Social Welfare Perspective Research Articles

Premature agglomeration?: Two phases of development with spatial sorting

AbstractClusters in the developing world do, to a large extent, attract low‐educated individuals, and these clusters are in some cases, characterized by urbanization without industrialization. This contrasts starkly to clusters in advanced economies that attract high‐skilled individuals and entrepreneurs. In this paper, we develop a model of agglomeration and spatial sorting that is consistent with these two types of different agglomeration processes in developed and developing countries. We show that a poor country that has an agglomeration with low skilled individuals, may get stuck in this equilibrium, but that free mobility of human capital from the outset nevertheless is superior from the perspective of total social welfare.

Optimal pricing and capacity management in service systems with delay-sensitive mixed-risk customers

In service systems with delay-sensitive customers, customer decisions to join the queue or balk influence demand, impacting service provider profits. Studies show that customers can be risk-seeking for short waits and risk-averse when waits exceed expectations. Prior research on this mixed-risk attitude is limited, focussing on optimal pricing policies from a social welfare perspective. This study fills this gap by investigating the impact of this behaviour on customer joining strategies and the provider's pricing and capacity policies. We analyse a profit-maximising firm managing an unobservable queue where customers display mixed-risk behaviour towards delay parameterised by a risk-switching point and a degree of risk propensity. Customers join or balk based on expected utility, while the firm determines the service price and rate to maximise expected profit. We derive optimal strategies for both customers and the firm under scenarios with concave or convex capacity costs. Computational experiments show that optimal pricing, capacity, and profit peak at intermediate risk-switching points. For smaller points, optimal price and capacity rise with the customers' degree of risk propensity, while larger points have minimal impact. Numerical exploration emphasises the significance of capacity cost and the effectiveness of leveraging price over controlling capacity for maximising firm profitability.

The Emission Reduction Technology Decision of the Port Supply Chain

The technology options for sustainable development are explored with customer low-carbon preference in a port supply chain consisting of one ship and one port. Port supply chains can opt for either shower power or low-sulfur fuel oil to cut down emissions. We set game models considering three power structures: the port dominant (port-led Stackelberg game), the ship dominant (ship-led Stackelberg game), and the port and ship on the same footing (Nash game). We compare the performances of different technologies. It is shown that, when customer low-carbon preference and carbon tax are both low, LSFO is the appropriate choice from the supply chain’s profit perspective, SP is preferred from the emission control perspective, and LSFO is preferred from the social welfare perspective. However, when customers’ low-carbon preferences, carbon tax, and environmental concerns are all low or all high, LSFO should be adopted from the view of social welfare. The profits and carbon emissions of the supply chain in the Nash game are higher than those in the Stackelberg game. While the environmental concern is low, the social welfare of the supply chain in the Nash game is greater than that in the Stackelberg game. Otherwise, it is less than that in the Stackelberg game. The obtained results can help governments formulate policies and ships make emission reduction technology decisions according to their own interests.

Carbon emission trading, technological progress, synergetic control of environmental pollution and carbon emissions in China

This study introduces three production technology shocks (Energy manufactures, Brown enterprises, and Green enterprises) by constructing different models, namely, the environment sector (baseline) model, the carbon emissions trading scheme (ETS) model, and the carbon emissions rights trading mechanism. The fluctuation trend of China's macroeconomic and environmental quality before and after the establishment of carbon market is compared and analyzed. Additionally, the study examines the welfare of the implementation of carbon market policies. The carbon trading market policy can promote the synergistic efficiency of China's pollution reduction and carbon reduction using energy and green production technologies. From the perspective of social welfare, the optimal range of the initial carbon quota ratio issued by the government to enterprises is [0.7,0.8]. The findings of this study provide theoretical support and contribute toward understanding the impact mechanisms of carbon market and technological progress on synergizing the reduction of pollution and carbon emissions in China.

Environmental regulation: An enhancing or burden for social welfare and public health?

Public health has been associated with environmental pollution and regulations. With the increasing awareness of environmental protection, the real effects of environmental regulations and mechanisms on public health remain uncertain. We develop a theoretical model of individual utility and investigate how environmental regulations affect public health from a social welfare perspective. By using the panel data from the China Household Finance Survey (CHFS) in 2011, 2013, 2015, 2017, and 2019, we find that environmental regulations positively influence public health. This positive effect is attributable to a boost in employment and an improvement in individual happiness. Furthermore, the heterogeneity analysis reveals that environmental regulations are more likely to affect groups with low education, middle-aged, living in eastern China and rural areas. These results provide a comprehensive understanding of the heterogeneous effects of environmental regulation on health and offer a new perspective for policy-makers to balance social welfare with environmentally sustainable development.

Grandfather-based or benchmark-based: Strategy choice for carbon quota allocation methods in the carbon neutrality era

Climate change and extreme weather caused by the greenhouse effect have attracted global attention. Governments and public sectors are beginning to recognize the importance of reducing carbon emissions and have reached a consensus on “carbon neutrality.” This study investigates the strategic choice of carbon quota allocation methods within a supply chain framework, involving a policy maker (government), a manufacturer, and a retailer. At the outset, the government selects either the grandfather-based allocation method (Method G) or the benchmark-based allocation method (Method B) to regulate the manufacturer's carbon emissions. Subsequently, the manufacturer determines the level of carbon emission reduction and wholesale pricing, and the retailer sets the order quantity based on the manufacturer's decision. Drawing on equilibrium outcomes, this research compares the optimal decisions of firms, carbon emissions, consumer surplus, overall social welfare, and supply chain sustainability under these two methods. The research highlights several major findings. First, regardless of which allocation method is adopted, a rise of the initial carbon emission in producing process will lead to an increase in the wholesale price, but a decrease in emission reduction level and the order quantity. Second, under method B, the manufacturer reduces more carbon emission. Third, from the social welfare perspective, the method B/G is a better choice for the government when the environmental damage coefficient is relatively low/high. Fourth, when carbon quota and the initial carbon emission meet some certain conditions, the method B can achieve environmental sustainability and economic sustainability.

Optimal decisions for hybrid manufacturing and remanufacturing with trade-in program and carbon tax

With the practical implementation of carbon taxes and the adoption of trade-in programs, the decision environment for manufacturing and remanufacturing has become increasingly complicated. Taking the carbon tax and the trade-in program into consideration, this study develops manufacturing-remanufacturing models for two market scenarios (i.e., emerging market and mature market) when cores for remanufacturing are limited by used product collection, and finds that the determining factors of optimal decisions are different across the two market scenarios. In addition to the carbon tax and carbon emissions of remanufactured product, the optimal decisions are also affected by the segment size of the replacement consumer in the mature market. Furthermore, we find that carbon tax policy does not always encourage the manufacturer to work on remanufacturing, and it may prevent remanufacturing under certain circumstances. Moreover, the impacts of supply chain parameters on optimal decisions, total carbon emissions, and profits are explored. The carbon tax has similar impacts across the two market scenarios; however, the carbon emissions of remanufactured product and the remaining value of the used product show different impacts. From the social welfare perspective, the optimal carbon tax depends on the regulator’s environmental concern.

Exploring incentive mechanisms for the CCUS project in China's coal-fired power plants: An option-game approach

Carbon capture, utilization and storage (CCUS) is a critical technology for reducing carbon emissions from coal-fired power plants (CFPPs). However, the CCUS project in China's CFPPs is not highly economically feasible, and the existing policies lack effective incentives. This study proposes an option-game approach to explore the incentive mechanisms to promote the CCUS project development in CFPPs, including initial investment subsidy, clean electricity price subsidy, incremental carbon emission allowance, and extra electricity quota. Based on the simulation results of a CCUS project in Guangdong Province, our major findings are as follows: 1) Of the two financial incentives, the clean electricity price subsidy has a better impact on CFPPs, but from a social welfare perspective, the government prefers to implement the initial investment subsidy. With a 0.045 yuan/kWh clean electricity price subsidy, the proportion of CFPPs choosing to invest in the CCUS project increases by 113.72 %. With an initial investment subsidy of 40 %, the proportion of governments choosing to incentivize the CCUS project investment decreases by only 6.08 %. 2) Non-financial incentive mechanisms have a larger impact on CCUS project development than financial incentives. And providing extra electricity quota can increase the proportion of government incentives for the CCUS project by up to 21.88 %. 3) The policy adjustment frequency and the subsidy adjustment magnitude have different levels of impact on the CCUS project.

A Case Study on Community Treatment Center for Response to COVID-19 in Korea: Focusing on Surge Capacity 4S Component Analysis and Social Well-Being Perspective

ABSTRACT In March, 2020, during the COVID-19 pandemic in Korea, the first Community Treatment Center (CTC), which is a motel-type Alternate Care Site (ACS) for mild and asymptomatic patients, was opened. This is a case study of the first Community treatment center prepared to respond to COVID-19. One of the researchers worked as a medical doctor in one of the CTCs operated by the Korean government. The CTC’s eight medical staff members were interviewed in-depth one-on-one. Then the data obtained from observation, collection, and interview were triangulated. In this study, it was identified based on the 4S factor that evaluates the surge capacity to meet the medical needs of CTC. And how the CTC was operated from a medical and social welfare perspective and what problems appeared to patients during the operation were analyzed. Three dormitories of a national training center were used as the CTC. Each patient used a room equipped with a toilet, a shower, and a washbasin. Medical staff and government officials with various backgrounds were dispatched. Telemedicine was also used to prevent the spread of infection. The CTC made a significant contribution to both medical and social welfare fields. It provided patients psychological stability in a comfortable environment. But some patients had psychological problems and difficulties involving work and family care. Various efforts in conjunction with participation from social workers are required to reduce these problems.

Auctions for Renewables: Does the Choice of the Remuneration Scheme Matter?

Auctions are increasingly used to support renewable energy sources (RES). The choice of the remuneration scheme is one of the major design challenges policymakers face. This paper analyzes the effects of remuneration schemes on RES auctions’ success in markets with imperfect competition. I develop a game-theoretical auction/operation framework to model the feedback effects between the spot market’s strategic behavior and the auction stage’s bidding behavior. The analysis indicates that policymakers concerned about true-cost bidding, allocative efficiency, spot price, total payments to RES, and non-realization risk may prefer feed-in-tariff (FIT) remuneration. However, feed-in-premium (FIP) remunerations may outperform FIT ones from a social welfare perspective, particularly in markets with dirty technologies at the margin. A machine-learning-based simulation strategy is also presented, indicating that, for an auction for 14 GW of onshore wind in France, FIP auction with a winning incumbent leads to 1.40% higher prices than FIT ones.

Combinatorial Auction of Used Cars Considering Pro-Environment Attribute: A Social Welfare Perspective

Air pollution is becoming more and more serious as the number of vehicles increases. To address such problems, many cities have implemented many measures, including the circular economy mode, in which used cars with low carbon emission are becoming important in the sustainable transportation and carbon abatement. Considering multi-attribute demand, this study designed combinatorial auction mechanism for the bidders of automobile enterprises on an online used-car platform to achieve social welfare maximization. Two kinds of attributes were considered, namely, price attribute and non-price attributes; the latter particularly included the pro-environment attribute based on an analysis of complementarity and substitutability. Moreover, the mechanism was proved to satisfy individual rational condition and incentive compatibility condition. Numerical application showed that preference for the pro-environment attribute can better realize social welfare and respond to national energy conservation and emission reduction targets. As a result, from the social welfare perspective, the multi-attribute combinatorial auction can provide a reference for more fair and effective allocation of used cars to bidders and can promote both buyer’s utility and seller’s income.

Platform information sharing and selling contract strategies with blockchain adoption

The recent rapid development of blockchain technology has drawn considerable attention. To examine the impact of blockchain on platform supply chains, we construct a supply chain consisting of two suppliers and an e-commerce platform. Each supplier may use either a reselling or an agency selling contract; therefore, three scenarios are possible: pure agency selling, pure reselling, or hybrid contracts. Considering blockchain’s role in eliminating transaction costs and achieving demand information transparency, we apply a game theory model to study each player’s pricing strategy and profits when blockchain and selling contract strategies vary. We find that the platform’s optimal selling contract and blockchain strategies strongly depend on commission rates, competition intensity, and transaction costs. Suppliers are willing to join the blockchain to gain demand information and reduce transaction costs. With low transaction costs and high competition intensity, the platform may ally itself with the agency supplier and authorize him to join the blockchain to maximize profits, which may ruin social welfare. From a social welfare perspective, we find that a pure agency contract is optimal, whereas the optimal blockchain strategy varies. Specifically, blockchain adoption may not benefit social welfare even when its operations costs are negligible. We further explore a scenario in which two suppliers can choose their selling contracts to derive insights into suppliers’ contract choices and government subsidy policies. Moreover, we explore the impact of marginal production costs on the optimal strategy for platforms.

1인 가구 청년의 독립생활을 통한 성장 경험

Recently, single-person households have surged across all age groups, including young adults, and there is a strong need from a social welfare perspective to understand the implications of this type of independent living in terms of human growth. Thus, this study would explore the growth experience of single young households through independent lives in depth. To gather data, this study interviewed 12 young individuals, meeting the study’s criteria, for a total of 26 hours, two sessions per each person. The study employed thematic analysis and constant comparative methods to reconstruct the participants’ experiences and perspectives. As a result, the meanings of growth experience through the independent living of single young households were identified along with five upper categories: ‘Leaving the original family and growing up in confusion,’ ‘Worries accumulated soon while enjoying freedom,’ ‘Taking a life path without minding others,’ ‘Worthy values learned while living alone,’ ‘Desiring a better world that embraces young independence,’ and the central theme of ‘Living as an adult firming up, weaving the world with my hands after leaving the nest.’ Based on these findings, recommendations were provided to enhance the quality of life and support the growth of young adults residing independently in single-person households through social welfare policies and practices.

Power production competition under different regulations: a social welfare perspective

With the prevalence of low-carbon transmission, traditional energy power generation enterprises (TGEs) are facing increasing pressure. By comparison, renewable energy power generation (REPG) holds the advantage of low carbon. To promote the development of REPG, various regulation policies have been implemented. This paper aims at investigating the interplays between renewable energy power generation enterprise (RGE) and TGE’s production decisions under different regulation policies from the social welfare perspective. We consider the feed-in tariff (FIT), renewable portfolio standard (RPS), and carbon tax (CT) policies. Our analyses reveal several major findings. First, the influence of the regulation policy on RGE and TGE’s power generation quantities depends on the gap between REPG cost and traditional energy power generation (TEPG) cost. Second, the regulator’s optimal regulation policy hinges on his emphasis on the economic benefit and the environmental protection. Third, as the REPG cost decreases and the regulator’s emphasis on environmental protection increases, the regulator’s optimal policy from the social welfare perspective exhibits a trend of ‘FIT-CT-RPS.' Fourth, TGE’s preferred policy focuses on FIT or CT, and RGE’s preferred policy is always RPS regardless of how the regulator’s attention on environmental protection changes. On this basis, managerial implications for promoting REPG are provided.

Does green credit financing mode with cap‐and‐trade scheme really benefit all members?

AbstractThere is a never‐ending debate about whether the cap‐and‐trade mechanism is a valid means of achieving carbon reduction. In this study, we examine it from the perspective of supply chain financing, as the cap‐and‐trade scheme appears to be an excellent solution to avoid the carbon emission requirements imposed by green credit financing services. We develop a theoretical framework for comparing three distinct kinds of financing modes: bank credit financing, green credit financing, and green credit financing with a cap‐and‐trade scheme. Based on Stackelberg game with stochastic demand, we then derive optimal outputs for the manufacturer and wholesale prices for the supplier. Counterintuitively, the green credit financing mode is less profitable for manufacturers with low investment in clean production due to stringent carbon emission requirements, yet it is advantageous for the supplier through a higher wholesale price. Conversely, the green credit financing combined with cap‐and‐trade scheme will result in a different situation in which the manufacturer will benefit from the green credit's lower interest rate, but the cap‐and‐trade mechanism will diminish the supplier's power in the Stackelberg game and reduce her profits. Finally, from the perspective of social welfare, the green credit financing mode with cap‐and‐trade scheme will not always benefit for the whole society. Even though it can improve the profit of the manufacturer and consumer surplus, it may lead to higher carbon emission and reduce profits of the supplier when the investment in clean production technology is limited.

Uniform versus discriminatory tariffs in increasing marginal costs and endogenous competition

By allowing exporters to produce under asymmetric increasing marginal costs, we investigate the impact of tariff discrimination when considering exporters' endogenous choice of competition mode. When considering endogenous competition mode, discriminatory tariffs lead to Cournot competition, whereas uniform tariffs lead to diverse modes of competition. The discriminatory (uniform) tariffs can obtain Pareto superiority from the perspective of consumers surplus, social and global welfare if product differentiation is either high or low (intermediate). Contrast to previous results, since the importing country tends to impose a lower (higher) tariff on the efficient (inefficient) exporter, the inefficient exporter always prefers the uniform tariffs while the efficient exporter's preference for tariff regime varies for any degree of product differentiation. Thus, with increasing marginal costs for any degree of product differentiation, there is a possibility that the preferences for tariff regimes change in the same direction for the exporters' profits, consumers surplus, social and global welfare.

Korean Adoption to Australia as Quiet and Orderly Child Migration

Approximately 3600 Korean children have been adopted to Australia, as of 2023. Existing studies have tended to approach transnational or intercountry adoption from child development, social welfare, or identity perspectives. Research on Korean adoption to Australia is relatively scarce. The current article approaches the population from a migration perspective, building on Richard Weil’s conceptualization of transnational adoption as “quiet migration.” Drawing on both Korean-language data from South Korean governments and Australian data, the authors analyse Korean adoption to Australia as a state-sanctioned transnational migratory mechanism that facilitated the orderly movement of children from so-called “deficient” families of predominantly single mothers in South Korea to adoptive families in Australia. Situating adoption practices within the socio-political contexts and larger migration trends of both countries, the authors identify multiple enabling factors for channelling the ‘quiet’ flow of Korean children for adoption and argue the very ‘quietness’ of the adoption system is a source of concern despite Australia’s relatively stringent regulations. A migration perspective and analysis of these enabling factors contributes to the conceptualization of adoption as a socio-political state-sanctioned phenomenon, rather than a solely private family affair.

The role of electricity market design for energy storage in cost-efficient decarbonization

The role of electricity market design for energy storage in cost-efficient decarbonization

Research on decision-making of water diversion supply chain considering both social welfare and water quality utility

When water diversion projects become important part of the water network around the world, the effective operation and management of the projects play important roles in giving full play to the optimal allocation of water resources. For the operation and management of water transfer, the decision-making of water supply chain under the scenario of economic benefit, producer surplus, and water quality utility should be considered simultaneously. According to the idea of supply chain, this paper regards water transfer operation management as a water supply chain composed of water transfer companies, water supply companies, and consumers. From the perspective of social welfare and water quality utility, a comprehensive optimization and coordination decision model for water transfer is proposed. Taking the South-to-North Water Diversion Project as the research object, the cost-sharing contract is designed, and the Stackelberg game method is used to optimize the decision-making and coordination of the water supply chain. The results show that when the concern coefficient and the cost-sharing ratio are evaluated within a given feasible value region, the profits of both the water transfer company and the water supply company can be improved. The feasible value interval of the concern coefficient decreases with the increase in the cost-bearing proportion. When the concern coefficient increases, the profit of the water transfer company decreases, while profit of the water supply company, water quality, consumer surplus, water quality utility, and utility of the water transfer company increase gradually. The results provide valuable references for water transfer decision-making.

Sequential tariffs with increasing marginal costs

AbstractThis study examines the superiority of the discriminatory and uniform tariff regimes under both simultaneous and sequential arrangements in terms of social and global welfare by considering asymmetrically increasing marginal costs among exporters. Under Cournot competition, the importing country has an incentive to manipulate the tariff structure using a sequential tariff arrangement, which implies that it prefers to impose tariff on a low‐cost exporter first and a high‐cost exporter later. Sequential discriminatory (uniform) tariffs can achieve Pareto superiority from the perspective of consumer surplus, and social and global welfare if product differentiation is low (high). It is mainly because high‐cost (low‐cost) exporters are handicapped (subsidized) under alternative tariff regimes. In contrast to previous research, our analysis suggests the possibility that preferences for tariff regimes will change in the same direction for consumer surplus, social welfare, and global welfare.