On the Basic Preconditions of Non-Neutrality of Money in Economic Theory

Based on the experimental calculations carried out with the help of the shifting mode reproduction model, as well as on the theoretical studies of Marx, Schumpeter, Keynes and his followers - representatives of the post-Keynesian direction, two conclusions were made in the article. First, that non-neutrality of money takes place in both short- and long-term periods, and second, that each of these periods has its own basic preconditions for non-neutrality. For the short term, it is a "phenomenon of nominal rigidity", and for the long term, it is a "phenomenon of capitalization of money". The thesis is justified that the "phenomenon of nominal rigidity" manifests itself mainly within the framework of the existing production, when the economic growth caused by the increase in money supply is achieved by increasing capacity utilization and engagement of idle labor. Accordingly, the "phenomenon of capitalization of money" manifests itself through the conversion of issued money into investments in fixed capital and, through the growth of this capital (and capacities), affects the GDP growth. It is shown that behind the two considered basic prerequisites there are fundamentally different theoretical approaches. Behind the short-term "phenomenon of nominal rigidity" there is an orthodox vision of economy focused on the equilibrium pricing mechanism. Behind the long-term "phenomenon of capitalization of money" there is a heterodox vision related to the mechanism of money circulation, emission and economic growth caused by it. It has been concluded that in case of probable increase of competition between these theoretical approaches it is unacceptable if short-term basic preconditions of non-neutrality of money are used in the analysis of long-term processes and long-term preconditions are used in the analysis of short-term growth cases.

Surge Pricing and Two-Sided Temporal Responses in Ride Hailing

Problem definition: We investigate surge pricing in ride-hailing platforms from a temporal perspective, highlighting strategic behavior by riders and drivers and that drivers respond to surge pricing much more slowly than riders do. Academic/practical relevance: Surge pricing in ride-hailing platforms is a pivotal and controversial subject. Despite abundant anecdotal evidence, strategic behavior by riders and drivers has not been formally studied in the literature. Methodology: We adopt and analyze a classic two-period, game-theoretical model as in the strategic consumer literature. Results: We identify two types of equilibrium pricing strategies. The first consists of a short-lived, sharp price surge followed by a lower price, which we refer to as skimming surge pricing (SSP). The second consists of a low initial price followed by a higher price, which we refer to as penetration surge pricing (PSP). We find that PSP equilibria are generally superior to SSP equilibria when both exist but require platforms to share demand–supply information with drivers. Managerial implications: The SSP equilibrium rationalizes the controversial sharp surge-pricing practice: the short-lived sharp price surge causes many high-value riders to voluntarily wait out the initial surge period, which attracts additional drivers to the region to serve riders at a much lower price than the initial surge price. The theoretically superior PSP equilibrium suggests that a vastly different approach may improve surge pricing and highlights the potential value and importance for platforms to share demand–supply information with drivers.

The Impact of Consumers’ Peer-Induced Fairness Concerns on Mixed Retail and E-Tail Channels

With the rapid development of e-commerce, online retailing has become an important part of the market. In order to improve market competitiveness and increase market share, more and more retailers have opened both regular offline channel and online e-tail channel to sell products. Then how to price becomes an urgent problem for upstream manufacturers and dual-channel retailers when there is price competition between regular channel and e-tail channel, especially when consumers have peer-induced fairness concerns. However, linking consumers’ behavioral factors such as fairness concerns to pricing decisions of mixed retail and e-tail channels draws little attention in the literature on supply chain management. This paper incorporates “consumers’ peer-induced fairness concerns” (CPFC) into pricing decisions in a dyadic supply chain, where dual-channel retailer obtains products from manufacturers and then sells products to consumers through both regular channel and e-tail channel. We use game-theoretic models to analyze the equilibrium pricing strategies under the setting with “symmetry consumers’ peer-induced fairness concerns” (SCPFC) and with “asymmetry consumers’ peer-induced fairness concerns” (ACPFC), respectively. Detailed comparisons and numerical analysis are further conducted to examine the impacts of different types of CPFC on equilibrium pricing strategies and profits.

The Effects of Competition and Entry in Multi-sided Markets

We study price competition and entry of platforms in multi-sided markets. Utilizing the simplicity of the equilibrium pricing formula in our setting with heterogeneity of customers’ membership benefits, we demonstrate that in the presence of externalities, the standard effects of competition can be reversed: as platform competition increases, prices, and platform profits can go up and consumer surplus can go down. We identify economic forces that jointly determine the social inefficiency of the free-entry equilibrium and provide conditions under which free entry is socially excessive as well as an example in which free entry is socially insufficient.