Fee Setting Research Articles

“It's not a one operation fits all”: A qualitative study exploring fee setting and participation in price transparency initiatives amongst medical specialists in the Australian private healthcare sector

The Australian government, through Medicare, defines the type of medical specialist services it covers and subsidizes, but it does not regulate prices. Specialists in private practice can charge more than the fee listed by Medicare depending on what they feel ‘the market will bear’. This can sometimes result in high and unexpected out-of-pocket (OOP) payments for patients. To reduce pricing uncertainty and ‘bill shock’ faced by consumers, the government introduced a price transparency website in December 2019. It is not clear how effective such a website will be and whether specialists and patients will use it. The aim of this qualitative study was to explore factors influencing how specialists set their fees, and their views on and participation in price transparency initiatives. We conducted 27 semi-structured interviews with surgical specialists. We analysed the data using thematic analysis and responses were mapped to the Theoretical Domains Framework and the Capability, Opportunity, Motivation and Behavior model. We identified several patient, specialist and system-level factors influencing fee setting. Patient-level factors included patient characteristics, circumstance, complexity, and assumptions regarding perceived value of care. Specialist-level factors included perceived experience and skills, ethical considerations, and gendered-behavior. System-level factors included the Australian Medical Association recommended price list, practice costs, and supply and demand factors including perceived competition and practice location. Specialists were opposed to price transparency websites and lacked motivation to participate because of the complexity of fee setting, concerns over unintended consequences, and feelings of frustration they were being singled out. If price transparency websites are to be pursued, specialists' lack of motivation to participate needs to be addressed.

Upstream information sharing in platform-based e-commerce with retail plan adjustment

We examine the incentive of an e-commerce platform to share advanced market demand information with a seller offering an assortment of products on its platform. The platform can operate either as a reseller, setting retail prices, or as a marketplace provider, earning commission fees. The shared information comprises the preferences of the consumers who shop on the platform. With this shared information, the seller can adjust its retail plan according to revealed consumer preferences in each planning cycle. Our analysis revolves around three factors: market variability, the cost of adjusting the retail plan, and the intensity of in-platform competition faced by the seller. Our results indicate that in the reseller setting the platform can be either better off or worse off with information sharing, whereas in the commission fee setting the platform invariably benefits from information sharing. If the platform shares information, it is generally beneficial for consumers in the reseller setting but could be harmful in the commission fee setting. We propose a price ceiling mechanism to incentivize information sharing. Our findings reveal that this price ceiling mechanism is superior to the subsidy mechanism as it yields benefits for all parties – the seller, the platform, and consumers – through information sharing. These results offer valuable insights to e-commerce platforms regarding strategic decisions on information sharing services and contract design to ensure mutual benefits.

StableFees: A Predictable Fee Market for Cryptocurrencies

Blockchain-based cryptocurrencies must solve the problem of assigning priorities to competing transactions. The most widely used mechanism involves each transaction offering a fee to be paid once the transaction is processed, but this discriminatory price mechanism fails to yield stable equilibria with predictable prices. We propose an alternate fee setting mechanism, StableFees, that is based on uniform price auctions. We prove that our proposed protocol is free from manipulation by users and miners as the number of users and miners increases and show empirically that gains from manipulation are small in practice. We show that StableFees reduces the fees paid by users and reduces the variance of fee income to miners. Data from December 2017 show that, if implemented, StableFees could have saved Bitcoin users $272,528,000 USD in transaction fees while reducing the variance of miner’s fee income, on average, by a factor of 7.4. We argue that our fee protocol also has important social welfare and environmental benefits. This paper was accepted by Agostino Capponi, Special Section of Management Science: Blockchains and Crypto Economics. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4735 .

Drivers of tuition fee setting practices for higher education institutions involved in international student recruitment

ABSTRACT Tuition fee (or price) setting drivers are still an under-researched area. We attempt to fill this gap using universities as the basis of analysis. Grounded in pricing contingency theory, specifically, pricing capability literature, a conceptual model is developed using qualitative data from eight annual pricing cycles (2009–2017). We test the model using quantitative data collected over 18 months between 2017 and 2019. The findings add to the research on higher education marketing and provide managerial insights into how tuition fee setting can serve as an international marketing tool.

Fee setting

Fee setting

Interchange Fees and Card Payments: A Cross-country Analysis

We study the relationship between interchange fees and card transactions in a large panel of countries and assess the impact of the Interchange Fee Regulation, introduced in 2015 in the European Union, on card usage. For our purposes, we take advantage of a newly assembled dataset covering almost 50 countries in the last decade and carry out two econometric exercises. Firstly, we estimate the relationship between card transactions per capita and average interchange fees by means of a panel estimator including both country and year fixed-effects, thus exploiting the broad heterogeneity across countries over time. Our results point toward a negative and significant relationship between the number and the growth rate of card-based transactions per capita and the level of interchange fees. Secondly, we adopt a difference-in-difference approach and compare the change in card payments in EU member countries (the treated group), before and after the implementation of the Interchange Fee Regulation in 2015, with that observed in a group of comparable countries (control group), which did not experience any change in interchange fee setting regulations. We find a strong and significant one-off impact of the Regulation immediately after its introduction and considerable propagation effects in the following years. Overall, we support the view that policy actions aiming at containing, but not eliminating, interchange fees can significantly contribute to the diffusion of electronic payments.

Negative Interest Rate Policy of Banks in Japan: A Review

The negative interest rate policy (NIRP) that lowered the long-term rate below zero might have impacted positively in Asian economies like Japan. The main objective of this study was to anticipate the effects of NIRP in the Japanese economy where exponential growth is missing for the last few decades. This paper review literatures on the state of NIRP in Japanese banks that lost their profit margins in domestic markets but discovered a new prospect to generate profit after the NIRP was introduced in January 2016. Online libraries and Google scholar electronic databases were researched using free-text words and NIRP subject headings relevant to the topic. Most studies identified were exploratory and of varying methodological design. The inclusion studies found that the strategic decision of the central bank in Japan resulted in bank-explicit variables like capitalization; subsidizing structure; plan of action; financing cost presentation; and focused conditions seem to lessen banks' eagerness to loan in a negative loan fee setting. These challenges need to be addressed in a manner that will help realize Japan's economic potential. This study will help to instill interest among policymakers to think of financial disputes to effortlessly contribute towards the development of the country.

Decentralising the patent system

Modern patent systems are slow, inefficient, expensive, and may result in outcomes that actively harm technological progress. This paper proposes a substantive re-think of these systems and lays a foundation upon which practical solutions can be built. Many solutions proposed in the past, such as prior-art bounties, outsourced examination, and dynamic fee setting, have gone unheeded due to the cost of administering them and the rigidity of the patent system. We explore how distributed ledger technologies (DLTs) enable these major changes by altering the way stakeholders are able to interact with the patent records system. We find that transitioning to a DLT-based patent records system can enable many previously suggested improvements to current patent systems in a flexible, scalable, and transparent manner. The case for such a transition is strengthened when jointly considering the complex but common roots of problems facing modern patent systems, rather than a balkanised set of technical solutions to address each issue independently. Noting that a DLT-based system is not a panacea, we also provide comment on the political, legal, and organisational challenges that must be overcome for such changes to be implemented at scale.

AVANÇOS E RECUOS DA DEMOCRATIZAÇÃO DO ENSINO SUPERIOR PORTUGUÊS NAS ÚLTIMAS DÉCADAS: EM JEITO DE BALANÇO


 
 
 
 No presente artigo, os autores debatem a situação do ensino superior em Portugal em diversas dimensões, tendo por marco temporal o período 1974-2020. São destacados os avanços no ensino superior com uma evolução fortemente positiva nos últimos 50 anos, nomeadamente em função do: crescimento explosivo da procura e da correspondente resposta do sistema educativo de que resultou a criação do ensino superior politécnico; aumento do número de instituições públicas de ensino superior que abrangem todo o território nacional; aumento do número de docentes e do investimento na sua formação; alargamentodabasesocialderecrutamentoeconsequentedemocratizaçãodosistema;ataxa real de escolarização superior que aproxima Portugal da média dos países da EU e da OCDE. Todavia, também se destacam alguns dos recuos que se têm vindo a sentir desde finais da década de 1980, nomeadamente a: abertura do ensino superior à iniciativa privada; privatização do ensino superior público com o estabelecimento de propinas atualizadas e a diminuição do financiamento público; precarização da função docente, em virtude do reforço de contratos precários bem como o envelhecimento da classe dos professores; e, o caminhar para algum défice de democraticidade no ensino superior público em consequência de o novo Regime Jurídico do Ensino Superior abrir as portas a uma governação menos colegial e à possibilidade de as instituições públicas poderem adoptar o regime fundacional. Finalizando, é evidenciada uma preocupação pelo perigo do ensino superior em Portugal se encontrar em “retrocesso” e a tornar-se um ensino para as elites.
 
 
 

Why is the ARF the same for all DCPs?

Dental therapist Shaun Howe shares his insight into the General Dental Council and its fee setting

Decentralized Mining in Centralized Pools

AbstractThe rise of centralized mining pools for risk sharing does not necessarily undermine the decentralization required for blockchains: because of miners’ cross-pool diversification and pool managers’ endogenous fee setting, larger pools better internalize their externality on global hash rates, charge higher fees, attract disproportionately fewer miners, and grow more slowly. Instead, mining pools as a financial innovation escalate miners’ arms race and significantly increase the energy consumption of proof-of-work-based blockchains. Empirical evidence from Bitcoin mining supports our model’s predictions. The economic insights inform other consensus protocols and the industrial organization of mainstream sectors with similar characteristics but ambiguous prior findings.

Decentralising the Patent System

Modern patent systems are slow, inefficient, expensive, and may result in outcomes that actively harm technological progress. This paper proposes a substantive re-think of these systems and lays a foundation upon which practical solutions can be built. Many solutions proposed in the past, such as prior-art bounties, outsourced examination, and dynamic fee setting, have gone unheeded due to the cost of administering them and the rigidity of the patent system. We explore how distributed ledger technologies (DLTs) enable these major changes by altering the way stakeholders are able to interact with the patent records system. We find that transitioning to a DLT-based patent records system can enable many previously suggested improvements to current patent systems in a flexible, scalable, and transparent manner. The case for such a transition is strengthened when jointly considering the complex but common roots of problems facing modern patent systems, rather than a balkanized set of technical solutions to address each issue independently. Noting that a DLT-based system is not a panacea, we also provide comments on the political, legal, and organizational challenges that must be overcome for such changes to be implemented at scale.

Discussion of “The Therapeutics of the Fee in Psychoanalysis”

This discussion of Dr. Pauley’s paper (this issue) on the therapeutics of the fee first highlights the various valuable contributions Pauley makes. It applauds his unusual openness in sharing his internal vulnerability with patients around fees, his raising the question about why fee setting is so complicated for analysts and patients alike, his focusing on omnipotent fantasies in the transference and countertransference, and his uncovering of the multiple meanings money has for therapists beyond just their income. Berger picks up on Pauley’s invitation to therapists to be more curious about their own discomforts with money. Drawing on her own teaching, writing and clinical experience, she adds to Pauley’s more global ideas, stressing instead the more specific meaning of money in each treatment dyad. Among these specifics, Berger highlights the chronic avoidance of teaching about money in analytic institutes. She clarifies some Freudian ideas about how money can become tied up with anal witholding, and offers examples of how she got stuck with three patients around setting and raising their fees. Berger describes how these patients’ believed that their fees could mean safety, value or exploitation and how these attribuitions generated countertransference blind spots for her. The discussion urges clinicians to keep digging hard into themselves for the many meanings of money, to pay attention to the devil in their own details, and thereby maximize the richness of their work with patients around a topic so loaded for all of us.

Sustainability of Service Intermediary Platform Ecosystems: Analysis and Simulation of Japanese Hotel Booking Platform-Based Markets

To achieve both a large number of platform users and the sustainability of service intermediation platform ecosystems, this study attempts to clarify appropriate platform fee settings and promising market types. It focuses on hotel-booking platforms and platform-based markets. We conduct agent-based simulation experiments with the conditions of (a) platform fee setting, (b) supply and demand balance, and (c) the consumer type categorized as “mandatorily” purchasing consumers (e.g., business travelers whose purchase of a hotel service is mandatory) and “optionally” purchasing consumers (who can refuse services if their requirements are not satisfied). Our simulation results reveal that when the platforms focus on mandatorily purchasing consumers, they could acquire larger platform users through fee settings, depending on the balance of supply and demand; however, they could not maintain ecosystem sustainability in any of the cases. When the platform focuses on optionally purchasing consumers, it can achieve both a large number of platform users and ecosystem sustainability with platform fee settings of consumer incentives, especially in excessive supply markets.

The influence of intra- and inter-system concentration on the pre-regulated setting of interchange fees within cooperative card payment networks

This paper deals with motives and consequences of regulatory involvement in cooperative card payment networks across the European Union and USA. The aim is to draw a bridge between the theoretical framework of two-sided markets and observable industry characteristics. By consolidating a data set on intra- and inter-industry concentration in acquiring, issuing and card scheme markets, a multivariate analysis of the determinants of interchange fees is enabled. Unlike previous studies, it departs from a pure theoretical view and empirically assesses the influence of concentration, rather than market externalities, in the setting of interchange fees. Findings allow for a preliminary assessment of the applicability of established theoretical models and policy intervention in card payment markets. Contrary to widespread belief, acquirer markets show to be highly (and more) concentrated than issuer markets which are characterised by a relative degree of concentration. Results show that concentration has a statistically significant influence on the setting of interchange fees in credit and debit card markets. Findings within this paper call for a more conservative regulatory involvement, as well as a review of utilised economic models incorporating empirical evidence.

Towards a Functional Fee Market for Cryptocurrencies

Blockchain-based cryptocurrencies must solve the problem of assigning priorities to competing transactions. The most widely used mechanism involves each transaction offering a fee to be paid once the transaction is processed, but this first-price mechanism fails to yield stable equilibria with predictable prices. We propose an alternate fee setting mechanism, StableFees, that is based on second-price auctions. We prove that our proposed protocol is free from manipulation by users and miners as the number of users and miners increases and show empirically that gains from manipulation are small in practice. We show that StableFees reduces the fees paid by users and reduces the variance of fee income to miners. Data from December 2017 shows that, if implemented, StableFees could have saved Bitcoin users \$272,528,000 USD in transaction fees while reducing the variance of miner's fee income, on average, by a factor of $7.4$. We argue that our fee protocol also has important social welfare and environmental benefits.

A web-based endodontic case difficulty assessment tool.

To develop a web-based tool to facilitate identification, evaluation and management of teeth requiring endodontic treatment. Following a literature search and thorough analysis of existing case difficulty assessment forms, the web-based tool was developed using an online survey builder (Qualtrics, Qualtrics Lab, UT, USA). Following feedback from a pilot study, it was refined and improved. A study was performed, using the updated version (EndoApp) on a cohort (n = 53) of dental professionals and dental students. The participants were e-mailed instructions detailing the assessment of five test cases using EndoApp, followed by completion of a structured feedback form. Analysis of the EndoApp responses was used to evaluate usage times, whereas the results of the feedback forms were used to assess user experience and relevance, other potential applications and comments on further improvement/s. The average usage time was 2min 7s; the average times needed for the last three (Cases 3-5) were significantly less than the preceding two (Cases 1 & 2) test cases. An overwhelming majority of participants expressed favourable views on user experience and relevance of the web-based case difficulty assessment tool. Only two participants (4%) were unlikely or very unlikely to use EndoApp again. The potential application of EndoApp as an 'educational tool' and for 'primary care triage' was deemed the most popular features and of greater importance than the secondary options of 'fee setting' and as a 'dento-legal justification tool'. Within the study limitations, owing to its ability to quantify the level of difficulty and provide guidance, EndoApp was considered user-friendly and helped facilitate endodontic case difficulty assessment. From the feedback, further improvements and the development of a Smartphone App version are in progress. EndoApp may facilitate treatment planning, improve treatment cost-effectiveness and reduce frequency of procedural errors by providing appropriate guidance on endodontic case management.

Price competition in the mutual fund industry

We find a puzzling fact about mutual fund industry that funds operating in more competitive segments charge higher fees. We argue that this surprising positive relation between competition and fund fees is consistent with strategic fee setting by funds. Fund performance is better and more persistent in less competitive segments, which attracts relatively more performance-sensitive investors. This leaves relatively less performance-sensitive investors in more competitive markets. Hence, funds operating in more competitive markets face a relatively inelastic demand curve and take advantage of it by increasing their fees (which reduces investors' net returns). Our findings have important policy implications that market competition on its own may not be sufficient to decrease fund fees and regulatory interventions are required to increase investor awareness of mutual fund fees and their adverse impacts on net fund performance.

Price Competition in the Mutual Fund Industry

We find a puzzling fact about the mutual fund industry that funds operating in more competitive segments charge higher fees. We argue that this surprising positive relation between competition and fund fees is consistent with strategic fee setting by funds. Fund performance is better and more persistent in less competitive segments, which attracts relatively more performance-sensitive investors. This leaves relatively less performance-sensitive investors in more competitive markets. Hence, funds operating in more competitive markets face a relatively inelastic demand curve and take advantage of it by increasing their fees (which reduces investors’ net returns). Our findings have important policy implications that market competition on its own may not be sufficient to decrease the fund fees and that regulatory interventions are required to increase investor awareness of mutual fund fees and their adverse impacts on net fund performance.

Governance, Decision-Maker and Fee Setting in the Pension Plan Industry

The impact of a switch of management company on pension plan fees is analyzed by comparing the effects on employer-sponsored versus individual defined-contribution private pension plans in Spain. This framework is ideal because the two types differ significantly both in plan governance structure and in the degree of bargaining power held by the decision-makers. In addition, intense bank restructuring, which has greatly modified the Spanish pension plan map, provides an interesting analytical context for the identification of causal links, because it is a scenario that features shocks exogenous to the relationship under analysis. The results show that a switch of management company significantly reduces management fees for employer-sponsored plans, where the nature of the governance structure aligns plan objectives more closely with those of the investors and improves their bargaining power, while the reverse is true for individual pension plans. As expected, diff-in-diff analysis reveals significant differences in employer-sponsored plans when the change of management company is due to factors exogenous to the management-client relationship, such as repercussions from the bank restructuring process. This effect is not observed in individual plans, however.