Price Restrictions Research Articles

Insurability and government-funded mitigation: safer but costlier

AbstractHurricanes significantly harm homeowners through physical damage and long-term financial strain due to rising insurance costs, property value loss, and repair expenses. This paper focuses on the interrelated decisions of the government mitigation funding of residential acquisitions and retrofit subsidies and of price restrictions on the insurance market in eastern North Carolina to determine the financial effects on stakeholders. The introduction of these policy interventions have impacts that propagate through the system due to risk adjustments, homeowner take-up behaviour, and insurer profit-maximising behaviour. This study uses an integrated game theoretic model to demonstrate that there are cost-effective government spending levels that reduce residential loss from hurricane damage. When insurance prices are capped at preintervention levels, the number of households and their distribution of losses, which has been altered through mitigation, leads to increased insurer insolvency. When insurance prices are allowed to adjust after mitigation, some homeowners find insurance is no longer affordable. This highlights the tradeoff between ensuring insurer stability and expanding homeowner insurance accessibility.

An Impact Assessment of Cordon Pricing Relaxation on Modal Shift During the COVID-19 Pandemic

ABSTRACT The COVID-19 pandemic brought significant disruptions to transportation patterns worldwide, with a notable increase in Private Vehicle (PV) usage. Many studies have focused on travel restrictions, while neglecting to consider potential changes in transportation-related policies implemented during COVID-19 that may have improved public health. The present study explores the motivations for modal shifts to PVs and tries to analyze which of the risks of exposure and modifications in transportation policies has caused these modifications. Focusing on the case study of Tehran, Iran, where cordon pricing was relaxed during the pandemic, the study collected data through online and paper-based surveys from 1475 respondents. Binary logit models were employed to analyze the data and understand the impact of destination location, residency area, trip purpose, trip frequency, and vehicle characteristics on modal shift behavior. In addition to COVID-19 exposure as a primary reason for the modal shift, respondents also identified the relaxation of cordon pricing restrictions as a factor that increased the utility of PVs. The study's findings contribute to better understanding the dynamics of travel behavior during pandemics, guiding policymakers in devising effective strategies to address both public health concerns and traffic conditions.

Optimizing the Building Refurbishment Process Using Improved Evolutionary Algorithms

An optimization model that may be applied to analyze building retrofit strategies is presented in this research. The aim of this research paper is to identify the optimal thermal envelope configuration that will assure the minimum energy requirement for heating in the case of a residential building, while also considering price restrictions obtained through a specific market survey. To achieve this, several values for the following parameters are considered: thermal insulation materials’ conductivities and thicknesses, windows’ overall heat transfer coefficients and total solar energy transmittance and doors’ thermal proprieties. Additionally, this paper presents a method used to find the best option from among the available heat pumps that could cover most of the energy requirements for heating and domestic hot water systems, also considering the products’ prices. The proposed method is based on a Non-dominated Sorting Genetic Algorithm II (NSGA-II) model developed in the Pymoo (Multi-Objective Optimization in Python) library. The result shows that the energy requirement for heating can be reduced by up to approximately 75% compared to that obtained in the case of a non-insulated building by using suitable insulation materials and doors and windows with superior thermal proprieties chosen by the NSGA-II.

Regulating Platform Competition in Markets with Network Externalities: Will Predatory Pricing Restrictions Increase Social Welfare?*

We consider an infinitely repeated platform competition in a market with network externalities. The platform that dominated the market in the previous period becomes the incumbent in the current period. We examine the effect of an antitrust policy that prohibits both platforms (symmetric regulation), or just the incumbent (asymmetric regulation) from charging predatory prices. We show that symmetric regulation decreases consumer surplus and does not affect efficiency. Asymmetric regulation increases consumer surplus and improves welfare when the size of the market remains constant over time. Yet, when market size varies over time, this policy may lead to inefficient entry.

Event Ticket Pricing With Capacity Constraints and Price Restrictions

Event Ticket Pricing With Capacity Constraints and Price Restrictions

Generalized Stochastic Arbitrage Opportunities

Concepts are introduced and applied for analyzing and selecting arbitrage portfolios in the face of uncertainty about initial positions and risk preferences. A stochastic arbitrage opportunity is defined as a zero-cost investment portfolio that enhances every feasible host portfolio for all admissible utility functions. The alternative to the existence of such investment opportunities is the existence of a solution to a dual system of asset pricing restrictions based on a class of stochastic discount factors. Feasible approaches to numerical optimization and statistical inference are discussed. Empirical results suggest that equity factor investing is appealing for all risk-averse stock investors with a wide range of initial position and sufficiently low transactions costs by mixing multiple factor portfolios with high after-cost appraisal ratios, low mutual correlation, and negative exposures to the relevant host portfolios. These findings weaken the case for risk-based explanations for the profitability of factor investing. This paper was accepted by Kay Giesecke, finance. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4892 .

Access to Medicines and Pharmaceutical Policy in Saudi Arabia: A Scoping Review.

This scoping review includes studies on pharmaceutical access, shortages, generics, availability, pharmacoeconomics, and pricing restrictions. The study's findings may aid in developing excellent pharmaceutical and access policies in the country. To conduct a scoping review documenting access to medicines and Pharmaceutical Policy in Saudi Arabia. The PRISMA-ScR guidelines were used to perform a scoping review. The articles were screened using databases from Google Scholar, EBSCO, Science Direct, and the University of Huddersfield Library. The selection, aims, results, and conclusion of each original research publication published between 2010 and 2022 were evaluated. To categorize the articles, a theme analysis was done. This study includes nineteen publications. The chosen articles revealed four themes. Among these topics were: Access to medications 36.84% Pharmacoeconomic 36.84%), which were the predominant theme followed by Generic Medicines 15.80%, and Cancer drug financing 10.54%. There are myriad challenges related to high-cost medicines. Access restrictions to medications have significant effects on patient morbidity and mortality; as a result, policy decision-makers frequently consider this issue. Access to medicines suffers budgetary limitations and the increasing cost of innovative medicines. Access to medicines for all patients could be significantly impacted by delays in patient access to new therapies. The available evidence revealed that Saudi Arabia's healthcare system has numerous issues ranging from cancer drug financing, medicine shortages, and access issue. In order to achieve the highest health standards possible, it is crucial that each individual has access to medicines and has the financial, physical, and social means to do so. However, the price of some medications can be prohibitive for people who need to obtain them. The study's outcomes could help the country develop pharmaceutical and access policies related to medicines.

Stock Market Liquidity during Periods of Distress and its Implications: Evidence from International Financial Markets

Traditional market pricing models assume frictionless markets with abundant liquidity. This traditional models also incorporate stock market liquidity as an exogenous cost. However, this paradigm has many shortcomings due to its inability to explain some of the problems associated with security market illiquidity. The aim of this study was to explore the concept of stock market liquidity during periods of financial distress. A Markov switching GARCH model was used to investigate market liquidity in the CAC 40, DAX, JSE, Nasdaq Index and the Nikkei-225 during the 2007-2008 financial crisis and the Covid-19 pandemic. The sample period was January 1, 2020 to December 31, 2021 and December 1, 2007 to June 30, 2009. From the findings, some financial markets where still liquid despite the financial crisis with the exception of the Nasdaq index. Conversely, all the financial markets under consideration displayed strong illiquidity during the covid-19 pandemic. In essence, the level of market depth has significantly decreased from the financial crisis to the covid-19 pandemic which may be attributed to increasing margin requirements and information asymmetry as well as price restrictions. There is an urgent need for regulatory authorities to review some of the trading regulations during financial distress.

Debt crisis in the electricity market: causes and threats to the economic security of electricity companies

The article states that one of the main sector conditions for Ukraine's accession to the European Union is the launch of a full-fledged energy market, for which purpose a number of institutional, economic and regulatory reforms have been implemented since 2015. It is proved that despite the government’s conscientious efforts to make a transition to the European model of energy markets, Ukraine has failed to do so due to a large number of regulatory restrictions on wholesale prices (price caps), an unbalanced policy of supporting renewable energy industry, the absence of market prices for households and the existing mechanisms for imposing special obligations, which together have led to the formation of a chain of debts “all to all” in the electricity market. It is substantiated that the debt crisis currently observed in the energy sector of Ukraine requires urgent measures. Further ignoring it is unacceptable, as it poses significant threats to both the country’s energy security and the financial viability of electricity companies. The article considers the chain of debts of electric power enterprises formed through the Public Service Obligations (PSO) model. The causes of the debt crisis in the Ukrainian electricity market are identified, including: incorrect operation of the PSO mechanism; significant underfunding of tariffs for households, as well as tariffs for electricity transmission services via the high-voltage trunk network and power system management (dispatching); granting debtors a preference - depriving them of "punishment" for late payment of the cost of consumed services. The author analyses the proposed measures to mitigate the crisis by: compensation of debts at the expense of the State budget; attraction of loans from State and international banks; cancellation of price restrictions established by the National Commission for State Regulation of Energy and Public Utilities (NCSREPU), the so-called price caps; allocation of part of the excise tax revenues to repay the debts incurred in the electricity market; increasing the volume of clean electricity exports to the EU; introduction of a market for guarantees of origin, under which each renewable energy producer will receive guarantees, i.e. an asset that can be sold. The advantages and disadvantages of each of the proposed measures are indicated.

Ручное управление ценами на продовольствие: механизмы, результаты, альтернативы

On December 2020 the Government of the Russian Federation launched measures to limit the maximum level of prices for sugar and sunflower oil. They were established on the basis of agreements between the Government of the Russian Federation, major manufacturers and retail chains. Decisions were made on an emergency basis. This paper analyzes the legislative basis of the decisions made, the mechanisms of regulation and their consequences. The study revealed problems in setting and observing maximum prices: flaws in the legal framework for imposing price restrictions and agreements between the government and business entities, difficulties in choosing business entities and regions for signing agreements, insufficient opportunities for signatories to implement agreements, difficulties in monitoring the implementation of agreements and evaluating the effectiveness of the introduction of marginal prices. Based on the results of the study, it was concluded that the experiment with limiting the maximum level of wholesale and retail prices for socially significant food products did not yield positive results and alternative options are needed to reduce the volatility of food prices.

Empirical evaluation of overspecified asset pricing models

Empirical asset pricing models with possibly unnecessary risk factors are increasingly common. Unfortunately, they can yield misleading statistical inferences. Unlike previous studies, we estimate the identified set of SDFs and risk prices compatible with a given model’s asset pricing restrictions. We also propose tests that detect problematic situations with economically meaningless SDFs unrelated to the test assets. Empirically, we estimate linear subspaces of SDFs compatible with popular extensions of the traditional and consumption versions of the CAPM, which are typically two-dimensional. Moreover, we often find that all the SDFs in those linear spaces are uncorrelated with the test assets’ returns.

Price restrictions in vertical agreements: benefits or shortages and possibility of exemption

Price restrictions in vertical agreements: benefits or shortages and possibility of exemption

Study on Cost Sharing of Inclusive Kindergartens in Suburban Area———Take RE District of R City in China as an Example

With a clear attitude to the principle of safeguarding the nationwide benefit of preschool education, Chinese government has set a clear goal of nationwide universal benefit coverage. Facing the pressure of rising artificial prices, inclusive kindergartens have price restrictions, resulting in difficult operation. The suburban area is a special zone, which has the characteristics of both urban area and rural area. The inclusive coverage rate of RE district in R City of S province far exceeds the national target in advance, which is of typical significance. Taking RE district as an example, this study analyzes the income structure, expenditure structure and cost structure of kindergartens in different areas with different properties, and puts forward countermeasures: actively striving to create grade kindergartens, adjusting the scale of running kindergartens to achieve economies of scale, and increasing the investment of funds to deploy more teachers.

Price versus quantity measures to deal with pollution and congestion in urban areas: A political economy approach

Pollution and congestion in urban areas are serious externalities that can be mitigated through the adoption of either price- or quantity-based mechanisms. While price restrictions are occasionally applied, quantity constraints based on car vintage are becoming increasingly popular. Our model provides a comprehensive analysis that explains this prevalence of quantity over price schemes. We also elucidate some other stylized facts observed in urban areas applying traffic restrictions, such as the implementation of hybrid price-and-quantity systems, the use of trial periods, the commitment to invest in public transit to enhance the acceptability of urban tolls, and the concentration of quantity restrictions in high-income cities.

Rating the comparative efficacy of state-level cannabis policies on recreational cannabis markets in the United States.

Cannabis policy is developing faster than empirical evidence about policy effects. With a panel of experts in substance use policy development and research, we identified key cannabis policies and their provisions enacted by U.S. states; rated their theoretical efficacy in a restrictive form for reducing problematic use and impaired driving in the context of a recreational cannabis market as judged by experts; and rated the strength of evidence for each policy. Using a modified Delphi approach, 9 panelists rated the comparative efficacy of 18 state cannabis policies for reducing youth use of cannabis, excessive cannabis use among the general population, and cannabis-impaired driving. Each outcome was rated separately using a Likert scale, and panelists also rated the strength of evidence supporting each efficacy rating. Investigators provided descriptions of each policy so that the nine panelists had similar conceptions of each policy. State monopoly (state owns all production, manufacturing, wholesale, and retail operations) was rated as the most effective policy for all three outcome areas. Restrictions on retail physical availability, taxes, retail price restrictions, and retail operations restrictions were also highly rated for all three outcomes. Policies regulating cannabis businesses and products were judged more effective than policies targeting consumer use and behavior. Panelists reported there was little or no direct evidence from the cannabis policy literature for most of the included policies. These ratings can facilitate research as well as policy-making decisions. A relatively small number of policies were judged to be highly effective across all three domains, indicating that for the most part adult excessive use, youth use, and impaired driving can all be reduced with the same set of policies; these policies tended to target the behaviors of businesses rather than consumers. The low levels of direct evidence available to inform policy ratings, as reported by the policy panelists, makes clear the need for ongoing and sustained cannabis policy research.

Simulation Analysis of a Double Auction-Based Local Energy Market in Socio-Economic Context

Local energy markets (LEMs) use online platforms and smart grid technologies to incentivize and coordinate a local supply of spatially-distributed renewable energy resources, which may not be directly controllable by power system operators. Socio-economic values are increasingly noted as prominent motivations for expected LEM users, but socio-economic aspects of user decision-making or market outcomes are not considered in current LEM mechanism design analyses. Here, agent-based simulation is used to analyze expected socio-economic outcomes from LEM operation under a double-sided auction with uniform pricing. The environment is modeled as a virtual LEM platform, operating independently from the underlying power grid. Socio-economic market inputs are produced by income-preference heterogeneous agents, and market outcomes are evaluated by two key socio-economic metrics: energy affordability, and market access. When LEM prices are not restricted to a common range considered by all agents (e.g., between external retail market prices), access disparities may arise; LEM price restriction addresses consumer disparities, but energy affordability gaps are expected to remain. The magnitude of affordability gaps is notably reduced, and bill assistance programs may eliminate remaining gaps, but a mechanism that efficiently realizes socio-economic standards for energy affordability may also reduce expected LEM operation costs. Remaining research gaps are noted, and LEM support for equitable and sustainable energy infrastructure is emphasized.

Mathematical Problems in Engineering Pharmaceutical Cold Chain Transportation Decision Making under the Government’s Reward–Penalty Mechanism: A Perspective of Evolutionary Game Theory

In the context of the COVID-19 pandemic, the cold chain transportation of medicines is becoming more and more critical to the quality and safety of drugs. In order to better motivate the logistics service providers to adopt the cold chain transportation strategy, this paper constructs a multiparty evolutionary game model composed of the government, logistics service providers, and medical institutions, and models behavioral strategies. The interaction is simulated and analyzed. Focusing on the contradictions between cost and service level in cold chain transportation, the revenue-sharing coefficient between medical institutions and logistics service providers and the government's reward and punishment mechanism are introduced. The results show the following: (1) a reasonable revenue sharing contract between the medical institution and logistics service provider will prompt the logistics service provider to use cold chain transportation. (2) With the government's penalties and rewards being further increased, the logistics service provider will tend to use noncold chain transportation. Therefore, the government must set a reasonable reward and punishment mechanism to ensure drug safety. (3) With the increasing revenue of the medical institution, the probability of the logistics service provider using noncold chain transportation decreases. In order to avoid medical malpractice related to noncold chain transportation, the government should appropriately adjust drug price restrictions to increase drug sales revenue. (4) With the rate of medical malpractice being increased, the evolution of each stakeholder to the equilibrium point of the game is accelerated.

Comparative overview of enhancing Drug pricing transparency in India and USA

The United States and other different countries, drug prices are out of control. In that the prescription drug prices increasingly the medical costs and other different healthcare costs. The branded drugs are launched with high prices that increase by double percentage over year. So, many states and countries are focusing on new ways or new approaches to drug pricing problems using different ways and clarity about drug price transparency are mainly that the study about drug transparency and identify the cost key drivers. India is one of the world's developing countries. The ability to obtain health-related services at a reasonable cost is a major worry for them. As a result, medical costs are a determining element for health-care facilities, particularly when it comes to price management of health-care institutions with a greater budget. NPPA (National Pharmaceutical Pricing Authority) and DPCO (Department of Pharmaceutical Pricing and Control) are two Indian regulatory bodies that oversee pharmaceutical pricing (Drug Pricing control order). Despite the establishment of the DPCO, significant price fluctuation is observed between goods containing the same API (Active Pharmaceutical Ingredient), and various reasons are responsible for this. TRIPS (Trade Related Intellectual Property Rights) offers Compulsory Licenses for which drugs have a distinctive function to play in the affordability of medicines to minimize the stated problem and govern the trade practice by patent holder/brand maker. Essential medicine is a basic requirement of the health-care system in order to serve its consumers, and as a result, an effective and overt price restriction on drugs is currently required.

Fixed price equilibria on peer‐to‐peer platforms: Lessons from time‐based currencies

There are many online platforms for peer-to-peer exchange that introduce a platform-specific currency and fix prices to some extent. We model such platforms as pure exchange economies and characterize all fixed price equilibria. We demonstrate the inherent inefficiency following from the combination of fixed prices and voluntary trade and show that simple additional Pareto improving trades exist. While our theoretical analysis predicts that fixed prices lead to less trade than competitive prices, we also discuss some potential advantages of price restrictions, in particular, with respect to simplicity and fairness considerations. Strikingly, it is not those agents with the most attractive goods who have the highest willingness to participate in a fixed price platform. In an empirical illustration, we explore how these theoretical insights unfold in reality by describing patterns of several platforms covering around 100k transactions. This work is informative for the market design of peer-to-peer platforms and for markets with price restrictions more generally.

Розбудова ринків теплової енергії: досвід європейських країн і висновки для України

The purpose of the article is to study the European experience of the functioning of heat energy markets, identify the components of their deregulation, and develop proposals for the formation of regional heat markets in Ukraine. The article stipulates that currently there is no trans-European legislation on the formation of heat energy markets, there are only certain provisions that relate to its production, consumption and accounting. From a theoretical point of view, there are three types of competition in the heat energy markets: between heat supply sources; between producers of centralized heat; between companies for assets. The analyzed experience in the development of heat energy markets in three European countries testifies to the fundamental differences in its structure. Denmark’s heat energy markets are government-regulated, where there is a partial distinction between the functions of production, transportation, and distribution of heat; pricing is carried out on a regulatory basis of non-profit; there are no transparent conditions for access to the network, and the consumer has limited opportunities to disconnect from the system. In Sweden, competition is open at the wholesale level between heat producers; the functions of production and supply are demarcated, and the distribution and supply functions are combined; the retail heat market is self-regulating, which implies the need to coordinate heat prices between suppliers and consumers who, in case of disagreement, have the opportunity to refuse centralized heat supply. Lithuanian heat energy markets are open to wholesale competition and operate in the forward segment, while at the retail level they are regulated, where the transmission from production and supply has been unbundled; regulatory access to heating networks for independent producers has been introduced, and consumers have the right to refuse centralized heat supply. The highlighted features allowed to provide proposals for the formation of heat energy markets in Ukraine, including: the development of competition between heat producers; delimitation of the functions of production, transmission and distribution; formation of its forward, spot and balancing segments; introduction of auctions with the declared pricing method under the pressure of regulatory price restrictions, which are established on the basis of business standards according to the benchmarking system.