Increase Social Welfare Research Articles

Bertrand vs. Cournot competition in distribution channels with upstream collusion

This paper applies repeated game theory to tacit collusion in dynamic distribution channels based on the grim trigger strategy. We examine competitors' choice of the strategic instruments in distribution channels comprised of two manufacturers distributing through two independent retailers respectively. First, the paper discusses the upstream manufacturers' collusion incentives under different competition modes for downstream retailers and shows that the manufacturers' collusion incentives critically depend on the retailers' competition modes and the discount factor. We then identify the endogenous competition modes in equilibrium. We find that upstream collusion is easier to sustain under Cournot competition than Bertrand competition, and it is least likely to be sustained under mixed Bertrand-Cournot competition. Furthermore, in equilibrium, retailers can engage in Bertrand, Cournot, or mixed Bertrand-Cournot competition, depending on the discount factor and the degree of product differentiation. This study provides the rationale behind the emergence of various modes of competition in practical dynamic distribution channels, especially the recent mixed Bertrand-Cournot competition mode. Finally, the manufacturers' collusion incentives and retailers' competition modes jointly affect the manufacturers' profitability and social welfare. We also discuss how the manufacturers' profitability and social welfare vary under different competition modes taking upstream collusion into consideration. We find that upstream collusion increases (decreases) social welfare for complements (substitutes).

How do housing price and sentiment affect consumption distribution in China?

Considering the lack of exploration of housing market sentiment in previous work, this paper uses quantile regression for panel data (QRPD) to investigate how housing price and housing market sentiment affect non-housing consumption distributions among owners and renters during their life cycles in China. The results show that the positive effect of housing price on consumption is stronger at the higher and lower parts of the distribution, and the differences caused by ages are more significant for owners. Furthermore, the housing market sentiment plays a significant role in owners' and highest-consuming renters' consumption. The heterogeneities in QRPD results suggest that the least square method provides less information. This study offers practical implication for governments in conducting different housing policy strategies for different households so as to help households benefit from the development of housing market and hence increase social welfare and equality.

Research on the problems of interconnection in China’s Internet backbone network

The Internet industry in China is in a period of rapid development. The new businesses of Internet are springing up. As a result, bandwidth users want to improve the quality of the Internet. Interconnection between backbone networks is crucial to network quality. Therefore, the Chinese government is very concerned about the interconnection of backbone networks. This paper mainly analyzes the development status of the interconnection of China’s Internet backbone networks from the interconnection way between the backbone networks, we find out the main problems of the interconnection between the Internet backbone networks, such as the regional monopoly of backbone networks, the resource distribution is not balanced, and the existing interconnection system has raised the market power of the leading backbone network.We put forward corresponding countermeasures and suggestions for the existing problems of the backbone network interconnection. It is great significance to optimize of the interconnection quality of China’s Internet backbone network, improve interconnection efficiency of backbone networks and increase social welfare.

Leveraging Wage Subsidies to Facilitate Fair Wages and Increase Social Welfare

Wage subsidies can be provided directly to the worker, as in the federal Earned Income Tax Credit (EITC) program. They can also be provided indirectly by subsidizing the employer; by reducing the cost of labor, employers are induced to offer higher wages. The standard literature stipulates that the identity of the entity that is statutorily entitled for the subsidy bears no implications for the economic incidence. We propose and test a mechanism by which indirect subsidies can lead to higher social welfare. A substantial empirical literature establishes that workers reciprocate gifts in the form of higher wages with the gift of exerting higher effort. Thus, if a wage subsidy is implemented by indirectly subsidizing employers, employers face a lower cost of labor and increase their wages, leading workers to reciprocate with higher effort and productivity than achieved by providing the equivalent direct subsidy. A controlled laboratory experiment supports our behavioral hypotheses and confirms the behavioral and welfare implications

Pengaruh globalisasi terhadap ketahanan pangan nasional

The problem on food security in Indonesia began to be interested since the economic crisis as one component of the social security net. Sustainable food security covers: availability of food, accessibility, utilization, stability, self reliance (autonomy) and sustainability. . Hirarchically food security can be at global order, regional, national, local, household and individual. The higher order offbod security is a necessary condition but not sufficient condition for the lower order.Economic theory indicate that there are gains to be made from free trade. increase the efficiency ufresource allocation, and increase welfare of all countries. However, all government, without exception, intervene to varying degrees in the working of natural market prces, with the reason the need to protect infant industry, to ensure food security, to redistribute income, and to enhance income of small producers.The liberalization initiatives culminated in UR agreement and WTO, among others, dismantling of quantitative restriction and subsidies as well as other nontariff barriers, but there were several new thing of antidumping tariff, sanitary and phytosanitary, technical barrier to trade,environment, and genetically modified organism.The impact of trade liberalization on exporter countries, in general, would benefit the producers, decrease the consumer surplus, and increase social welfare except large populated as India and China. The impact of importer countries depend on the policy of each country. Malaysia and Indonesia by decreasing import tariff policy would increase consumer surplus and social welfare but sacrificing the producers/farmers.National food policies consist of international trade policy domestic price policy, and policy on production efficiency. The international trade policy means to protect producers, consumers, and social welfare from the uncertainty of international market especially in the long run. The stabilization of domestic price policy needs inter department coordination and STE to implement. Protection could result inefficiency but it is needed for commodities those are not ready to compete and to protect from unfair trade, to protect farmers and long run food security.

An analysis of economic benefits of the Southern Gas Corridor

ABSTRACTIn this paper, we examine economic benefits and viability of the Southern Gas Corridor (SGC) for supplying natural gas to Europe from the Caspian Basin. In particular, we examine what will be the effects of natural gas supplies from the Caspian Basin on import prices and social welfare of the EU countries and Turkey. We also analyze profits of exporters and oil companies engaged in production and transportation of natural gas to Europe. We find that the SGC will reduce import prices and increase social welfare in the EU and Turkey. Our results also suggest that the SGC will generate noteworthy profits for exporters and oil companies engaged in the project and thus bring significant economic gains to all parties.

Pathways and Hidden Benefits of Healthcare Spending Growth in the U.S.

After a brief reprieve, healthcare spending in the United States is expected to once again rise rapidly, continuing the trend of the past half-century. To inform the debate about whether policymakers should take action to contain high and rising medical care costs, we use panel data on all 50 states for the period 1993 to 2009 to estimate a healthcare spending model. Our framework, which includes a structural spending equation and a health production function, identifies the pathways through which medical technology and income affect healthcare costs and the potential health benefits they produce. We find evidence that medical technology and income are important factors fueling rising healthcare costs in the United States. However, our results also indicate they generate large health benefits in the form of lower mortality that may outweigh the costs and increase social economic welfare.

How can we make a socially optimal large-scale media platform? Analysis of a monopolistic Internet media platform using two-sided market theory

Monopolistic media platforms (MMPs) are increasingly prominent in the global Internet media industry due to the lock-in effect of the network economy. A MMP is capable of offering great utilities to its users and content providers (CPs) because such parties do not need to access multiple Internet media platforms to find their trading partners. However, a MMP operator (MMPO) can have a significant negative impact upon social welfare whenever it attempts to maximize profits via abuses of its own monopolistic power.The aims of this paper are as follows: firstly, we construct a model of a monopolistic media platform market to identify and analyze the decisions of a MMPO based on two-sided market theory. Secondly, we demonstrate how three factors – matching technology, prosumer strategy and advertising technology – impact on the size of the network and social welfare. Finally, we provide both policy makers and media platform operators (MPOs) with useful suggestions on how to promote the Internet media industry and deter MMPOs from abusing their own powers.From the analysis of the modified new model we suggest, matching technology and prosumer policy are demonstrated to increase the number of users and CPs of the platform and increase social welfare. Advertising policy is also one way of increasing social welfare, however, the necessity of monitoring of government for MMPO is proven because it may harm the utility of users.

Predicted Satisfaction from Simultaneous Evaluation of Prosocial and Pro-self Employee Bonus Schemes: Towards a New Form of Management Strategy for Corporate Social Spending

A prosocial bonus is money given to people with a condition that the amount needs to be spent on others. This article suggests a new way of implementing corporate social spending by involving ‘prosocial bonuses’. Such a policy can potentially serve a dual benefit of improving employee satisfaction and help organizations reach the mandate for social spending. This study examined predicted satisfaction from choosing between pro-self and prosocial bonuses, with both options being available concurrently. Previous discussions have stated that people predict higher satisfaction from spending on the self, compared to spending money on others. However, this study showed that predicted stated satisfaction from opting to spend on the poor can be higher (Experiment 1) or equal (Experiment 2) to spending a bonus on oneself. We argue that this is possible when spending options are evaluated simultaneously. The major motivation for spending on the poor was to positively impact lives. A prosocial employee incentive policy could be built into corporate social responsibility programmes in developing countries like India that benefit both the company and increase social welfare.

IMPLEMENTASI KEBIJAKAN KUOTA BAGI PENYANDANG DISABILITAS UNTUK MENDAPATKAN PEKERJAAN DI KOTA YOGYAKARTA

This article aims to describe the implementation of the quota policy 1 percent ofemployment opportunities for persons with disabilities in the city of Yogyakarta as stated in Government Regulation No. 43 Year 1998 on Efforts to Increase Social Welfare of Persons with Disabilities. In addition, a study of the obstacles encountered and efforts made by the Government of the city of Yogyakarta is also a goal of writing this article. The method used in this research is qualitative descriptive. The author uses interview, observation and documentation for data collection. The results showed that the implementation of the quota policy 1 percent for disabled for agencies that have hired employees more than 100 people, has not run optimally in the city of Yogyakarta. This is demonstrated by the limited number of disabled absorbed in government and private agencies. Various obstacles encountered in the implementation of this policy, namely: training materials for the disabled less up to date, enforcement of regulations about 1 percent quota has not run optimally; low awareness of state agencies and private companies to employ persons with disabilities; and the lack of willingness of the disabled to find jobs.Keywords: Quota Policy, Employment, Disabled

Horizontal merger under strategic tax policy

In a Cournot oligopoly with consumption externality, we show that the presence of a strategic tax policy increases the incentive for a horizontal merger compared to the situation with no tax policy. Thus, we point towards a new factor, viz., strategic tax policy, for increasing the incentive for a horizontal merger that has been ignored in the existing literature. In contrast to the usual belief, we also show that a horizontal merger may benefit the consumers and increase social welfare.

Effective Labor Relations Laws and Social Welfare

Effective labor relations laws determine the allocation of bargaining power between the parties involved in labor disputes, and hence, influence social welfare. The right to strike, the types of legal strikes, and the right to hire replacement workers are fundamental components of labor relations laws in the public sector. Strikes by public school teachers, which are common in real-world settings, involve particularly high social costs. We theoretically study the social welfare effects of labor relations laws that permit the effective use of replacement teachers in case of strikes. These laws refer to the explicit right to hire replacement teachers and to the prohibition of intermittent strikes. We present a sequential bargaining game of incomplete information. Our model explicitly includes a law component, which captures the impact of effective labor relations laws. We conduct social welfare analysis and demonstrate that these laws reduce bargaining impasse and increase social welfare.

Does Government‐sponsored Advertising Increase Social Welfare? A Theoretical and Empirical Investigation

AbstractThe main objective of this study was to analyze the effect of advertising on social welfare in a perfectly competitive market where the level of advertising is chosen by a social planner. The theoretical model revealed that social planner‐sponsored advertising that increases the equilibrium price of the advertised good can increase society's welfare if the effect of advertising in consumers' utility is higher than the consumer welfare‐reducing price effect. The empirical illustration focuses on the U.S. state of South Carolina's “buy local” food products campaign. The findings suggest that this government‐sponsored advertising campaign increases total welfare.

Dynamic Pricing and Price Commitment in Experience Good Markets

This article develops a dynamic model to examine how a firm selling non-durable experience goods can signal its high quality with dynamic spot-pricing or price commitment. Since consumers who buy and use the product will learn the quality of the product, the firm’s early-period price will endogenously determine the fraction of informed consumers in the later period. Without credible price commitment, the high-quality firm will prefer the pooling outcome in the first period, and in the second period, both types of firms will separate and target only the first-period buyers. By contrast, with credible price commitment, the high-quality firm will be able to profitably signal its quality by lowering its first-period price or increasing its second-period price from its first-best price. Credible price commitment will benefit the high-quality firm by lowering its signaling cost, but can either increase or decrease consumer surplus and social welfare. Furthermore, we show that a longer time horizon can allow the high-quality firm to signal its quality costlessly, by maintaining its high first-best price for all periods.

Privatization and merger in a mixed oligopoly with spatial price discrimination

This paper is the first to investigate the impact of the presence of a public firm on the profitability of two-firm mergers in a spatial price discrimination model. The presence of the public firm may increase the set of mergers for two private firms to profitably merge. Merger increases social welfare in the presence of a public follower alone. However, privatizing the public firm never increases social welfare.

Preference based on Reasons of Vocational and Technical Secondary Schools in Turkey

It is considered that choosing a career is one of the most important decisions in human life. Because of many reasons such as family, environment, school etc. Industry and technical occupation high school to be preferred by students’ educational system is very important to adoption of developments in the world, catch up with information society and develop its international competitiveness. The education system must train qualified manpower in order to decrease unemployment and increase social welfare. Policy of educational system is important at this stage. Industry technical occupation high schools educate qualified manpower and various non-formal education institutions continuously give the employers the skills needed by sector. A survey was done among the 503 students of 10th classes in industry and technical high school in Uskudar, Istanbul, Turkey. The data was collected with survey method. It is understood that the students of educated in industry technical high school choose their school according to their own wishes abilities and gender. They also think they couldn’t get enough points for university entrance exam. In addition industry technical occupation high schools give them a chance to find a job easily. It is the shortest way for job opportunities and they bring off in their life.

Patents and Innovation: Are the Brakes Broken, or How to Restore Patentss Dynamic Efficiency?

The standard view of patents emphasizes their dynamic efficiency. It considers that, by providing firms with incentives to invest in R&D and to disclose their knowledge, patents encourage innovation and increase social welfare in the long run. Yet, a growing body of literature opposes this view and asks for patent reform or even for the abolition of the patent system. In this work, which reviews the most recent literature on patents, we show that patents can have a negative impact on the dynamics of innovation. This is not due to some intrinsic properties of the patent system but to some of its recent evolutions which mean that, nowadays, too many patents are granted and that patent information is bad. The combination of those two elements explains most of the problems induced by modern patent systems such as hold-up (patent trolls), anti-commons (royalty stacking), and high transaction costs in markets for technology. We conclude by showing that realistic reforms can solve those problems and ensure that the patent system becomes again an instrument of dynamic efficiency.

An economy-wide analysis of impacts on Taiwan of reducing tariff escalation on agriculture-related products in WTO Doha Round negotiations

Purpose– The purpose of this paper is to assess the degree of tariff escalation in Taiwan's agriculture-related commodities and the economy-wide impact of tariff harmonization.Design/methodology/approach– A computable general equilibrium model of the Taiwan economy is applied to simulate for the economy-wide impact of three alternative proposals that reduce tariff rates as well as the degree of tariff escalation in agriculture-related products.Findings– The paper shows that reduction in tariff wedge helps increase social welfare of Taiwan at the expense of some agricultural sectors. Based on the pair-wise comparisons of the three tariff reduction proposals, the scenario where the upstream products have the least reduction would have agricultural sectors fare better than in the other scenarios where more negative impact on output and employment would occur to agricultural sectors.Originality/value– The paper assesses quantitatively the economy-wide impact of reducing tariff wedges between unprocessed and processed products, which is rarely seen in the literature using a detailed computable general equilibrium model.

Dynamic visiting coordination problem based on multi-agent for large-scale crowds' activities

In order to reduce the phenomena of long time queuing and congestion in large-scale crowds’ activities, improve the tourist’s satisfaction and increase social welfare, a dynamic visiting coordination model based on multi-agent for large scale crowds’ activities is proposed. Then, a visiting coordination algorithm considering comprehensively the tourist’s preference, attraction’s congestion and road impedance (denoted as PCI) is designed. The other two visiting coordination algorithms only considering attraction’s preference or congestion are introduced respectively. Three types of these coordination algorithms are tested by computer simulation. The results indicate that the proposed coordination algorithm PCI can improve the congestion status significantly and ensure better social welfare while meeting the real-time requirements.

Islands of sustainability in time and space

We review the economics perspective on sustainable resource use and sustainable development. Under standard conditions, dynamic efficiency leads to sustainability of renewable resources but not the other way around. For the economic-ecological system as a whole, dynamic efficiency and intergenerational equity similarly lead to sustainability, but ad hoc rules of sustainability may well lead to sacrifices in human welfare. We then address the challenges of extending economic sustainability to space as well as time and discuss the factors leading to optimal islands of preservation regarding renewable resources. Exogenous mandates based on moral imperatives such as self-sufficiency and strong sustainability may result in missed win-win opportunities that could improve both the economy and the environment, as well as increase social welfare across generations.