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Pooling Mechanism (pooling + mechanism)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	50%

Selected Abstracts

Trade implications of price discrimination in a domestic market

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2010
Nobunori Kuga
This study examines how domestic price discrimination between fluid and manufacturing milk influences dairy trade. Two types of dairy models are used for the study. The first one is a stylized mathematical model which is used to explore the relative trade effects of domestic price discrimination accompanied with revenue pooling mechanism versus border measures in dairy product markets. The second one is a partial equilibrium, multiple-region model of dairy policy and trade, which is used to see the empirical implication of domestic price discrimination for six major dairy producers. The analytical results identify the trading status as the key to determine the relative trade effects. While domestic price discrimination is always less trade distorting than border measures in a net-importer case, the relative trade distortiveness depends on the export volume in a net exporter case. The theoretical possibility that domestic price discrimination is more trade distorting than border measures is found when the ratio of dairy export to domestic manufacturing milk consumption is very high. The results also indicate that while the both support measures increase dairy export, domestic price discrimination may place greater economic burden on fluid milk consumers and less economic burden on tax payers than border measures. In addition, the results imply that domestic price discrimination schemes can be effective trade protective measures for Canada, Japan and the United States, where the schemes are currently being implemented. © 2010 Wiley Periodicals, Inc. [source]

Nash bargaining over allocations in inventory pooling contracts

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 6 2008
Eran Hanany
Abstract When facing uncertain demand, several firms may consider pooling their inventories leading to the emergence of two key contractual issues. How much should each produce or purchase for inventory purposes? How should inventory be allocated when shortages occur to some of the firms? Previously, if the allocations issue was considered, it was undertaken through evaluation of the consequences of an arbitrary priority scheme. We consider both these issues within a Nash bargaining solution (NBS) cooperative framework. The firms may not be risk neutral, hence a nontransferable utility bargaining game is defined. Thus the physical pooling mechanism itself must benefit the firms, even without any monetary transfers. The firms may be asymmetric in the sense of having different unit production costs and unit revenues. Our assumption with respect to shortage allocation is that a firm not suffering from a shortfall, will not be affected by any of the other firms' shortages. For two risk neutral firms, the NBS is shown to award priority on all inventory produced to the firm with higher ratio of unit revenue to unit production cost. Nevertheless, the arrangement is also beneficial for the other firm contributing to the total production. We provide examples of Uniform and Bernoulli demand distributions, for which the problem can be solved analytically. For firms with constant absolute risk aversion, the agreement may not award priority to any firm. Analytically solvable examples allow additional insights, e.g. that higher risk aversion can, for some problem parameters, cause an increase in the sum of quantities produced, which is not the case in a single newsvendor setting. © 2008 Wiley Periodicals, Inc. Naval Research Logistics, 2008 [source]

Peer Group Formation in an Adverse Selection Model

THE ECONOMIC JOURNAL, Issue 465 2000
Beatriz Armendariz De Aghion
This paper develops an adverse selection model where peer group systems are shown to trigger lower interest rates and remove credit rationing in the case where borrowers are uninformed about their potential partners and ex post state verification (or auditing) by banks is costly. Peer group formation reduces interest rates due to a ,collateral effect', namely, cross subsidisation amongst borrowers acts as collateral behind a loan. By uncovering such a collateral effect, this paper shows that peer group systems can be viewed as an effective risk pooling mechanism, and thus enhance efficiency, not just in the full information set up. [source]

Catastrophic payments for health care among households in urban Tamil Nadu, India

JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 2 2009
Salem Deenadayalan Vaishnavi
Abstract Urban residents in India face important health problems due to unhygienic conditions, excessive crowding and lack of proper sanitation. The private sector has started occupying the centre stage of the health system and households are burdened with increasing levels of health expenditure. This paper aims to study out-of-pocket expenditure (OOPE) and the extent of catastrophic payments for health care among households in a highly urbanised state, Tamil Nadu. The study used data on morbidity and health care for the year 2004 collected by the National Sample Survey Organization, India. Care was sought for 84 per cent of illness episodes in urban areas, and the majority used private sector providers (67 per cent for inpatients and 78 per cent for outpatients). Mean OOPE for inpatients and outpatients was higher for households with higher income. The average cost burden per visit was higher among those who sought care from private providers for inpatient services (29 per cent of household consumption expenditure) and outpatient services (20% of household consumption expenditure) compared with the burden associated with public health service use (3,4 per cent of consumption expenditure). About 60 per cent of households which used private health services faced catastrophic payments at the 10 per cent threshold level. To avoid catastrophic expenditure, greater use of the public sector which is providing services at an affordable cost is needed. Improving access to public health services, better gate-keeping systems, stronger controls on drug prices and increasing the quality of services are required to reduce the incidence of catastrophic expenditure both on inpatients and outpatients. Greater use of risk pooling mechanisms would encourage the poor to seek health care and also to protect households from all socio-economic groups from catastrophic expenditure. Copyright © 2009 John Wiley & Sons, Ltd. [source]