On Designing a Socially Optimal Expedited Service and Its Impact on Individual Welfare

2021 ◽  
Author(s):  
Ricky Roet-Green ◽  
Aditya Shetty
Keyword(s):  
Social Welfare ◽  
Wait Time ◽  
Service Differentiation ◽  
Problem Definition ◽  
Policy Implications ◽  
Fixed Cost ◽  
Main Concern ◽  
Managerial Implications ◽  
Fixed Quantity ◽  
To Come

Problem definition: We consider the problem faced by a welfare-maximizing service provider who must make a decision on how to split a fixed quantity of resources between two variants of the service: a standard variant and an expedited variant. The service is mandatory, but customers can choose between the two variants. Choosing the expedited variant requires enrollment that incurs a fixed cost per period. Customers are strategic and have the same cost of waiting but are heterogeneous in the rate at which they use the service. Academic/practical relevance: The option of expedited security at U.S. airports (TSA PreCheck) is an instance where this problem arises. As has been the case with the PreCheck program, providers that offer expedited service may face criticism from customers, with the main concern being that the diversion of resources to expedited services increases wait time for regular customers. This has important policy implications for the provider, especially a government organization such as the TSA. Existing literature has focused on service differentiation as a means to maximize profit or overall social welfare, but its effect on individual customers has received little attention. Methodology: We find customer’s equilibrium decisions for any allocation choice made by the provider. Using the equilibrium result, we solve for the allocation choice that maximizes social welfare. Results: Even when customers behave strategically, an expedited service offered in parallel to a standard service cannot only increase overall welfare, but also do so for each customer individually. We also find that in a scenario where some customers lose out because of the expedited service, improving the efficiency of the expedited service is more effective than decreasing the enrollment cost to help those who are worse off. Managerial implications: The gains from offering expedited service do not have to come at the expense of regular customers. When they do, we provide recommendations for which decision levers are most effective at making the system fair.

The Effects of Patent Extension and Take-Back Regulation on Green Pharmacy

2021 ◽  
Author(s):  
Tianqin Shi ◽  
Nicholas C. Petruzzi ◽  
Dilip Chhajed
Keyword(s):  
Pharmaceutical Industry ◽  
Social Welfare ◽  
Technical Information ◽  
Problem Definition ◽  
Theoretic Model ◽  
Innovative Company ◽  
Take Back ◽  
Starting Point ◽  
European Environmental Agency ◽  
Managerial Implications

Problem definition: The eco-toxicity arising from unused pharmaceuticals has regulators advocating the benign design concept of “green pharmacy,” but high research and development expenses can be prohibitive. We therefore examine the impacts of two regulatory mechanisms, patent extension and take-back regulation, on inducing drug manufacturers to go green. Academic/practical relevance: One incentive suggested by the European Environmental Agency is a patent extension for a company that redesigns its already patented pharmaceutical to be more environmentally friendly. This incentive can encourage both the development of degradable drugs and the disclosure of technical information. Yet, it is unclear how effective the extension would be in inducing green pharmacy and in maximizing social welfare. Methodology: We develop a game-theoretic model in which an innovative company collects monopoly profits for a patented pharmaceutical but faces competition from a generic rival after the patent expires. A social-welfare-maximizing regulator is the Stackelberg leader. The regulator leads by offering a patent extension to the innovative company while also imposing take-back regulation on the pharmaceutical industry. Then the two-profit maximizing companies respond by setting drug prices and choosing whether to invest in green pharmacy. Results: The regulator’s optimal patent extension offer can induce green pharmacy but only if the offer exceeds a threshold length that depends on the degree of product differentiation present in the pharmaceutical industry. The regulator’s correspondingly optimal take-back regulation generally prescribes a required collection rate that decreases as its optimal patent extension offer increases, and vice versa. Managerial implications: By isolating green pharmacy as a potential target to address pharmaceutical eco-toxicity at its source, the regulatory policy that we consider, which combines the incentive inherent in earning a patent extension on the one hand with the penalty inherent in complying with take-back regulation on the other hand, serves as a useful starting point for policymakers to optimally balance economic welfare considerations with environmental stewardship considerations.

The Implications of the Term ‘Elder Abuse’ for Problem Definition and Response in Health and Social Welfare

1995 ◽  
Vol 24 (4) ◽  
pp. 493-507 ◽  
Author(s):  
Richard Hugman
Keyword(s):  
Social Policy ◽  
Social Welfare ◽  
Elder Abuse ◽  
Elderly Person ◽  
Problem Definition ◽  
Policy Implications ◽  
Professional Practices ◽  
Policy And Practice ◽  
Social Responses ◽  
Definition Of

ABSTRACT‘Elder abuse’ has recently emerged as an important phenomenon, with implications for social policy and professional practices. In this article it is argued that responses must be based on a more thorough definition. of ‘elder abuse’. A distinction between acts which can be regarded as ‘abuse’ and those which could be seen as ‘criminal’ is seen to be necessary for the development of policy and practice, recognising that these two ideas are grounded in competing discourses. The concept of an ‘obligation of care’ between perpetrator and elderly person is proposed as the basis for establishing a boundary between the two discourses and their policy implications. It is argued that this concept will enable a more focused definition of ‘elder abuse’ to be developed which will provide a more effective foundation for policies and subsequent social responses.

Slugging: Casual Carpooling for Urban Transit

2021 ◽  
Author(s):  
Shiliang Cui ◽  
Kaili Li ◽  
Luyi Yang ◽  
Jinting Wang
Keyword(s):  
Social Welfare ◽  
Public Transportation ◽  
Unintended Consequences ◽  
Problem Definition ◽  
Social Optimum ◽  
Environmental Implications ◽  
The Road ◽  
Free Ride ◽  
Managerial Implications ◽  
On The Road

Problem definition: “Slugging,” or casual carpooling, refers to the commuting practice of drivers picking up passengers at designated locations and offering them a free ride in order to qualify for high-occupancy vehicle (HOV) lanes. Academic/practical relevance: It is estimated that tens of thousands of daily commuters rely on slugging to go to work in major U.S. cities. As drivers save commute time and passengers ride for free, slugging can be a promising Smart Mobility solution. However, little is known about the welfare, policy, and environmental implications of slugging. Methodology: We develop a stylized model that captures the essence of slugging. We characterize commuters’ equilibrium behavior in the model. Results: We find that slugging indeed makes commuters better off. However, the widely observed free-ride tradition is socially suboptimal. As compared with the social optimum, commuters always underslug in the free-slugging equilibrium when highway travel time is insensitive to slugging activities but may overslug otherwise. The socially optimal outcome can be achieved by allowing pecuniary exchanges between drivers and passengers. Interestingly, passengers may be better off if they pay for a ride than if they do not under free slugging. We also find that although policy initiatives to expand highway capacity or improve public transportation always increase social welfare in the absence of slugging, they may reduce social welfare in areas where free slugging is a major commuting choice. Nevertheless, these unintended consequences would be mitigated by the introduction of pecuniary exchanges. Finally, contrary to conventional wisdom, slugging as a form of carpooling can result in more cars on the road and thus, more carbon emissions. Managerial implications: Our results call upon the slugging community to rethink the free-ride practice. We also caution that slugging benefits commuters possibly to the detriment of the environment.

Introducing Autonomous Vehicles: Adoption Patterns and Impacts on Social Welfare

2021 ◽  
Author(s):  
Opher Baron ◽  
Oded Berman ◽  
Mehdi Nourinejad
Keyword(s):  
Social Welfare ◽  
Autonomous Vehicles ◽  
Positive Impact ◽  
Network Connectivity ◽  
Optimal Level ◽  
Problem Definition ◽  
Travel Times ◽  
Managerial Implications ◽  
Sharing Patterns ◽  
The Impact

Problem definition: Autonomous vehicles (AVs) are predicted to enter the consumer market in less than a decade. There is currently no consensus on whether their presence will have a positive impact on users and society. The skeptics of automation foresee increased congestion, whereas the advocates envision smoother traffic with shorter travel times. We study the automation controversy and advise policymakers on how and when to promote AVs. Academic/practical relevance: The AV technology is advancing rapidly and there is a need to study its impact on social welfare and the likelihood of its adoption by the public. Methodology: We use supply-demand theory to find the equilibrium number of trips for autonomous and regular households. We develop a simulation model of peer-to-peer AV sharing. We compare the socially optimal level of automation with the selfish adoption patterns where households independently choose their vehicle type. Results: We establish that the optimal social welfare is influenced by: (i) the network connectivity, that is, the ability of the infrastructure to serve AVs, (ii) the additional comfort provided by AVs that allows passengers to engage in other productive activities instead of driving, and (iii) the AV sharing patterns that reduce ownership costs, but create empty vehicle trips that increase congestion. Managerial implications: We investigate the impact of AVs in a case study of Toronto and show that partial automation maximizes social welfare. We show that the comfort of AVs may add traffic that compromises social welfare. Moreover, although traffic increases with automation, travel times may decrease because of significant improvements in traffic flow caused by AV connectivity in the network.

On Queue-Length Information when Customers Travel to a Queue

2020 ◽  
Author(s):  
Refael Hassin ◽  
Ricky Roet-Green
Keyword(s):  
Social Welfare ◽  
Queue Length ◽  
Real Life ◽  
Wait Time ◽  
Arrival Rate ◽  
Problem Definition ◽  
Model Complexity ◽  
Equilibrium Strategy ◽  
Online Information ◽  
Queue Lengths

Problem definition: We consider a service system in which customers must travel to the queue to be served. In our base model, customers observe the queue length and then decide whether to travel. We also consider alternative information models and investigate how the availability of queue-length information affects customer-equilibrium strategies, throughput, and social welfare. Academic/practical relevance: A common assumption in queueing models is that once a customer decides to join the queue, joining is instantaneous. This assumption does not fit real-life settings, where customers possess online information about the current wait time at the service, but while traveling to the service, its queue length may change. Motivated by this realistic setting, we study how queue-length information prior to traveling affects customers’ decision to travel. Methodology: We prove that a symmetric equilibrium exists in our base model. We perform the calculation numerically as a result of the model complexity, which is due to the fact that the arrival rate to the traveling queue depends on the current state of the service queue, and vice versa. The alternative models are tractable, and we present their analytical solution. Results: When customers can observe the service-queue length prior to traveling, their probability of traveling is monotonically nonincreasing with the observed queue length. We find that customers may adopt a generalized mixed-threshold equilibrium strategy: Travel when observing short queue lengths, avoid traveling when observing long queue lengths, and mix between traveling and not traveling when observing intermediate queue lengths, with a decreasing probability of traveling. Managerial implications: Our results imply that when system congestion is high, the provider can increase throughput by disclosing the queue-length information, whereas at low congestion, the provider benefits from concealing the information. With respect to social welfare, queue-length information prior to departure is beneficial when congestion is at intermediate to high levels and yields the same social welfare otherwise.

Designing Sustainable Products Under Coproduction Technology

2020 ◽  
Vol 22 (6) ◽  
pp. 1181-1198
Author(s):  
Yen-Ting Lin ◽  
Haoying Sun ◽  
Shouqiang Wang
Keyword(s):  
Product Line ◽  
Problem Definition ◽  
Policy Implications ◽  
Raw Material ◽  
Sensitivity Analyses ◽  
Business Practices ◽  
Green Consumers ◽  
Sustainable Products ◽  
Environmental Value ◽  
Managerial Implications

Problem definition: A manufacturer takes raw material with an exogenous quality distribution to make a traditional product and a coproduct using material of quality above and below a well-established standard, respectively. The market consists of traditional consumers, who are only willing to pay for a product’s consumption value, and some environmentally conscious (i.e., green) consumers, who additionally value the product’s material conservation. In this context, we study the firm’s optimal design of its coproduct, that is, its quality and price decisions. Academic/practical relevance: Motivated by emerging conservation-oriented business practices exemplified by companies such as Taylor Guitars, our study informs resource-dependent firms whether and how to design their product line to leverage a coproduct’s environmental value. Our findings also yield important policy implications regarding the conservation of natural resources. Methodology: We formulate and solve the firm’s challenge as a constrained optimization problem, supplemented with extensive sensitivity analyses and robustness tests. Results: When the material cost is intermediate and consumers are not sufficiently green, the firm should position the coproduct without exploiting its environmental value. Otherwise, the firm should position the coproduct by extracting its environmental value from green consumers, in which case the firm may strategically abandon some traditional consumers by leaving their demand unfulfilled. Managerial implications: Quotas and taxation on material supply in general act as policy substitutes. A greener market may inadvertently result in higher resource consumption and waste. Quotas can mitigate such adverse effects.

Ride-Hailing Platforms: Competition and Autonomous Vehicles

2022 ◽  
Author(s):  
Auyon Siddiq ◽  
Terry A. Taylor
Keyword(s):  
Social Welfare ◽  
Autonomous Vehicles ◽  
Sufficient Conditions ◽  
Structural Effect ◽  
Problem Definition ◽  
Theoretic Model ◽  
Fleet Size ◽  
Managerial Implications ◽  
Public Policy Decisions ◽  
Necessary And Sufficient

Problem definition: Ride-hailing platforms, which are currently struggling with profitability, view autonomous vehicles (AVs) as important to their long-term profitability and prospects. Are competing platforms helped or harmed by platforms’ obtaining access to AVs? Are the humans who participate on the platforms—driver-workers and rider-consumers (hereafter, agents)—collectively helped or harmed by the platforms’ access to AVs? How do the conditions under which access to AVs reduces platform profits, agent welfare, and social welfare depend on the AV ownership structure (i.e., whether platforms or individuals own AVs)? Academic/practical relevance: AVs have the potential to transform the economics of ride-hailing, with welfare consequences for platforms, agents, and society. Methodology: We employ a game-theoretic model that captures platforms’ price, wage, and AV fleet size decisions. Results: We characterize necessary and sufficient conditions under which platforms’ access to AVs reduces platform profit, agent welfare, and social welfare. The structural effect of access to AVs on agent welfare is robust regardless of AV ownership; agent welfare decreases if and only if the AV cost is high. In contrast, the structural effect of access to AVs on platform profit depends on who owns AVs. The necessary and sufficient condition under which access to AVs decreases platform profit is high AV cost under platform-owned AVs and low AV cost under individually owned AVs. Similarly, the structural effect of access to AVs on social welfare depends on who owns AVs. Access to individually owned AVs increases social welfare; in contrast, access to platform-owned AVs decreases social welfare—if and only if the AV cost is high. Managerial implications: Our results provide guidance to platforms, labor and consumer advocates, and governmental entities regarding regulatory and public policy decisions affecting the ease with which platforms obtain access to AVs.

scholarly journals 662 PAP Therapy: A Review of Resources for the Uninsured during COVID-19

SLEEP ◽  
2021 ◽  
Vol 44 (Supplement_2) ◽  
pp. A259-A259
Author(s):  
Melissa Malinky ◽  
Abigail Oberla ◽  
Meena Khan ◽  
M Melanie Lyons
Keyword(s):  
Low Income ◽  
Web Search ◽  
Low Cost ◽  
Wait Time ◽  
The United States ◽  
Fixed Cost ◽  
United States Census ◽  
Lower Socioeconomic ◽  
Increased Risk ◽  
Available Resources

Abstract Introduction In 2019, the United States Census estimated 8% (26.1 million) people were without health insurance. Further, an estimated 3.5 million people became/remained uninsured from COVID-19-related job losses. Patients with OSA that belong to a lower socioeconomic status (SES) are less likely to have access to healthcare and may be under or uninsured. Untreated OSA can lead to increased risk of symptoms and associated co-morbidities. Resources to help the uninsured to obtain PAP therapy were available pre-COVID, including two main sources, American Sleep Apnea Association (ASAA) and our local branch serving central Ohio, The Breathing Association. However, the COVID pandemic limited access or closed these programs. Our Sleep Medicine clinics saw 148 uninsured OSA patients between March-December, 2020. Given these difficulties, we re-evaluated available resources for the uninsured. Methods We conducted a search for current low cost ($100 or less) PAP therapy options for the uninsured, March 15, 2020-December 3, 2020, by: (1) contacting pre-COVID-19 resources, including Durable Medical Equipment (DME) providers, (2) consulting social work, and (3) completing a librarian assisted web-search not limited to PubMed, Embase, CINAHL for academic related articles and electronic searches using a combination of English complete word and common keywords: OSA, PAP, uninsured, no insurance, cheap, medically uninsured, resources, self-pay, low-income, financial assistance, US. Resources such as private sellers were not investigated. Results During COVID-19, assistance for PAP machines/supplies have closed or required a protracted wait-time. Options including refurbished items range from low, one-time fixed cost or income-based discounts from: one local charity (Joint Organization for Inner-City Needs) and DME (Dasco), and four national entities (ASAA, Second Wind CPAP, Reggie White Foundation, CPAP Liquidators). An Electronic Health Record-based tool was developed and distributed to increase provider awareness of pandemic available resources. Conclusion Untreated OSA is associated with increased risk of cardiovascular co-morbidities. Access and cost may limit treatment in OSA patients from a lower SES. The COVID-19 pandemic has shuttered programs providing discount PAP and supplies, leaving fewer resources for these patients, thus further widening this health care disparity. Alternatives are needed and current resources are not easily accessible for providers and patients. Support (if any):

Partial Completion as a Nonprofit Strategy

2021 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Karthik Ramachandran
Keyword(s):  
Nonprofit Organizations ◽  
Service Provision ◽  
Problem Definition ◽  
Product Service ◽  
Service Portfolio ◽  
Wide Range ◽  
Partial Completion ◽  
Innovative Solution ◽  
Managerial Implications ◽  
Level 3

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constraints, some nonprofit organizations (NPOs) have adopted an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO’s choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO’s product or service portfolio. Academic/practical relevance: Although partial product or service provision has been observed in the nonprofit operations, there is limited understanding of when it is an appropriate strategy—a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO’s product/service completion and variety choices. Results: We identify when and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization versus fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations. (1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, even in the presence of ample resources. (2) Partial provision is particularly valuable when beneficiary needs are highly heterogeneous, or beneficiaries have high self-completion capabilities. A higher self-completion capability generally implies a lower optimal completion level; however, it may lead to either a higher or a lower optimal variety level. (3) Although providing incomplete products may appear to burden beneficiaries, a lower completion level can be optimal when fairness is factored into an NPO’s objective or when beneficiary capabilities are more heterogeneous.

Implications of Price Matching in Supply Chain Negotiation

2021 ◽  
Author(s):  
Weixin Shang ◽  
Gangshu (George) Cai
Keyword(s):  
Supply Chain ◽  
Social Welfare ◽  
Wholesale Price ◽  
Consumer Welfare ◽  
Problem Definition ◽  
Nash Bargaining ◽  
Price Matching ◽  
The Impact ◽  
Multiple Buyers ◽  
Wholesale Pricing

Problem definition: Few papers have explored the impact of price matching negotiation (PM), in which a channel matches its price with the resulting wholesale price bargained by another channel, on firms’ performances, consumer welfare, and social welfare, with and without supply chain coordination. Academic/practical relevance: Negotiation has been widely seen in determining both uniform and discriminatory wholesale prices, which affect outcomes of competitive supply chain practices. Methodology: To characterize the PM mechanism, we use game theory and Nash bargaining theory to compare PM with simultaneous negotiation (SN) through a common-seller two-buyer differentiated Bertrand competition model. Results: Our analysis reveals that PM can benefit the seller but hurt all buyers, which is at odds with some fair wholesale pricing clauses intending to protect buyers. Under coordination with side payments, however, all firms can conditionally benefit more from PM than from SN. Despite firms’ gains, PM leads to less consumer utility and social welfare compared with SN, unless the second buyer in PM is considerably less powerful than the first buyer. Coordination further worsens PM’s negative impact on consumer utility and social welfare. Moreover, the existence of a spot market can increase the wholesale price in PM, hurting buyers, consumers, and society. Furthermore, the qualitative results about PM remain robust under an alternative disagreement point for PM, multiple buyers, and other extensions. Managerial implications: This paper delivers insights on when price matching in supply chain wholesale price negotiation can benefit a seller, buyers, consumers, and society in a variety of scenarios. It advocates how managers can use PM to their own advantages and provides rationale to decision makers for policy regulations regarding wholesale pricing.

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