Consumer Welfare Research Articles

Evaluating the Spatial Heterogeneity and Driving Factors of Sustainable Development Level in Chengdu with Point of Interest Data and Geographic Detector Model

Over the past few decades, China has undergone the largest and fastest urbanization process in world history. By 2023, Chengdu’s urbanization rate had reached 80.5%, significantly higher than the national average of 66.16%. Studying the urbanization experience of Chengdu is of great significance for optimizing urban planning policies in Chengdu and other cities in China. Although much literature has explored the urbanization process from macro and micro perspectives, studies using a top-down approach to examine urban fringe expansion are relatively scarce. This study first applies the entropy weight method to analyze the spatial-temporal evolution trends of urban development, identifying areas of imbalanced development and prominent issues. Secondly, the K-means machine learning algorithm and nightlight data are used to reconstruct and classify urban regions, and a comparative analysis is conducted with administrative divisions to further identify unreasonable areas in urban spatial distribution and structure. Finally, POI data and the geographical detector method are used to analyze the micro-driving forces in areas of imbalanced development, identifying major limiting factors and solutions. The study found that the gap between urban and rural development in Chengdu is narrowing during the urbanization process, but there is severe differentiation in the second circle of Chengdu, where economic development is accelerating but residents’ happiness is declining. Moreover, analysis based on urban nightlight data and land-use data reveals that the expansion areas on the urban-rural fringe are mainly concentrated in the second circle of Chengdu. Micro-level driving factor analysis found that the western region of the second circle has many but small urban settlements, with a dense road network but scattered functional areas. The eastern region has inefficient and extensive use of construction land. Additionally, the mismatch between student status and household registration has resulted in relatively lagging educational resource development, and high entry barriers have hindered the progress of urbanization, leading to low per capita welfare expenditure. These reasons are the main factors causing the decline in residents’ happiness, and this impact shows significant differences at different temporal and spatial scales. Encouraging innovation in research and development or education can serve as a long-term and effective driving force for promoting sustainable urbanization. This study provides valuable insights for scientifically planning sustainable urban development and promoting the urbanization process.

The Regulation Impact of Foreign Ownership on the Cooperation Projects Air Transportation

<div><table cellspacing="0" cellpadding="0" align="left"><tbody><tr><td align="left" valign="top"><p class="AbstractText">This study aims to identify, locate, and analyze constitutional issues regarding the impact of foreign capital ownership above 50% (fifty percent) in government-business cooperation projects, particularly in the area of public interest projects involving air transportation infrastructure. This normative research examines legal texts, mainly primary and secondary legal materials. This research found that, first, the changes in the Presidential Regulation regarding foreign investment in the field of public interest, such as airport services, were incompatible with the Constitution. The changes abolished the maximum percentage limit of foreign investment regulated in the previous provisions so that currently, foreign investment may carry out Government Cooperation with Business Entities on air transportation infrastructure projects without a percentage limit. Second, based on the Indonesian Constitution, ownership of air transportation should be under the state's authority, learning from China, which excessively applies foreign investors in the air transportation sector, causing consumer welfare to be affected by very high airplane ticket prices.</p></td></tr></tbody></table></div>

Dual-channel decision models for the transnational supply chain considering strategic inputs and compensation

Based on a transnational dual-channel supply chain consisting of the domestic manufacturer and retailer, this paper constructs four models, namely, the without tariff model, the tariff model, the retailer’s strategic inputs model, and the manufacturer’s compensation model, to investigate the impact of the tariff imposing on supply chain decisions, the effect of the retailer’s strategic inputs to hedge against tariffs, and the incentive effect of the manufacturer’s compensation. The results show that the tariff imposed by the foreign government leads to higher product prices and lower sales volumes, resulting in welfare losses for foreign consumers. When the domestic retailer makes strategic inputs, the prices of products in the foreign market decrease and the sales volumes increase, which increases the profits of the domestic retailer and manufacturer and improves the welfare of foreign consumers. The equilibrium solutions of the models also show that the manufacturer has an incentive to compensate the retailer for its strategic inputs; when the manufacturer compensates for the retailer’s strategic inputs, the profit of the retailer and the manufacturer will be improved again, and thus, the whole supply chain will achieve Pareto improvement.

The impact of platform audits on the manipulation of online reviews

To reduce sellers’ manipulation of online reviews, platforms conduct audits and impose penalties on abusive practices. In this article, we study the effectiveness of self-regulation in preventing fake reviews and increasing consumer and social welfare. To this purpose, we use a Stackelberg model with the platform as the leader. Our major contribution is to explain the auditing game between the platform and the seller. These are our major findings. First, we found a self-regulation’s Achilles’ heel. Despite its noble intent, the self-regulation system often falters. Why? The platform faces a powerful incentive to accommodate fake reviews, especially when consumers heavily rely on the seller’s information and regulatory repercussions remain mild. For this reason, consumer activism and external supervision are the key factors leading the platform to audit the seller. Second, we discovered the paradox of fake reviews, establishing the conditions under which, counter-intuitively, fake reviews create social value. Finally, by considering an endogenous retail price, we found evidence of a complex relationship between pricing, auditing, and review manipulation policies, all dependent on consumer sophistication and product quality, which can only be analyzed numerically, as there is no closed-form solution.

Cash holding by consumers: The role of the perceived characteristics of money

AbstractThis study examined why consumers who typically pay electronically at points of sale still carry cash and explained the inertia of demand for cash by considering the additional (perceived by consumers) characteristics of cash. The research was motivated by the growing discussion on why cash, despite the increasing importance of e‐payments, remains a significant part of the demand for money. The study focused on psychological factors and consumers' perceptions of certain features of cash, which make it an attractive additional option for precautionary reasons, and therefore, explored beyond the typical discussion of money as a means of payment. The structural equation modeling based on data collected as part of a survey of Polish consumers was used to verify the hypotheses. It was revealed that cash becomes a reserve solution for consumers, which is kept “just in case” to expand the scope of personal freedom and flexibility in making payments and protect against various potential restrictions and threats related to e‐payments. Consumers' holding of cash as an additional option depends on three key factors: attitude toward cash, particularly the flexibility it offers, unusual purchasing situations, and perceived card or mobile payment risk, considered as a moderator. In the debate on the future of cash, the study supports the position that cash has a place in the modern payment system, although it plays a different role. Cash is a supportive backup solution. Eliminating cash significantly reduces consumer welfare.

Climate change, production and trade in apples

AbstractIn this paper, we investigate the impacts of climate extremes on the production and trade of apples. Apple production being notoriously sensitive to climate shocks, we show that March and April temperatures and precipitations beyond estimated thresholds cause large yield reductions in Quebec and Ontario. In years when climate shocks are large and highly correlated across space, large variations in national production cause major variations in trade flows. Hence, we exploit the theoretical foundations of a sectoral structural gravity model to implement counterfactual trade experiments about harvest shocks in Canada and the United States. We report changes in tariffs, imports, exports, farmgate prices, and in consumer welfare. The shocks greatly impact trade between North American countries but have little impact on other countries except for Chile and New Zealand which see their exports grow.

Perlindungan Hukum Terhadap Konsumen Atas Produk Pangan Kemasan Yang Tidak Memiliki Label

Introduction: The expiry date of a food and beverage product in the form of the date, month and year of storage of the food and beverage product is printed on the packaging label which is intended to inform consumers about the product consumed. Includes expiration dates that are useful to consumers, retailers, sellers and manufacturers. Adding expiration dates to food gives consumers clear information about product safety, allows traders and sellers to manage inventory of traded products, and allows manufacturers to know the product warranty period after it has been produced.Purposes of the Research: The purpose of writing carried out by the author is to find out the effect of consumer buying interest on packaged food products that do not have labels and to know and explain how consumers protect packaged food products that do not have labels.Methods of the Research: The research method used by the author in this study is normative juridical where research is carried out to obtain data through library studies, namely various literature and scientific materials, brochures and so on.Results of the Research: The results of the study indicate that packaging can influence consumer interest in buying. If we look at it now, it's not only the large food industry products that are starting to intensively create attractive packaging innovations, this has also begun to be followed by MSME business actors or home industries. Labels help consumers to obtain product information for the benefit and welfare of consumers. With this packaged information, it will reduce the losses that consumers get. The benefit of including the correct label or information on the package is to provide knowledge to the parties concerned with the item. With this article to protect consumers, in order to balance the potential awareness that is built in the relationship between business actors and consumers. And to improve the quality and quality of merchandise properly

Unhealthy food, regulations, and consumer welfare: The US microwaveable popcorn market

AbstractDue to significant health concerns, governments across the world have taken measures to regulate dietary trans fat, for example, through bans and ad‐valorem taxes. We assess the effectiveness of these two strategies and measure their ensuing welfare implications. We estimate a structural demand and supply model for the microwavable popcorn market using NielsenIQ Homescan data. Applying the recovered consumer preferences and marginal costs, we find a ban and a 35% tax result in similar levels of welfare loss and trans fat reduction. A 10% tax can still significantly reduce trans fat consumption (around 48%), while the associated consumer welfare loss is substantially smaller.

Optimizing equity in intermittent water supply systems: A volume-driven demand and flow control approach

In many developing countries, intermittent water supply (IWS) systems are prevalent, resulting in limited access to water for consumers who do not have continuous 24/7 supply. Consumers are compelled to utilize private storage tanks to adapt to IWS conditions and overcome periods with no water access. While achieving greater water availability, the use of storage tanks exacerbates existing supply inequity. We propose a simulation–optimization approach that models consumers using a volume-driven demand technique to account for IWS consumer behavior, and employs a Bayesian optimization to determine the flow control valve schedule to improve local supply and global equity. The results demonstrate the existence of a hierarchy in supply in which consumers with favorable hydraulic conditions are able to fill their tanks any time supply is available, leaving consumers with less-favorable hydraulic conditions to fill their tanks only when an excess in supply exists. With limited control, only some global disparities can be offset. Additionally, intermittency in supply exacerbates the inequity and limits the efficacy of controls, reinforcing the importance of improving the continuity in supply. The proposed approach provides insights into the mechanisms behind inequitable supply in IWS systems, where further research is needed to maximize consumer welfare.

Collusion by mistake: Does algorithmic sophistication drive supra-competitive profits?

A burgeoning literature shows that self-learning algorithms may, under some conditions, reach seemingly-collusive outcomes: after repeated interaction, competing algorithms earn supra-competitive profits, at the expense of efficiency and consumer welfare. This paper offers evidence that such behavior can stem from insufficient exploration during the learning process and that algorithmic sophistication might increase competition. In particular, we show that allowing for more thorough exploration does lead otherwise seemingly-collusive Q-learning algorithms to play more competitively. We first provide a theoretical illustration of this phenomenon by analyzing the competition between two stylized Q-learning algorithms in a Prisoner’s Dilemma framework. Second, via simulations, we show that some more sophisticated algorithms exploit the seemingly-collusive ones. Following these results, we argue that the advancement of algorithms in sophistication and computational capabilities may, in some situations, provide a solution to the challenge of algorithmic seeming collusion, rather than exacerbate it.

Regulating data sales: The role of data selling mechanisms

We analyze the effects of different data selling mechanisms of a monopolistic Data Broker (DB) who sells consumer data to firms in a downstream market with free entry, where data can be used for consumer price discrimination. We consider three possible data selling mechanisms, namely auctions with and without reserve prices, and Take-It-Or-Leave-It offers, which exhibit decreasing levels of DB’s bargaining power towards firms. We highlight the emergence of an entry barrier effect in the downstream market, regardless of the data selling mechanism. Moreover, we show that the auction-based selling mechanisms, and particularly the auction with reserve prices, induce the DB to sell the lowest quantity of data, implying the lowest level of consumer surplus. Conversely, under TIOLI, the DB floods the market for data, selling to all firms data partitions that overlap over subsets of consumers. Imposing the sale of non-overlapping partitions to all firms would improve consumer surplus and welfare.

Supply-Chain Antitrust and Being Too Big in the Context of AT&T’s 1984 Breakup

In 1984, due to a US Department of Justice antitrust lawsuit, AT&T, the U.S. telecommunications monopoly, split into eight entities, including long-distance and local service providers known as Regional Bell Operating Companies (RBOCs). Vertical integration of suppliers typically benefits consumers by avoiding the issues associated with successive monopolies, where prices may be excessively high. The separation of long-distance and local services by the Department of Justice may seem counterintuitive, potentially driven by concerns over AT&T's size rather than economic rationale. This paper suggests that integrated monopolies have more willingness to build demand rigidity due to an absence of the free-riding problem, leading to higher prices. The implications extend to regulated firms and social media, highlighting the complexity of antitrust actions and their economic consequences on market dynamics and consumer welfare.

Optimal decision-making and coordination of the shipping logistics service supply chain cooperation mode under the carbon quota and trading mechanism

Carbon cap-and-trade policy based on market mechanism becomes an important means to restrain shipping logistics enterprises' carbon emission reduction. This paper studies the new requirements of shipping enterprises under the pressure of carbon emission reduction. Considering the logistics service supply chain composed of two competing providers and one integrator under the constraint of carbon cap-and-trade policy, this paper explores the optimal pricing and revenue decision of shipping logistics service supply chain through vertical cooperation, horizontal cooperation between providers and revenue sharing cooperation among integrators. This paper obtains feedback strategies under different cooperation modes by constructing a game model. In the vertical game, the shipping logistics supplier is the Stackelberg leader, and the shipping logistics integrator is the follower; there is a Nash equilibrium in the emission reduction decisions among suppliers in the horizontal game. On this basis, the results of different cooperation modes are compared, and the influence of competitive strategies on the optimal results is discussed. We found that the vertical cooperation of the shipping logistics service supply chain has a higher carbon emission reduction rate and a lower sales price, and the horizontal cooperation of shipping logistics suppliers can improve their own profits but reduce the income of the shipping logistics integrators and consumer welfare. When the revenue sharing contract provides the shipping logistics integrator with a share proportion in a certain range, the revenue sharing contract can generate higher supply chain profits than the integration of two chains, which can urge shipping logistics suppliers to forfeit the horizontal cooperation and help the shipping logistics service supply chain achieve win-win results.

Firm decisions and government subsidies in a supply chain with consumer surplus consideration

AbstractThis paper considers a supply chain that consists of a manufacturer and a retailer, who concern their respective profits as well as consumer welfare. Each firm's objective is modelled as a weighted sum of its profit and consumer surplus, with the weight on consumer surplus representing the concern level of the firm. We first examine a push supply chain where the manufacturer determines the wholesale price and the retailer determines the order quantity. We derive the optimal decisions and investigate the impact of the firms' consumer surplus consideration on the interactive decisions of the supply chain members and the overall performance of the supply chain. We show that a higher level of retailer's consumer concern does not necessarily lead to higher consumer surplus because her concern on consumers may be exploited by the manufacturer to improve his objective; and the manufacturer's concern on consumers may not benefit the retailer in terms of her profit, especially when the manufacturer's concern level is relatively low. Nevertheless, compared to the for‐profit supply chain, concern on consumer surplus could be beneficial to both firms' profits as well as consumer surplus, inducing a “win‐win‐win” situation under certain conditions. Furthermore, as a social planner, the government seeks to optimize social welfare by adopting subsidy policies, and we examine two types of intervention policies, that is, subsidizing firms and subsidizing consumers. We show that when subsidizing firms, government's quantity‐based subsidy is always more cost‐effective than sales‐based subsidy. As the firms' concern levels become higher or the demand uncertainty becomes lower, subsidizing consumers can achieve higher social welfare than subsidizing firms. Moreover, we examine the impact of the government's budget constraint and concern level on consumer surplus, and extend the analysis to a pull supply chain to show the robustness of the major findings.

Non-firm vs priority access: On the long run average and marginal costs of renewables in Australia

In Australia, the National Electricity Market (NEM) has experienced a rapid expansion of Variable Renewable Electricity (VRE) projects, not without obstacles. Entry frictions such as movements in Marginal Loss Factors and/or network congestion adversely impacted ∼15% of new projects. Are these the expected results in a workably functioning market, or due to market design defects? Policy advisors have sought to reform the NEM's non-firm, open-access regime. As VRE market shares increase, curtailment will increase rapidly through excess generation and/or network congestion, given the ratio of maximum-to-average wind output is 3 times, and solar PV is 4 times. But access reform focused solely on congestion and curtailment may have unintended consequences as a careful analysis of the difference between average and marginal curtailment rates demonstrates. Malalignment between market conventions and access policy may distort entry, raise consumer prices and harm welfare. Our model results confirm that switching from open- to priority access in Australia's NEM and REZ in particular damages consumer and producer welfare materially.

Muslim consumers’ behaviour towards halal nutraceutical products in Malaysia

Nutraceutical is defined as a food, or parts of a food, that provide medical or health benefits, including disease prevention and treatment. Although the primary source of nutraceutical products is plant-based, not all nutraceutical products can be categorized as halal. Many ingredients are involved in food processing and used as flavours, stabilizers, or colouring agents. In addition, some additives may be derived from non-halal sources, whether from pork, blood, non-slaughtered animals, genetically modified, or extracted with ethanol. Therefore, there is a need to identify the factors influencing Muslims’ consumer behaviour towards halal nutraceutical products to improve their awareness of them in Malaysia. For this reason, the present study has been developed to examine the factors that affect Muslim behaviour in purchasing halal nutraceutical products. This study employed a quantitative approach, with a total of 400 Muslim consumers in Malaysia participating and selected through multi-stage random sampling. Multiple regression analysis was used to determine whether Islamic values, religiosity, the maqasid shariah principle, and trust in government influence consumer behaviour toward halal nutraceutical products. The result indicated that all four factors significantly affect the consumers’ behaviour, where trust in the government was the most substantial predictive factor. This study was expected to improve halal awareness among Muslim consumers while encouraging the government to strengthen the Halal industry to protect the welfare of Muslim consumers in Malaysia.

Keep It Simple? Consumer Perceptions of Brand Simplicity and Risk

Evoking simplicity in marketing communications has become popular among marketing practitioners, but little is known about its effects on consumers and firms. The current work focuses on consumers’ perceptions of the simplicity or complexity of brands and a previously overlooked consequence of those perceptions. Results from six experiments and analysis of a proprietary customer satisfaction dataset from Consumer Reports (N = 147,600) show that when consumers think brands are simple, they judge them to be less likely to experience product or service failures. Although these lower risk judgments could be positive for brands, they can also lead consumers to punish simpler brands more in the event of failures. Results also suggest that consumers’ simplicity/complexity perceptions reflect the dimensionality of their mental representations of brands, and the relationship between simplicity and lower risk is attenuated when additional brand dimensionality is framed in terms of redundancy. The findings cast doubt on the degree to which evoking simplicity is a uniformly positive marketing strategy and encourage practitioners to more thoughtfully consider simplicity's implications for consumer and firm welfare.

Pengaruh Lifestyle, Word Of Mouth Dan Brand Image Terhadap Keputusan Pembelian Handbody Scarlett (Studi Kasus Pada Masyarakat Lingkungan XI Jl. Garu III Medan Amplas)

Many factors influence consumer decisions regarding Handbody Scarlett (Case Study, Environment XI Jl. Garu III, Amplas Community, Medan), including lifestyle, word of mouth marketing, and brand photography. This research aims to understand consumer welfare, word of mouth marketing and determine the image of Handbody Scarlett (Case Study of the Amplas Medan XI Community Circle Jl. Garu III). The research method used in this research is multivariate research, and the sampling method in this research is the Slovin sample, the population is 190 people, so the sample size is 85 participants. The data collection methods used are observation and surveys. The data analysis process used is multi-row iterative. The research results show that lifestyle changes have a partial effect on consumer decision making. Topic change messages influence consumer purchasing decisions. Changes in image patterns influence consumer purchasing decisions. Meanwhile, lifestyle changes, word-of-mouth marketing and brand image influence consumer decisions regarding Handbody Scarlett (Case Study of the Median Amplas XI Community Circle Jl. Garu III).

Who should decide how much information to collect?

Abstract This article examines the tradeoffs concerning the collection and disclosure of personal information and considers either the seller or the buyers choosing how much information to collect. We identify two channels through which having heterogeneous buyers make the decision increases social welfare: the full internalization of privacy costs and the customized choice of information levels. Perhaps surprisingly, the buyers voluntarily provide more information than what is mandatorily collected particularly when privacy is a significant concern, which often benefits the seller. Consumer and total welfare are increased with buyers choosing how much information to collect unless the external value of information is sufficiently large relative to the buyers’ privacy cost and heterogeneity in valuation. Given the growing privacy concerns surrounding personal data, our analysis supports offering consumers the autonomy, which can result in a Pareto improvement.

Reining in regret: emotion regulation modulates regret in decision making

ABSTRACT Whereas the influence of regret on decision making is well-established, it remains unclear whether emotion regulation may modulate both the affective experience of regret and its influence on decisions. To examine this question, participants made decisions about options involving uncertainty using two different, instructed emotion regulation strategies. In one case, they were instructed to treat each choice individually, while in the other they were encouraged to treat a series of decisions as a portfolio. The present experiment demonstrates that approaching a series of decisions as a portfolio led to less extreme affective reactions to outcomes and lowered physiological arousal levels compared to focusing on each decision in isolation. However, the different emotion regulation strategies did not alter the influence of anticipatory regret on choices. The results indicate that these different emotion regulation strategies can be used to alter the experience of regret. These findings support a role for cognitive strategies in mitigating the affective experience of regret and suggest a means to encourage consumer welfare.