation and the stability of the periodic solution. The results of the proposed model are then raised, analysed and discussed.

On a cannibalistic predator–prey model with prey defense and diffusion

Protective instincts of prey can strongly influence the development of species and also reduces the risk of predation. Cannibalism is frequent in predators and it has strong influence in the evolution of predator species. The consequences of cannibalism is largely neglected when studying the evolution of phenotype prey defenses in predator–prey systems. Motivated by this biological fact, we propose a predator–prey model that involves (a) prey defense; (b) predator cannibalism; and (c) diffusion. We discuss conditions for existence of all biological feasible equilibrium points for non-spatial system. Kolmogorov analysis is performed to examine appearance of limit cycle and chaos in non-spatial system. We obtain local and global stability conditions around all biological feasible equilibrium points. The direction and stability of the Hopf-bifurcation is determined at the vicinity of the concomitant population state of the non-spatial system. In order to study spatio-temporal dynamics, we derive local stability conditions of diffusive system and obtain conditions for the occurrence of Turing instability. Numerical simulations are performed to explore the cases which are beyond the range of analytical methods. Bifurcation diagrams show that non-spatial system has rich dynamics. Various spatial structures such as stripe, spot, rhombus, irregular and target wave patterns of interacting species through Turing and Hopf-Turing instability in two dimensional spatial domain are portrayed and analysed at finite length in order to substantiate the applicability of the present model. Numerical results reveal the impact of drivers of pattern formation in predator–prey systems which provides a better understanding of complex predator–prey interaction.

Strategies analysis of luxury fashion rental platform in sharing economy

As the sharing economy has grown rapidly in recent years, luxury fashion rental has become a prominent business trend. An increasing number of designer brands are finding ways to cooperate with rental platforms rather than compete with them. We develop a stylized model to study the impact of business-to-consumer product sharing on luxury fashion brands. Specifically, we consider a setting where a designer brand firm provides a luxury fashion product to a rental platform, which can either purchase the product from the firm then rent to consumers, or allow the designer brand firm to use its platform to reach the consumers directly with a commission fee. Our analysis reveals that the presence of a rental platform leads to two simultaneous effects: a market expansion effect and a cannibalization effect. In the base model, we show that the market expansion effect dominates the cannibalization effect. Therefore, the designer brand firm can benefit from the appearance of a rental platform. Further, our analysis reveals that the optimal choice between the wholesale and agency contract of the firm and the platform depends critically on two parameters: the revenue-sharing proportion and salvage value. We illustrate that when the revenue-sharing proportion is relatively large and salvage value is relatively small, both the firm and the platform benefit more under the agency contract. Moreover, we illustrate the robustness of our main insights to consider the presence of different consumer segments, consumers’ conspicuous behavior, competition between rental platforms, and two-period rental setting.

What drives customers' purchase behavior in a click-and-mortar retailing context: a value transfer perspective

PurposeTo examine the effectiveness of a multichannel strategy, this study mainly investigates two issues: (1) whether customers' five value perceptions (i.e. product quality, service quality, innovation, price and store image) extend from e-stores to physical stores and (2) whether customers' five value perceptions derived from e-stores/physical stores facilitate purchase intention within and beyond the channel context.Design/methodology/approachThis study develops a research model to elaborate on the relationships between the focal constructs and collects 177 useable responses via an online community and personal contacts survey. Partial least squares structural equation modeling (PLS-SEM) methods and mediation analyses are conducted to validate the proposed hypotheses.FindingsThe results show that the values perceived in e-stores/physical stores generally motivate online/offline purchase intention, respectively. Next, based on Tversky's belief/feature matching process, the five value perceptions correlate with their counterparts across online and offline channels. The results of the mediation analyses suggest that the advantages established in online channels may be contagious to offline channels at the belief level. Specifically, four of the five online value perceptions may have different effects on offline purchase intention: (1) product quality perceived in e-stores directly (negative) and indirectly (positive) results in offline purchase intention, demonstrating cannibalization effects and (2) service quality, innovation and store image perceived in e-stores indirectly and positively contribute to offline purchase intention, indicating synergetic effects.Originality/valueThe findings of this study provide several important theoretical and practical implications for multichannel and omnichannel retailing strategies.

Optimizing facility location and design

In this paper we develop a generalized framework and a novel methodology to simultaneously optimize locations and design decisions for a set of facilities that are facing competition from pre-existing facilities. The framework encompasses multi-attribute design decisions, an elastic customer demand mechanism that can capture both expansion and cannibalization effects, and a flexible demand allocation mechanism that encompasses both, proportional allocation (“gravity type”) and all-or-nothing models (such as p−median). Many classic location models appear as special cases of our Generalized Facility Location and Design Problem (GFLDP). We present an effective solution methodology, that allows us to approximate exact solutions to GDFLP to pre-selected accuracy levels. Our results show that not combining design and location decisions within a single model can lead to very substantial optimality gaps, thus underscoring the importance of GDFLP approach.

How Digital Word-of-Mouth Affects Consumer Decision Making: Evidence from Doctor Appointment Booking

We use detailed clickstream data on online word-of-mouth (WOM) to uncover mechanisms underlying its influence on consumer decision making. A feature launch on a major doctor appointment booking platform allows us to examine the effects of online WOM on three dimensions of a consumer’s choice process: the consideration set size, the time taken to consider alternatives (web session duration), and the geographic dispersion of the choices considered. Results indicate that the effects of WOM on decision-making processes are not monotonic but rather are contingent on the abundance of WOM (number of rated doctors) in a market. When the abundance of WOM is high, the introduction of WOM makes patients consider fewer doctors, browse for a shorter duration, and focus on doctors that are geographically more proximate. In contrast, when the abundance of WOM is low, the introduction of WOM makes patients consider more doctors, browse for longer duration, and consider doctors that are geographically more dispersed. We also find that WOM can lead to a cannibalization effect: when ratings are published, the highly rated doctors reap the benefits (in the form of increased demand) at the expense of unrated doctors. Our study contributes to the extant literature on online WOM by providing new insights into how WOM influences consumer decision making and by examining this question at a more granular level than prior work.This paper was accepted by Anandhi Bharadwaj, information systems.

Direct and indirect effect of cannibalism and intraguild predation in the two sibling Harmonia ladybird beetles.

In this study, we focused on the direct (i.e., predation) and indirect (i.e., potential threat from coexisting with a larger individual) effects of cannibalism and intraguild predation (IGP) during larval stages of two sibling ladybird beetles. These effects play an important role in the coexistence of the generalist–common Harmonia axyridis and specialist–rare H. yedoensis (Coleoptera: Coccinellidae). Direct predation effect of cannibalism and IGP was asymmetric in the two sibling ladybird beetles; the fourth instar larvae of H. axyridis were better intraguild predators than cannibals, while the reverse was true in the larvae of H. yedoensis. Neither cannibalism nor IGP significantly affected female body weight in either species. Larval H. axyridis surviving exposure to cannibalism or IGP had a reduced number of ovarioles as adults, whereas adult H. yedoensis ovarioles were not affected. For the indirect effects, longer developmental times in males and females and a lower total number of ovarioles in females were detected in H. axyridis. In H. yedoensis, shorter developmental time of males, lighter adult weight and fewer total ovarioles in females were observed. Olfactometer choice experiments clarified that the fourth instar larvae of H. axyridis avoided the first instar conspecific larvae, while those of H. yedoensis were attracted to the odors from H. axyridis and conspecifics. Thus, H. axyridis has an avoidance mechanism only for cannibalism but not for IGP, whereas H. yedoensis does not have any avoidance mechanism. These different behaviors in the direct and indirect effects of cannibalism and IGP observed in the laboratory may play important roles in the coexistence of generalist–common H. axyridis and specialist–rare H. yedoensis in natural conditions, compensating for the large handicap of H. yedoensis at reproductive interference from H. axyridis.