Incentives to Invest in Transport Cost Reduction - Conceptual Issues and an Application to Electronic Commerce

2003 ◽  
Vol 3 (1) ◽  
Author(s):  
Martin Bandulet ◽  
Karl Morasch
Keyword(s):  
Electronic Commerce ◽  
Cost Reduction ◽  
Negative Impact ◽  
Consumer Surplus ◽  
Relative Strength ◽  
Transportation Costs ◽  
Transport Cost ◽  
Market Demand ◽  
Digital Products ◽  
Investment Level

Abstract Do firms have proper incentives to invest in transport cost reduction? We discuss this question in a duopoly with a local firm and a distant competitor that may invest in a reduction of marginal transportation costs. In a two-stage game with investment in the first and duopoly competition in the second stage, we compare profit-maximizing investment with (constrained) welfare maximization by a social planer. Intuitively, a firm will overinvest if the negative impact on its competitor exceeds the gain in consumer surplus. We analyze how the relative strength of these two effects depends on market demand, firm conduct and investment costs. Applying our results to electronic commerce, we argue that for physical goods either overinvestment or the efficient decision not to invest is the most likely outcome while the specific characteristics of digital products yield either underinvestment or an efficient investment level that reduces transportation costs to zero.

scholarly journals The impact of FDI on environmental technology innovation from the perspective of environmental regulation

2020 ◽  
Vol 206 ◽  
pp. 02001
Author(s):  
Ziting Wei
Keyword(s):  
Environmental Regulation ◽  
Technology Innovation ◽  
Negative Impact ◽  
Positive Impact ◽  
Inhibitory Effect ◽  
Market Demand ◽  
Environmental Technology ◽  
Industrial Enterprises ◽  
Threshold Regression Model ◽  
The Impact

Based on the perspective of environmental regulation, this paper selects panel data of 30 provinces in China from 2011 to 2016, establishes Hansen panel threshold regression model, and investigates the impact of FDI on environmental technology innovation of industrial enterprises in China under the threshold of environmental regulation. The results show that FDI has a significant inhibitory effect on the environmental technological innovation of industrial enterprises; the effect has a significant dual threshold of environmental regulation, with the intensity of environmental regulation across the threshold, the negative impact of FDI gradually weakened; market demand and industry scale have a significant positive impact, the role of technological progress is not significant. The findings of this paper provide a certain reference for the rational use of environmental regulation policies, the maximization of FDI technology spillover, the promotion of environmental technology innovation of industrial enterprises, and the realization of “win-win” of environment and economy.

Underground Globalization: Mapping the Space of Flows of the Internet Adult Industry

2003 ◽  
Vol 35 (7) ◽  
pp. 1261-1286 ◽  
Author(s):  
Matthew A Zook
Keyword(s):  
Electronic Commerce ◽  
Metropolitan Areas ◽  
The Internet ◽  
Barriers To Entry ◽  
Digital Products ◽  
Global Networks ◽  
Entry Cost ◽  
Cost Differentials ◽  
Space Of Flows

This paper develops a case study of the Internet adult industry in order to study the ways in which electronic commerce interacts with geography. Digital products, low barriers to entry, cost differentials, and sensitivity to regulation have created a pervasive and complex geography of models, webmasters, and consumers around the globe. With a series of specially developed datasets on the location of content production, websites, and hosting it is shown that the online adult industry offers people and places outside major metropolitan areas opportunities to become active purveyors of this type of electronic commerce. The roles of these actors, however, are not simply determined by a spaceless logic of cyber-interaction but by histories and economies of the physical places they inhabit. In short, the ‘space of flows’ cannot be understood without reference to the ‘space of places’ to which it connects. This geography also provides a valuable counterpoint to mainstream electronic commerce and highlights the ability of socially marginal and underground interests to use the Internet to form and connect in global networks.

Improving the Financial Performance of Concentrating Solar Thermal Power

2014 ◽  
Author(s):  
Andrew C. Beath ◽  
Brian Webby ◽  
Mehdi Aghaei Meybodi
Keyword(s):  
Cost Reduction ◽  
Financial Analysis ◽  
Negative Impact ◽  
Investment Decision ◽  
Thermal Power ◽  
Solar Thermal ◽  
Electricity Production ◽  
Cost Estimates ◽  
Electricity Cost ◽  
Investment Decision Making

Commercial-scale implementation of concentrating solar thermal (CST) technologies for electricity generation has been increasing worldwide, but technology assessments produced by engineering consultancies typically indicate that electricity production using CST is more expensive than most other renewable energy technologies. A review of a selection of costing studies that have been prepared in recent years for Australian government and industry bodies suggests that electricity cost estimates for CST technologies are exaggerated by a combination of high capital cost estimates and the financial analysis methods used. The results of these assessments are often used in investment decision-making processes of industry and government bodies, so this may have a negative impact on further development of CST technologies. While it is apparent that revision of the methods used in these analyses could improve the apparent cost effectiveness of CST, it is also apparent that the competitiveness of CST technologies needs to be improved through cost reduction and generation improvement. One major driver for this is that some CST technologies have the capability to efficiently store energy in thermal form for electricity production on demand and this could have significant benefits to both specific users and to the general electricity network stability. As a stage in identifying potential targets for new research that will improve competitiveness of CST technologies, a sensitivity analysis was performed to examine the influence of a broad range of factors on the cost of electricity using combined performance modeling and financial analysis. This largely reconfirms the commonly held view that reduction of solar collector costs is a critical target, but also identifies the importance of improving the performance of the overall power generation cycle and general cost reduction throughout the plants.

scholarly journals Potential impact of traffic densification on rail freight transport cost in Sub-Saharan Africa

2011 ◽  
Vol 8 (4) ◽  
pp. 508-513 ◽  
Author(s):  
Anneke de Bod ◽  
Jan Hendrik Havenga ◽  
W.J. Pienaar
Keyword(s):  
Cost Reduction ◽  
Critical Role ◽  
Sub Saharan Africa ◽  
Transport Cost ◽  
Rail Freight ◽  
Potential Impact ◽  
Cross Country ◽  
Sub Saharan ◽  
Significant Cost Reduction ◽  
Ssa Countries

This article highlights the significant cost-reduction opportunities possible through the densification of rail freight traffic, especially over longer distances, and the concomitant implications for increased profitability for railway organisations in sub-Saharan Africa (SSA). Densification opportunities should also focus on the development of transport corridors throughout the region. SSA countries themselves can play a critical role in unlocking this potential by, inter alia, simplifying regional economic agreements. As with most other initiatives in SSA, unlocking this potential will require efficient cross-country collaboration.

scholarly journals Strategies of E-Commerce Business Value Optimization

2005 ◽  
pp. 2653-2657 ◽  
Author(s):  
Ada Scupola
Keyword(s):  
Electronic Commerce ◽  
Value Chain ◽  
Business Models ◽  
Organizational Structures ◽  
The Internet ◽  
Digital Networks ◽  
Digital Products ◽  
Electronic Networks ◽  
Information Products ◽  
America Online

The Internet economy is becoming an integral part of many countries’ economies, creating new jobs, giving rise to new companies like the dot coms and transforming traditional jobs and traditional companies. The Internet is increasingly becoming a part of the basic business model for many companies as organizations around the world are adopting new e-business models, integrated solutions to explore new ways of dealing with customers and business partners, new organizational structures and adaptable business strategies (Singh & Waddell, 2004). There are many definitions of electronic commerce (e.g., Wigand, 1997). Here, a classic definition by Kalakota and Whinston (1996) is adopted, where e-commerce is “the buying and selling of information, products and services via computer networks today and in the future via any one of the myriad of networks that make up the ‘Information Superhighway (I-way)’” (p.1). A distinction between physical and digital products can be made. A digital product is defined as a product whose complete value chain can be implemented with the use of electronic networks; for example, it can be produced and distributed electronically, and be paid for over digital networks. Examples of digital products are software, news, and journal articles. The companies selling these products are usually Internet-based “digital dot coms” such as Yahoo and America Online. On the contrary, a physical product cannot be distributed over electronic networks (e.g., a book, CDs, toys). These products can also be sold on Internet by “physical dot coms”, but they are shipped to the consumers. The corporations using electronic commerce are distinguished into “bricks and mortar” companies, hybrid “clicks and mortar” companies (such as Amazon.com) and pure dot coms (Barua & Mukhopadhyay, 2000).

Mixed pricing strategies in museums: Examining the potential of voluntary contributions for capturing consumer surplus

2019 ◽  
Vol 26 (1) ◽  
pp. 115-136
Author(s):  
Bart Neuts
Keyword(s):  
Consumer Surplus ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Market Demand ◽  
Voluntary Contributions ◽  
Museum Visitors ◽  
Pay What You Want ◽  
Visitor Survey ◽  
Maritime Museum ◽  
Design Experiments

Existing pricing strategies at museums rarely reflect actual market demand. This article compares willingness to pay with paid entrance fees to establish consumer surplus and investigates whether voluntary contributions can serve to capture part of this surplus. A donation box is tested under various design experiments to identify best-performing contribution mechanisms. The proposed method is tested at the New Zealand Maritime Museum, with data collected via an intercept visitor survey and through electronic donation box counters. While the results indicate the existence of a significant consumer surplus, practically none of this surplus was gathered via voluntary contributions, and under normal circumstances less than 1% of museum visitors offered a donation. An animated donation box increased donations to 2% but remained well below the percentage of visitors that claimed to have a positive consumer surplus. The findings conclude that pay-what-you-want principles seem to have limited potential in mixed pricing strategy environments.

Multiregional Oligopoly with Capacity Constraints

2020 ◽  
Author(s):  
Humoud Alsabah ◽  
Benjamin Bernard ◽  
Agostino Capponi ◽  
Garud Iyengar ◽  
Jay Sethuraman
Keyword(s):  
Revenue Management ◽  
Free Trade ◽  
Consumer Surplus ◽  
Capacity Constraints ◽  
Unintended Consequences ◽  
Transportation Costs ◽  
Unique Equilibrium ◽  
Equilibrium Allocation ◽  
Multiple Regions ◽  
Capacity Constrained

We develop a model of Cournot competition between capacity-constrained firms that sell a single good to multiple regions. We provide a novel characterization for the unique equilibrium allocation of the good across regions and design an algorithm to compute it. We show that a reduction in transportation costs by a firm may negatively impact the profit of all firms and reduce aggregate consumer surplus if such a firm is capacity constrained. Our results imply that policies promoting free trade may have unintended consequences and reduce aggregate welfare in capacity-constrained industries. This paper was accepted by David Simchi-Levi, revenue management and market analytics.

Contract design on digital platform for the risk-averse retailer with moral hazard

Kybernetes ◽  
2018 ◽  
Vol 47 (4) ◽  
pp. 716-741 ◽  
Author(s):  
Zhenhong Li ◽  
Bo Li ◽  
Yanfei Lan
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Contract Design ◽  
Principal Agent ◽  
Risk Averse ◽  
Market Demand ◽  
Content Type ◽  
Digital Platform ◽  
Investment Level ◽  
Virtual Product

Purpose The advent of e-commerce has prompted the proliferation of digital platforms for virtual products. This reinforces the importance of the contract design problem between the virtual product supplier (he) and the digital platform retailer (she). The purpose of this paper is to investigate a principal-agent problem in a virtual product supply chain, in which the retailer’s sales-effort investment level to sell the virtual product is unobservable to the supplier, and the market demand is unknown to both parties. Design/methodology/approach In this study, the supplier designs two kinds of contracts (wholesale price contract and two-part tariff contract) to maximize his profit, while the retailer determines her sales-effort investment level and the virtual product’s retail price. The results of two different types of contracts are compared to explore in depth the effect of contract choices on the participants’ profits. Findings The authors show that the comparative results of the optimal wholesale prices, retail prices and sales-effort investment levels between these two kinds of contracts all rely on the retailer’s risk-averse degree. Specifically, both the supplier and the whole supply chain prefer the two-part tariff contract rather than the wholesale price contract, the retailer should do opposite when she is low risk-averse, whereas there is no distinction for the retailer’s utilities between these two kinds of contracts when she is more risk-averse. Originality/value The value of the research rests on the use of principal-agent theory in the contracts of virtual products considering the retailer’s sales-effort and risk-aversion degree. The research will serve as a guide for the virtual products’ supplier and the platform retailer in decision-making processes.

Role of Platform, Supplier and Medium in Online Trust Formation

2019 ◽  
Vol 15 (1) ◽  
pp. 58-70
Author(s):  
You Yan ◽  
Zhao Dongmei ◽  
Yang Weining
Keyword(s):  
Electronic Commerce ◽  
Structural Equation ◽  
Negative Impact ◽  
Positive Impact ◽  
Web Design ◽  
Trust Model ◽  
Equation Modeling ◽  
Online Platform ◽  
Online Trust

Research literature suggests that online trust and commitment are the core constructs in building a sustainable electronic commerce relationship. This article investigates the respective roles of the platform, supplier and medium in forming online trust, and determines whether these factors ultimately influence purchase intentions. It seeks to re-examine the trust model by McKnight and identifies how a trust model can be adapted in current business environments. A model is developed and tested by six constructs which have an impact on each other. Survey data from online platform customers (n = 386) are used to test the online trust hypotheses with structural equation modeling. As hypothesized, the results suggest that platform, supplier and medium have a positive relationship with online trust, and especially the platform has the highest positive impact. Among platform sub constructs, the web design, supplier rank and the privacy policy are crucial. After sale service, the company location and price strongly influence the supplier. For the medium sub constructs, 3rd party seals impact the medium more strongly than expert comments and consumer reviews. However, the medium has negative impact on behavioral intentions. The article identifies interesting differences between the original work by McKnight and the findings of this study, but basically concludes that the online trust theory applies to current electronic commerce market. Few studies have examined the role of platform, supplier and medium separately in forming online trust. This study divides platform and supplier into two separate constructs to meet the new market development. The modified model truly reflects the vibrant online platform environment and can provide better insight into managing the platform.

scholarly journals KAJIAN SOSIAL LINGKUNGAN PERKEBUNAN KELAPA SAWIT BERKELANJUTAN BERDASARKAN ISPO DI PTPN VIII TAMBAKSARI SUBANG JAWA BARAT

2018 ◽  
Vol 3 (2) ◽  
Author(s):  
Prisman Andri Lesmana Sihombing ◽  
Ernah Ernah
Keyword(s):  
Palm Oil ◽  
Oil Palm ◽  
Negative Impact ◽  
Descriptive Analysis ◽  
Market Demand ◽  
Environmental Aspects ◽  
Qualitative Descriptive ◽  
The Republic ◽  
The Government ◽  
Almost All

 ABSTRAK.Kelapa sawit adalah komoditas yang paling banyak dibudidayakan di Indonesia, hal ini dikarenakan tingginya permintaan pasar international akan minyak nabati. Fenomena ini menimbulkan dampak negatif pada aspek sosial dan lingkungan. Untuk mengatasi hal tersebut, pemerintah mengeluarkan kebijakan yang dikenal dengan ISPO (Indonesian Sustainable Palm Oil) standard, yaitu prinsip dan kriteria untuk perkebunan kelapa sawit di Indonesia yang dibuat sebagai bentuk perwujudan peraturan perundang – undangan dan dukungan Pemerintah Republik Indonesia untuk mewujudkan perkebunan kelapa sawit yang berkelanjutan dan ramah lingkungan. PTPN VIII Kebun Tambaksari adalah salah satu perusahaan perkebunan kelapa sawit yang telah menerapkan standard ISPO dalam pengelolaan perkebunannya. Penelitian ini bertujuan untuk mengkaji sejauh mana pemenuhan aspek sosial dan lingkungan perkebunan kelapa sawit berdasarkan ISPO di PTPN VIII Tambaksari Subang Jawa Barat. Metode penelitian yang digunakan adalah analisis deskrptif kualitatif. Hasil survey menunjukkan bahwa PTPN VIII Tambaksari telah memenuhi hampir semua indikator aspek sosial dan lingkungan sebagaimana yang tercantum dalam Prinsip ISPO.Kata Kunci: Kelapa Sawit, ISPO, Keberlanjutan, PerkebunanABSTRACTPalm oil is the most cultivated commodity in Indonesia, this is due to the high international market demand for vegetable oil. This phenomenon has a negative impact on social and environmental aspects. To overcome this, the government issued a policy known as the Indonesian Sustainable Palm Oil (ISPO) standard, namely the principles and criteria for oil palm plantations in Indonesia which were made as a manifestation of legislation and the support of the Government of the Republic of Indonesia to realize oil palm plantations that sustainable and environmentally friendly. PTPN VIII Tambaksari Gardens is one of the oil palm plantation companies that has implemented the ISPO standard in managing their plantations. This study aims to examine the extent of fulfillment of the social and environmental aspects of oil palm plantations based on ISPO at Tambaksari Subang VIII West Java. The research method used is qualitative descriptive analysis. The survey results show that PTPN VIII Tambaksari has fulfilled almost all indicators of social and environmental aspects as stated in the ISPO Principles.Keywords: Palm Oil, ISPO, Sustainability, Estate

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