The Herfindahl‐Hirschman Index and the Distribution of Social Surplus*

2021 ◽  
Vol 69 (3) ◽  
pp. 561-594
Author(s):  
Yossi Spiegel
Keyword(s):  
Social Surplus

Optimal Market-Integration Decisions by Policymakers: Modeling and Analysis of Agriculture Market Data

2021 ◽  
Author(s):  
Shivam Gupta ◽  
Saurabh Bansal
Keyword(s):  
Operations Management ◽  
Market Integration ◽  
Relative Size ◽  
Relative Price ◽  
The European Union ◽  
Demand Model ◽  
Modeling And Analysis ◽  
Complete Integration ◽  
Seed Market ◽  
Social Surplus

Policymakers often seek to integrate markets as a way to maximize social welfare. In this article, the authors consider the spectrum of all possible integration policies, from full isolation to complete integration, and characterize the socially optimal market integration, under general demands. They identify market conditions under which social surplus is indeed maximized at partial market integration. For the linear price-responsive demand model that is used extensively in the operations management literature, these conditions are identified as thresholds on (i) the relative size of the markets being integrated, and (ii) the relative price sensitivity of consumers in these markets. The authors then apply the model to the commercial seed market in the European Union (EU). Their analysis shows that socially optimal market integration for these countries provides a further improvement in the social surplus for the EU by 2.80%, relative to complete integration. Results show that policymakers should exercise caution in determining the extent to which markets are integrated.

scholarly journals Equilibrium Provider Networks: Bargaining and Exclusion in Health Care Markets

2019 ◽  
Vol 109 (2) ◽  
pp. 473-522 ◽  
Author(s):  
Kate Ho ◽  
Robin S. Lee
Keyword(s):  
Health Care ◽  
Consumer Welfare ◽  
Bargaining Solution ◽  
Health Care Markets ◽  
Social Incentives ◽  
Provider Networks ◽  
Hospital Networks ◽  
Private Incentives ◽  
Social Surplus ◽  
Optimal Networks

We evaluate the consequences of narrow hospital networks in commercial health care markets. We develop a bargaining solution, “Nash-in-Nash with Threat of Replacement,” that captures insurers’ incentives to exclude, and combine it with California data and estimates from Ho and Lee (2017) to simulate equilibrium outcomes under social, consumer, and insurer-optimal networks. Private incentives to exclude generally exceed social incentives, as the insurer benefits from substantially lower negotiated hospital rates. Regulation prohibiting exclusion increases prices and premiums and lowers consumer welfare without significantly affecting social surplus. However, regulation may prevent harm to consumers living close to excluded hospitals. (JEL C78, D85, G22, H75, I11, I13, I18)

Bargaining for Justice

1988 ◽  
Vol 5 (2) ◽  
pp. 65-74 ◽  
Author(s):  
Russell Hardin
Keyword(s):  
Distributive Justice ◽  
Central Core ◽  
Bargaining Theory ◽  
The Social ◽  
Social Surplus

David Gauthier's Morals by Agreement presents a partial theory of distributive justice. It is partial because it applies only to the distribution of gains from joint endeavors, or what we may call the ‘social surplus’ from cooperation. This surplus is the benefit we receive from cooperation insofar as this is greater than what we might have produced through individual efforts without interaction with others. The central core of Gauthier's theory of distributive justice is his bargaining theory of ‘minimax relative concession’ or MRC. Whether his theory is compelling turns essentially on whether MRC is workable and compelling. It is this issue that I wish to address.

Conclusion

2021 ◽  
pp. 161-164
Author(s):  
Eric A. Posner
Keyword(s):  
Artificial Intelligence ◽  
Labor Market ◽  
Labor Markets ◽  
Human Beings ◽  
Independent Contractors ◽  
Gig Economy ◽  
Long Run ◽  
The Social ◽  
Market Fragmentation ◽  
Social Surplus

Many people are worried about the fragmentation of labor markets, as firms replace employees with independent contractors. Another common worry is that low-skill work, and ultimately nearly all forms of work, will be replaced by robots as artificial intelligence advances. Labor market fragmentation is not a new phenomenon and can be addressed with stronger classification laws supplemented by antitrust enforcement. In fact, the gig economy has many attractive elements, and there is no reason to fear it as long as existing laws are enforced. Over the long run, artificial intelligence may replace much of the work currently performed by human beings. If it does, the appropriate response is not antitrust or employment regulation but policy that ensures the social surplus is fairly divided.

Product Quality and Market Size: Price Competition Between a Large and Small Country

2006 ◽  
Vol 6 (1) ◽  
pp. 1850080 ◽  
Author(s):  
Jannett K Highfill ◽  
Robert C Scott
Keyword(s):  
Product Quality ◽  
Free Trade ◽  
Price Competition ◽  
Market Size ◽  
Home Market ◽  
Small Country ◽  
Price Effects ◽  
Social Surplus ◽  
Sales Increase

In a two-country world for a product which in the absence of trade is provided by a monopoly in each country, opening trade effectively creates a world duopoly rather than two separate country monopolies. Suppose the goods produced in the competing countries differ in quality because the firm's home market sizes differ and quality is chosen before trade opens. Our results suggest that consumers benefit in free trade both from the choice of qualities and from the price competition. Social surplus for both countries is higher in trade than autarky—and although normally firms lose due to the increased competition, occasionally one of the firms may actually gain in trade. The competition between firms means that the trade price is less than the autarky price, but sales increase, sometimes enough to offset the price effects.

scholarly journals Revenue-Capped Efficient Auctions

2019 ◽  
Vol 18 (3) ◽  
pp. 1284-1320 ◽  
Author(s):  
Nozomu Muto ◽  
Yasuhiro Shirata ◽  
Takuro Yamashita
Keyword(s):  
Upper Bound ◽  
Private Information ◽  
Weighted Sum ◽  
Reserve Price ◽  
Total Surplus ◽  
Good For ◽  
Expected Revenue ◽  
Social Surplus

Abstract We study an auction that maximizes the expected social surplus under an upper-bound constraint on the seller’s expected revenue, which we call a revenue cap. Such a constrained-efficient auction may arise, for example, when (i) the auction designer is “pro-buyer”, that is, he maximizes the weighted sum of the buyers’ and seller’s auction payoffs, where the weight for the buyers is greater than that for the seller; (ii) the auction designer maximizes the (unweighted) total surplus in a multiunit auction in which the number of units the seller owns is private information; or (iii) multiple sellers compete to attract buyers before the auction. We characterize the mechanisms for constrained-efficient auctions and identify their important properties. First, the seller sets no reserve price and sells the good for sure. Second, with a nontrivial revenue cap, “bunching” is necessary. Finally, with a sufficiently severe revenue cap, the constrained-efficient auction has a bid cap, so that bunching occurs at least “at the top,” that is, “no distortion at the top” fails.

Sign in / Sign up

Export Citation Format

Share Document