scholarly journals Quality Recovery or Low-End Recovery? Profitability and Environmental Impact of Durable Product Recovery

2019 ◽  
Vol 11 (6) ◽  
pp. 1726
Author(s):  
Lingfei Cai ◽  
Xuan Shi ◽  
Jingrong Zhu
Keyword(s):  
Environmental Impact ◽  
Environmental Sustainability ◽  
Secondary Market ◽  
Theoretic Model ◽  
Technology Improvement ◽  
Recovery Strategies ◽  
Game Theoretic ◽  
Recovery Result ◽  
Product Manufacturer

With the rising awareness of environmental responsibility in industrial production, a series of recovery strategies have been developed and play different roles in achieving sustainability. In this study, we examine when quality recovery, low-end recovery, and hybrid recovery result in a win-win outcome where both profitability and environmental performance can be improved for a durable product manufacturer. We develop a game-theoretic model to analyze the manufacturer’s payoffs under different recovery strategies. A secondary market where used products can be resold among consumers is also considered. We obtain the results by comparing the profitability and environmental impact under each recovery strategy. Hybrid recovery causes both synergy and a contradiction effect between quality and low-end recovery. It always improves the win-win outcome of low-end recovery and it can also improve the win-win outcome of quality recovery under a high recovery standard when the recovered value is not too high. The technology improvement only achieves environmental sustainability under sufficient stringent recovery standard, otherwise, it may backfire and deteriorate the environment. We offer insights for the policymaker to understand the role of the recovery standard in achieving the win-win outcome and the importance of setting a proper recovery standard in achieving environmental sustainability.

scholarly journals EFFECT OF SALVAGE MARKET ON STRATEGIC TECHNOLOGY CHOICE AND CAPACITY INVESTMENT DECISION OF FIRM UNDER DEMAND UNCERTAINTY

2016 ◽  
Vol 17 (1) ◽  
pp. 140-155 ◽  
Author(s):  
Mohammad Ali KASHEFI
Keyword(s):  
Demand Uncertainty ◽  
Numerical Study ◽  
Investment Decision ◽  
Secondary Market ◽  
Theoretic Model ◽  
Technology Choice ◽  
Capacity Investment ◽  
Flexible Technology ◽  
Game Theoretic ◽  
Unique Nash Equilibrium

This paper examines the effect of salvage market on technology choice and capacity investment decision of two firms that compete on quantity under demand uncertainty. A game theoretic model applies such that firms choose their production technology between two alternatives: flexible versus inflexible production process. Then they decide on the amount of capacity investment: flexible firm makes decision about general and specific components and inflexible firm just about unified component. One stage forward both enter the primary market in which demand is uncertain and play a la Cournot and finally, flexible firm will be able to sell its unsold general components in the secondary market with a deterministic price. Numerical study was employed to observe equilibrium behavior of firms. Findings demonstrate that with symmetric parameterization there is a unique Nash equilibrium in which both firms choose inflexible technology while applying asymmetric parameters has the potential to form two types of equilibrium when both firms choose inflexible technology or only one firm chooses flexible technology. Moreover, it is shown that there is a cost threshold that could shift the equilibria.

Alliances and the High Politics of International Trade

2015 ◽  
Vol 5 (4) ◽  
pp. 587-611
Author(s):  
Scott Wolford ◽  
Moonhawk Kim
Keyword(s):  
Theoretic Model ◽  
Trade Barriers ◽  
Security Cooperation ◽  
Data Set ◽  
Dyadic Data ◽  
Military Alliances ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Relationship

What is the role of trade policy in military alliances? We analyze and test a game-theoretic model of economic and security cooperation in which allies hold different interests across the security and commercial aspects of the relationship. In equilibrium, allies with little market power who are valuable politically to larger states engage in sociallysuboptimal protectionism, as their allies’ threats of retaliation are incredible. Stable cooperation emerges in the form of unretaliated protection rather than mutually low trade barriers. We test the model’s implications against a dyadic data set of antidumping petitions from 1980 to 2013 and find that larger allies are more likely to tolerate protectionism by smaller allies by denying domestic petitions to retaliate against dumping measures by the latter.

scholarly journals Intuition, deliberation, and the evolution of cooperation

2016 ◽  
Vol 113 (4) ◽  
pp. 936-941 ◽  
Author(s):  
Adam Bear ◽  
David G. Rand
Keyword(s):  
Self Control ◽  
Dual Process ◽  
Evolution Of Cooperation ◽  
Human Cognition ◽  
Altruistic Behavior ◽  
Theoretic Model ◽  
Evolutionary Modeling ◽  
Game Theoretic ◽  
Social Decision Making

Humans often cooperate with strangers, despite the costs involved. A long tradition of theoretical modeling has sought ultimate evolutionary explanations for this seemingly altruistic behavior. More recently, an entirely separate body of experimental work has begun to investigate cooperation’s proximate cognitive underpinnings using a dual-process framework: Is deliberative self-control necessary to reign in selfish impulses, or does self-interested deliberation restrain an intuitive desire to cooperate? Integrating these ultimate and proximate approaches, we introduce dual-process cognition into a formal game-theoretic model of the evolution of cooperation. Agents play prisoner’s dilemma games, some of which are one-shot and others of which involve reciprocity. They can either respond by using a generalized intuition, which is not sensitive to whether the game is one-shot or reciprocal, or pay a (stochastically varying) cost to deliberate and tailor their strategy to the type of game they are facing. We find that, depending on the level of reciprocity and assortment, selection favors one of two strategies: intuitive defectors who never deliberate, or dual-process agents who intuitively cooperate but sometimes use deliberation to defect in one-shot games. Critically, selection never favors agents who use deliberation to override selfish impulses: Deliberation only serves to undermine cooperation with strangers. Thus, by introducing a formal theoretical framework for exploring cooperation through a dual-process lens, we provide a clear answer regarding the role of deliberation in cooperation based on evolutionary modeling, help to organize a growing body of sometimes-conflicting empirical results, and shed light on the nature of human cognition and social decision making.

scholarly journals Transparency, Protest and Democratic Stability

2018 ◽  
Vol 49 (4) ◽  
pp. 1251-1277 ◽  
Author(s):  
James R. Hollyer ◽  
B. Peter Rosendorff ◽  
James Raymond Vreeland
Keyword(s):  
Empirical Support ◽  
Theoretic Model ◽  
The Public ◽  
Institutional Rules ◽  
Satisfaction With Democracy ◽  
Game Theoretic ◽  
Democratic Rule ◽  
Democratic Stability ◽  
Rules Of The Game

Democratic rule is maintained so long as all relevant actors in the political system comply with the institutional rules of the game – democratic institutions must be self-enforcing. We examine the role of transparency in supporting a democratic equilibrium. Transparency improves the functioning of elections: in transparent polities, elections more effectively resolve adverse selection problems between the public and their rulers. Transparency increases popular satisfaction with democracy and inhibits challenges to the democratic order. We provide a game-theoretic model, test these claims, and find they enjoy empirical support. Transparency is associated with a reduction in both the probability of democratic collapse and of the irregular removal of democratic leaders. Transparency stabilizes democratic rule.

scholarly journals The Role of Problem Specification in Crowdsourcing Contests for Design Problems: A Theoretical and Empirical Analysis

2020 ◽  
Author(s):  
Zhaohui (Zoey) Jiang ◽  
Yan Huang ◽  
Damian R. Beil
Keyword(s):  
Problem Definition ◽  
Empirical Literature ◽  
Theoretic Model ◽  
Real World Data ◽  
Solution Quality ◽  
Design Problems ◽  
Managerial Implications ◽  
Game Theoretic ◽  
Types Of Information

Problem definition: This paper studies the role of seekers’ problem specification in crowdsourcing contests for design problems. Academic/practical relevance: Platforms hosting design contests offer detailed guidance for seekers to specify their problems when launching a contest. Yet problem specification in such crowdsourcing contests is something the theoretical and empirical literature has largely overlooked. We aim to fill this gap by offering an empirically validated model to generate insights for the provision of information at contest launch. Methodology: We develop a game-theoretic model featuring different types of information (categorized as “conceptual objectives” or “execution guidelines”) in problem specifications and assess their impact on design processes and submission qualities. Real-world data are used to empirically test hypotheses and policy recommendations generated from the model, and a quasi-natural experiment provides further empirical validation. Results: We show theoretically and verify empirically that with more conceptual objectives disclosed in the problem specification, the number of participants in a contest eventually decreases; with more execution guidelines in the problem specification, the trial effort provision by each participant increases; and the best solution quality always increases with more execution guidelines but eventually decreases with more conceptual objectives. Managerial implications: To maximize the best solution quality in crowdsourced design problems, seekers should always provide more execution guidelines and only a moderate number of conceptual objectives.

Transaction Utility and Quality Choice

2017 ◽  
Vol 15 (1) ◽  
pp. 1-17 ◽  
Author(s):  
Sajeesh Sajeesh ◽  
Sang-Young Song
Keyword(s):  
Price Competition ◽  
Theoretic Model ◽  
Consumer Decision Making ◽  
Firm Strategies ◽  
Pricing Decisions ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Quality Choice ◽  
The Impact

AbstractThis paper uses a game-theoretic model to examine the role of reference price for firms that vary in their quality positioning in competing for customers. Reference prices provide consumers with additional components of utility. Building on previous research on the impact of consumer decision making on firm strategies, we focus on how firms choose their positioning when consumer utility is driven not only by acquisition utility but also by the transaction utility associated with the purchase and how this, in turn, affects firms’ pricing decisions and profits. Considering a competition between two firms, this paper shows that the firm with higher product quality provides greater discounts to consumers. We also show that when firms are allowed to set a high ‘regular’ price, product differentiation is greater between the firms, and price competition is less intense. Furthermore, under some conditions, the profits of both firms can be higher than the benchmark case (when the effects of transaction utility are ignored).

scholarly journals The Effect of Green Technology Adoption Strategy on Duopoly Competition

2021 ◽  
Vol 9 (5) ◽  
pp. 498-518
Author(s):  
Chenglin Shen ◽  
Xinxin Zhang
Keyword(s):  
Green Technology ◽  
Social Planner ◽  
Theoretic Model ◽  
Green Product ◽  
Trade Offs ◽  
Environmental Attributes ◽  
The Social ◽  
Game Theoretic ◽  
Game Theoretic Model

Abstract Given consumers’ trade-offs between conventional economic and environmental attributes of products, we provide a game-theoretic model to explore the role of GTA strategy in duopoly competition by incorporating two salient features: Two product types — The green product produced by a firm with GTA strategy and the ordinary product produced by a firm without GTA strategy, and two consumer segments, i.e., the green consumers who are willing to pay for green products and the ordinary consumers who are willing to pay for ordinary products. Our analysis shows that GTA strategy may either increase or decrease the green firm’s quality provision. The subtle relationship between the green firm’s quality strategy and GTA strategy not only affects its own equilibrium performances but its rival’s. We also find that two consumer segments may be better off in the presence of a lower GTA intensity. Additionally, although the GTA strategy benefits the environment, the GTA investment is not the more the better. Finally, we find that GTA strategy would lead to higher social welfare only when the GTA efficiency is high enough. Our work not only provides an alternative economic explanation why some firms choose to implement GTA strategy and some do not in reality, but gives managerial insights for firms with different GTA strategies as well as policy insights for the social planner.

Stability in the informal value transfer systems: norms of trust or institutions of control?

2017 ◽  
pp. 120-130
Author(s):  
A. Lyasko
Keyword(s):  
Social Control ◽  
Institutional Economics ◽  
Theoretic Model ◽  
Transfer System ◽  
Value Transfer ◽  
Partner Interaction ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
Informal Value Transfer System

Informal financial operations exist in the shadow of official regulation and cannot be protected by the formal legal instruments, therefore raising concerns about the enforcement of obligations taken by their participants. This paper analyzes two alternative types of auxiliary institutions, which can coordinate expectations of the members of informal value transfer systems, namely attitudes of trust and norms of social control. It offers some preliminary approaches to creating a game-theoretic model of partner interaction in the informal value transfer system. It also sheds light on the perspectives of further studies in this area of institutional economics.

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