The Economics of Retailing Formats: Competition Versus Bargaining

We set up a merger game between retailing stores to study the incentives of independent stores to form a big store when some consumers have preferences for one‐stop shopping. Such one‐stop shopping creates complementarity between products, leading in turn to lower prices after a big store is formed but may also lead to an improvement in the bargaining position vis‐à‐vis producers through the creation of an inside option that small stores do not have. We find that big stores will not be formed when the stores' ex ante bargaining power vis‐à‐vis producers is high. Otherwise, an asymmetric situation occurs with only one big store created when one‐stop shoppers are abundant.     

Non-discriminating renegotiation in a competitive insurance market

A variant of the Rothschild-Stiglitz model of a competitive insurance market is considered, where each uninformed firm is allowed to renegotiate the contracts that its customers initially sign, subject to the restriction that renegotiated contracts be offered to all the firm's customers. Such non-discriminating renegotiation is shown to weaken the profitability of cream skimming to the extent that there exists a unique equilibrium outcome. This outcome is that of Miyazaki and Spence i.e., the incentive-compatible pair of zero-profit contracts, if efficient; and the incentive-compatible, zero-profit pair of contracts maximizing low-risk utility, otherwise.     

PLANNING THROUGH INCLUSIVE DIALOGUE: NO ESCAPE FROM SOCIAL CHOICE DILEMMAS

The thrust of the theory of preference aggregation is that it is impossible to design institutions guaranteeing collective decisions that are both consistent and fair. Proponents of deliberative democracy have used this as an argument for decision-making based on dialogue rather than voting. Communicative public planning - producing plans through public participation exercises - is seen as an integral part of deliberative democracy. It is argued here, however, that the inclusive dialogue of this style of planning cannot promise escape from arbitrariness and does not necessarily deliver improved local decision-making.     

Understanding consumers' in-store visual perception: The influence of package design features on visual attention

It is widely accepted that the human brain has limited capacity for perceptual stimuli and consumers' visual attention, when searching for a particular product or brand in a grocery store, should then be limited by the boundaries of their own perceptual capacity. In this exploratory study, we examine the relationship between abundant in-store stimuli and limited human perceptual capacity. Specifically, we test the influence of package design features on visual attention. Data was collected through two eye-tracking experiments, one in a grocery store using wireless eye-tracking equipment, and another in a lab setting. Findings show that consumers have fragmented visual attention during grocery shopping, and that their visual attention is simultaneously influenced and disrupted by the shelf display. Physical design features such as shape and contrast dominate the initial phase of searching. Time pressure and familiarity with the grocery store are studied and discussed.     

Balancing the sequential logic of quality constructs in manufacturing-supplier relationships — Causes and outcomes

Manufacturers in business markets are experiencing a strong trend towards close versus distant relationships with suppliers. Three key relationship constructs in academic research are trust, commitment, and satisfaction. Although the relevant literature holds some evidence that trust and commitment are antecedent to satisfaction, the possibility that satisfaction plays a key mediation role between trust/commitment and other important outcomes (i.e., coordination, cooperation, and continuity) receives scant examination. This study tests this conceptual model by examining the relationships between manufacturers and suppliers. A random sample of small-to-medium-sized Norwegian manufacturers was contacted by phone in order to identify potential key informants. Shortly thereafter, a total of 581 surveys were mailed to the key informants. Two hundred and twelve surveys were returned, representing a response rate of 36.5%. Results support the conceptual model presented; trust and commitment relate positively to satisfaction; and satisfaction, in turn, relates positively to all three outcomes of coordination, cooperation, and continuity.     

The choice of stratification points

Abstract

Extract

The importance of the problem of the optimum choice of stratification points, when conducting stratified sampling on a univariate population, has been pointed out by Dalenius (1950, 1957) In a simplified form, this problem may be given the following mathematical formulation.     

Resident Attitudes Towards Mountain Second-Home Tourism Development in Norway: The Effects of Environmental Attitudes

Rural tourism, especially through second-home development is increasing rapidly in much of Europe, the USA and Canada offering new economic opportunities for local communities, but also challenges related to environmental impacts and differing perceptions within communities about appropriate development paths. This study examines associations between the environmental attitudes of residents and attitudes towards second-home development in two regions in Southern Norway, with community attachment and economic dependency as additional predictors. Ecocentrism was found to have a strong negative effect on attitudes towards tourism development, while, in contrast to previous findings, community attachment did not have significant effects. Economic dependency is significantly related to attitudes towards development; both ecocentrism and economic dependency are mediated by other variables, such as expected impacts and benefits. The findings are important in planning to reduce potential conflicts.     

Health insurance: Medical treatment vs disability payment

We present arguments for treating health insurance and disability insurance in an integrated manner in economic analysis, based on a model where each individual’s utility depends on both consumption and health and her income depends on her earning ability. When purchasing insurance, she may choose a contract that offers less than full medical treatment. We find that high-ability individuals demand full recovery and equalize utility across states, while low-ability individuals demand partial treatment and cash compensation and suffer a loss in utility if ill. Our results carry over to the case where health states are not observable.     

Time Schedule and Program Profile: TV News in Norway and Denmark

Two TV channels compete on programming with respect to both time schedule (continuous choice) and program profile (discrete choice), with a directional constraint concerning time schedule (viewers cannot watch TV before they get home). We show how the relative importance of program profile and time schedule, as perceived by the viewers, determines the equilibrium outcome. Furthermore, we find that there is a first-mover disadvantage in a sequential game where one channel sets its two choice variables before its rival does, and a first-mover advantage in a semise-quential game where the channels set time schedules sequentially and thereafter set program profiles simultaneously. The results are applied to the Norwegian and Danish markets for TV news, where number-two channels have challenged the incumbents.     

Elasticities of Demand and Willingness to Pay for Environmental Services in Sweden

Are environmental services luxuriesor necessities? Are low-income groupsrelatively more willing to pay forenvironmental improvements than high-incomegroups? The discussion on the shape of theenvironmental Kuznets curve and environmentaljustice call for analyses that approach thesequestions. Following a survey-based approachfor modelling the demand for public goods, thispaper provides estimates of income and priceelasticities of demand for reduced marineeutrophication effects in the case of theBaltic Sea, using data from five Swedishcontingent valuation studies. Point estimatesindicate that reduced marine eutrophicationeffects can be classified as a necessity and anordinary and price elastic service. Confidenceintervals show however that the classificationas a necessity is not statisticallysignificant. Income elasticities of willingnessto pay, not to be confused with incomeelasticities of demand, are estimated for abroad range of environmental services inSweden. A basic finding is that income tends toinfluence willingness to pay positively andsignificantly. The elasticity estimates are inmost cases greater than zero, but less thanunity, indicating that the benefits ofenvironmental improvements tend to beregressively distributed. In a cost-benefitanalysis of a project suggesting environmentalimprovements, distributional concerns thereforecall for an introduction of weights or at leasta sensitivity analysis of how weighting wouldchange decisions about the project's socialprofitability.