Corporate Social Responsibility Spillover and Competition Effects on the Food Industry

This paper examines the spillover and competition effects of corporate social responsibility (CSR) with duopoly competition. In employing the assumption that firm CSR increases consumer willingness to pay for the firm's products while consumer willingness to pay decreases for non‐CSR firm products, some interesting conclusions are achieved. First, CSR spillover effects increase CSR firm outputs and prices, while CSR spillover has the opposite effect on competitors. Second, CSR spillover decreases total outputs and total social welfare levels. Third, competition effects increase CSR expenditures, and CSR firms' CSR policies are the most robust when non‐CSR firms assume a leading position. It is found that total outputs and consumer utilities are highest when CSR firm acts as leader, while the relationships of social welfare among different cases are ambiguous depending on product substitution and spillover effects.     

TIME TO MARKET AND IMPATIENT CUSTOMERS

We analyse the decision of firms about when to launch their products on the market when they produce differentiated goods and compete on prices. We find two subgame perfect equilibria: one in which the high‐quality firm holds its leadership in quality, and another in which the low‐quality firm leapfrogs its rival. When the initial level of differentiation is high enough, the low‐quality firm always launches first. Finally, we extend this model to analyse commercial piracy. We obtain that pirates are highly unlikely to launch the illegal copy first because they would bear a higher penalty and a higher risk of being detected.     

ESTIMATING THE WILLINGNESS TO PAY FOR DIGITAL MUSIC

The general consensus among the copyright piracy literature is that economic incentives and enforcement are both effective strategies that complement one another in reducing the occurrence of piracy. Yet, the key factor underlying these strategies is the ability of the media industries to influence an individual's willingness to pay (WTP) for legal purchases when illegal versions exist. This article estimates the effects of factors influencing WTP for digital music downloads. Our results show that while income and risk perceptions play a dominant role in determining WTP, ethics are also important in influencing WTP. Our results are consistent with the growing consumer acceptance of fee-based music services that can exist alongside peer-to-peer file sharing as well as serve as a viable substitute . ( JEL O34, K42, D12)     

Consumer attitudes toward low stake risk in food markets

Consistency of quality is viewed as important for producers of consumer goods. However, there is no literature testing the importance of quality consistency on consumers’ willingness to pay for consumer goods. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers’ willingness to pay for beef. We find that most consumers are risk averse with respect to sensory quality. Both the average tenderness and the variance of tenderness affected the consumers’ willingness to pay for beef. Reducing the uncertainty of the sensory quality by categorizing the beef into three tenderness classes increased the total value of the beef by 8%.     

Complementarity of willingness to pay and cost heterogeneity under vertical product differentiation: A welfare analysis

Due to the fact that a consumer’s willingness to pay differs between segments, many unregulated industries are price constrained, although the specific costs of market segments also differ. If the product quality is endogenously chosen, we find that third-degree price discrimination increases welfare if a sufficiently pronounced complementarity between the willingness to pay and variable cost heterogeneity is given. This is due to the fact that the monopolist’s incentive for employing a pronounced price dispersion strategy is directly influenced by the consumers’ willingness to pay for the quality of a product. With endogenous product quality, the paper shows that the standard welfare result of third-degree price discrimination compared to uniform monopoly pricing (e.g. that total welfare and consumer surplus both fall if total output does not rise) can be only reversed given the complementarity is sufficiently pronounced.     

Conditional-logit Bayes estimators for consumer valuation of electric vehicle driving range

Range anxiety – consumers’ concerns about limited driving range – is generally considered an important barrier to the adoption of electric vehicles. If consumers cannot overcome these fears it is unlikely that they will consider purchasing an electric car. Hence, a successful introduction of low emission vehicles in the market requires a full understanding of consumer valuation of driving range. By analyzing experimental data on vehicle purchase decisions in California, I derive and study the statistical behavior of Bayes estimates that summarize consumer concerns toward limited driving range. These estimates are superior to marginal utilities as parameters of interest in a discrete demand model of vehicle choice. One of the empirical results is the posterior distribution of the willingness to pay for electric vehicles with improved batteries offering better driving range. Credible intervals for this willingness to pay, as well as both parametric and nonparametric heterogeneity distributions, are also analyzed.     

住宅智能化、消费者异质性与支付意愿——基于技术接受模型的实证分析

智能时代的到来使得智能化新产品成为人们广泛关注的焦点,住宅产业也在经历智能化的转变。本文从消费者的角度,基于技术接受模型(TAM),构建了住宅智能化对于消费者支付意愿的影响模型并对其进行实证研究。研究结果表明：住宅智能化能够通过满足消费者对住宅功能的需求进而提升消费者的支付意愿,消费者异质性对智能化住宅和支付意愿的关系具有调节作用。年轻群体和低收入群体更关注智能化住宅的基本居住功能和生活品质功能;未婚消费者更关注智能化住宅的生活品质功能,已婚群体对住宅智能化的支付意愿更高;低收入群体相比高收入群体对住宅智能化的支付意愿更高;高教育配套需求者、有会所需求和有装修需求的消费者对住宅智能化的支付意愿更强烈。     

Quality upgrading in Ethiopian dairy value chains: dovetailing upstream and downstream perspectives

Abstract

In this article, we analyze opportunities and constraints for upgrading product quality in the dairy value chain in Ethiopia. Our analysis is based on an integrated understanding of supply chain performance both from producer and from consumer perspectives. We outline as main drivers for quality upgrading: (a) factors that influence producers’ willingness to invest toward intensification by smallholder dairy farmers and cooperatives and (b) factors that induce consumer’s willingness to pay for healthy and nutritious dairy products delivered at specific retail outlets. Since there are large gaps between upstream producers incentives and downstream consumers motives, possibilities for dairy quality upgrading remain fairly limited. Given this market structure, decisive policy support is required for better tailoring producer’s investments with consumer preferences.     

Monopoly pricing when consumers are antagonized by unexpected price increases: a “cover version” of the Heidhues–K?szegi–Rabin model

This paper reformulates and simplifies a recent model by Heidhues and K?szegi (The impact of consumer loss aversion on pricing, Mimeo, 2005), which in turn is based on a behavioral model due to K?szegi and Rabin (Q J Econ 121:1133?C1166, 2006). The model analyzes optimal pricing when consumers are loss averse in the sense that an unexpected price hike lowers their willingness to pay. The main message of the Heidhues?CK?szegi model, namely that this form of consumer loss aversion leads to rigid price responses to cost fluctuations, carries over. I demonstrate the usefulness of this ??cover version?? of the Heidhues?CK?szegi-Rabin model by obtaining new results: (1) loss aversion lowers expected prices; (2) the firm??s incentive to adopt a rigid pricing strategy is stronger when fluctuations are in demand rather than in costs.     

Segmenting the market: The monopolist's optimal product mix

In an industry producing products which differ in quality, to consumers who vary in their willingness to pay, it may happen that only a bounded number of producers can coexist at (noncooperative price) equilibrium; in other words, the industry is a natural oligopoly. We are here concerned with a special example, in which only one producer can survive. Our focus of interest in the present paper is to examine this monopolist's optimal product range. Depending on the dispersion of consumers' willingness to pay (income), either (i) the monopolist will find it optimal to segment the market completely, offering the maximum number of products permitted or (ii) the monopolist will offer only a single product. The precise nature of this switch of policy, which occurs at a certain critical distribution of consumer incomes (willingness to pay), is explored fully.     

Willingness to Pay and the Cost of Commitment: An Empirical Specification and Test

In a static setting, willingness to pay for an environmental improvement is equal to compensating variation. In a dynamic setting, however, willingness to pay may also contain a commitment cost. In this paper we incorporate the dynamic nature of the value formation process into a stated preference study designed to test whether there is an important dynamic component (commitment cost) in stated preference values. The results clearly indicate that stated preference values can contain commitment costs and that these can be quite large: respondents offered the opportunity to delay their purchasing decisions until more information became available were willing to pay significantly less for improved water quality than those facing a now-or-never decision. These results have important consequences for the design and interpretation of stated preference data.     

Eco-labels, Trade and Protectionism

Eco-labels are suspected to serve protectionist purposes. We analyze the choice between an environmental standard and a voluntary eco-label scheme in a partial trade model with one domestic firm and one foreign firm. The environmental standard will only apply to the domestic firm, while both firms can adopt the eco-label. Pollution is production related, and domestic consumers demand products that are produced in an “environmentally friendly” way. Our results show that it may be optimal for the domestic government to introduce an eco-label and get both firms to adopt the label, instead of setting an environmental standard. However, to what extent this policy serves protectionist purposes is ambiguous. In particular, if the willingness to pay for green products is sufficient to cover the pollution abatement costs of the foreign firm, foreign firm profit will increase while domestic firm profit will decrease compared to the outcome with a domestic environmental standard. On the other hand, if the willingness to pay for green products is insufficient, the foreign firm would be better off with a domestic environmental standard.     

消费者对地理标志农产品支付意愿的实证分析——以盐池滩羊为例

以农产品主销区消费者调查问卷为依据,分析了影响因素对消费者地理标志农产品支付意愿的实际影响。结果表明:消费者对农产品地理标志了解和认知程度仍处初级阶段;受教育程度正向影响购买意愿,反向影响溢价支付意愿;对农产品注册为地理标志了解程度、对农产品口感味道评价正向影响购买意愿和支付意愿;非穆斯林、已婚、羊肉占肉类消费比重正向影响购买意愿,而家庭收入水平、无羊肉忌口、无超市购物去处等则正向影响溢价支付意愿;但性别、年龄、农产品品牌了解程度、地理标志了解程度等均未显著影响消费者支付意愿。     

Do price-tags influence consumers’ willingness to pay? On the external validity of using auctions for measuring value

This paper considers the external validity of the growing corpus of literature that reports the use of laboratory auctions to reveal consumers’ willingness to pay for consumer goods, when the concerned goods are sold in retail stores through posted price procedures. The quality of the parallel between the field and the lab crucially depends on whether being informed of the actual field price influences a consumer’s willingness to pay for a good or not. We show that the elasticity of the WTP revision according to the field price estimation error is significant, positive, and can be roughly approximate to one quarter of the error. We then discuss the normative implications of these results for future experiments aimed at eliciting private valuations through auctions.     

基于居民生活满意度的城市景观经济价值评价——以大连市为例

基于大连市的调研数据,利用生活满意度数据,探索了城市景观质量对居民效用的影响,进而使用有序Probit模型测算城市景观的经济价值。结果表明:城市景观质量对居民的生活满意度具有显著的正向影响;以十分制定位景观评价标准,每年每户居民对单位城市景观质量改善的意愿支付为26282元;相对于低收入群体,较高收入群体对城市景观质量的变化更为敏感;当城市景观质量实现由Ⅰ级向Ⅱ级的改善时,居民的支付意愿最强,可达到96807元;随着城市景观质量等级的升高,家庭的边际支付意愿明显下降,反映出处在较低质量景观状态中的居民具有更强烈的景观改善意愿。     

Complementing Cournot’s analysis of complements: unidirectional complementarity and mergers

We study the price and welfare effects of a merger of firms producing unidirectional complements: a firm is producing a product (called an optional good) that is valuable only if it is consumed with the other product (called a base good) produced by another firm. Under the assumption that there are two types of consumers: (i) those who consume one unit of the base good only or nothing (having zero valuation of the optional good), and (ii) those who consume one unit of the composite good or nothing, we show that a merger of the two firms raises the price of the base good, resulting in lower consumer surplus for the former consumer group, if and only if the average willingness to pay in the latter consumer group is sufficiently low. This result is in sharp contrast to Cournot’s (Researches into the mathematical principles of the theory of wealth, 1838) classical implication that a merger of firms producing strict complements makes all consumers strictly better off.     

动物福利认知与居民食品安全

农场动物福利不仅是伦理问题,还关乎食品安全。文章将农场动物福利纳入食品安全议题之内,考察了消费者的农场动物福利认知对其支付意愿及政策诉求的影响。研究表明,尽管当前我国消费者对农场动物福利认知还不充分,但仍有81.42%的消费者对农场动物福利存在一定的支付意愿,平均支付溢价达19.24%,消费者关于农场动物福利的认知对其农场动物福利支付意愿及政策诉求存在显著影响。这一结论表明,我国已存在通过市场激励手段或是政府规制手段改善农场动物福利,进而提升居民食品安全的基础条件。     

Corporate social responsibility,vertical product differentiation and international competition

Would a foreign firm’s consumer‐oriented corporate social responsibility (CSR) activities be rewarded by an importing country’s voluntary tariff reduction? The current paper addresses this question in an import‐competing duopoly model with vertical product differentiation. It is shown that the tariff will decrease if the foreign firm switches from a purely profit‐driven firm to a CSR firm. A consumer‐oriented CSR strategy will always hurt the domestic firm’s profit, whereas the relationship between the foreign firm’s profit and CSR sensitivity (the degree to which a firm cares about consumer welfare) is invertedly U‐shaped. When firms’ decisions to switch to CSR are endogeneized, only the foreign firm will become a CSR firm.     

Behavioural responses to science-based eco-labelling: gold,silver, or bronze

This study uses unique data collected from field experiments to investigate consumer willingness to pay (WTP) for otherwise homogeneous commodities that provide different levels of environmental services. On average, individuals are willing to pay more for products that provide a higher level of ecosystem services. This effect is larger when the label contains symbols that explicitly differentiate the levels. The effect magnitude is further amplified when it contains brief information on the scientific basis for the levels. However, our results also suggest that the WTP premium for the superior product is smaller than the discount in WTP for the inferior product.     

Learning,quality and prices

Product quality is often unknown to consumers. Purchasing decisions are based on individual expectations about product quality. Consumers, in general, acquire private information about product quality from observing the quality of purchased goods. This information is used to update prior expectations. This paper analyzes the effect of consumer learning on the optimal pricing strategy of a firm in a two period model.