Simulation of the effect of low-cost companion animal clinics on the market for veterinary services

OBJECTIVE To understand the market dynamics of companion animal veterinary services through the simulation of willingness to pay and willingness to wait as consumer behavior attributes. SAMPLES Numerical distributions for the willingness to pay and willingness to wait of simulated potential clients of companion animal clinics. PROCEDURES Simulations were run by use of numerical distributions to create demand curves and analyze market dynamics across 2 market segments (price sensitive and price insensitive) and different price dispersion between clinics. RESULTS The simulations suggested that the profit-maximizing price of a full-service clinic created a natural segmentation of the companion animal veterinary market, with a majority of clients coming from the price-insensitive segment. The simulation of 2 clinics (full-service and low-cost) with 2 market segments showed an increase in the overall market for veterinary services when a low-cost clinic was present. In addition, the lower the price charged at the low-cost clinic, the greater the profits for the full-service clinic. CONCLUSIONS AND CLINICAL RELEVANCE The presence of multiple prices for the same services, or price dispersion, in a market increases the overall market value and services more clients. Discouraging low-cost companion animal practices from entering the market decreases efficiency by leaving a population of pet owners unserved and ultimately reduces the overall market for veterinary services and the economic viability of veterinary practices.

Sentiment-Augmented Supply and Demand Equations for the Dry Bulk Shipping Market

We present, for the first time in the literature, empirical estimates of the supply and demand curves for the ocean-going dry bulk sector, using a three-stage least squares methodology. Furthermore, we augment these functions with sentiment, which appears to have a positive and significant impact on supply. This supports the view that the outlook that shipowners have about the market will undoubtedly influence their decisions regarding purchasing vessels or bringing them out of lay up. Thus, our results highlight the fact that future expectations have an impact on current pricing, albeit indirectly, through their impact on the supply side. Our results further enhance the behavioral economics literature and provide important insights for both academics and professionals.

A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases

We propose a simple method, requiring only minimal data, for bounding demand elasticities in growing, homogeneous-product markets. Since growing demand curves cannot cross, shifts in market equilibrium over time can be used to “funnel” the demand curve into a narrow region, bounding its slope. Our featured application assesses the antitrust remedy in the 1952 DuPont decision, ordering incumbents to license patents for commercial plastics. We bound the demand elasticity significantly below 1 in many post-remedy years, inconsistent with monopoly, supporting the remedy’s effectiveness. A second application investigates whether the 1911 dissolution of American Tobacco fostered competition in the cigarette market. (JEL K21, L24, L65, L66, N41, N42, O34)

Quasi-Stochastic Electricity Markets

Summary of Contribution This article was inspired by price formation changes recently proposed and implemented in several U.S. wholesale electricity markets. The analysis draws from and contributes to three lines of literature. First, the paper specifies two mechanisms that lead to inefficient and inconsistent prices in real-world markets. Second, the article illustrates the importance of considering uncertainty in evaluating policies for pricing in nonconvex markets and observes that convex hull pricing, sometimes described as an ?ideal? due to its uplift-minimizing property in deterministic analyses, can perform poorly in settings with uncertainty. Lastly, the paper strengthens the theoretical basis for operating reserve demand curves by connecting their parameterization to outcomes expected in efficient stochastic markets.

An Experimental Pricing Framework for E-Commerce

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.

Flexible Electricity Dispatch of an Integrated Solar Combined Cycle through Thermal Energy Storage and Hydrogen Production

In this work, the flexible operation of an Integrated Solar Combined Cycle (ISCC) power plant has been optimized considering two different energy storage approaches. The objective of this proposal is to meet variable users’ grid demand for an extended period at the lowest cost of electricity. Medium temperature thermal energy storage (TES) and hydrogen generation configurations have been analyzed from a techno-economic point of view. Results found from annual solar plant performance indicate that molten salts storage solution is preferable based on the lower levelized cost of electricity (0.122 USD/kWh compared to 0.158 USD/kWh from the hydrogen generation case) due to the lower conversion efficiencies of hydrogen plant components. However, the hydrogen plant configuration exceeded, in terms of plant availability and grid demand coverage, as fewer design constraints resulted in a total demand coverage of 2155 h per year. It was also found that grid demand curves from industrial countries limit the deployment of medium-temperature TES systems coupled to ISCC power plants, since their typical demand curves are characterized by lower power demand around solar noon when solar radiation is higher. In such scenarios, the Brayton turbine design is constrained by noon grid demand, which limits the solar field and receiver thermal power design.