The Perils of Personalized Pricing with Network Effects

2021 ◽  
Author(s):  
Bita Hajihashemi ◽  
Amin Sayedi ◽  
Jeffrey D. Shulman
Keyword(s):  
Network Effects ◽  
Consumer Surplus

This research shows when, why, and how network effects can make it such that price personalization reduces profit, demand, and consumer surplus.

scholarly journals Integration between Transport Models and Cost-Benefit Analysis to Support Decision-Making Practices: Two Applications in Northern Italy

2018 ◽  
Vol 2018 ◽  
pp. 1-16 ◽  
Author(s):  
Paolo Beria ◽  
Alberto Bertolin ◽  
Raffaele Grimaldi
Keyword(s):  
Network Effects ◽  
Cost Benefit Analysis ◽  
Consumer Surplus ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Sustainable Mobility ◽  
Transport Models ◽  
Planning Stage ◽  
Public Investments ◽  
Operative Case

Decisions on transport plans and projects involve relevant public investments and may also determine radical changes in users’ costs. Unfortunately, it is not rare that—especially at the strategic planning stage—decisions on alternative projects or scenarios are made on a qualitative basis or, at best, by setting some indicators and verifying how much they reach the politically decided targets (e.g., “increasing the use of bicycles by 10%”). In order to reduce subjectivity, a more quantitative and comprehensive approach to the evaluation is needed. A Cost-Benefit Analysis is a tool commonly used to assess public expenditure, but its application to mobility plans introduces further practical and theoretical complexities. In this paper, we will thus try to contribute to the topic of the assessment of both sustainable mobility transport plans and infrastructure projects by presenting the operative application of a CBA methodology that is, at the same time, theoretically coherent and rich in outputs to support the decision-maker. Moreover, we will discuss the possible use of GIS software in order to provide to the decision-makers a clear and immediate “picture” of the effects on the network linked to different scenarios. The structure is as follows. Firstly, we discuss the complexities involved in the evaluation of plans with respect to a single infrastructure. Secondly, we introduce the available approaches for the assessment of consumer surplus, namely, the Rule of Half and the logsum function method, which allow the perfect integration between CBA and transport models. Thirdly, we present, through some operative case studies, the methodologies applied to the assessment and the network effects visualization of the urban mobility plan and new infrastructures. Finally, we underline how we can make the results more understandable to politicians, policy-makers, stakeholders, and citizens and in general improve the transparency and the awareness of the choices.

scholarly journals Pricing Network Effects: Competition

2020 ◽  
Vol 12 (3) ◽  
pp. 1-32
Author(s):  
Itay P. Fainmesser ◽  
Andrea Galeotti
Keyword(s):  
Market Efficiency ◽  
Information Acquisition ◽  
Network Effects ◽  
Consumer Surplus ◽  
Consumer Product ◽  
Strategic Complements ◽  
Oligopoly Markets ◽  
Price Discriminate ◽  
Other Consumers

We study the practice of influencer marketing in oligopoly markets and its effect on market efficiency. In our model, each consumer is influenced by choices of a subset of other consumers. Firms gather information on consumers’ influence and price discriminate using this information. In equilibrium, firms charge premia/subsidize below-/ above-average-influential consumers; the premia/discounts depend on the strength of network effects and on how much information firms have on consumers’ influence. Influencer marketing leads to inefficient consumer-product matches. Firms’ investments in information are strategic complements, leading to a race for information acquisition that erodes welfare and firms’ profits but increases consumer surplus. (JEL D11, D21, D43, D83, D85, L13, M31)

scholarly journals Bertrand Competition in Markets with Network Effects and Switching Costs

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Irina Suleymanova ◽  
Christian Wey
Keyword(s):  
Network Effects ◽  
Switching Costs ◽  
Critical Mass ◽  
Consumer Surplus ◽  
Mass Effect ◽  
Large Network ◽  
Market Outcomes ◽  
Discount Factors ◽  
Market Expansion ◽  
Consumer Switching

Abstract We analyze Bertrand duopoly competition in markets with network effects and consumer switching costs. Depending on the ratio of switching costs to network effects, our model generates four different market patterns: monopolization and market sharing, which can be either preserved or reversed. A critical mass effect where one firm becomes the monopolist for sure only occurs for intermediate values of the ratio, whereas for large switching costs market sharing is the unique equilibrium. For large network effects, both monopoly and market sharing equilibria exist. Our welfare analysis reveals a conflict between maximization of consumer surplus and social welfare when network effects are large. We also analyze firms’ incentives for compatibility and incentives to increase switching costs and examine how market outcomes are affected by market expansion and cost asymmetries. Finally, in a dynamic extension of our model, we show how competition depends on agents’ discount factors.

The Factors Influencing Tourist Visitations Number in Curug Silawe

2019 ◽  
Vol 2 (3) ◽  
pp. 553-561
Author(s):  
Novian Hangga Prakosa ◽  
Fafurida Fafurida
Keyword(s):  
Economic Value ◽  
Consumer Surplus ◽  
Sampling Technique ◽  
Travel Cost ◽  
Analysis Tool ◽  
Literature Study ◽  
Factors Influencing ◽  
Negative Effect ◽  
Value Estimation ◽  
Positive Effect

The purposes of this research are to identify the influence of travel cost, income, distance, access, facilities, natural beautiness, and age on the number of individual visits to Curug Silawe and to estimate the economic value of Curug Silawe through individual travel cost method. The population in this study are tourists that visited Curug Silawe with sample of 98 respondents taken by the quota accidental sampling technique. The data collection method used are literature study and questionnaire. The analysis tool used are OLS linear regression and economic value estimation. The results showed the variables that influence the number of individual visits to Curug Silawe are income, distance and age. Income and age has a positive effect. While distance has a negative effect. The economic value of Curug Silawe reached IDR 1,109,930,140.48 per year. This value is obtained from consumer surplus obtained per individual per year of IDR 308,656.88. Tujuan dari penelitian ini adalah untuk mengidentifikasi pengaruh biaya perjalanan, pendapatan, jarak, akses, fasilitas, keindahan alam, dan usia pada jumlah kunjungan individu ke Curug Silawe dan untuk memperkirakan nilai ekonomi Curug Silawe melalui metode biaya perjalanan individu . Populasi dalam penelitian ini adalah wisatawan yang berkunjung ke Curug Silawe dengan sampel 98 responden yang diambil dengan teknik quota accidental sampling. Metode pengumpulan data yang digunakan adalah studi literatur dan kuesioner. Alat analisis yang digunakan adalah regresi linear OLS dan estimasi nilai ekonomi. Hasil penelitian menunjukkan variabel yang mempengaruhi jumlah kunjungan individu ke Curug Silawe adalah pendapatan, jarak dan usia. Penghasilan dan usia memiliki efek positif. Sedangkan jarak memiliki efek negatif. Nilai ekonomi Curug Silawe mencapai Rp1.109.930.140,48 per tahun. Nilai ini diperoleh dari surplus konsumen yang diperoleh per individu per tahun sebesar Rp308.656,88.

Transformation of education as a metatrend of the digital economy

2020 ◽  
Vol 16 (10) ◽  
pp. 1960-1979
Author(s):  
N.A. Egina ◽  
E.S. Zemskova
Keyword(s):  
Human Capital ◽  
Social Transformation ◽  
Network Effects ◽  
Digital Economy ◽  
Network Education ◽  
Economic Progress ◽  
Positive Externalities ◽  
Communication Processes ◽  
Education Network ◽  
The Impact

Subject. The study focuses on the impact of the digital economy determinants of the education transformation. Objectives. The article provides our own approach treating the education capital as a specific asset of the digital economy, which has an acceleration effect and sets up new trends in education through integrative networks. Methods. The study is based on principles of the systems integration, cross-disciplinary and multidisciplinary approaches. Results. The socio-economic progress was found to be determined with properties of human capital, which are solely specific to the digital economy. In new circumstances, it gets more important for actors of global, national, corporate and social networks to more actively cooperate within distributed networks in order to train high professionals, who would have skills in information networks. Thus, they would raise a new form of human capital – the capital of network education (network-based education capital). We describe positive externalities that arise when the educational sector joins communication processes. We illustrate how educational forms evolves, which are typical of a certain phase of the socio-economic development. The education capital was discovered to grow into a specific asset generating the quasi-rent and working as a social ladder only provided more actors are involved into the network. Conclusions and Relevance. Studying the evolution of educational forms through the cross-disciplinary method, we discovered the need for a system approach, which would help substantiate its transformation in the time of the digital economy, and the emergence of network-based education. These are technologies and tools of the digital economy that become unique factors generating the acceleration effect of the educational capital and ensuring the use of diverse network effects for the formation of intellectual capital and their social transformation.

Principles for sharing economy formation in the digital society

2020 ◽  
Vol 16 (5) ◽  
pp. 800-821
Author(s):  
E.V. Popov ◽  
K.A. Semyachkov
Keyword(s):  
Network Effects ◽  
Sharing Economy ◽  
Network Effect ◽  
Industrial Society ◽  
Economic Activities ◽  
Digital Platforms ◽  
Digital Society ◽  
Modern Economy ◽  
Characteristic Features ◽  
The Impact

Subject. The article addresses economic relations that are formed in various areas of economic application of digital platforms. The target of the research is the modern economy of digital platforms across different economic activities. Objectives. The aim is to systematize principles for share economy formation in the context of the digital society development. Methods. We employ general scientific methods of research. Results. The study shows that the development of digital platforms is one of the most important trends in the development of the modern economy. We classified certain characteristic features of modern digital platforms, analyzed principles for their creation. The paper emphasizes that the network effects achieved through the use of digital platforms are an important factor in the development of the share economy. The network effect describes the impact of the number of the platform users on the value created for each of them. The paper also considers differences in the organization of traditional economy companies and companies that are based on the digital platform model, reveals specifics of changes in socio-economic systems caused by the development of digital platforms, systematizes principles of the sharing economy formation in the context of the digital society development. Conclusions. The analyzed principles for sharing economy development on the basis of digital platforms can be applied to create models for the purpose of forecasting the transformation of economic activity in the post-industrial society.

СОЦИАЛЬНО-ЭКОНОМИЧЕСКИЕ КОНФЛИКТЫ В РАМКАХ «КАПИТАЛИЗМА ПЛАТФОРМ»

2019 ◽  
Vol 14 (3) ◽  
pp. 33
Author(s):  
L. V. Tomin
Keyword(s):  
Large Scale ◽  
Network Effects ◽  
Corporate Control ◽  
Balance Of Power ◽  
Negative Effects ◽  
Potential Threat ◽  
Communication Infrastructure ◽  
Political Effects ◽  
Information And Communication ◽  
Integrated Information

The article is devoted to the analysis of the structure, the peculiarities of functioning and the socio-economic and political effects of the «platform capitalism». The basis of this model is the network effects produced by the integrated information and communication infrastructure, which contribute to the monopolization and the constant expansion of platform companies into new areas. The principle of functioning of this infrastructure is the continuous collection and further monetization of data extracted from the interactions of individuals among themselves or with one of the elements of a digitalized economy or government structures. Such an infrastructure — forms a potential threat of strengthening state and corporate control over citizens. In addition, the activities of platform companies produce negative effects on the labor market, reinforcing the process of precarization of employment. The integrated information and communication infrastructure of platform companies form a system of a kind of «digital Taylorism», which deprives the employee of autonomy and privacy in the workplace. The influence of digitalization, subjected to the technocratic logic of the neoliberal model of governance in democratic countries, strengthens the de-politicization of relations between the citizen and the state and further changes the balance of power between labor and capital in favor of the latter. Large-scale protests of the last years against the companies of “capitalism of platforms” demonstrated the structural contradictions of this model and formed new forms of organization and actions of grassroots workers of the “digital economy”.

Intraoperative localization of spatially and spectrally distinct resting-state networks in Parkinson’s disease

2020 ◽  
Vol 132 (4) ◽  
pp. 1234-1242 ◽  
Author(s):  
Paolo Belardinelli ◽  
Ramin Azodi-Avval ◽  
Erick Ortiz ◽  
Georgios Naros ◽  
Florian Grimm ◽  
...  
Keyword(s):  
Parkinson’S Disease ◽  
Parkinson's Disease ◽  
Network Effects ◽  
Brain Activity ◽  
Dynamic Imaging ◽  
Oscillatory Activity ◽  
Network Information ◽  
Novel Approach ◽  
Electrophysiological Recordings ◽  
Intraoperative Localization

Deep brain stimulation (DBS) of the subthalamic nucleus (STN) is an effective treatment for symptomatic Parkinson’s disease (PD); the clinical benefit may not only mirror modulation of local STN activity but also reflect consecutive network effects on cortical oscillatory activity. Moreover, STN-DBS selectively suppresses spatially and spectrally distinct patterns of synchronous oscillatory activity within cortical-subcortical loops. These STN-cortical circuits have been described in PD patients using magnetoencephalography after surgery. This network information, however, is currently not available during surgery to inform the implantation strategy.The authors recorded spontaneous brain activity in 3 awake patients with PD (mean age 67 ± 14 years; mean disease duration 13 ± 7 years) during implantation of DBS electrodes into the STN after overnight withdrawal of dopaminergic medication. Intraoperative propofol was discontinued at least 30 minutes prior to the electrophysiological recordings. The authors used a novel approach for performing simultaneous recordings of STN local field potentials (LFPs) and multichannel electroencephalography (EEG) at rest. Coherent oscillations between LFP and EEG sensors were computed, and subsequent dynamic imaging of coherent sources was performed.The authors identified coherent activity in the upper beta range (21–35 Hz) between the STN and the ipsilateral mesial (pre)motor area. Coherence in the theta range (4–6 Hz) was detected in the ipsilateral prefrontal area.These findings demonstrate the feasibility of detecting frequency-specific and spatially distinct synchronization between the STN and cortex during DBS surgery. Mapping the STN with this technique may disentangle different functional loops relevant for refined targeting during DBS implantation.

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