Circular City Model Research Articles

Greenness transformation, environmental awareness, and green product policy in spatial markets

AbstractThis paper examines the transformation towards greenness, focusing on consumer environmental awareness within a circular city model characterized by elastic demand. Our findings reveal that the equilibrium investment in environmentally friendly initiatives falls short of the socially optimal level for a given market structure. The degree of excess or insufficient market entry is influenced by the level of environmental awareness. Further, we delve into the role of environmental delegation, demonstrating that heightened environmental awareness can mitigate underinvestment in the environment and reduce inefficiency in market entry. From a policy perspective, we expand our analysis to include the “Green Product Policy.” This extension aims to explore the impact of such a policy on environmental awareness and assess the applicability of the “excess entry theorem” in this context.

Regulation through reference prices

We analyze the role of reference prices on competition and welfare in a circular city model where paying prices above a reference negatively affects consumers' utility. Agents interact in a three-stage game. First, a policymaker chooses a reference price; second, firms make their entry decision; finally, firms compete in prices while consumers make their consumption decisions. We find that the market price and the optimal reference price always coincide in equilibrium, reducing consumer prices and implying a net welfare gain.

Impact of Consumer Data Value on Pricing of Platform Enterprise

Based on the background of digital economy, this paper mainly discusses the value of consumer data and the promotion effect of digital finance on enterprise entre-preneurship, and analyzes the differentiated choice of pricing strategy for platform enterprises under the situation that consumer data is known and unknown. Based on the linear city model, circular city model and vertical differentiation model, this paper constructs the competition system of platform enterprises in two situations: consumer data is known and consumer data is unknown, and reveals the influence of consumer data on the pricing strategy of platform enterprises. The research shows that consumer data can influence the pricing strategy of platform enterpris-es, and when consumer data is unknown to platform enterprises, they tend to choose unified pricing. At this time, consumers choose service types based on their preferences. If consumer data is known to platform enterprises, platform enter-prises will choose personalized pricing in order to compete with consumers in the market, but the price will be low, which will increase consumer welfare at the mi-cro level. Moreover, the development of digital finance based on the background of digital economy has a positive role in promoting new enterprises and affecting consumer welfare at the macro level, it has practical significance and profound re-search significance for the study of social welfare changes.

Spatial dependence in physicians’ prices and additional fees: Evidence from France

Concerns about healthcare affordability have grown in France as physician additional fees have increased threefold in the last 20 years. In this paper, we develop an innovative structural spatial framework to provide new insights into free-billing physician pricing behavior. We empirically test a closed-form solution of a circular city model with heterogeneous physicians by using a unique geolocalized database that covers more than 4000 private practitioners in three specializations (ophthalmology, gynecology and pediatrics). We highlight a positive spatial dependence in prices for all specialties that increases with physician density. This result reflects markets in which both prices are strategic complements and incentives for quality competition are low. We also find evidence of potential noncompetitive behavior for two specialties for which price and competition measures are positively related. These findings in the context of a growing spatial concentration of free-billing physicians emphasize key mechanisms explaining the increasing of additional fees.

The Multidimensional Evaluation of Cultural Heritage Regeneration Projects: A Proposal for Integrating Level(s) Tool—The Case Study of Villa Vannucchi in San Giorgio a Cremano (Italy)

The challenges of sustainable development are mainly concentrated in the cities. Therefore, they represent a key place for implementing strategies and actions to achieve (or not achieve) sustainable development objectives. In this perspective, the circular city model represents a new way of organizing the city. As demonstrated by a variety of best practices, the entry points for triggering circular processes at the urban scale are various. In this paper, cultural heritage is presented as the entry point for the implementation of this new urban development model. The focus here is on the implementation tools, with a particular emphasis on the evaluation tools for assessing the effectiveness and efficiency of this model, that is, the multidimensional benefits that it can produce. The Level(s) tool, proposed by the European Commission in 2017, is the only officially recognised assessment tool related to the circular economy at the European level. It aims to evaluate the performance of new buildings from a circular economy perspective. This paper intends to expand the field of action of the aforementioned tool to projects related to cultural heritage. Nevertheless, the Level(s) tool has some weaknesses in relation to values and attributes that need to be considered when dealing with cultural heritage. This paper proposes an evaluation framework for assessing cultural heritage renovation and reuse projects, considering all its values and the multidimensional impacts that they are able to produce (economic, social, environmental impacts) in the city. The starting point for the development of the proposed evaluation framework is the Level(s) tool by the European Commission. On the basis of critical considerations, this tool is integrated with criteria and indicators deduced from other previous studies and other official tools on this issue (Green Building Council and Heritage Impact Assessment tools). The evaluation framework is here tested to evaluate the renovation/reuse project of Villa Vannucchi, a historic building located in the city of San Giorgio a Cremano in the metropolitan city of Naples (Italy).

District Circular Transition e progettoDistrict Circular Transition and technological design towards a Circular City model

In the processes of urban regeneration, in a circular transition perspective, a multiscalar, integrated and systemic approach allows intervention scenarios to be defined, based on a renewed conception of environmental-economic-social sustainability characterised by circular flows of material and non-material resources. Research results translate these demands into a methodological model at the district scale, trialled in two public housing neighbourhoods in Rome, to turn them into “circular districts”. It is demonstrated that, by applying a circular model of ecological transition to urban districts, the 2050 goal of climate neutrality may be attained, while at the same time improving ecosystemic quality, environmental performance and bioclimatic adaptivity in a wide vision of green cities.

Standards Harmonization and Asymmetric Compliance Technology

Purpose - The purpose of this paper is to examine the welfare effects of standards harmonization between technologically asymmetric countries, and to determine optimal harmonization strategies for a country with mid-level technological advancement. Design/methodology - Following Salop’s circular city model (Salop, 1979), this study constructs a simple, horizontally-differentiated oligopoly model in which three firms and three countries exist. Each country adopts different compatibility standards and each firm incurs conversion costs for foreign market access due to differences in standards. The conversion costs are related to technology; standards harmonization removes these costs between participating countries. The paper considers three cases: i) no harmonization; ii) harmonization with the more technologically-advanced country and iii) harmonization with the less technologically-advanced country. Findings - The paper first considers a scenario in which all three firms occupy some share of the market in each country. It shows that standards harmonization with both the technologically more-or less-advanced country always increases consumer surplus and social welfare. In addition, the producer surplus will increase if the harmonization partner has a higher technology level, whereas it may decrease if the partner has a lower technology level. It also shows that if most domestic export goods are in sectors with conversion costs above a certain level, harmonizing standards with a technologically more-advanced country should be prioritized. Such strategies, moreover, should be emphasized when there exists a large technology gap among countries. Lastly, the paper considers another scenario, in which harmonization leads to the foreclosure of the non-member firm from the member countries’ markets. It shows that harmonization improves the social welfare of a mid-level technology country regardless of its partner’s technology. It also shows that the country should prioritize harmonization with the technologically less-advanced country. Originality/value - Though some of the existing studies consider the welfare effects of harmonization, their main assumption is that firms have the same conversion technology. Since complying with standards often requires substantial technological advancement and technical expertise, harmonization of compatibility standards between countries with gaps in technological ability carries different implications. This paper investigates the welfare effects of this harmonization and determines an optimal harmonization strategy while considering technological asymmetry among countries in standards compliance.

Imitation, network size, and efficiency

AbstractA number of theoretical results have provided sufficient conditions for the selection of payoff-efficient equilibria in games played on networks when agents imitate successful neighbors and make occasional mistakes (stochastic stability). However, those results only guarantee full convergence in the long-run, which might be too restrictive in reality. Here, we employ a more gradual approach relying on agent-based simulations avoiding the double limit underlying these analytical results. We focus on the circular-city model, for which a sufficient condition on the population size relative to the neighborhood size was identified by Alós-Ferrer & Weidenholzer [(2006) Economics Letters, 93, 163–168]. Using more than 100,000 agent-based simulations, we find that selection of the efficient equilibrium prevails also for a large set of parameters violating the previously identified condition. Interestingly, the extent to which efficiency obtains decreases gradually as one moves away from the boundary of this condition.

Operationalizing the Circular City Model for Naples’ City-Port: A Hybrid Development Strategy

The city-port context involves a decisive reality for the economic development of territories and nations, capable of significantly influencing the conditions of well-being and quality of life, and of making the Circular City Model (CCM) operational, preserving and enhancing seas and marine resources in a sustainable way. This can be achieved through the construction of appropriate production and consumption models, with attention to relations with the urban and territorial system. This paper presents an adaptive decision-making process for Naples (Italy) commercial port’s development strategies, aimed at re-establishing a sustainable city-port relationship and making Circular Economy (CE) principles operative. The approach has aimed at implementing a CCM by operationalizing European recommendations provided within both the Sustainable Development Goals (SDGs) framework—specifically focusing on goals 9, 11 and 12—and the Maritime Spatial Planning European Directive 2014/89, to face conflicts about the overlapping areas of the city-port through multidimensional evaluations’ principles and tools. In this perspective, a four-step methodological framework has been structured applying a place-based approach with mixed evaluation methods, eliciting soft and hard knowledge domains, which have been expressed and assessed by a core set of Sustainability Indicators (SI), linked to SDGs. The contribution outcomes have been centred on the assessment of three design alternatives for the East Naples port and the development of a hybrid regeneration scenario consistent with CE and sustainability principles. The structured decision-making process has allowed us to test how an adaptive approach can expand the knowledge base underpinning policy design and decisions to achieve better outcomes and cultivate a broad civic and technical engagement, that can enhance the legitimacy and transparency of policies.

Moving Towards the Circular Economy/City Model: Which Tools for Operationalizing This Model?

As the world continues to urbanize, identifying and implementing new urban development models and strategies is necessary to face sustainable development challenges. To this end, the circular economy model can be implemented in cities in order to operationalize and achieve human sustainable development managing simultaneously, in a systemic perspective, the social inequalities issue and the ecological and economic crisis. Today there are many cities that are defining themselves as a “circular city” but, to date, a clear definition of this does not exist. In the transition towards the circular city, tools (such as evaluation, governance, financial, business tools) play a fundamental role. The aim of this paper is (after an analysis of the concept of the circular city and its implementation, starting from literature, official documents and reports) to identify and analyze tools for implementing the circular city model. In particular, a set of indicators to assess (positive and/or negative) impacts of projects and initiatives of the circular city agenda is identified.

Circular Economy Strategies in Eight Historic Port Cities: Criteria and Indicators Towards a Circular City Assessment Framework

The circular city is emerging as new concept and form of practice in sustainable urban development. This is a response to the complex and pressing challenges of urbanization, as highlighted in the New Urban Agenda (NUA). The concept of a “circular city” or “circular city-region” derives from the circular economy model applied in the spatial territorial dimension. It can be associated with the concept of a “self-sustainable” regenerative city, as stated in paragraph n.71 of the NUA. This paper aims to develop an extensive form of “screening” of circular economy actions in emerging circular cities, focusing on eight European historic port cities self-defined as “circular”. The analysis is carried out as a review of circular economy actions in the selected cities, and specifically aims to identify the key areas of implementation in which the investments in the circular economy are more oriented, as well as to analyze the spatial implications of the reuse of buildings and sites, proposing a set of criteria and indicators for ex-ante and ex-post evaluations and monitoring of circular cities. Results show that the built environment (including cultural heritage), energy and mobility, waste management, water management, industrial production (including plastics, textiles, and industry 4.0 and circular design), agri-food, and citizens and communities can be adopted as strategic areas of implementation of the circular city model in historic cities, highlighting a lack of indicators in some sectors and identifying a possible framework for “closed” urban metabolism evaluation from a life-cycle perspective, focusing on evaluation criteria and indicators in the (historic) built environment.

Circular Economy and Eco-Innovation Solutions for Low-Carbon Buildings in Cities: The Case of Kayseri

<p><em>An analysis of eco-innovations solutions for efficient low carbon buildings through circular economy principles (reduce, reuse, recycle), that also consider economic and social indicators has been performed at the national (Turkey) and urban scale (Kayseri).</em><em> </em><em>The framework for the city of Kayseri and the implementation of the circular economy for construction chain were determined that</em><em> </em><em>the three enabler tools which are policies, funding and awareness and collaboration could help to implement circular city model in Turkey.</em><em> </em><em>Reducing energy intensity and understanding the factors that can influence this (such as urbanization and industrialisation) will help mitigate future climate changes, improve local air pollution and health. </em></p>

Local interactions under switching costs

We study the impact of switching costs on the long-run outcome in $$2\times 2$$ coordination games played in the circular city model of local interactions. For low levels of switching costs, the predictions are in line with the previous literature and the risk-dominant convention is the unique long-run equilibrium. For intermediate levels of switching costs, the set of long-run equilibria still contain the risk-dominant convention but may also contain conventions that are not risk dominant. The set of long-run equilibria may further be non-monotonic in the level of switching costs, i.e., as switching costs increase the prediction that the risk-dominant convention is the unique long-run equilibrium and the prediction that both conventions are long-run equilibria alternate. Finally, for high levels of switching costs, also non-monomorphic states will be included in the set of long-run equilibria.

Production cost heterogeneity in the circular city model

We derive the closed-form solution that characterizes the equilibrium in the circular city model, when competing firms have heterogeneous production costs. Tractability issues in this setting are well-known and have not been resolved in prior work. In this paper, the equilibrium solution illustrates the effects of production costs on firms’ strategic decisions and profits and on consumer surplus.

Seller Diversity on a Two-Sided Platform

The growth of online marketplaces is accompanied by significant heterogeneity of the third-party sellers. The marketplace owner often applies policies that favor the sellers who offer higher values to buyers, which puts the lower-value sellers at an even greater disadvantage. This leads to the phenomenon of Matthew Effect. Our study focuses on a marketplace owner’s policy in managing seller heterogeneity and analyzes Matthew Effect in a competitive market environment. By extending the circular city model, we analytically examine the price competition among a large number of sellers that differ both in variety and in their value offerings. We present the closed-form equilibrium solution for the sellers’ pricing strategies, which illustrates the ripple effect that exerts competitive pressure from seller to seller at a diminishing magnitude. Furthermore, we show that, by providing each seller with the support that enhances its value offering proportionally, the marketplace owner further sharpens seller heterogeneity and creates Matthew Effect. This results in an increased profit for the marketplace owner and improved consumer surplus. The optimal level of such value-based support is dependent on the distribution of the sellers’ values and the buyers’ horizontal preferences. Our findings suggest that Matthew Effect improves social welfare by increasing the total profits of sellers and the marketplace owner, as well as the consumer surplus; moreover, it creates business opportunities for new sellers in the online marketplace.

Information and Online Reviews

Online review aggregators, such as TripAdvisor, HotelClub and OpenTable help consumers identify the products and services that best match their preferences. The goal of this study is to understand the impact of online review aggregators on firms and consumers. We adopt Salop’s circular city model in which consumers initially do not know the locations of the firms in the product space. The firms decide whether or not to be listed on an online review aggregator’s website and choose their prices. When a firm resorts to the aggregator, its location and price become observable to the consumers who visit the website. We consider two different scenarios, depending on the possibility for online firms to offer discounts to the consumers who book online. We show that in equilibrium not all firms will go online – some will remain offline. Online firms attract more customers than their offline counterparts due to reduced mismatch costs, but face a tougher price competition. Comparing the equilibrium prices, profits and the number of firms that go online across the scenarios, we derive interesting conclusions from the private and the social standpoints.

A Normative Analysis of Impact Fees for Suburban Commercial Development

Using a circular city model to represent commercial development in a suburban setting, we present a normative analysis showing that complete reliance on impact fees is economically superior to any alternative relying on taxes levied on households. The reason is that impact fees allocate the cost of maintaining infrastructure services to those who benefit from the commercial development, whereas tax financing creates a fiscal externality wherein part of the cost of a commercial development is borne by households other than those who benefit, leading to inefficient over entry.

Consumer privacy in oligopolistic markets: Winners, losers, and welfare

Motivated by the unprecedented availability of consumer information on the Internet, we characterize the winners and losers from potential privacy regulation in the context of four commonly-used oligopoly models: a linear city model, a circular city model, a vertical differentiation model, and a multi-unit symmetric demand model. We show that while there are winners and losers as a result of privacy enforcement, the parties who stand to benefit and the parties who stand to lose, as well as whether social welfare is enhanced or diminished, largely depends on the specific economic setting under consideration.

Do Supply Restrictions Raise the Value of Urban Land? The (Neglected) Role of Production Externalities

Restriction on the supply of new urban land is commonly thought to raise the value of existing urban land. Our paper questions this view. We develop a tractable production-externality-based circular city model in which firms and workers choose locations and intensity of land use. Consistent with evidence, the model implies exponentially decaying density and price gradients. For plausible parameter values, an increase in the demand for urban land can lead to a smaller increase in urban rents in cities that cannot expand physically because they are less able to exploit the positive external effect of greater employment density. ; Supersedes Working Paper 12-25.

Spatial Cournot competition with non-extreme directional constraints

The circular city model and the linear city model are extended to allow for asymmetric directional transportation costs. A two-stage location-then-quantity model is proposed. We show that in the circular city model, maximal dispersion arises in equilibrium, while in the linear city model, the unique equilibrium is represented by both firms agglomerating in a non-central point of the segment.