scholarly journals An Experimental Pricing Framework for E-Commerce

2021 ◽  
Vol 16 (7) ◽  
pp. 2571-2578
Author(s):  
Puneet Vatsa ◽  
Wanglin Ma ◽  
Xiaoshi Zhou
Keyword(s):  
Economic Theory ◽  
Experimental Approach ◽  
Demand Curve ◽  
Utility Functions ◽  
Budget Constraints ◽  
Demand Curves ◽  
Online Environments ◽  
Profit Maximizing ◽  
Pricing Framework

Characterizing the demand curve of products is important for pricing them optimally. However, in deriving empirical demand curves, econometricians have to contend with identification issues. Furthermore, theoretical demand curves derived using standard economic theory are divorced from empirical realities: firms rarely have information on customers’ budget constraints; theoretical utility functions are seldom derived empirically. Recognizing these issues, we propose an experimental approach for determining a product’s demand curve and, in turn, its profit-maximizing price in online environments. The proposed approach yields precise estimates and is quick and inexpensive to implement.

scholarly journals The (Non) Economic Properties of the Law

Games ◽  
2021 ◽  
Vol 12 (1) ◽  
pp. 26
Author(s):  
Leo Katz ◽  
Alvaro Sandroni
Keyword(s):  
Economic Theory ◽  
Bounded Rationality ◽  
Budget Constraints ◽  
The Law

This paper shows that the logical properties of constraints imposed by law are fundamentally different from other constraints considered in economics such as budget constraints and bounded rationality constraints, such as the ones based on inattention or shortlisting. This suggests that to fully incorporate law into economics may require a revision of economic theory.

GIFFEN EFFECT MODEL

2020 ◽  
Vol 10 (7) ◽  
pp. 1228-1245
Author(s):  
V.I. Tsurikov ◽  
Keyword(s):  
Consumer Choice ◽  
Demand Curve ◽  
Aggregate Demand ◽  
Negative Slope ◽  
Individual Values ◽  
Effect Model ◽  
Demand Curves ◽  
Income Individual ◽  
The Mathematical Model

The mathematical model of the Giffen effect proposed in the article clearly demonstrates both the effect itself and the reasons for its manifestation. The main advantages of the model include its extreme simplicity, which opens up access to the widest circle of readers, the use of standard methods for solving the consumer choice problem, and the most important fundamental agreement with the results of the field experiment of Jensen and Miller. The model shows that any good for which there is a more expensive substitute can be of little value. This or that good is endowed with the appropriate property by a particular consumer due to his or her own preferences, income level and prevailing prices. Any good of little value, including those that can only be consumed by a high-income individual, may turn out to be Giffen’s goods. Therefore, the consumption of Giffen’s product cannot be considered as evidence of the low standard of living of the consumer. According to the model, an increase in demand for an increasingly expensive low-value good, which is the essence of the Giffen paradox, is the result of optimizing a set of goods, i.e. the result of rational consumer behavior. It is shown that for the manifestation of the Giffen effect, it is necessary that the amount of funds allocated by the consumer for the purchase of a low-value good and its more expensive substitute falls into a certain rather narrow range of values. The failures of numerous and long-term studies aimed at detecting empirical manifestations of Giffen behavior in various historical events are explained by the fact that the corresponding analysis was carried out on the basis of averaged rather than individual values of demand for all categories of consumers. As a result, the negative slope of the aggregate demand curve turned out to be dominant over the positive sections of certain individual demand curves.

scholarly journals EVOLUTION OF THE PRODUCTION AND PRICE OF FOREST BIOMASS FOR ENERGY

FLORESTA ◽  
2018 ◽  
Vol 49 (1) ◽  
pp. 011
Author(s):  
Thiago Manoel Sozinho ◽  
David Alexandre Buratto ◽  
Anadalvo Juazeiro Dos Santos ◽  
João Carlos Garzel Leodoro da Silva ◽  
José Roberto Frega
Keyword(s):  
Energy Production ◽  
Demand Curve ◽  
Supply And Demand ◽  
Forest Biomass ◽  
The State ◽  
Planted Forests ◽  
Native Forests ◽  
Demand Curves ◽  
The Right ◽  
Biomass For Energy

This study aimed to analyze the evolution of the production and price of biomass from native and planted forests of the state of Paraná (Brazil), between 1998 and 2015, based on the behavior of the prices of the products, according to variations of their supply or demand. The annual rates for growth of the price and quantity produced were calculated and related to the displacements of the supply and demand curves of the products. The results indicated a decrease in the quantity and an increase in the biomass price for native forests, which caused a shift in the supply curve to the left. For the biomass of planted forests, the demand curve shifted to the right due to the demand increase of this product for energy production. The behavior of both curves indicated a substitution of the biomass from native forests to biomass from planted forests due to factors related to the increase of environmental protection regarding the native forests located in the state of Paraná

scholarly journals The Econometrics of Kinked Budget Constraints

1990 ◽  
Vol 4 (2) ◽  
pp. 119-139 ◽  
Author(s):  
Robert Moffitt
Keyword(s):  
Economic Theory ◽  
Piecewise Linear ◽  
Applied Econometrics ◽  
Budget Constraint ◽  
Budget Constraints ◽  
Transfer Programs ◽  
Demand Functions ◽  
Number Of Segments ◽  
Block Pricing

In the last several years, a branch of applied econometrics has developed that is devoted to the development of techniques for the estimation of demand and other functions when the budget constraint is “piecewise-linear,” or “kinky”—that is, when the constraint consists of a number of segments joined together at kink points. Such constraints most frequently arise from government tax and transfer programs. But kinked constraints sometimes arise in nongovernment contexts, a well-known example being the block pricing schedule commonly set by utilities and volume discounting in general. Kinked budget constraints create two difficulties. First, changes in tax and transfer schedules can have unexpected effects that can be exactly the opposite in sign to those expected from economic theory. Examples of this phenomenon are given below. Second, kinked budget constraints make the estimation of demand functions quite difficult.

scholarly journals How COVID-19 lockdown has impacted demand curves of Croatia and surrounding countries

2021 ◽  
Vol 70 (1) ◽  
pp. 7-13
Author(s):  
Igor Vidić ◽  
Matija Melnjak ◽  
Davor Bošnjak
Keyword(s):  
Demand Curve ◽  
Electricity Consumption ◽  
Electrical Energy ◽  
Stable Operation ◽  
Daily Routine ◽  
Total Consumption ◽  
Global Pandemic ◽  
Demand Curves ◽  
Electricity Load ◽  
Restrictive Measures

Electrical energy is a specific commodity because it can’t be stored in significant quantities, so accurate day-ahead forecasting of total consumption plays a crucial role in stable operation of the whole power system. In order to maintain the adequacy, power generation and electricity consumption have to be constantly in a balance. Electricity demand curve is very sensitive and vulnerable to a lot of different factors that can be categorized in several main groups that include social, stochastic and weather dependent factors. In condition of global pandemic caused by COVID 19, prediction of total consumption is even more challenging task. New restrictive rules, that completely changed behavior of consumers, their daily routine and habits, have been adopted in most of the European countries. Hence, this lockdown restrictive measures affected the volume of electricity consumption and the shape of demand curves as well. This paper analyzes some of the cases with very variable electricity load, due to volatile households’ behavior, on cases of Croatia and countries in the region. Additionally, results are compared with the electricity load of Italy and Sweden whose economy and industry are well developed. Consumption of Sweden was interesting to observe because of its totally different approach of mitigating corona virus, without lockdown restrictions.

Evaluation of the Recreational Benefits of Major Dams in Queensland, Australia

1989 ◽  
Vol 21 (2) ◽  
pp. 229-235
Author(s):  
G. L. Fahey
Keyword(s):  
Demand Curve ◽  
Recreational Facilities ◽  
Travel Costs ◽  
Demand Curves ◽  
Curve Method ◽  
Recreational Benefits

This paper describes the use of the “Final Clawson Demand Curve” method in the evaluation of the recreational benefits of four major dams in Queensland, Australia. The use of existing demand curves to predict the demand for recreational facilities at proposed sites was also investigated. The results indicate that the demand curves are sensitive to changes in variables such as travel costs. However, within the method is the potential to provide estimates of the recreational worth of proposed dams.

Comparison of four contingent valuation methods to estimate the economic value of a pneumococcal vaccine in Bangladesh

2008 ◽  
Vol 24 (04) ◽  
pp. 481-487 ◽  
Author(s):  
Rebekah R. Heinzen ◽  
John F. P. Bridges
Keyword(s):  
Pneumococcal Vaccine ◽  
Demand Curve ◽  
Dichotomous Choice ◽  
Elicitation Method ◽  
Payment Card ◽  
Bidding Game ◽  
Elicitation Methods ◽  
Demand Curves ◽  
Elicitation Format ◽  
Choice Method

Objectives:To compare four contingent valuation elicitation methods as a means to estimate the value of a pneumococcal vaccine in Bangladesh and to test if the elicitation methods are subject to bias and if they produce valid responses.Methods:Three hundred sixty-one households with at least one child under 5 years of age were recruited in Dhaka, Bangladesh. Subjects were cluster-randomized to various elicitation methods: open-ended, dichotomous choice (at one of two asking prices), payment card (one of two cards with differing ranges). The dichotomous choice method was then followed up with a bidding game methodology, with the dichotomous choice price acting as the starting price for the bidding game. Analysis focused on summary statistics, demand curve estimation and multivariate regression analysis to test for validity and bias.Results:Thirty-one households refused to participate, leaving a total of 330 participating households (a 91.4 percent response rate). Willingness to pay estimates varied significantly across the methods (p< .001), with average estimates varying between $2.34 and $18 (US). The open-ended elicitation method was found to produce highly inflated values that were insensitive to construct validity tests. The dichotomous choice method produced quantity (demand) estimates rather than value estimates, and there was some evidence of yea saying. The payment card elicitation method was found to be affected by range bias. The bidding game elicitation method was found to be less sensitive to starting point bias and yea-saying.Conclusions:Different elicitation format do give rise to different demand curves; however, this may be partially due to the fact that they do not measure the same outcome. For example, the dichotomous choice format produces a demand curve, while the payment card, open-ended and bidding game produce inverse demand curves. All formats are prone to multiple biases. When choosing an elicitation format, it is important to first consider the purpose and use of the data. Each elicitation method has strengths and weaknesses and can be used for different purposes in technology assessment.

The Economic History of a Young Corporation

1941 ◽  
Vol 1 (S1) ◽  
pp. 110-111 ◽  
Author(s):  
S. B. Clough
Keyword(s):  
Economic History ◽  
Demand Curve ◽  
Supply And Demand ◽  
The Past ◽  
Demand Curves ◽  
The Future ◽  
History Of ◽  
Economic Thinking

Economics, as it is frequently taught nowadays, consists largely of supply and demand curves. Within their graceful lines are contained the wisdom of the ages—the key to the past and the barometer of the future. If superimposed on one another, these curves have all the esthetic quality of dynamistic drawings. So completely have they dominated economic thinking that when a group of economists considered the possibility of founding an Economic History Association, their first impulse was to establish a demand curve. This was done, as Professor Heaton has intimated, by Miss Anne Bezanson, who canvassed the field. She discovered that four hundred people could be counted upon immediately to support a Journal of Economic History.

scholarly journals An improved demand curve for analysis of food or drug consumption in animal experiments

2019 ◽  
Author(s):  
Mark Newman ◽  
Carrie R. Ferrario
Keyword(s):  
Demand Curve ◽  
Animal Experiments ◽  
Maximum Response ◽  
Mathematical Framework ◽  
Mathematical Form ◽  
Self Administration ◽  
Demand Curves ◽  
Consumption Data ◽  
Wide Range ◽  
Experimental Protocols

AbstractThe incorporation of microeconomics concepts into studies using preclinincal self-administration procedures has provided critical insights into the factors that influence consumption of a wide range of food and drug reinforcers. In particular, the fitting of demand curves to consumption data provides a powerful analytic tool for computing objective metrics of behavior that can be compared across a wide range of reward types and experimental settings. The results of these analyses depend crucially on the mathematical form used to fit the data. The most common choice is an exponential form proposed by Hursh and Silberberg, which is widely used and has provided fundamental insights into relationships between cost and consumption, but it also has some disadvantages. In this paper we first briefly review the use of demand curves to quantify the motivating effects of food and drugs, then we describe the current methodology and highlight some potential issues that arise in its application. To address these issues, we propose a new mathematical framework for the analysis of consumption data, including a new functional form for the demand curve. We show that this proposed form gives good fits to data on a range of reinforcers across different animals and different experimental protocols, while allowing for straightforward calculation of key metrics of demand, including preferred consumption level, maximum response, price at maximum response, and price elasticity of demand. We provide software implementing our entire analysis pipeline, including data fits, data visualization, and the calculation of demand metrics.

scholarly journals THE RELATIONSHIP BETWEEN THE DEVELOPMENT OF THE FINANCIAL SECTOR AND THE ECONOMIC GROWTH IN THE REPUBLIC OF NORTH MACEDONIA

2021 ◽  
Author(s):  
Dashmir Saiti ◽  
◽  
Borce Trenovski ◽  
Keyword(s):  
Economic Growth ◽  
Economic Theory ◽  
Money Supply ◽  
Positive Impact ◽  
Demand Curve ◽  
Time Lag ◽  
Trade Openness ◽  
Financial Sector ◽  
Short Run ◽  
The Impact

According to economic theory, the money supply positively affects economic growth, especially in the short run. Additionally, for small and open economies, the openness of the economy plays a crucial role in economic growth. Therefore, the subject of this paper is the impact of the money supply, measured through the broad money aggregate (M3), and trade openness of the country on the economic growth in North Macedonia. M3 aggregate is taken as an indicator of the financial sector development, whereas on the other hand, the trade-to-GDP ratio is an indicator for the openness of the economy. The research is employing the Vector Autoregression (VAR) model, and quarterly data for the period 1995-2019 are used. As opposed to the economic theory, the results show the absence of a long-run relationship between GDP, broad money, and trade openness in North Macedonia for the observed period. Also, in the short run, M3 and trade openness have a significant positive impact on GDP. Additionally, there is no noticeable time gap in the above relationships. Namely, the impact of broad money and trade openness on GDP in North Macedonia is not much stronger after a significant time lag from the impact in the first year. This put into question the capability of the monetary policy as a tool of the broader macroeconomic policy to shift the aggregate demand curve upwards and boost economic activity.

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