Price Reduction Research Articles

The Impact of Renewable Energy Tax Incentives on Electricity Pricing in Texas

Texas has abundant natural resources, making it a good place for renewable energy facilities to build. Unfortunately, property taxes are the highest tax on an incoming renewable energy facility in the state. In order to increase renewable energy in the state, Texas tax code Chapter 313 was introduced. Chapter 313 allows school districts the opportunity to offer a 10-year limit, ranging from USD 10 million to USD 100 million, on the taxable value of a new green energy project. With Chapter 313 ending in 2022, the following question is raised: how do tax incentives that increase the number of applications for producing renewable energy in Texas impact the wholesale, real-time pricing of electricity in the state? Skew-t regression models were implemented on a large dataset, focusing on the designated North, Houston, and West regions of the Electricity Reliability Council of Texas (ERCOT), since these regions account for 80% of the state’s energy consumption. Analysis focused on the hours ending at 3 AM, 11 AM, and 4 PM, due to the ERCOT’s time-of-day pricing. Three key findings related to the above question resulted. First, tax incentives that increase the number of active wind and solar facilities lead to a statistically significant (p < 0.0001) reduction in wholesale electricity price (USD/MWh), ranging between 2.31% and 6.6% across the ERCOT during different hours of the day. Second, for a 10% increase in tax-incentivized green energy generation, during a 24-hour period, there is a statistically significant (p < 0.0001) reduction in the generation cost (USD/MWh), ranging between 0.82% and 1.96%. Finally, electricity price reductions from solar energy are much lower than those from wind generation and/or are not statistically significant.

Female executives, industrial robots, and stock price crash risk

We examine the effect of female executives on industrial robot adoption and its impact on stock crash risk. Based on the data of listed manufacturing companies in China, we find that: 1) female executives promote the application of industrial robots; 2) the introduction of industrial robots by female executives contributes to the reduction of stock price crash risk; 3) the effect of the introduction of industrial robots by female executives on the reduction of crash risk is more pronounced in regions with strict environmental regulation, more safety accidents, and firms with rapid information diffusion.

Counterparty Risk Contagion Model of Carbon Quota Based on Asset Price Reduction

Driven by the “double carbon” goal, the sale of financial assets at reduced prices by firms due to carbon emission constraints is bound to aggravate the uncertainty and volatility of carbon trading among firms, and potentially create counterparty risk contagion. In view of this, this paper considers the sensitivity of the transaction of corporate financial assets, the transaction price of carbon quotas, and corporate carbon performance; constructs a network model for the risk contagion of carbon quota counterparties; theoretically discusses the risk formation and infection mechanism of carbon quota counterparties; and calculates and simulates the evolutionary characteristics of the risk contagion of carbon quota counterparties. The main research conclusions are as follows. (1) In the interfirm debt network, the sensitivity to the price of selling the financial asset, the probability of credit risk contagion of carbon quotas among firms, the cumulative proportion of assets sold, and the proportion of rational investors in the financial market exert a decreasing phenomenon on the risk of carbon quota counterparties. In addition, the corporate carbon performance shows a marginal increasing phenomenon. (2) When multiple factors intersect, the proportion of rational investors in the financial market has the greatest influence on the formation of the carbon quota counterparty risk, whereas the effect of corporate carbon performance has the least. Corporate carbon risk awareness has the greatest effect on the risk contagion of carbon quota counterparties, whereas the trading price of the carbon quota has the least influence. In addition, the total score of the interfirm assessment has a great impact on the trend and range of the risk contagion of carbon quota counterparties. (3) Corporate carbon risk awareness and the carbon quota trading price have a marginally decreasing effect on the risk contagion of carbon quota counterparties, and corporate carbon performance and the total score of interfirm assessment have a marginally increasing effect. This study has important theoretical and practical significance for preventing interfirm counterparty risk contagion under the double carbon target.

How does blockchain technology affect the strategic financing decisions of platform supply chain with low-carbon product?

PurposeTo explore how the blockchain affects the pricing and financing decisions in a low-carbon platform supply chain.Design/methodology/approachConsidering the dual roles of the e-commerce platform as a seller and an initiator, a typical game-theoretical method is applied to analyze the behavior of supply chain decision-makers and the impact of key variables on equilibriums.FindingsWhen loan interest rates are symmetric, whether blockchain is used or not, the e-commerce platform financing mode will always produce higher wholesale price and unit carbon emission reduction, while the retail price is the opposite. Higher unit additional income brought by the blockchain can bring higher economic and environmental performances, and the e-commerce platform financing mode is superior to bank financing mode. The application of blockchain may cause the manufacturer to change his/her financing choice. For bank financing, with the increase of loan interest rates, the advantages brought by blockchain will gradually disappear, but this situation will not occur under e-commerce platform financing.Originality/valueBlockchain is known for its information transparency properties and its ability to enhance user trust. However, the impacts of applying blockchain in a low-carbon platform supply chain with different financing options are not clear. The authors examine the manufacturer's strategic choices for platform financing and bank financing, whether to adopt blockchain, and the impact of these decisions on carbon emissions reduction, consumer surplus and social welfare. The research conclusion can provide reference for the operation and financing decisions of platform supply chain under the carbon reduction target in the digital economy era.

Whether to offer return-freight insurance or open a physical showroom: A strategic analysis of an online retailer’s decisions

Return-freight insurance (RI) and physical showroom (PS) can be a double-edged sword for retailers, as they can help consumers reduce product mismatch and information uncertainty but may lead to higher return rates and operating and construction costs. In this study, we examine four corresponding configurations regarding whether to provide RI (yes-R, no-N) and whether to open a PS (yes-S, no-N): NN, RN, NS, and RS. First, we find that offering RI or opening a PS does not necessarily expand market demand. Whether demand grows is closely related to the RI premium. When the RI premium is low, the RN strategy, which offers only RI, can expand the market, and the NS and RS strategies, where retailers open a PS, can shrink the market. In addition, retailers offering RI charge a higher sales price, while those opening a PS adopt a price reduction strategy. Second, the optimal strategy configuration for retailers depends on four factors: the RI premium, the proportion of consumers, the retailer’s cost of handling returns and the PS construction cost. Retailers consider opening a PS only when both the proportion of high-cost consumers and the PS construction cost are low. An interesting result is that when the RI premium is higher, offering RI still benefits the retailer. Third, we present an intuitive decision support matrix to help retailers recommend the optimal strategy configuration, using the RI premium as a proxy for the product online return rate and the proportion of high-cost consumers as a proxy for the degree of product standardization. Depending on whether products with high (low) return rates are highly personalized or standardized, retailers decide whether to use an NS (RS) or NN (RN) strategy.

The utility and value of contract terms: a case study on interior contractors

This study applied the conjoint analysis technique to appraise the utility of interior contractors' contract terms and project price conditions, the sample group comprising 112 interior contractors working in 12 shopping centers of a public company in Thailand. The results showed that the advance payment term, the period of an interim payment term, the period to make a payment term, and the project price conditions had average utility ratios (ratio of its utility to the total utility) of 28.53%, 20.24%, 20.41%, and 25.87%, respectively. These results confirmed that each of these three contract terms are as important to interior contractors as the project price condition (no price reduction by 5% of the proposed price). This study also valued the three contract terms by comparing their utility with the utility of the project price condition. The values of the terms to the interior contractor were as follows: the value of the advance payment term varied between 0.00–11.67% of the proposed price; the value of the period of the interim payment term varied between 1.25–8.33% of the proposed price; and the value of the period to make a payment term varied between 2.00–11.67% of the proposed price. The value of all three contract terms varied between 12.00–20.00% of the proposed price. The insights into the utility and value of these three contract terms from this study could aid project owners or tenants of shopping centers in project price negotiations.

Final Price Neglect in Multi-Product Promotions: How Non-Integrated Price Reductions Promote Higher-Priced Products

Abstract Price reductions take either an integrated form (e.g., a discount shown directly on the price tag) or a non-integrated form (e.g., a discount contained in a coupon sent to consumers and thus separate from the price tag). This research examines how non-integrated versus integrated promotions influence choices among vertically differentiated products. Under an integrated promotion (e.g., $10 off) applicable to multiple products (e.g., original list prices: $50 vs. $30), consumers directly compare these products’ post-promotion final prices displayed on their price tags (after a reduction of $10: $40 vs. $20). In contrast, under a non-integrated promotion of the same monetary value, consumers simply compare these products’ original list prices ($50 vs. $30) and neglect their post-promotion final prices, which require calculations. The list prices ($50 vs. $30; relative to the final prices: $40 vs. $20) as a basis for price comparison reduce the perceived price difference between these products. Consequently, a non-integrated promotion (compared to an integrated promotion) increases consumers’ choice of higher-priced products. A series of experiments (N = 5,187) demonstrate this effect and support the final price neglect mechanism. Furthermore, although attenuated, this effect still emerges for price reductions of a smaller magnitude or in a percent-off format.

The spillover effect of corporate frauds and stock price crash risk

This paper examines the spillover effect of corporate frauds on interlocked firms that share at least one director with the fraudulent firms. We document a reduction of stock price crash risk of interlocked firms following the frauds. Our findings imply that the spillover effect is mainly motivated by the experiences that interlocked directors learned during frauds. Furthermore, we show that frauds have a stronger effect on the stock price crash risk when interlocked firms are exposed to higher levels of information asymmetry and industry-level competition. We find no evidence that the busyness of the interlocked directors affects the spillover effect.

Decision models of pricing and carbon emission reduction for low-carbon supply chain under cap-and-trade regulation

All carbon emissions generated by supply chain (SC) members should be taken seriously. This paper constructs low-carbon SC models consisting of one supplier and one manufacturer under three power structures: supplier-led power structure, manufacturer-led power structure, and Nash competition power structure. Based on differential game theory, we explore SC members' optimal pricing and carbon emission reduction decisions by considering the impacts of consumers' low-carbon preference, cap-and-trade regulation, and power structure from a long-term perspective. The results indicate that consumers' low-carbon preference always benefits the environment and low-carbon SC performance. However, whether cap-and-trade regulation can improve the environment and low-carbon SC performance depends on the cap and the carbon trading price. Under three power structures, we provide the government with two important threshold caps: one threshold cap ensures that SC members can benefit from cap-and-trade regulation; another threshold cap ensures that SC members can obtain positive profits under cap-and-trade regulation. This paper also reveals that the decision-making priority is not a necessary condition for SC members to maximize profits.

Do price reductions attract customers in urban public transport? A synthetic control approach

Do price reductions attract customers in urban public transport? A synthetic control approach

The Power Link Caribbean Project

The PWRLINKCAR (Power Link Caribbean) is a research project that has the aim of promoting the renewable energies in the Caribbean area. The use of a submarine cable is proposed for the union of the electric markets of Greater and Lesser Antilles. The goal of the project is to extend the renewable energies to the markets of the Caribbean Area by studying, designing, and modelling the interconnectivity of the markets. It is proposed the use of direct current in order to transmit the electricity energy power using HVDC (High Voltage Direct Current) and HVAC (High Voltage Alternating Current) through submarine cables. Regulatory provisions of the different markets are considered. Energy stocks and electricity price reduction are benefits expected by implementing the power link proposed in this work. Moreover, the power link can include optical cable for promoting telecommunications possibilities in the Caribbean area.

Supporting Environmentally Conscious Consumer Sales Law by Life-cycle Thinking

The circular economy is a core approach driving innovative economic solutions. Although the legal system should support the development of such an economy, scientific methods to assess the environmental impact of legal rules are lacking. Legislators and scholars have highlighted consumer law as an area requiring ecologically efficient solutions. This research aims to design a method to calculate environmental costs related to the exercise of remedies for nonconforming goods under a consumer sales contract. Various environmental impact assessment approaches are reviewed to identify those which can be used when designing a method for calculating the environmental impact of legislative provisions. The Life Cycle Thinking is applied and the Life Cycle Assessment method is chosen and used to compare different remedy-scenarios, that is, when the consumer chooses repair, replacement, price reduction or termination. A formula is devised to determine which remedies should be prioritized and whether it is possible to design an eco-friendly hierarchy of remedies in consumer sales law. Though it proved impossible to design a rigid hierarchy of remedies, which would be optimal in every scenario from the perspective of environmental costs generated as a result of the consumer exercising the rights for non-conforming goods, the environmental costs of exercising each of the rights under the remedies available to the consumer can be assessed not only in concreto but also in abstracto allowing for formulation of specific recommendations for legislator.

Power Quality Improvement using Dual Multilevel Converter for Micro Grid-Connected PV Energy Systems using ANFIS

This paper presents the implementation of dual voltage source inverter (DVSI) approach to improve the microgrid performance by enhancing the power quality. This paper also improves the power quality in photovoltaic (PV) generation interactive microgrids, respectively. The power generated from PV based distributive energy resources (DER) is perfectly applied to the microgrid through the two inverters, thus the nonlinear and unbalance load related problems are compensated. Thus, the power quality problems such as voltage sag, current drops, and power factor, active, and reactive powers are reduced by dual multilevel converter (DMLC). This converter also used for cooperative controlling to minimize the unbalances and voltage harmonics in microgrid by using adaptive neuro fuzzy interface system (ANFIS) based controller, which is applied in the shunt and series manner between the two VSIs. The total load current is mutually shared among the series and shunt VSI, if one VSI fails, then the other VSI continues its operation. Thus, the DMLC components failure rate is reduced, and the system lost energy is also reduced, which leads to improved reliability by maintain the reduction of down time price at environmental free conditions. The proposed control model is implemented in MATLAB/Simulink environment, and the obtained results shows that the superiority of total harmonic distortion (THD) reduction by the proposed ANFIS controller as compared to the conventional artificial neural network (ANN) and fuzzy logic controllers (FLC) by eliminating all the load current and grid voltage-based harmonics.

Does sunk‐cost affect prices? Evidence from the US airline industry

AbstractIn contrast to the extensive literature on behavior bias by individuals, studies on behavior bias by firms have been relatively scarce. We explore the possibility of the latter in the context of US airlines, where fuel hedging leads to lump sum gains or losses which may impact airlines' pricing decisions. Our results show that the (sunk) hedging gains or losses affect airlines' ticket prices. In particular, a 10% reduction in airlines' reported fuel costs (due to hedging gains) leads to a 2.2% reduction in ticket prices. Moving onto nonprice decisions, we find that hedging gains lead airlines to use larger aircraft and reduce the airtime of their flights, yet have no impact on the number of routes and flights which the airlines operate. Our results provide empirical evidence that fixed/sunk costs can affect firms' prices and nonprice decisions, establish a link between financial market and product market competition, and have important welfare/policy and managerial implications.

Optimal pricing and carbon emission reduction decisions for a prefabricated building closed-loop supply chain under a carbon cap-and-trade regulation and government subsidies.

This paper explores a two-level prefabricated building closed-loop supply chain (CLSC) comprising a retailer and a prefabricated building manufacturer (PBM) under carbon cap-and-trade legislation and the government subsidies of carbon emission reduction (CER). In this CLSC, the PBM and the retailer recycle used products through their independent recycling channels. The optimum pricing and CER strategies within both decentralized and centralized systems, respectively, are analyzed. The Stackelberg game is used in the decentralized system to determine the optimum PBM's CER level and the retailer's pricing. By analysis, it concludes that increasing the carbon trading price can stimulate prefabricated construction corporations to improve their CER level, and that the government subsidy rate has a great effect on the profits of the PBM. Numerical examples with sensitivity analysis are used to further evaluate the roles of important factors in the optimum CER and pricing solutions of the prefabricated building CLSC in two dissimilar systems.

Cost-effectiveness and budget impact of pembrolizumab+axitinib versus sunitinib in patients with advanced clear-cell renal cell carcinoma in the Netherlands.

The phase 3 clinical trial KEYNOTE-426 suggested a higher efficacy regarding overall survival (OS) and progression-free survival (PFS) of pembrolizumab+axitinib compared to sunitinib as a first-line treatment for patients with advanced renal cell carcinoma. In this analysis, the potential cost-effectiveness of this combination treatment versus sunitinib for patients with advanced clear-cell renal cell carcinoma (accRCC) was examined from the societal perspective in the Netherlands. For this analysis, a partitioned survival model was constructed. Clinical data were obtained from the published KEYNOTE-426 trial reports; data on costs and (dis-)utilities were derived from published literature. Costs outside of the healthcare sector included treatment-related travel, informal care and productivity loss. Next to a probabilistic scenario analysis, various scenario analyses were performed that aimed at survival extrapolation, different utility values, treatment duration and drug pricing, as well as restricting the cohort to patients with an intermediate or poor prognosis. Further, a budget impact analysis over three years was conducted, in which a sensitivity analysis concerning ranges in costs and the number of patients was applied. Moreover, a scenario concerning increasing market penetration of pembrolizumab+axitinib up to a market share of 80% in the third year was analyzed. The incremental cost-effectiveness ratio (ICER) of pembrolizumab+axitinib was estimated at €368,396/quality-adjusted life year (QALY) gained, with an incremental QALY gain of 0.55 over sunitinib. The probability of cost-effectiveness at a willingness-to-pay threshold of €80,000/QALY was estimated at 0%, a 50% probability was estimated at €340,000/QALY. Cost-effectiveness was not achieved in any of the applied scenarios. The budget impact over three years amounted to €417.3 million upon instantaneous and full replacement of sunitinib, and to €214.9 million with increasing market penetration. Pembrolizumab+axitinib was not estimated to be cost-effective compared to sunitinib as a first-line treatment for patients with accRCC in the Netherlands from a societal perspective. In none of the analyzed scenarios, cost-effectiveness was achieved. However, price reductions and shorter treatment durations might lead to a more favorable ICER.

The Impact of Certain Price of Natural Gas Policy on Indonesia’s Economy

The Indonesian national industry has experienced a slowdown in growth and decrease in competitiveness, allegedly caused by the high price of natural gas. Therefore, the government intervened by implementing Certain Price of Natural Gas Policy (Harga Gas Bumi Tertentu), a policy that facilitates industries to obtain gas at lower prices through the issuance of Presidential Decree Number 121 of 2020 concerning Natural Gas Pricing. This study aims to analyze the impact of the policy on the national economy by considering the decline in state revenues as a consequence of the reduced price of natural gas for industry. Using the Computable General Equilibrium (CGE) model, analyses were carried out on various economic indicators. This study finds a decline in GDP for 0.076% in the short-run and an increase in GDP for 0.004% in the long-run. Furthermore, household income, in both rural and urban areas, decreases from 0.1 to 0.2% in both short and long-run. For industries that use gas intensively, the price reduction increases sectoral output and labor, and reduces commodity prices.

Food price and availability in Solomon Islands during COVID-19: A food environment survey.

Background: In Solomon Islands, the retail food environment is an important food source, for instance, the dominant source of fresh fruit and vegetables for urban consumers is open markets. The effects of COVID-19 mitigation measures (such as restriction of human movement and border closures) in early 2020 placed food security at risk in many parts of the community. Of particular concern was the risk of price gouging in an already price-sensitive market. Aims: The study aimed to provide rapid and policy-relevant information on the pricing of foods in the urban food environment in Solomon Islands in the context of the unfolding COVID-19 pandemic. Methods: A vendor survey was conducted in July to August 2020 and repeated in July 2021 using a survey tool that collected information on type, quantity, and price of food on offer. Findings: We found price reductions among the majority of fresh fruit and non-starchy vegetables available. A trend of rising prices was reported for some other commodities, such as fresh locally caught fish. Conclusion: Our findings highlight the impact of 'schocks to the system' on food prices as a potential barrier or enabler to consumption of fresh foods purchased from urban areas - an important finding in a price sensitive market. The survey design was successful in collecting pricing data from the retail food environment during a time of external 'shock to the system'. Our approach is applicable to other settings needing a rapid survey of the external food environment.

Leveraging strategic consumer behavior in consumer-to-consumer resale: From economic and environmental perspectives

To generate profits and support a sustainable environment, forward-looking firms are adapting to the trend of used-product transactions among individual consumers. Incorporating consumers’ strategic waiting and reselling behaviors, we investigate the effects of consumer-to-consumer (C2C) resale platform (CRP) on the market from both economic and environmental perspectives. In a two-period setting, a retailer dynamically sets prices to sell new products and a CRP provides a venue for used-product transactions. Consumers are heterogeneous in their valuations for new and used products, which play a vital role in market formation. Our results indicate that all market participants can profit from the presence of CRP, albeit at the expense of aggravated environmental impact. Specifically, with the CRP sustaining used-product transactions, the retailer intensifies intertemporal price discrimination in most situations. The new-product demand increase in each period, producing a demand-expansion effect, while the new-product prices across periods may either decrease or increase. The demand-expansion effect is sufficiently strong to improve the retailer's revenue when consumers perceive a medium value of used products. Otherwise, the price reduction dominates to worsen the retailer's revenue. The retailer can benefit from the rise of CRP by leveraging consumers’ strategic behaviors, despite competing with it for demand. Importantly, the consumers and the retailer are likely to hold the same preference over the establishment of CRP. In this situation, coupled by the CRP’s revenue received from used-product transactions, social welfare improves with the addition of this market entity, leading to a win-win situation. Nevertheless, the demand-expansion effect arising from the presence of CRP aggravates the environmental impact, contrasting with the ethos of environmental friendliness held by the retailer and the consumers. Moreover, the existence of a disposal option to salvage used products at a positive value makes it less likely for the retailer to benefit from the existence of CRP and leads to a heavier environmental impact.

Value for Money of CAR-T Cell Therapy for Patients with Diffuse Large B-cell Lymphoma in China: Evidence from a Cost-Effectiveness Analysis.

This research assesses the cost effectiveness of Axicabtagene ciloleucel (Axi-cel), Tisagenlecleucel (Tis-cel), Relmacabtagene autoleucel (Rel-cel) and Lisocabtagene maraleucel (Lis-cel) against standard of care (SOC) for patients with diffuse large B-cell lymphoma (DLBCL) in the first-line setting (1L), second-line setting (2L) and third-line or later setting (3L+). Markov modelling based on a flexible survival model was adopted to evaluate four chimeric antigen receptor T-cell (CAR-T) therapies compared with SOC for patients with diffuse large B-cell lymphoma (DLBCL). The clinical inputs and utility values of the model were derived from the most recent clinical trials and the health care costs from a Chinese provincial clinical center. Costs and quality-adjusted life years (QALYs) were used to derive incremental cost-effectiveness ratios (ICERs) from the Chinese health care system perspective. The ICER of Axi-cel (1L) versus SOC was approximately Chinese Yuan (CNY)2,125,311 per QALY. The ICER for Axi-cel (2L), Tis-cel (2L) and Liso-cel (2L)) versus SOC in transplant-eligible patients were approximately CNY363,977, CNY32,066,781 and CNY347,746 per quality-adjusted life year (QALY), respectively. The ICER for Liso-cel (2L) versus SOC in transplant-ineligible patients was approximately CNY1,233,972 per QALY. The ICERs for Axi-cel (3L+), Tis-cel (3L+), Rel-cel (3L+) and Liso-cel (3L+) versus SOC were approximately CNY346,009, CNY654,344, CNY280,964 and CNY436,858 per QALY, respectively. In the scenario analysis using mixture cure models, the long-term survival benefit for CAR-T and SOC groups was found higher, and only Rel-cel (3L+) was found to be cost effective. Our results demonstrated that CAR-T treatments are not cost effective in any-line settings for DLBCL patients at the WHO-recommended willingness-to-pay threshold (CNY257,241 per QALY) in the base-case analysis. Price reduction of CAR-T therapies is the main approach for lowering ICERs and ensuring that the drug costs are proportional to patient health benefits.