Price System Research Articles

Innovation in Agricultural Water Pricing Systems in China Based on Irrigation Benefits

The comprehensive reform of agricultural water prices is an important component of China’s agricultural water conservation strategy and is highly important for ensuring national water security and sustainable agricultural development. Given the difficulty in raising water prices due to the limited carrying capacity of farmers in the reform, there is a pressing need to consider the implementation of agricultural water price sharing as a potentially viable strategy. Based on the grain production data from 2000 to 2018, the proportion of agricultural water prices borne by farmers and governments in different regions were calculated via the C-D production function method and the “Mitchell scoring + Expert scoring” method in the study. The results revealed that the average sharing coefficient of irrigation benefits for grain crops in China is 0.245. The sharing proportion of agricultural water prices for farmers in seven major geographical regions are ranked as follows: Northwest China (0.467) > Central China (0.427) > Southwest China (0.389) > Northeast China (0.358) > North China (0.319) > East China (0.312) > South China (0.163), while the sharing proportion of the government is 0.533, 0.573, 0.611 0.642, 0.681, 0.688, and 0.837. We proposed a systematic approach that directly ties cost distribution to the benefits received, and determined the proportion of agricultural water prices shared by farmers and governments, which is in line with the farmers’ economic interests and psychological demands. Furthermore, suggestions were proposed regarding the implementation of a rational agricultural water price-sharing policy.

Oil discovery, energy transition, and the decline in wholesale prices during the Great Depression

AbstractStatistical tests are used to examine the role of prices for petroleum, coal, and farm products in the Great Depression. A new empirical mapping of relationships between monthly energy and farm product prices and key macroeconomic variables shows how biophysical factors intersected with the price system in the 1930s US economy. Deflation was a critical feature of the Depression, with the US aggregate wholesale price index falling by 37 percentage points between October 1929 and February 1933. Petroleum product prices and farm product prices can explain 89% of changes to the aggregate wholesale price index over the 1930s. Granger causality tests show that petroleum product prices led changes to money supply in the 1930s, by 8 months, while farm product and all‐commodities prices Granger caused changes to industrial production. Changes in prices from October 1929 to February 1933 varied substantially between commodities, with prices of coal, metals, and building materials—the essential ingredients for capital formation—all increasing in real terms. Real bituminous coal prices are found to Granger cause changes to money supply, personal income, and industrial production over the 1930s. Overall, the results add further support to the hypothesis that the Great Depression was caused by an energy transition, following discovery of large quantities of petroleum in the US Southwest.

Pricing in the contemporary electricity market: Theoretical considerations

Subject. This article examines and analyzes the theoretical aspects of the formation of prices for electricity and capacities of power supply companies. Objectives. The article aims to examine fundamental approaches to price formation and consider the systems of intra-company management in the supply and sales sector of the electric power industry in order to identify the areas for developing the pricing concept of energy supply companies. Methods. For the study, we used analysis and synthesis, generalization and comparison, and system reasoning. Results. The article summarizes the classical approaches to pricing and characterizes the theoretical provisions regarding the possibility of their adaptation to the formation of the pricing policy of energy supply companies in present-day conditions. On the basis of streamlining the system of views regarding the formation of pricing policy, the article proposes conceptual provisions for price formation in the electric power industry in the form of a grid of price achievements, which helps energy supply companies modify the applied methods of price formation in current realities. Conclusions and Relevance. The article concludes that it is necessary to synthesize different pricing approaches that integrate the specifics of the activities of energy supply companies in the changing business environment. This will help develop conceptual provisions for pricing in the electric power industry on the basis of a grid of price opportunities that takes into account the basic elements of the pricing system. The results of the study can be used for further theoretical research related to the electric power industry, taking into account the needs of market participants and consumers.

A Comprehensive Framework for ML Model Validation: From Development to Production Monitoring in Search and Recommendation Systems

This article presents a comprehensive framework for validating, testing, and debugging machine learning models throughout their lifecycle, emphasizing search and recommendation systems. The article introduces a three-phase validation approach encompassing offline validation, pre-production testing, and production monitoring, addressing the unique challenges posed by dynamic data distributions and evolving user behaviors. The framework incorporates robust test set construction, counterfactual evaluation techniques, and automated debugging tools while emphasizing the importance of continuous monitoring and interpretability in production environments. The article demonstrates the framework's effectiveness in maintaining model performance and reliability through case studies across financial trading, content moderation, dynamic pricing, and real-time bidding systems. The article also presents novel approaches to automated root cause analysis and drift detection, contributing to developing more resilient machine learning systems. The proposed framework advances the field by bridging the gap between theoretical validation methods and practical implementation challenges in production environments, providing practitioners with actionable guidelines for ensuring model quality across the entire development pipeline.

Research on Impact of Equity Costs and Environmental Costs on Supply-Side Classified Water Pricing

The classified water pricing system is an effective measure for promoting the rational utilization of water resources under market mechanisms. Studying the water prices of three different types of water sources, including reservoir water, river water, and wastewater treatment plant effluent, is the basis for promoting the use of reclaimed water. However, there remains a spectrum of viewpoints on how to establish a pricing mechanism for reclaimed water at present. This study primarily focuses on the multi-level quality-separated water supply system in Yiwu City, China. It analyzes the limitations of the current water pricing formation mechanism and the externality of integrating reclaimed water into the unified allocation of multiple water sources. Based on the principles of full-cost water pricing and externality theory, a supply-side classified water pricing permit cost and pricing calculation model, covering the entire process of the social water cycle, is proposed. It focuses on the analysis of the impact of equity costs and environmental costs on supply-side classified water pricing. The Shapley value method is used for the technology of cost allocation among stakeholders to reasonably distribute the calculated water pricing of reclaimed water. The price of reclaimed water varies depending on the user type, with residential users paying 2.93 CNY/t, industrial users 4.00 CNY/t, and government allocations at 8.52 CNY/t. Compared with the classified water prices of various stakeholders on the user side of reservoir water, reclaimed water has a significant price advantage. This research demonstrates that the supply-side classified water pricing model, which includes a permit cost and pricing calculation framework, can encourage the supply of higher-quality water at corresponding higher prices, while also providing the internalization of external costs. Furthermore, the Shapley value method of cost allocation can realize the fair burden of stakeholders on the calculated water price and maintain the competitive advantage of reclaimed water prices.

Edge bank: a novel resource pricing and management system for edge service provider

Edge bank: a novel resource pricing and management system for edge service provider

Challenges and Opportunities in Pineapple and Cabbage Cultivation in Nagaland: A Garrett Ranking Analysis

India’s horticulture sector, a significant contributor to the nation’s economy has experienced substantial growth, particularly in states like Nagaland. This study examines the growth and challenges faced by the horticulture sector in Nagaland, with a particularly emphasis on fruit and vegetable cultivation. Despite horticulture sector being a significant component of the state’s economy, the sector has experiences periods of negative growth particularly between 2011-12 and 2017-18. Taking a sample survey of 120 farmers, the study aims to analyse the farm sizes, productivity and the challenges faced by the farmers associated with the decline. Both Pineapple and Cabbage farmers face common challenges such as pest and disease management and ineffective pricing systems. However, pineapple farmers also struggle with inadequate credit facilities, while cabbage farmers face additional issues with irrigation infrastructure. The findings suggest that targeted interventions, such as upgrading infrastructure, improving farm practices, and expanding market access, are crucial for revitalising the sector. The research provides valuable insights for policymakers and stakeholders to formulate strategies that can address these challenges, support sustainable growth, and ultimately strengthen the horticulture sector in Nagaland.

A practical revenue management approach for car parks via dynamically optimized self-adjusting bid pricing

Nowadays, there are major parking problems in crowded cities. This situation results in a loss of time and money for drivers and increased traffic congestion. Since car parks are vastly demanded facilities in crowded cities, the application of effective pricing strategies within parking reservation systems has the potential to increase revenues of the car parks and reduce the undesirable effects of parking problems. In this research, previous studies in the literature that are focused on revenue management (RM) in car parks are examined, and available solution procedures are discussed in some detail. A practical data-driven bid-price-based dynamic pricing methodology is developed in this study to maximize the expected revenue of a car park. The developed pricing system increases the weekly revenue of the car park by 15%. Since the developed pricing methodology is a data-driven based approach, it can also be generalized and applied to other systems that would benefit from dynamic pricing.

The reference price regulation in the AMNOG market - a view from practice

The Pharmaceutical Market Reorganisation Act (AMNOG) was introduced by the legislator in 2010 as a supplement to the reference price system, which had already been in place for a long time. The AMNOG instruments were intended to regulate prices in the 'non-fixed price market'. The AMNOG obliges the National Association of Statutory Health Insurance Funds and the pharmaceutical company, as the explanatory memorandum to the law briefly and succinctly stated at the time, 'to agree a reimbursement amount for non-fixed-price drugs with new active ingredients with effect for all health insurance funds' (Deutscher Bundestag 2010: 31). In reality, however, the exact application and delimitation of both instruments were unclear. The categorisation of drugs without proven additional benefit into the reference price system was considered the standard case in the initial concept: 'Without additional benefit - transfer to the reference price system' was the chapter heading in the explanatory brochure of the Federal Ministry of Health on the AMNOG (BMG 2010: 16). In these cases, the reimbursement amount negotiation should only be necessary on an interim basis. On closer inspection, however, there was a lack of concrete guidelines as to which instrument should be used when and how the different regulatory logics of the two systems should be harmonised. De facto, the self-administration had a great deal of room for manoeuvre here. This article analyses how the reference price regulation has been applied in practice in the AMNOG market since 2011. After a brief explanation of the legal framework (1), different case constellations are presented and the procedural practices of the self-administration are analysed in each case (2). The analysis is based on all benefit assessment procedures published by the Federal Joint Committee (G-BA) up to and including 15 July 2024 in which the reference price regulation has become relevant. These 42 procedures for 27 medicinal products were classified and compared. The review is followed by a discussion of the challenges and problems arising from procedural practice (3). Overall, the present study shows that reference price regulations in the AMNOG market have so far tended to be a 'procedural sidetrack' in practice (4).

Managing Traffic Congestion Pricing, the Associated Equity Issues, and Establishment of Sustainable Funding for Transportation Infrastructures

Abstract Road traffic congestion, partly resulting from inefficient land use plans and the inadequacy of existing transportation infrastructure to transport people from various origins to various destinations, using the same paths, at the same time (without delay) is an issue of concern to humanity". Inadequate funding for transportation limits the number of roads that can be built to increase the capacity of the transportation network. Road traffic congestion pricing has been identified as a way of reducing congestion, as it makes the cost of travel more apparent to users, but there is concern about equity issues for those who may not be able to afford the price tag. This study used the records of vehicle miles travelled in a country to illustrate the variations in revenue that could be achieved with varied fuel efficiency of vehicles. As an illustration, a comparison of revenue that could have been generated (all other things being equal) using a vehicle-kilometre travel (VKT) pricing system as compared to fuel tax for a 5-year period was also done. This review noted that the VKT ‘road user fee’ pricing system is a viable way to make the cost of travel apparent to motorists and form a basis for equity between those who use fossil fuel vehicles and those who use alternative energy. In addition to presenting a simplified procedure for establishing a sustainable transportation finance system, this study also presented a simplified method to estimate the appropriate fuel tax, as well as VKT road user fee to achieve a self-funded transportation system.

German-Speaking Émigré Economists in Great Britain and the Analysis of the German War Economy

The need for analysis of the German war economy became urgent after the defeat of France and the threat of an invasion of Britain by Nazi Germany after the battle of Dunkirk in the summer of 1940. The expertise of émigré scholars now was in strong demand. First, this essay discusses the series of twelve articles that Hans Singer contributed at the request of Keynes to the Economic Journal from 1940 to 1944. An important characteristic of war economies is a shortage of consumer goods, which raises the question of the appropriate rationing scheme. Therefore, the notion of a virtual price system, introduced by Erwin Rothbarth, which takes note of the welfare consequences of interventions into the free choices of consumers, is the focus of the next section. Hal C. Hillmann was a leading analyst of the German war economy, the comparative strength of the great powers, and postwar reconstruction. Finally, the article discusses the role of Nicholas Kaldor, who had firsthand knowledge as a key member of the research team of highbrow economists chaired by John Kenneth Galbraith that at the end of the war studied the effects of Allied bombing on the German war economy. Kaldor's experience, also as the director of the Research and Planning Division of the UN Economic Commission for Europe from 1947 to 1949, significantly influenced his pioneering contributions to growth theory.

Carbon taxes, CO2 emissions, and the economy: The effects of fuel taxation in the UK

Carbon taxes remain economists’ preferred policy tool to curb emissions, but they are often criticized by the wider public as ineffective and damaging to the economy. This paper provides new evidence of the effectiveness of carbon taxation through empirical ex-post analysis, using the synthetic control method. We base our quantitative work on a theoretical general equilibrium model with dirty and clean transportation. We take the predictions of the model to data on the UK Fuel Tax Escalator, and estimate the impact of the tax on CO2 emissions, GDP, and transport behaviour. With a potential control pool of OECD countries, we estimate the difference between the observed outcome in the UK and a synthetic counterfactual UK. We find that the tax has a large and significant impact on CO2 emissions from traffic, while there is no discernible impact on GDP or growth. We do not find large changes in driving behaviours, but the available evidence points to a possible switch to rail travel from road travel. Our results are relevant for energy policy makers as they show how a suitable pricing system can effectively reduce climate-damaging emissions without causing macroeconomic damage.

Implications of overlap in tariff policy on waste management costs in Italian municipalities

Abstract In today’s race toward a more circular economy, optimization of tariff design is important for minimizing the environmental impact and costs of municipal waste management. This study examines the overlap of an incentive-based tariff method and the unit pricing system. We address whether this overlap impacts the effectiveness and efficiency of waste management in Italian municipalities. Based on a panel data sample for 5,512 municipalities from 2016 to 2022, a generalized method of moments estimation was employed for a linear dynamic panel model. The results suggest that there is room for optimizing their overlap under certain circumstances—specifically, when the availability of waste treatment facilities is adequate and the percentage of separate waste collection is high. The interaction between the percentage of separate collection and the incentive tariff method contributed to cost reduction, confirming the need for consistency and compatibility of a tariff scheme with circular economy objectives. The effective adoption of both tools, as well as other actions such as information campaigns and service delivery improvements, can promote waste sorting and investment in management facilities. The results provide insights for policymakers seeking to design more effective and efficient policy measures aimed at maximizing environmental effectiveness, in accordance with the polluter-pays principle, and minimizing costs.

Peer-to-peer energy trading: Innovations, regulatory challenges, and the future of decentralized energy systems

Peer-to-peer (P2P) energy trading represents a transformative approach to energy distribution, where consumers, referred to as prosumers, generate and exchange electricity directly with one another. This decentralized model promotes local generation and consumption balancing, reducing reliance on centralized grids and encouraging the use of renewable energy. The development of platforms and technologies, such as blockchain, smart contracts, and Internet of Things (IoT)-)-enabled devices, has enabled secure, transparent, and automated transactions. These innovations facilitate real-time monitoring and energy matching, while artificial intelligence (AI) optimizes pricing and supply-demand dynamics. Microgrids and energy storage solutions further enhance the efficiency and reliability of local energy balancing in P2P systems. However, the widespread adoption of P2P energy trading faces significant regulatory and market challenges. Current regulatory frameworks, designed for traditional, centralized energy markets, often lack provisions for decentralized trading models. Key issues include grid access, tariffs, consumer protection, and data privacy. Furthermore, regulatory barriers differ widely by region, affecting the pace of P2P adoption. Market mechanisms that support P2P energy trading, such as dynamic pricing, demand-response programs, and real-time settlement systems, are also critical for its success. The role of aggregators and intermediaries in facilitating transactions is evolving, as regulatory bodies explore sandbox environments to test these innovative models. This review explores the technological advancements and regulatory landscape shaping P2P energy trading, highlighting successful case studies and identifying future trends. It underscores the need for adaptable policies and robust platforms to unlock the potential of P2P energy trading in building resilient, sustainable, and decentralized energy systems.

Redesigning Pricing Systems for E-Commerce Platforms: A Case Study in Backend Optimization

The dynamic nature of e-commerce requires adaptable and efficient pricing systems to meet the demands of competitive markets. This study presents a comprehensive approach to redesigning pricing systems for e-commerce platforms with a focus on backend optimization. By analyzing the limitations of traditional pricing architectures, we propose a robust framework that leverages microservices, scalable databases, and machine learning algorithms to enhance pricing accuracy and agility. The redesign emphasizes modularity, enabling real-time price adjustments based on market trends, inventory levels, and consumer behavior. A case study of an e-commerce platform's transition to the proposed system demonstrates significant improvements in performance metrics, including reduced latency, increased system reliability, and enhanced revenue growth. This research highlights the importance of integrating advanced technologies and streamlined backend processes to sustain a competitive edge in the e-commerce industry. The findings serve as a guide for businesses aiming to modernize their pricing systems and align them with evolving market dynamics.

Integrating Cold Thermal Energy Storage for Air Conditioning Demand in a CO2 Refrigeration System at a Supermarket

A common configuration for transcritical CO2 booster systems in supermarkets involves air conditioning (AC) supplied by cooling a water-glycol circuit. The design capacity of the refrigeration unit must handle all refrigeration loads and the AC load during the hottest summer day, leading to overcapacity and part-load operation for most of the year. A proposed design for implementing cold thermal energy storage (CTES) dedicated to AC demand in a supermarket located in the Oslo region is modeled in the object-oriented language Modelica. Simulation results demonstrate an electricity peak power reduction of up to 32.33%. Even though energy savings are not the primary objective of this project, they are achieved by producing and storing energy when the outdoor temperature is lower, and the coefficient of performance (COP) of the system is higher. The energy savings can reach up to 11.8%. Finally, the economic benefits of the system are assessed under the spot pricing system, revealing potential electricity cost savings of up to 12.56%.

Assessing the Effects of Unit-Based Pricing on Household Waste Reduction During COVID-19 in Japan

Focusing on the COVID-19 period in Japan, this study identifies the effectiveness of a municipal unit-based pricing (UBP) system on household waste reduction through a panel data analysis targeting 770 cities for 2013–2022. It focuses on simple unit pricing (SUP) and two-tiered pricing (TTP) systems as the UBP components. As previous studies have not considered the COVID-19 period when assessing UBP, this study significantly contributes to the literature by providing new evidence. The main findings are as follows: First, SUP effectively reduced household waste even during the COVID-19 period; however, its effectiveness was slightly neutralized owing to the pandemic environment. Second, TTP also restrained household waste efficiently; however, its effect was smaller than that of SUP, and its reduction effect accelerated during the COVID-19 period (in 2020) because people became cautious about excessive waste volumes beyond the TTP criteria. The study implicates the need to expand the municipal adoption of the UBP system for household waste reduction.

The Pushback Against Canada’s Carbon Pricing System: A Case Study of Two Canadian Provinces, Saskatchewan and Nova Scotia

As part of its plan to transition to an energy secure and environmentally sustainable future, Canada has had a national carbon pricing system since 2019. When first introduced, the $20 (‘$’ refer to Canadian dollars (CAD) in this paper) per tonne price was widely accepted by most Canadians and seen as a way of helping Canada meet its emissions reduction pledges made at the 2015 United Nations Climate Change Conference (COP 21) in Paris. The Canadian system is novel in that it both charges consumers for their emissions and reimburses them for their expected emissions; this is intended to raise awareness of their emissions and encourage those who can afford to opt for lower-emissions energy services to do so. By 2023, the combination of the carbon price reaching $65 per tonne and the post-pandemic economic slowdown was seized on by numerous politicians as a way of pushing back against the carbon pricing system, with most demanding the entire system be scrapped. The debate intensified in late 2023 and into 2024, when the federal government removed the carbon tax on home heating oil because the reimbursement was insufficient to cover the cost of the tax. In this paper, we consider the recent actions of two Canadian provinces, Saskatchewan and Nova Scotia, embroiled in the federal carbon pricing system debate due to the removal of the carbon tax on fuel oil for space heating. The objective of this paper is to identify how some of the reasons, including global post-pandemic inflation and other challenges facing Canadians, such as those cited in third-party polls, have contributed to a rise in the system’s unpopularity. Our method estimates and compares the impacts of the carbon tax on the household energy services for space and water heating, lighting and appliances, and private (i.e., household) transportation for different types of housing (apartment, single-attached, and single-detached) and number of occupants (two, three, and four) in Saskatchewan and Nova Scotia. The results of this work show that while Saskatchewan households have higher energy intensities than those in Nova Scotia, the impact of the carbon tax on Nova Scotians using fuel oil for heating was greater than in Saskatchewan. In Saskatchewan and Nova Scotia, natural gas and electricity, respectively, are used for heating. This paper concludes with a summary of our findings and potential options for improving perceptions of the system.

The spontaneous provision of criminal law

AbstractFor decades, non-state actors have supplied criminal law in Brazil’s favelas. This paper offers a humanomics account of the private provision of an impure public good. Our analysis reaches three conclusions. First, criminal law can be provided without either public intervention or reliance on the price system. Informal norms may be sufficient, indicating that Adam Smith’s invisible hand logic extends beyond legal markets grounded in private property rights and governed by well-defined prices. Second, a common sense of propriety, a key aspect of the humanomics approach, may not always be context-free. One’s environment may shape the precise objects of propriety. Third, spontaneous legal orders can be robust to agent type.

Customer Voice on Two-Sided Platforms: The Effect of Surge Pricing on Customer Complaints

Two-sided platforms (e.g., ride-sharing, freelance labor, and lodging) match customers and service providers. Customers can voice their satisfaction level through review/rating systems, which the platforms use to monitor and screen service providers. However, customers may misdirect complaints about platform-level features toward individual service providers. We examine the extent and consequences of this issue in the context of a large ride-sharing platform. We focus on surge pricing as the platform-level feature. Our findings are as follows. First, for an average trip, surge pricing makes it 1.13 times more likely for the driver to receive a complaint (either a low rating or a formal complaint). Second, complaints negatively impact a driver’s future income. Surge-induced complaints offset about 23% of a driver’s immediate gain from the surged fare. Third, after the platform adopted a policy to cap the magnitude of surge prices, the effect of surge on customer complaints reduced. The policy also led to more usage of the platform. The results suggest a close interaction between the pricing and review systems on ride-sharing platforms. More broadly, they point to the importance for online two-sided platforms to identify and address customer complaints about platform-level features that may have been misdirected to service providers. This paper was accepted by Eric Anderson, marketing. Funding: Y. Zhu acknowledges financial support from 3M [Nontenured Faculty Grant]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2024.4992 .