Marginal Utility Research Articles

The effect of banking channels and efficiency indicators on bank profitability

This article proposes two models to analyze profitability banking. Using panel data methodology it’s analized the relationship between operational efficiency indicators and banking access channels alternative to the branch with ROA and ROE. The main findings are that Net Operating Margin (MNO) has a direct relationship. Net noninterest Margin (MNNI) and Asset Utilization (RA) have a negative impact on ROA. Regarding access channels, Automatic Teller Machines (ATMs) have a positive, albeit weak, impact. Point of Sale Terminals (POS) are significant but in reverse. As for ROE, MNO and MNNI are related in the same sense as ROA. The Capital Multiplier (MC) presents a negative relationship. Mobile Banking (NBM) and POS show a significant inverse relationship, while ATM is direct.

Privacy-Aware Adversarial Network in Human Mobility Prediction

As mobile devices and location-based services are increasingly developed in different smart city scenarios and applications, many unexpected privacy leakages have arisen due to geolocated data collection and sharing. User re-identification and other sensitive inferences are major privacy threats when geolocated data are shared with cloud-assisted applications. Significantly, four spatio-temporal points are enough to uniquely identify 95% of the individuals, which exacerbates personal information leakages. To tackle malicious purposes such as user re-identification, we propose an LSTM-based adversarial mechanism with representation learning to attain a privacy-preserving feature representation of the original geolocated data (i.e., mobility data) for a sharing purpose. These representations aim to maximally reduce the chance of user re-identification and full data reconstruction with a minimal utility budget (i.e., loss). We train the mechanism by quantifying privacy-utility trade-off of mobility datasets in terms of trajectory reconstruction risk, user re-identification risk, and mobility predictability. We report an exploratory analysis that enables the user to assess this trade-off with a specific loss function and its weight parameters. The extensive comparison results on four representative mobility datasets demonstrate the superiority of our proposed architecture in mobility privacy protection and the efficiency of the proposed privacy-preserving features extractor. We show that the privacy of mobility traces attains decent protection at the cost of marginal mobility utility. Our results also show that by exploring the Pareto optimal setting, we can simultaneously increase both privacy (45%) and utility (32%).

Are Individual Investors Attracted to Shareholder Perks in the Emerging Markets? An Experimental Study in Indonesia

Choice-Based Conjoint (CBC) analysis experiment is conducted in this study to investigate perception equivalency of shareholder perks (SP) and dividend policy among Indonesian investors and to examine whether SP as a new alternative of payout policy can attract more individual investors in Indonesia. The results show that investors prefer SP over dividend in both 2 and 4 percent yield. However, the marginal utility of SP is decreasing to yield. This result suggests that individual investors prefer to receive SP rather than no dividends but they do not expect to receive an excessive number of SP when it is possible for the company to distribute a high amount of cash dividend. Furthermore, the results grouped by gender indicates that female respondents are prefer SP to dividend and have a higher economic value on SP than their male counterpart. Practically, by investing in an SP-paying stocks, individual investors are able to buy their favourite brands and products at lower prices which might be more beneficial than receiving a small amount of cash dividends. Meanwhile, for companies, the results imply that the distribution of SP can attract a number of individual investors, particularly women. Keywords: Shareholder Perks, Dividend Policy, Individual Investor, Conjoint Analysis, Indonesia

Transportation resilience optimization from an economic perspective at the pre-event stage

Since disruptive events can cause negative impacts on a city's regular traffic order and economic activities, it is crucial that a transport network is resilient against disaster to prevent significant economic losses and ensure regular social, economic, and traffic order. However, using the transport metric for resilience improvement can only provide a limited view of transport pre-investments. This study develops an optimization framework to tackle the problem of resilient road pre-investment with the aim of resilience enhancement of traffic systems from an economic perspective by applying the integrated computable general equilibrium (CGE) model. First, we use the Shapley value, which considers road links’ interact cooperation, to determine critical candidate links that need to be upgraded. Second, we propose the Economic-based Network Resilience Measure (ENRM) as a performance indicator to evaluate network-level resilience from the economic perspective. Third, a bi-level multi-objective optimization model is formulated to identify the optimal capacity improvement for candidate critical links, where the objectives of the upper-level model are to minimize the ENRM and pre-enhancement budget. The lower-level model is built on the integrated CGE model. The genetic algorithm approach is used to solve the proposed bi-level model. A case study of the optimization framework is presented using a simplified Sydney network. Results suggest that a higher budget can help promote people's social welfare and improve transportation resilience. However, the Pareto-optimality is observed, and the marginal utility decreases with an increase in the investment budget. Further, the results also show that investment returns are higher in severe disasters. This study will help transport planners and practitioners optimize resilience pre-event investment strategies by capturing a wider range of project impacts and evaluating their economic impacts under general equilibrium rather than partial economic equilibrium, which is often assumed in traditional four-step transport planning.

Relational Contracts: Public versus Private Savings

Work on relational employment agreements often predicts low payments or termination for poor performance. The possibility of saving can, however, limit the effectiveness of monetary incentives in motivating an employee with diminishing marginal utility for consumption. We study the role of savings and their observability in optimal relational contracts. We focus on the case where players are not too patient, and hence the constant first‐best effort cannot be implemented. If savings are hidden, the relationship eventually deteriorates over time. In particular, both payments and effort decline. On the other hand, if savings are public, consumption is initially high, so the agent's savings fall over time, and effort and payments to the agent increase. The findings thus suggest how tacit agreements on consumption can forestall the deterioration of dynamic relationships in which the agent can save.

Human Resource Management Model of Large Companies Based on Mathematical Statistics Equations

Abstract The article applies mathematical statistics to the dynamic analysis of the demand for talents in large companies. Prediction of the overall demand for talents through the use of deep learning models. We use the theory of diminishing marginal utility to solve the degree of enterprise human resource investment under each index. Based on the analysis of traditional human resource management methods, this paper uses the three-dimensional fuzzy model to construct a new three-dimensional fuzzy model of human resource management model. The research found that the algorithm proposed in this paper can improve the quality of data training and improve the matching of people and posts.

Distributional weighting and welfare/equity tradeoffs: a new approach

AbstractThere are increasing calls for concrete suggestions on how to account for distributional impacts in policy analysis. Within the context of benefit-cost analysis, per se, one possibility is to apply “distributional weights,” to inflate costs and benefits experienced by poor or disadvantaged groups. We distinguish between “utility-weights,” intended to correct for the bias in willingness to pay caused by diminishing marginal utility of income, and “equity-weights,” intended to account for the possibility that decision makers might have disproportional concern about the welfare of the poor or other disadvantaged groups. We argue that utility-weights are appropriate and necessary to maintain the legitimacy of BCA as a measure of aggregate welfare, but that equity-weights are inappropriate because they involve moral judgments that should remain in the domain of democratically accountable decision makers, and because they conflate information about both the welfare and equity impacts of policies, making it impossible for decision-makers to apply their own moral values to the assessment of tradeoffs between welfare and equity. We offer concrete suggestions regarding the application of utility-weights and the calculation of a set of metrics to provide intuitively comprehensible and useful information about, and allow decision makers to quantitatively assess the tradeoffs between, welfare and equity caused by specific policies.

Harris Hawks Optimizer with Graph Convolutional Network Based Weed Detection in Precision Agriculture

Precision agriculture includes the optimum and adequate use of resources depending on several variables that govern crop yield. Precision agriculture offers a novel solution utilizing a systematic technique for current agricultural problems like balancing production and environmental concerns. Weed control has become one of the significant problems in the agricultural sector. In traditional weed control, the entire field is treated uniformly by spraying the soil, a single herbicide dose, weed, and crops in the same way. For more precise farming, robots could accomplish targeted weed treatment if they could specifically find the location of the dispensable plant and identify the weed type. This may lessen by large margin utilization of agrochemicals on agricultural fields and favour sustainable agriculture. This study presents a Harris Hawks Optimizer with Graph Convolutional Network based Weed Detection (HHOGCN-WD) technique for Precision Agriculture. The HHOGCN-WD technique mainly focuses on identifying and classifying weeds for precision agriculture. For image pre-processing, the HHOGCN-WD model utilizes a bilateral normal filter (BNF) for noise removal. In addition, coupled convolutional neural network (CCNet) model is utilized to derive a set of feature vectors. To detect and classify weed, the GCN model is utilized with the HHO algorithm as a hyperparameter optimizer to improve the detection performance. The experimental results of the HHOGCN-WD technique are investigated under the benchmark dataset. The results indicate the promising performance of the presented HHOGCN-WD model over other recent approaches, with increased accuracy of 99.13%.

The Effects of Deleveraging Policy on Cash Dividends

This paper examines the effect of deleveraging policies on cash dividends by using the difference-in-difference (DID) model based on the panel data of Chinese A-share non-financial firms from the 2008-2020. The results indicates that the deleveraging policy can promote enterprise dividend, with a marginal utility of 0.06%.

Differential Calculus and its Application in Economics- A Study with Reference to Consumer Demand Theory

Calculus is one of the important components of mathematical tools used in economics. This enables understanding, improving and problem-solving tools for economic variables. The mathematical analysis contains differential calculus and integral calculus. Calculus is mostly expressed in functions and derivatives. The two-consumer demand theories are cardinal and ordinal. The former is the marginal utility approach and the latter is indifference curve analysis popularised by authors like Gossen (1854), William Jevons (1871), Leon Walras (1874), Carl Marshall (1890), Menger (1950), Hicks (1956), Pareto (1909), P.A. Samuelson (1949), and Robbins (1984) etc. These models analysed the relationship between the price of a commodity and the quantity demanded of the same commodity for deriving individual and market demand curves. The coefficient of price, income and cross elasticities and price, income and substitution effects are also part of these theories.

The Elasticity of Marginal Utility of Income for Distributional Weighting and Social Discounting: A Meta-Analysis

AbstractEstimates of the elasticity of the marginal utility of income are necessary for determining distributional weights to correct for diminishing marginal utility of income, which is particularly important in light of increasing concern about accounting for distributional impacts in regulatory review. The elasticity is also necessary for computing the social discount rate using the Ramsey formula. Despite many attempts to estimate the elasticity of the marginal utility of income, considerable uncertainty exists about the magnitude of this key parameter. In this paper, we use meta-analysis of estimates of the elasticity from the US and UK to shed light on the appropriate elasticity values to use for both distributional weighting and discounting. Relying on our findings, we tentatively conclude that it is reasonable to base the social discount rate and distributional weights on an elasticity of 1.6, with lower- and upper-bound sensitivity testing at 1.2 and 2.0. This estimate results in distributional weights which appear plausible, and which we believe can contribute to a consensus on how to conduct distributional weighting. Moreover, the resulting social discount rate is within the range typically recommended when the Ramsey formula is used.

Performance evaluation and bi-objective optimization for $ F $-policy queue with alternating service rates

<p style='text-indent:20px;'>In queueing systems, achieving a reasonable balance between system performance and service quality requires strict control over arrivals. <inline-formula><tex-math id="M2">\begin{document}$ F $\end{document}</tex-math></inline-formula>-policy is a control policy that forbids the entry of new customers when the system is full, only allowing entry when the size of the system is reduced to a predetermined value <inline-formula><tex-math id="M3">\begin{document}$ F $\end{document}</tex-math></inline-formula>. Enhancing server efficiency is another effective approach to improve service quality. This paper considers an <inline-formula><tex-math id="M4">\begin{document}$ F $\end{document}</tex-math></inline-formula>-policy GI/M/1 queue with alternating service rates, which can be upgraded in accordance with the state of the system. Steady-state analysis is performed using a recursive method in conjunction with the supplementary variable technique. Steady-state probability is used to evaluate critical system characteristics and perform sensitivity analysis. A bi-objective optimization scheme is then formulated using the NSGA-Ⅱ and two multi-objective evolutionary algorithms (MOEAs) in accordance with the performance measures to minimize the expected cost function per unit time as well as the expected waiting time. Numerical results demonstrate that the marginal utility of increasing the budget decreases when the expected waiting time is low. Regression models are also formulated to facilitate decision-making.</p>

Retirement Choices in Italy: What an Option Value Model Tells Us

Using Italian data this study estimates the option value model in order to quantify the effect of financial incentives on retirement choices. As far as we know, this is the first empirical study which estimates the conditional multiple-years (CMY) model put forward by Stock and Wise (1990). This implies that we have accounted for dynamic self-selection bias. For the subsample of females the CMY model yields plausible estimates of the preference parameters such as the marginal utility of leisure. This last parameter is typically underestimated if one does not take into account the self-selection problem. From our results it becomes clear that dynamic self-selection results in a considerable downward-bias in the estimate of the marginal utility of leisure. We also performed a simulation study to gauge the effects of a dramatic pension reform. It turns out that the underestimation of the marginal utility of leisure translates into a sizable overprediction of the impact of the reform. For males we also obtain plausible estimates. The results for males should be interpreted with caution because we are not able to fully correct for dynamic self-selection bias.

Теорія вартості як надбання економічної науки: відновлення основ суспільної гармонії

The formation of the information society and the network based economy has marked the beginning of global market transformations, which in their deep essence are associated with the need for a creative understanding of the new socio-economic picture of the world. An adequate response to the vital social demand is the formation of a relativistic economic theory. The logic of the Middle Way as a classical institutional channel is today called to create political economy in a broad sense with the help of the theory of economic value. Since the time of Adam Smith, when economic science recognized value relations as its own subject, and until now, the theoretical stream of the classical school has preserved internal harmony and is now able to produce signals of balanced functioning and sustainable development for economic entities. The basis for this is its value based origins in the triple unity of transformed economic forms of marginal utility, value and price. Such a concept is able, on the one hand, to most fully reflect the economic picture of the world with the help of the value based unity of economic history, and on the other hand, to creatively transform it. The triple nature of economic value as an ideal platform for the institutional architecture of management designed to formulate the guidelines of virtuous social life, constitutes the core of true European values. However, the concept of European values has not yet been properly understood in the coordinate system of fundamental scientific knowledge, and the key concept of economic value as an economic good has not yet acquired proper scientific interpretation and consistent deployment. The ideological detachment of the official concepts of modern economic thought from the institutional core of European values determines the tendency of their methodological degradation. Meanwhile, the value based methodology has not exhausted its potential. Continuity with the legacy of classical political economy determines the most important creative breakthroughs in economic theory during the 20th century. In the bowels of the Middle Way logic based on the concept of a standard product by P. Sraffa, the outlines of a new model of economic equilibrium in the economic system were formed in the process of its informational and technological modification. However, traditional economic science does not recognize the actual meaning of such a concept. Under the conditions of value disorientation against the background of politicized economic relations and dysfunction of social institutions, the struggle for the transformation of the world order model acquires the characteristics of a war against humanity. But it is not the "hard" power and manipulation of technologies, but rather effective mastery of social values, and the restoration of their beneficial creative potential, that is the key to success in the struggle.

The influence of social capital on network effects

Introduction. The current social and eco­nomic changes caused by networking relations in the economic system are a significant element of contemporary scientific research aimed to identify the essential characteristics of such new concepts as "network economy" and "social ca-pital". This situation has resulted from the deve­lopment of Internet technologies, the increasing role of intangible assets in value creation, and the need to study the state involvement in these processes, which identifies the level of their development.Problem. The impact of social capital on the economic system has been observed in various patterns of economic system relationships, and it is amid the network economy that this impact is clearly revealed through the changes in the mani­festation of network effects. It is necessary to spe­cify such changes for the effective organization of economic relations under the conditions of the network economy as well as for the determina­tion of the role of social capital in them.The aim of the article is to identify the relationship between social capital and the net­work economy and determine in which interact­tion patterns of the economic system social capital changes (or levels) the manifestation of network effects.Methods. In the course of the research, the following methods were used: analysis, genera­lization, comparison, analogy, scenario constru­ction, graphic, and microeconomic analysis (marginal utility curve).Results. In the course of the research, there has been revealed the relationship between the levels of social capital and network readiness, as well as theoretical and practical aspects of the outlined issues. The findings obtained while analyzing the nature of the formation of various relationship patterns of the economic system and the role of social capital in those patterns show that social capital determines the manifestation character of network effects (posi­tive and nega­tive) in such patterns.Conclusions. The components of social capi­tal are identical to the elements of network via­bility. Thus, social capital becomes a key mana­gement object in the network economy. The obtai­ned results of the research will form the basis for further scientific research on the social capital management system of an enterprise in the network economy.

Does corporate ESG create value? New evidence from M&As in China

Using a large sample of Chinese companies' domestic M&A, this study provides new evidence on the financial payback of corporate ESG and its dynamics. We find that acquirers' ESG rating is positively correlated to post-M&A performance and deal completion likelihood. Additionally, we find the relationship between acquirer's ESG dynamic and post-M&A performance is contingent on the firm's previous ESG standards. Overall, these findings are in line with the instrumental stakeholders' view that high ESG performance could earn support from stakeholders for post-M&A synergy creation and emphasize the asymmetric marginal outcome of firms' ESG efforts as a result of diminishing marginal utility of stakeholders.

Buy-One-Get-One Promotions in a Two-Echelon Supply Chain

Buy-one-get-one (BOGO) promotions have become popular. With BOGO, the first unit is sold for the regular price, and the second unit is discounted. We analyze BOGO in manufacturer–retailer supply chains. We identify conditions under which BOGO outperforms price reduction (PR) and everyday low price (EDLP) policies. We find that, for some products, whether consumers stockpile or not, if BOGO and PR have the same market size, BOGO has a larger retailer profit and the same or larger manufacturer profit because BOGO induces more consumers to buy and consume two units. When consumers stockpile, the retailer sets prices to prevent such behavior, and the retailer’s share of supply chain profits is largest under BOGO, whereas consumer surplus with BOGO is smaller than PR. We also find that BOGO reduces double marginalization. When PR expands market size more than BOGO, BOGO’s effectiveness diminishes. When consumers stockpile without increasing consumption and/or production cost is high, EDLP is best. Our results are robust to multiperiod with single-promotion-period settings. A large number of regular-price periods following a promotion period increases stockpiling, which erodes the retailer’s profit and favors EDLP. If promotions are offered for consecutive periods, a larger number of promotion periods increases PR’s efficacy relative to BOGO. Time-inconsistent consumers increase stockpiling and make PR outperform BOGO. Heterogeneous consumers’ holding cost and marginal utility prevent retailers from perfectly discriminating among consumers who make profit-reducing choices. Compared with retailers’ BOGO, manufacturers’ BOGO increases double marginalization and decreases retailers’ and manufacturers’ profits and consumer surplus. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: This work was partially supported by the National Science Foundation of China [Grants 71972026, 72101102]. Y. Li’s work was supported by the China Scholarship Council [Grant 201806070094]. Supplemental Material: The online companion and data are available at https://doi.org/10.1287/mnsc.2022.4638 .

How do rice consumers trade off sustainability and health labels? Evidence from Vietnam

IntroductionStrategies for increasing rice production in the Asian Mega-Deltas have led to environmental degradation, resource overexploitation, and high greenhouse gas emissions. Certified sustainable production labels can support governments in their efforts to render rice value chains more sustainable by simultaneously fostering planetary and human health. Little is known, however, about how consumers trade off sustainability and health attributes in staple crops such as rice. This study aims to fill this knowledge gap by investigating Vietnamese consumers' preferences and willingness to pay for rice characterized by multi-attribute sustainability and health certification labels.MethodsWe collected empirical data from 410 supermarket consumers in Can Tho, Vietnam using a choice experiment survey. The results were analyzed using a mixed logit model to determine consumers' preferences for sustainability and health traits in rice. Four price levels were used to elicit willingness-to-pay for four certification labels: low-emission, eco-friendly, ethically produced, and low glycemic index rice. By separating the components that make up the concept of sustainability and by including a label related to personal health and diet preferences, we are able to gain an understanding of the value consumers place on attributes that benefit the common good vs. attributes that benefit the individual consumer.ResultsThe results showed that consumers were willing to pay a price premium for all certification labels, with the highest marginal utility assigned to low glycemic index rice.DiscussionCertification of eco-friendly and ethical production generated similar utility levels, while low-emission rice was valued lower, although it still fetched a significant price premium compared to the status-quo option of rice with no certifications. The results of this study can help policymakers and value chain actors develop rice value chains that integrate sustainable production practices as well as foster the nutrition and health of rice consumers.

EE457 Forecasting Social Welfare GainsFfrom Biosimilar Entries in the Basal Insulin Market

The emergence of biosimilar products has resulted in hopes of significant cost savings on biologic therapies. While previous work has analyzed generic competition in small molecule products, there is limited empirical knowledge of the impact of biosimilar entry on the extensive margin (utilization of drugs by patients) as well as the intensive margin (impact on unit prices). We study various measures of social welfare gain from biosimilar entry in the basal insulin market in the United States.

Translation in the cell under fierce competition for shared resources: a mathematical model.

During translation, mRNAs 'compete' for shared resources. Under stress conditions, during viral infection and also in high-throughput heterologous gene expression, these resources may become scarce, e.g. the pool of free ribosomes is starved, and then the competition may have a dramatic effect on the global dynamics of translation in the cell. We model this scenario using a network that includes m ribosome flow models (RFMs) interconnected via a pool of free ribosomes. Each RFM models ribosome flow along an mRNA molecule, and the pool models the shared resource. We assume that the number of mRNAs is large, so many ribosomes are attached to the mRNAs, and the pool is starved. Our analysis shows that adding an mRNA has an intricate effect on the total protein production. The new mRNA produces new proteins, but the other mRNAs produce less proteins, as the pool that feeds these mRNAs now has a smaller abundance of ribosomes. As the number of mRNAs increases, the marginal utility of adding another mRNA diminishes, and the total protein production rate saturates to a limiting value. We demonstrate our approach using an example of insulin protein production in a cell-free system.