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Consumer Welfare (consumer + welfare)
Selected AbstractsConsumer Welfare and the Loss Induced by Withholding Information: The Case of BSE in ItalyJOURNAL OF AGRICULTURAL ECONOMICS, Issue 1 2004Mario Mazzocchi The paper develops a measure of consumer welfare losses associated with withholding information about a possible link between BSE and vCJD. The Cost of Ignorance (COI) is measured by comparing the utility of the informed choice with the utility of the uninformed choice, under conditions of improved information. Unlike previous work that is largely based on a single equation demand model, the measure is obtained retrieving a cost function from a dynamic Almost Ideal Demand System. The estimated perceived loss for Italian consumers due to delayed information ranges from 12 percent to 54 percent of total meat expenditure, depending on the month assumed to embody correct beliefs about the safety level of beef. [source] Efficiency Gaps, Love of Variety and International TradeECONOMICA, Issue 269 2001Catia Montagna We develop a general equilibrium monopolistic competition model of trade with technical heterogeneity among firms and countries. With free entry, technical asymmetries between firms result in the endogenous determination of the equilibrium average efficiency of the industry. We show that trade reduces (increases) the minimum efficiency required to survive in the more (less) efficient country. This has important welfare implications: (1) Contrary to the constant elasticity of substitution homogeneous-firms model, trade affects welfare even when there is no love of variety. (2) There are circumstances in which trade liberalization leads to a loss of consumer welfare. [source] Combating deceptive advertisements and labelling on food products , an exploratory study on the perceptions of teachersINTERNATIONAL JOURNAL OF CONSUMER STUDIES, Issue 3 2003Wai-ling Theresa Lai Yeung People are becoming more health conscious nowadays, but most of them are not able to adopt a lifestyle with adequate physical exercise and a healthier eating pattern. Many attempt to compensate by taking ,health foods'. Despite the recent economic recession, the functional food market expands rapidly in Asian countries. Recent statistics indicate a huge increase in weight loss and functional food product advertising expenditure in Hong Kong and other Asian countries. In a massive survey conducted by the Hong Kong Consumer Council, it was found that 85% of the medicines, health food and therapies sampled contain questionable claims and misleading messages (Consumer Council, 1999). In fact, young people do not understand much about modern food processing, in particular those present in low energy and functional foods, and they know very little about the modern food marketing strategies. The situation is detrimental to consumer welfare especially to the younger generation. This study attempts to reflect critically on the implications of these issues for the health and well-being of young people in Hong Kong. It explores directions for designing relevant and effective education programmes to empower young people in understanding food advertising strategies and making informed decisions on food choice. The paper will begin with a critical review on the current situation in Hong Kong. An interview survey on preservice and in-service teachers' perception towards misleading food advertising and labelling will then be reported. The situations at schools will be defined and problems faced by teachers in providing relevant consumer education programmes to students will be identified. Finally, the study will look to the future, with a view to developing students' critical skills in evaluating claims offered in food advertisements. [source] A behavioral account of compensation awarding decisionsJOURNAL OF BEHAVIORAL DECISION MAKING, Issue 2 2009Claire I. Tsai Abstract Suppose an individual loses an irreplaceable object and someone else is at fault. How much should he be compensated? Normatively, compensation should equal the value (utility) to the victim. Our experiments demonstrate that compensation decisions often ignore value and are instead based on cost (how much the victim originally paid for the item) except when cost is zero. For example, we found that people awarded $200 for a destroyed item worth $500 to the victim if the cost was $200; however, they awarded $500 if the original cost was zero. We explain these phenomena in terms of lay scientism (the tendency to base decisions on objective factors) and discuss how the prevalent cost-based compensation rule hurts consumer welfare. Copyright © 2008 John Wiley & Sons, Ltd. [source] Consumer Perceptions of Privacy and Security Risks for Online ShoppingJOURNAL OF CONSUMER AFFAIRS, Issue 1 2001ANTHONY D. MIYAZAKI Government and industry organizations have declared information privacy and security to be major obstacles in the development of consumer-related e-commerce. Risk perceptions regarding Internet privacy and security have been identified as issues for both new and experienced users of Internet technology. This paper explores risk perceptions among consumers of varying levels of Internet experience and how these perceptions relate to online shopping activity. Findings provide evidence of hypothesized relationships among consumers' levels of Internet experience, the use of alternate remote purchasing methods (such as telephone and mail-order shopping), the perceived risks of online shopping, and online purchasing activity. Implications for online commerce and consumer welfare are discussed. [source] Randal Heeb Innovation and Vertical Integration in Complementary MarketsJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 3 2003Randal Heeb This paper studies vertical integration by an essential-good monopolist into complementary markets. Unlike previous studies of complementary products, consumers are allowed to purchase some components of a complementary basket, but not others. Two different pricing strategies by the integrated firm may emerge. In mass-market equilibria, the price of the complement under integration is zero and it is given away with the essential good. Niche-market equilibria have more conventional pricing. This dichotomy is consistent with consumer software pricing. Integration enhances consumer and total surplus, unless it leads to exit by the higher-quality rival, in which case welfare is reduced. Exit is most likely when it is least damaging to consumer welfare. Integration reduces innovation by the rival firm. The effect on innovation by the integrated firm is ambiguous, but numerical computation of an extended model indicates that integration increases the innovation of the integrated firm and enhances welfare. [source] A Theory of Broadcast Media Concentration and Commercial AdvertisingJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2004Brendan M. Cunningham We analyze a model in which the interaction of broadcasters, advertisers, and consumers determines the level of nonadvertising broadcasting produced and consumed. Our main finding is that an increase in concentration in broadcast media industries may lead to a decrease in the total amount of nonadvertising broadcasting. The strength of this inverse relationship depends, in part, on the behavioral response of the consumers to changes in advertising intensities. We also present a numerical general equilibrium solution to our model and demonstrate a positive relationship between consumer welfare and the number of firms in the broadcast industry. [source] Leviathan and Capital Tax Competition in FederationsJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 2 2003Michael Keen This paper analyzes a simple model of taxation in a federal system within which policymakers are revenue,maximizing Leviathans and fiscal externalities arise not only horizontally, across the "states," but also vertically between levels of government. Such an economy is characterized by excessively high taxation in the noncooperative equilibrium. Intensifying horizontal competition, by increasing the number of states, unambiguously increases revenues (contrary to the Leviathan wisdom) but nevertheless enhances consumer welfare (consistent with the Leviathan wisdom). Revenue sharing arrangements between policymakers are shown to be,contrary to the Leviathan wisdom,Pareto improving. [source] Welfare-Reducing Mergers in Differentiated Oligopolies with Free Entry,THE ECONOMIC RECORD, Issue 273 2010NISVAN ERKAL Antitrust authorities regard the possibility of post-merger entry and merger-generated efficiencies as two factors that may counteract the negative effects of horizontal mergers. This article shows that in differentiated oligopolies with linear demand, all entry-inducing mergers harm consumer welfare. This is because if there is entry following a merger, it implies that the merger-generated efficiencies were not sufficiently large. Mergers which induce exit, owing to sufficiently high cost savings, always improve consumer welfare. [source] Why Do Suppliers Charge Larger Buyers Lower Prices?THE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 1 2001Rajeev K. Tyagi The phenomenon of input suppliers charging larger buyer firms, relative to smaller buyer firms, lower prices is commonly explained in terms of supplier economies of scale, supplier competition for larger buyers, and the larger bargaining power of larger buyers. This paper provides an alternative explanation, and shows that the observed direction of differential pricing can benefit the supplier by lowering the level of tacit collusion its buyers can sustain in their output market. This result also provides a new mechanism through which a ban on price discrimination by input suppliers may lower consumer welfare. [source] Moonlighting: public service and private practiceTHE RAND JOURNAL OF ECONOMICS, Issue 4 2007Gary Biglaiser We study job incentives in moonlighting, when public-service physicians may refer patients to their private practices. Some doctors in the public system are dedicated, and behave sincerely, but others,the moonlighters,are utility maximizers. Allowing moonlighting always enhances aggregate consumer welfare, but equilibrium public-care quality may increase or decrease; if quality increases, moonlighting improves each consumer's expected utility. Unregulated moonlighting may reduce consumer welfare as a result of adverse behavioral reactions, such as moonlighters shirking more and dedicated doctors abandoning their sincere behavior. Price regulation in the private market limits such adverse behaviors in the public system and improves consumer welfare. [source] The welfare costs of urban outdoor water restrictionsAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 3 2007Donna Brennan Outdoor water restrictions are usually implemented as bans on a particular type of watering technology (sprinklers), which allow households to substitute for labour-intensive (hand-held) watering. This paper presents a household production model approach to analysing the impact of sprinkler restrictions on consumer welfare and their efficacy as a demand management tool. Central to our empirical analysis is an experimentally derived production function which describes the relationship between irrigation and lawn quality. We demonstrate that for a typical consumer complete sprinkler bans may be little more effective than milder restrictions policies, but are substantially more costly to the household. [source] FAILING FIRM DEFENCE WITH ENTRY DETERRENCEBULLETIN OF ECONOMIC RESEARCH, Issue 4 2010Alessandro Fedele K21; L13; L41 ABSTRACT Under the principle of the failing firm defence a merger that would be blocked due to its harmful effect on competition could be nevertheless allowed when (i) the acquired firm is actually failing, (ii) there is no less anticompetitive alternative offer of purchase, (iii) absent the merger, the assets to be acquired would exit the market. We focus on potential anticompetitive effects of a myopic application of the requirement (iii) by studying consequences of a horizontal merger on entry in a Cournot oligopoly with a failing firm. Entry is deterred if the merger is cleared and, when the industry is highly concentrated, consumer welfare is higher under a prohibition because long-run gains due to augmented competition exceed short-run losses due to shortage of output. [source] A welfare analysis of Canadian chartered bank mergersCANADIAN JOURNAL OF ECONOMICS, Issue 3 2002James McIntosh An econometric model of Canada's five largest banks is estimated using time series data from 1976 to 1996. The principal findings are that chartered bank technology is characterized by increasing returns to scale. Scale efficiency is sufficiently large to offset the consequences of reduced competition that might have arisen from a merger between Bank of Montreal and Royal Bank of Canada, Canadian Imperial Bank of Commerce and Toronto Dominion Bank, or both. The estimated model predicts that all the mergers proposed in 1998 would have led to slightly lower prices and, consequently, to an increase in consumer welfare. Une analyse de bien,être des fusions des banques à charte canadiennes. L'auteur calibre un modèle économétrique des cinq plus grandes banques à charte au Canada à l'aide de séries chronologiques de 1976 à 1996. Les principaux résultats montrent que la technologie des banques à charte a des rendements croissants à l'échelle. Ces rendements à l'échelle sont suffisamment importants pour compenser les effets de réduction de la concurrence qui auraient pu se produire en conséquence de la fusion de la Banque de Montréal et la Banque Royale, de la Banque Impériale de Commerce et de la Banque Toronto,Dominion, ou des deux. Le modèle suggère que toutes les fusions proposées en 1998 auraient entraîné des prix légèrement plus bas, et en conséquence un accroissement dans le niveau de bien,être des consommateurs. [source] ,Consumer' versus ,Customer': The Devil in the DetailJOURNAL OF LAW AND SOCIETY, Issue 2 2010Pinar Akman According to the European Commission, the objective of EU competition rules is enhancing ,consumer welfare'. In EU competition law, however, ,consumer' means ,customer' and encompasses intermediate customers as well as final consumers. Under Article 102TFEU, harming intermediate ,customers' is generally presumed to harm ,consumers' and where intermediate customers are not competitors of the dominant undertaking, there is no requisite to assess the effects of conduct on users further downstream. Using advances in economics of vertical restraints and, in particular, non-linear pricing, this article shows that there are instances where the effect on ,customer welfare' does not coincide with the effect on ,consumer welfare' and the presumption can potentially lead to decisional errors. Thus, if the law is to serve the interests of ,consumers', the Commission should reconsider this presumption and its interpretation of the ,consumer' in ,consumer welfare'; otherwise, it remains questionable whose interests EU competition law serves. [source] The European Commission's Guidance on Article 102TFEU: From Inferno to Paradiso?THE MODERN LAW REVIEW, Issue 4 2010Article first published online: 8 JUL 2010, nar Akman The European Commission has for the first time issued a document expressing its official position on the enforcement of Article 102TFEU which prohibits the abuse of a dominant position on the Common Market. The Commission Guidance on enforcement priorities in applying Article 102TFEU to exclusionary abuses (adopted in December 2008) has ended a review of about four years. Given the increased enforcement of Article 102TFEU at the European level and the fact that many national provisions in the EU on unilateral conduct are modelled after Article 102TFEU, how the Commission intends to enforce Article 102TFEU is crucial for the application of competition law and the undertakings subject to it under European and/or national laws. The review period was preceded by severe criticisms of the Commission's approach to Article 102TFEU for protecting competitors instead of competition and for being insufficiently grounded in modern economic thinking. At the heart of the review and the discussions surrounding it lay the question of the objective of Article 102TFEU. Some, including the Directorate General for Competition claimed the objective to be ,consumer welfare', whereas some argued that ,consumer welfare' cannot be adopted as the objective at the expense of the protection of the competitive process. This article critically reviews the Commission Guidance, with an eye to assessing the ultimate objective of and the test of harm under Article 102TFEU. After discussing whether the Guidance indeed sets priorities, it examines the general approach of the Guidance to exclusionary conduct. It points out that despite there being some welcome novelties in the Guidance, there are also suggestions therein whose legitimacy and legality are questionable. Reflecting on the Guidance as a soft-law instrument, the article argues that although regarding the objective of Article 102TFEU, the Commission's apparent tendency towards ,consumer welfare' is not unlawful, the reform of Article 102TFEU to bring it more in line with modern economic and legal thinking seems to be far from complete. [source] Integrative Model of Caregiving: How Macro and Micro Factors Affect Caregivers of Adults With Severe and Persistent Mental IllnessAMERICAN JOURNAL OF ORTHOPSYCHIATRY, Issue 1 2005Winnie W. S. Mak PhD The study tested an integrative model of caregiving by examining the effects of sociocultural characteristics, interpersonal relations, mental health service structure, consumers' symptoms, objective burden, and evaluation of service systems on the subjective experiences of caregivers. The sample consisted of 428 caregivers of adults with severe and persistent mental illness. Results from multiple regression analyses indicated that ethnicity was the most significant sociocultural factor on caregivers' worry, personal growth, and benefits. Caregivers enrolled in managed care plans worried more about their consumers' welfare and felt less gratified by their experiences than their counterparts from fee-for-service plans. Implications to and partnerships among caregivers and mental health service systems were discussed. [source] | |||||||||||||