Why do firms oppose entry-deterring policies? Environmental regulation and entry deterrence

2014 ◽  
Vol 20 (2) ◽  
pp. 141-160 ◽  
Author(s):  
Ana Espínola-Arredondo ◽  
Félix Muñoz-García
Keyword(s):  
Environmental Regulation ◽  
Entry Deterrence ◽  
Social Planner ◽  
Policy Regimes ◽  
Incumbent Firm ◽  
The Social ◽  
Emission Fees

AbstractThis paper investigates the design of environmental regulation under different regimes: flexible and inflexible policies. We analyze under which settings strict emission fees can be used as an entry-deterring tool, and become socially optimal. Furthermore, we demonstrate that the incentives of the social planner and the incumbent firm are aligned regarding policy regimes ifentry can be easily deterred by setting a stringent regulation. Their incentives, however, can bemisaligned when entry becomes more costly to deter, leading the incumbent to actually preferenvironmental policies that attract entry.

Pricing of Connected and Autonomous Vehicles in Mixed-Traffic Networks

2021 ◽  
pp. 036119812098585
Author(s):  
Paolo Delle Site
Keyword(s):  
Autonomous Vehicles ◽  
Marginal Cost ◽  
User Behavior ◽  
Social Planner ◽  
Traffic Networks ◽  
Mixed Traffic ◽  
The Third ◽  
First Case ◽  
Marginal Cost Pricing ◽  
The Social

For networks with human-driven vehicles (HDVs) only, pricing with arc-specific tolls has been proposed to achieve minimization of travel times in a decentralized way. However, the policy is hardly feasible from a technical viewpoint without connectivity. Therefore, for networks with mixed traffic of HDVs and connected and autonomous vehicles (CAVs), this paper considers pricing in a scenario where only CAVs are charged. In contrast to HDVs, CAVs can be managed as individual vehicles or as a fleet. In the latter case, CAVs can be routed to minimize the travel time of the fleet of CAVs or that of the entire fleet of HDVs and CAVs. We have a selfish user behavior in the first case, a private monopolist behavior in the second, a social planner behavior in the third. Pricing achieves in a decentralized way the social planner optimum. Tolls are not unique and can take both positive and negative values. Marginal cost pricing is one solution. The valid toll set is provided, and tolls are then computed according to two schemes: one with positive tolls only and minimum toll expenditure, and one with both tolls and subsidies and zero net expenditure. Convergent algorithms are used for the mixed-behavior equilibrium (simplicial decomposition algorithm) and toll determination (cutting plane algorithm). The computational experience with three networks: a two-arc network representative of the classic town bypass case, the Nguyen-Dupuis network, and the Anaheim network, provides useful policy insight.

scholarly journals Demand Subsidy versus Production Regulation: Development of New Energy Vehicles in a Competitive Environment

Mathematics ◽  
2021 ◽  
Vol 9 (11) ◽  
pp. 1280
Author(s):  
Zixuan Wang ◽  
Xiuzhang Li
Keyword(s):  
Social Welfare ◽  
Stackelberg Game ◽  
Positive Impact ◽  
Consumer Preference ◽  
Social Planner ◽  
Environmental Preferences ◽  
The Social ◽  
New Energy ◽  
Vehicle Market ◽  
New Energy Vehicles

In the competitive market environment, the growth of new energy vehicles (NEVs) faces many obstacles. Demand subsidy or production regulation-related policies are widely used to promote the development of NEVs. A comparative analysis of the effects of the two types of policies on the competitive vehicle market requires further study. To fill this gap, we investigate which type of policy is more preferable from the perspective of the social planner. In this paper, we construct a Stackelberg game with a welfare-maximizing social planner and two profit-maximizing manufacturers producing NEVs and fuel vehicles (FVs), respectively. Interestingly, although both types of policies can increase the quantity of NEVs, demand subsidy also promotes the growth of total vehicles at the same time; in contrast, production regulation reduces the total vehicles. Moreover, compared with the benchmark that no policy intervention, demand subsidy generally improves social welfare, while production regulation improves social welfare only with high consumer preference for NEVs. Nevertheless, production regulation always has a positive impact on the environment, whereas demand subsidy may have a positive impact only when the NEV is very environment friendly. The numerical results show that consumer environmental preferences and the regulation of environmental impact determine which type of policy dominates the other.

scholarly journals Product innovation, process innovation and advertising-based goodwill: A dynamic analysis in a monopoly

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Genlong Guo ◽  
Shoude Li
Keyword(s):  
Product Quality ◽  
Product Innovation ◽  
Dynamic Control ◽  
Innovation Process ◽  
Process Innovation ◽  
Social Optimum ◽  
Social Planner ◽  
State Variables ◽  
Product Price ◽  
The Social

<p style='text-indent:20px;'>In this paper, we develop a dynamic control model to investigate a monopolist's investment strategies in product innovation, process innovation and advertising-based goodwill. The significant features of our study are: (ⅰ) considering the effect of product quality on goodwill; (ⅱ) considering the instantaneous cost of producing a quality using machinery and/or skilled labour; (ⅲ) the customers' demand function depends on product quality, product price and goodwill in a separable multiplicative way between the state variables and control variables. Our results suggest that (ⅰ) the system admits unique saddle-point steady-state equilibrium under the monopolist optimum and the social optimum; (ⅱ) and the monopolist will have an underinvestment problem as compared with the social planner; and (ⅲ) although the product price is still determined by the monopolist under the social planner optimum, the product price is higher under the monopolist optimum than that under the social planner optimum.</p>

The Role of Science

2011 ◽  
Author(s):  
Gilles Saint-Paul
Keyword(s):  
Social Sciences ◽  
Population Distribution ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Social Planner ◽  
The Social ◽  
The Cost ◽  
Gains And Losses ◽  
Social Engineer

This chapter describes the social sciences. Unlike the natural sciences, the social sciences are inevitably statistical. When documenting human behavior, for example, they can at most claim that a trait is present in a certain fraction of the population. However, the social engineer of the paternalistic state must take into account that the “science of happiness” that is being implemented does not apply uniformly to all individuals. A policy that benefits some by preventing mistakes or removing their biases harms those who are immune to these issues. This difficulty, however, entirely disappears as long as the state is utilitarian or, more generally, pursues any objective that aggregates welfare between individuals, for the statistics are the only thing the utilitarian needs to know. Once the population distribution of the relevant effects and mechanisms is known, the social planner can safely use it to balance gains and losses across incarnations and perform the cost-benefit analysis of its policies.

Welfare Efforts in Comparative Perspective

2020 ◽  
pp. 52-89
Author(s):  
Ferdinand Eibl
Keyword(s):  
Social Policy ◽  
Social Protection ◽  
Social Spending ◽  
Welfare Provision ◽  
Regime Formation ◽  
Policy Regimes ◽  
The Social ◽  
Social Expenditures ◽  
The International Monetary Fund

This chapter provides an analytical overview of welfare provision in labour· abundant MENA regimes. Organized in sections by country and covering the period from regime formation until the late 2000s, the chapter pays particular attention to spending levels and the accessibility of social policies, and maps the eigbt regimes onto the three different pathways of welfare provision outlined in Chapter I. It draws on a combination of historical reports and statistics, available secondary accounts, and a novel dataset on social expenditures developed from archival material of the International Monetary Fund (IMF). It also diversifies the picture by examining policies of education, health, and social protection separately. The chapter lays important groundwork for further analyses and gives a more complete sense of social policy regimes beyond the social spending figures presented in Chapter I.

A NOTE ON OPTIMAL DEBT REDUCTION POLICIES

2019 ◽  
Vol 24 (7) ◽  
pp. 1850-1860 ◽  
Author(s):  
Davide la Torre ◽  
Simone Marsiglio
Keyword(s):  
Economic Policy ◽  
Real World ◽  
Optimal Policy ◽  
Social Costs ◽  
Social Planner ◽  
Long Run ◽  
The Social ◽  
Reduction Problem ◽  
Short Run ◽  
Over Time

We analyze the optimal debt reduction problem in an uncertainty context. The social planner has a finite horizon and seeks to minimize the social costs associated with debt repayment by taking into account not only the short-run costs of the policy, but also the long-run costs associated with the outstanding level of debt. We characterize the optimal policy and the dynamics of the debt-to-GDP ratio, showing that it will decrease over time if economic policy is effective enough. We characterize how the evolution of the debt-to-GDP ratio depends on the main parameters and we present a simple calibration based on Greek data to illustrate the implications of our analysis in real-world setups.

Entry Deterrence, Coordinating Advertising and Pricing in Markets with Consumption Externalities

2018 ◽  
Vol 19 (2) ◽  
Author(s):  
Adele Whelan
Keyword(s):  
Price Competition ◽  
Entry Deterrence ◽  
Fixed Cost ◽  
Pricing Strategies ◽  
Consumption Externalities ◽  
Strategic Investment ◽  
Incumbent Firm ◽  
First Mover Advantage ◽  
Success Function ◽  
Consumption Externality

Abstract This paper extends the entry deterrence literature by examining coordinating advertising and pricing in markets with consumption externalities using a stochastic success function. Optimal advertising and pricing strategies are analysed when an incumbent firm faces a challenger with a product of equal quality. I show that strategic entry deterrence using advertising is possible and optimal entry deterrence involves strategic pre-commitment to over-investment relative to the non-strategic simultaneous advertising benchmark. I show that when entry deterrence is not possible the incumbent does not possess a first mover advantage and optimal entry accommodation involves strategic investment in advertising with intensified price competition congruent with the non-strategic simultaneous advertising benchmark. The findings suggest that an incumbent’s ability to deter entry through coordinating advertising in a market with products of equal quality is sensitive to the size of the fixed cost of entry that the challenger must incur and the consumption externality parameter.

Strategic priority-purchasing and joining rules in a retrial queue

2020 ◽  
Author(s):  
Zhongbin Wang ◽  
Jinting Wang
Keyword(s):  
Retrial Queue ◽  
Dominant Strategy ◽  
Equilibrium Strategy ◽  
Social Planner ◽  
Theoretic Model ◽  
Retrial Queueing System ◽  
Retrial Queueing ◽  
The Social ◽  
Game Theoretic ◽  
Customer Welfare

Abstract This paper considers a retrial queueing system with a pay-for-priority option. A queueing-game-theoretic model that captures the interaction among the customers, the service provider (SP) and the social planner is developed. We obtain the equilibrium strategy of customers for any fixed priority premium and identify the unique Pareto-dominant strategy. The optimal pricing strategies for the SP and the social planner are derived and compared extensively. Interestingly, we find that the equilibrium outcome of customers is non-monotone in the service reward and the profit of the SP is bimodal in the priority premium. We reveal the fact that the SP’s optimization makes the system more congested than what is socially desirable. Finally, numerical examples indicate that the customer welfare can be improved by providing priorities when the market size is large.

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