Bundling for Flexibility and Variety: An Economic Model for Multiproducer Value Aggregation

2020 ◽  
Author(s):  
Hemant K. Bhargava
Keyword(s):  
Economic Model ◽  
Revenue Sharing ◽  
Total Output ◽  
Market Demand ◽  
Patent Pools ◽  
Home Video ◽  
Market Structures ◽  
Goods And Services ◽  
Independent Firm ◽  
Zero Sum

Many markets feature an economic structure in which value is cocreated by multiple producers and aggregated into a common bundle by a producer-consortium or independent firm. Examples include in-home video entertainment, technology goods and services, multisourced data platforms, and patent pools. This paper develops an economic model to study demand, production choices, revenue sharing, and relative market power in such markets. Producers in these markets are not rivalrous competitors in the usual zero-sum sense, because output of each casts an externality on production decisions of others and total market demand expands with total output, albeit with diminishing returns. This property allows multiple producers to flourish in equilibrium (versus just one with the most favorable technological or cost structure), and more so when the market expands less quickly with total output. Equilibrium production quantities of competitors are strategic complements, yet competition between producers does manifest itself, for example, if one acquires better production technology (i.e., makes value units at lower cost) then the equilibrium production levels of other producers are reduced. Insights are also derived for alternative market structures, for example, producers have more output and earn higher profit when organized into a distribution consortium (e.g., Hulu or consortia of zoos or museums) versus relying on a separate retailer. Mergers between producers have similar effect. The formulation enables us to rigorously answer economic questions ranging from pricing, revenue sharing, and production levels in a static setting, to market dynamics covering both the causes and effects of changes in industry structure. This paper was accepted by Chris Forman, information systems.

Prospects Of Development And Problems Of Introducing Digitalization In The Economy Of Uzbekistan

2021 ◽  
Vol 03 (04) ◽  
pp. 55-62
Author(s):  
Martabo Makhmudovna Dadajonova ◽  
Keyword(s):  
Economic Model ◽  
Small Businesses ◽  
Digital Technologies ◽  
Digital Economy ◽  
High Importance ◽  
Goods And Services

Realizing the high importance of digital technologies, Uzbekistan, along with many countries, creates conditions for the transition to a digital economy. The task of the new economic model is to improve the lives of citizens by improving the quality of goods and services produced using modern digital technologies and to bring small businesses to the level of innovative entrepreneurship.

scholarly journals Win–Win Denial: The Psychological Underpinnings of Zero-Sum Thinking

2020 ◽  
Author(s):  
Samuel Gregory Blane Johnson ◽  
Jiewen Zhang ◽  
Frank Keil
Keyword(s):  
Naive Realism ◽  
Naïve Realism ◽  
Goods And Services ◽  
Psychological Mechanisms ◽  
Zero Sum

A core proposition in economics is that voluntary exchanges benefit both parties. We show that people often deny the mutually beneficial nature of exchange, instead espousing the belief that one or both parties fail to benefit from the exchange. Across 4 studies (and 7 further studies in the Supplementary Materials), participants read about simple exchanges of goods and services, judging whether each party to the transaction was better off or worse off afterwards. These studies revealed that win–win denial is pervasive, with buyers consistently seen as less likely to benefit from transactions than sellers. Several potential psychological mechanisms underlying win–win denial are considered, with the most important influences being mercantilist theories of value (confusing wealth for money) and naïve realism (failing to observe that people do not arbitrarily enter exchanges). We argue that these results have widespread implications for politics and society.

scholarly journals A Green Supply-Chain Decision Model for Energy-Saving Products That Accounts for Government Subsidies

2019 ◽  
Vol 11 (8) ◽  
pp. 2209 ◽  
Author(s):  
Jian Xue ◽  
Ruifeng Gong ◽  
Laijun Zhao ◽  
Xiaoqing Ji ◽  
Yan Xu
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Supply Chain ◽  
Energy Conservation ◽  
Social Welfare ◽  
Energy Saving ◽  
Revenue Sharing ◽  
Green Supply Chain ◽  
Market Demand ◽  
Government Subsidies

Government subsidies are a common policy adopted to promote energy conservation and emission reduction. The decision-making that occurs within the green supply chain for energy-saving products under government subsidies is an area of great academic interest and game theory is becoming a popular tool in such research. In this paper, we examined centralized and decentralized decision-making models for the green supply chain and a coordinated decision-making model for revenue-sharing contracts based on game theory. We studied the effects of government subsidies on retail prices, energy conservation levels, market demand, supply chain profits, and social welfare for energy-saving products. We then compared the effectiveness of the three models using a numerical example. Our results revealed the range of contract parameters for which manufacturer and retailer profits increase. Our results show that government subsidies can significantly improve social welfare and promote the improvement of energy-saving products. Centralized decision-making generates higher profits than decentralized decisions and government subsidies were positively correlated with the level of energy conservation, product prices, and market demand. Revenue sharing contract coordination decisions can coordinate the supply chain and achieve the same effect as centralized decisions.

scholarly journals Three-level supply chain coordination of fresh agricultural products in the Internet of Things

2017 ◽  
Vol 117 (9) ◽  
pp. 1842-1865 ◽  
Author(s):  
Bo Yan ◽  
Xiao-hua Wu ◽  
Bing Ye ◽  
Yong-wang Zhang
Keyword(s):  
Supply Chain ◽  
Internet Of Things ◽  
Supply Chain Coordination ◽  
Revenue Sharing ◽  
Agricultural Product ◽  
The Internet ◽  
Market Demand ◽  
Content Type ◽  
Revenue Sharing Contract ◽  
The Internet Of Things

Purpose The Internet of Things (IoT) is used in the fresh agricultural product (FAP) supply chain, which can be coordinated through a revenue-sharing contract. The purpose of this paper is to make the three-level supply chain coordinate in IoT by considering the influence of FAP on market demand and costs of controlling freshness on the road. Design/methodology/approach A three-level FAP supply chain that comprises a manufacturer, distributor, and retailer in IoT is regarded as the research object. This study improves the revenue-sharing contract, determines the optimal solution when the supply chain achieves maximum profit in three types of decision-making situations, and develops the profit distribution model based on the improved revenue-sharing contract to coordinate the supply chain. Findings The improved revenue-sharing contract can coordinate the FAP supply chain that comprises a manufacturer, distributor, and retailer in IoT, as well as benefit all enterprises in the supply chain. Practical implications Resource utilization rate can be improved after coordinating the entire supply chain. Moreover, loss in the circulation process is reduced, and the circulation efficiency of FAPs is improved because of the application of IoT. The validity of the model is verified through a case analysis. Originality/value This study is different from other research in terms of the combination of supply chain coordination, FAPs, and radio frequency identification application in IoT.

scholarly journals Coordinating Three-Level Supply Chain under Disruptions Using Revenue-Sharing Contract with Effort Dependent Demand

2016 ◽  
Vol 2016 ◽  
pp. 1-10 ◽  
Author(s):  
Qinghua Pang ◽  
Yanli Hou ◽  
Yifei Lv
Keyword(s):  
Supply Chain ◽  
Revenue Sharing ◽  
Optimal Contract ◽  
Market Demand ◽  
Numerical Examples ◽  
Revenue Sharing Contract ◽  
Special Case ◽  
Additive Form ◽  
Dependent Demand

Considering that the market demand is stochastic and dependent on effort, this essay shows that the benchmark revenue-sharing contract could not coordinate a three-level supply chain consisting of one manufacturer, one distributor, and one retailer. By assuming that the retailer himself bears the effort cost, coordination is achieved by implementing revenue-sharing contract based on rebate and penalty policy in one transaction or two transactions of three-level supply chain, and the former is a special case of the latter. When the disruptions induce the changes of the market demand, the revenue-sharing contract could not coordinate the supply chain. To deal with the problem, this essay introduces two forms of improved revenue-sharing contracts which have antidisruption ability. The model of improved revenue-sharing contract is optimized when the market demand is in the additive form with effort dependent demand. Formulas are given to calculate the optimal contract parameters. Finally, this essay demonstrates the accuracy of the model of improved revenue-sharing contract with the help of numerical examples.

scholarly journals Three-Level Supply Chain Coordination under Disruptions Based on Revenue-Sharing Contract with Price Dependent Demand

2014 ◽  
Vol 2014 ◽  
pp. 1-11 ◽  
Author(s):  
Qinghua Pang ◽  
Yuer Chen ◽  
Yulu Hu
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Revenue Sharing ◽  
Optimal Contract ◽  
Market Demand ◽  
Revenue Sharing Contract ◽  
Normal Environment ◽  
Contract Form ◽  
Additive Form ◽  
Dependent Demand

Considering the market demand is stochastic and dependent on price, this paper shows that the revenue-sharing contract could coordinate a three-level supply chain consisting of one manufacturer, one distributor, and one retailer under normal environment. However, the original revenue-sharing contract cannot coordinate the supply chain under disruptions in circumstances of certain incidents leading to significant changes in market demand and causing additional deviation costs. To solve the problem, this essay introduces two improved forms of revenue-sharing contract: a mixed contract form based on a quantity discount policy and a pure form, which are characterized by antidisruption ability. The model of improved revenue-sharing contract is optimized when the market demand is in the additive form or in the multiplicative form with price dependent demand. Formulas are given to calculate the optimal contract parameters. Finally, this essay demonstrates the accuracy of the model of improved revenue-sharing contract with the help of numerical examples.

scholarly journals Percobaan Ekonomi untuk Mengkaji Pengaruh Informasi serta Jumlah Penjual dan Pembeli dalam Transaksi Pasar

The Winners ◽  
2010 ◽  
Vol 11 (1) ◽  
pp. 43
Author(s):  
Edy Supriyadi
Keyword(s):  
Everyday Life ◽  
High Efficiency ◽  
Experimental Methods ◽  
Perfect Competition ◽  
Double Auction ◽  
Market Structures ◽  
Contract Price ◽  
Goods And Services ◽  
Monopoly Market ◽  
Very High

Perfect competition (PPS) is the most ideal market structure because this market system is considered will ensure the realization of activities producing goods and services with very high efficiency compared to other market structures such as monopoly. Due to its benefits for sellers and buyers, economists often wish for the creation of perfect competition. In the pattern of transactions in everyday life, there are many market transactions commonly encountered, such as decentralized systems (DT), and Double Auction (DA). This paper presents the use of experimental methods to study the characteristics of both systems the transaction is in a "perfect competition” (5 sellers and 5 buyers' and market monopoly (with 1 seller and 5 buyers). Responses observed are Contract Price (CP), market efficiency, CP diversity coefficient on the price balance, buyer surplus and seller surplus. From the experimental results can be seen that the average Contract Price (CP) during 5 experimental periods that the value of CP at Perfect Competition Market is smaller than the monopoly market. From efficiency levels between transactions type it can be seen that the Double Auction type of transaction is more efficient than with the Decentralization type of transaction.

scholarly journals Organizational support of the competitiveness management of the enterprise in the conditions of entering foreign markets

2020 ◽  
pp. 9-12
Author(s):  
Kseniia KOVTUNENKO ◽  
Oleksandra KOVALVHUK ◽  
Dmytro ZHYVODER
Keyword(s):  
Organizational Support ◽  
Economic Model ◽  
Practical Importance ◽  
Theory And Practice ◽  
Competitive Advantages ◽  
Foreign Markets ◽  
Goods And Services ◽  
Stage Of Development ◽  
Level Of Economic Development ◽  
Sustainable Competitive Advantages

At the present stage of development of the Ukrainian economic system, the concept of «competitiveness» and its effective organizational support is becoming increasingly important. The problem of competitiveness management is recognized as one of the most important in the theory and practice of economics. It is important for Ukrainian enterprises operating in a transitive economy, whose competitive position in today's world markets remains insufficiently high. A significant number of scientists agree that in the context of rapid globalization and an informatized society, it is impossible to achieve the projected level of economic development due to traditional intensive and extensive factors of production. For companies operating internationally or seeking to develop their own foreign economic activity and face international competition, it is important not only to offer certain goods and services to the market, but to achieve sustainable competitive advantages in the global economic space. A significant place in the process of increasing the competitiveness of modern ukrainian enterprises is occupied by the organizational support of competitiveness management. In the course of this study, the problem of managing the competitiveness of modern ukrainian enterprises was considered, as well as the organizational and economic model of managing the competitiveness of the enterprise in terms of entering foreign markets was proposed. The results of the study are of practical importance for the enterprise of non-specialized wholesale trade LLC EL-ITEX, as proposed in the article organizational and economic model will create a kind of «foundation» for effective management of the competitiveness of the enterprise in terms of entering new markets.

scholarly journals Shortageflation 3.0. Gospodarka wojenna – państwowy socjalizm – kryzys pandemiczny

Ekonomista ◽  
2021 ◽  
Vol 5 ◽  
Author(s):  
GRZEGORZ KOŁODKO
Keyword(s):  
Point Of View ◽  
Budget Deficits ◽  
Market Demand ◽  
New Production ◽  
The Sustainable Development ◽  
War Economy ◽  
Goods And Services ◽  
Real Socialism ◽  
Specific Reactions ◽  
Production Capacities

The crisis caused by the pandemic has induced governments and central banks to undertake non-orthodox actions aimed at the protection of people’s living standards and the maintenance of production and service activities of enterprises. The policy of the aggressive rise in money supply has resulted in a considerable increase in budget deficits and foreign debts. In this context, it is important to seek an answer to the question how this can accelerate inflationary processes and to formulate proper suggestions addressed to economic policy. In fact, inflation now is higher than the official price indices because it is partly dampened. The rise in the general price level does not reflect fully the actual intensity of inflation. We have to do with a price and resource inflation, called shortageflation. Methodologically, it is interesting to compare this contemporary phenomenon (3.0) with inflation suppression in a war economy (1.0) and in the economies of real socialism (2.0). Such comparisons show some similarities of these processes but also significant differences due to the specific reactions of households and enterprises. The author discusses five channels of liquidating the excessive money resources and indicates the ways most advisable from the point of view of the sustainable development in the post-pandemic future. Especially important is to stimulate the transformation of a part of the inflationary money surplus into the market demand for goods and services which increases the utilization of the existing production potential and leads to investments which create new production capacities as well as the conversion of compulsory savings into voluntary savings.

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