Consumer Welfare and Inefficiency Among Regulated Industries

While the issue of efficiency on the side of production is still not a settled question, it is generally agreed that competition is more conductive to efficiency—both allocative and X—than monopoly. When the monopoly is regulated, i.e., receiving a rate of return less than it would if left unregulated but greater than the market rate of return, both allocative and X-inefficiency result. Since the degree of inefficiency amounts to a tax on consumers, the question of inefficiency in production has a twin companion in the form of consumer welfare losses. This is particularly true for many public utilities upon which low income families spend a large proportion of their income. The quasi tax that the regulated monopolist exacts neither generates a flow of public goods nor increases returns to shareholders. It is a particularly burdensome levy because the rate structure is highly regressive.     

Consumer and Welfare Losses from Milk Marketing Orders

Consumer and welfare losses from milk marketing orders in 1985 including their impact on the sale of reconstituted milk are estimated. Results indicate that consumers pay higher prices for fluid milk and lower prices for manufactured milk products than they would under a competitive system. The net loss in consumer surplus ranges from $621 million to $851 million while the absolute welfare loss ranges from $343 million to $608 million. In addition, existing provisions of milk marketing orders effectively prohibit the use of reconstituted milk, an innovation that could ensure adequate and low cost supplies of fluid milk through the year and have many of the same effects as eliminating milk marketing orders.     

政府规制与消费者保护

政府规制是保护消费者利益的根本方式。本文主要通过制度分析来探讨我国消费者保护运动中政府规制的绩效及其影响,从改善政府规制规制绩效的制度建设角度提出改进措施,以期促进消费者保护与消费和谐的实现。     

论反垄断法中的消费者福利保护——以知识经济为背景

消费者福利一直是反垄断法保护的对象。在知识经济时代,反垄断法受到了前所未有的挑战,将保护消费者福利明确定位为反垄断法的终极目的与核心价值,有针对性的制定微观制度与政策,是传统反垄断法因应知识经济时代的必然选择。     

Effects of Joint Outsourcing on Consumer Welfare

This work models outsourcing under oligopolistic competition with nonlinear costs. I show that in a covered market, if each firm’s marginal cost before outsourcing is lower than the industry’s average cost, outsourcing leads to increased prices and decreased consumer welfare. Joint outsourcing is more profitable if the firms’ equilibrium quantity produced is in the economies of scale part of their cost curve.     

Consumer Credit Risk and Pricing

Previous academic studies viewed borrower rejection as a sign of market imperfections in the consumer credit markets, but this view was based upon the assumption that differences in the levels of borrower creditworthiness could not be accurately identified. Today, it is possible to differentiate between types of borrowers, and riskier borrowers can participate in credit markets if they are willing to pay relatively higher borrowing costs. Hence, a more critical issue concerning the performance of these markets should be whether loan prices correctly reflect the level of borrower credit risk. This paper reexamines consumer participation in credit markets looking specifically at issues related to the pricing of borrowers of different credit risk.     

Potential Profitability and Decreased Consumer Welfare Through Manufacturers' Cents-Off Coupons

This paper examines the potential increase in oligopolistic manufacturers' profits due to a policy of cents-off couponing and the resulting changes in consumer welfare and resource allocation. This paper offers support to the hypothesis that the observed couponing policies of U.S. manufacturers are motivated by their desire to increase profits through third-degree price discrimination—a practice that results in welfare losses to consumers. While some conclusions reached have been dealt with by other researchers, its approach differs in that it attempts to quantify the probable magnitudes of the welfare effects and profit potential of manufacturers' couponing policies within the framework of a third-degree price discrimination model where firms are assumed to behave as Cournot oligopolists.     

Consumer Trust,Social Marketing and Ethics of Welfare Exchange

The global corporate scandals such as Enron, Worldcom and Global Crossing have raised fundamental issues of business ethics as well as economic, social and anthropological questions concerning the nature of business competition and global capitalism. The purpose of this conceptual paper is to introduce the concept of “welfare exchange” to the existing notions of economic, social and anthropological notions of business and exchange in markets and society in the 21st century. Global competition and business success in the 21st century continue to raise the nature of economic value and the interaction among diverse actors in international markets, institutions and society. We believe that the nature of such exchange between consumers and organizations, which can also be termed social marketing, need to increasingly take into account a welfare and ethical component. In this paper, we introduce our concept of welfare exchange to emphasize the importance of such welfare and ethical issues in the global business environment of the 21st century.     

Complementary Goods: Prices and Consumer Welfare Under Duopoly and Monopoly

We examine prices, profits, and consumer surplus for differentiated complementary goods under duopoly and a multi‐product monopoly. We find that little can be said about the relative magnitudes of prices of the components of a system of complementary goods under the alternative market structures. Although demand complementarity can lead to lower prices for either the primary or the secondary good under monopoly, both prices are not necessarily lower. The results unique to this paper are that, when two complementary goods form a system, the system price is unambiguously lower and consumer surplus and profits are higher under a multi‐product monopoly.     

Consumer Welfare Implications of Changes in Interstate Telephone Pricing

Past practice in regulating telephone prices has encouraged telephone companies to incur excessive costs. The Federal Communications Commission has recently changed some of these practices. In this paper the consumer welfare implications of some of these changes are examined, primarily the institution of interstate subscriber line charges and changes in the procedures for allocating costs among jurisdictions. The conclusion is that these changes serve consumer interests.     

Estimating Direct Gains in Consumer Welfare in Telecommunications Sector

This paper discusses the benefits of product and process innovation as well as deregulation in consumer telecommunication products markets. The twin trends of price reduction and new features have benefited consumers. These major changes have taken place alongside deregulation. Using the data from Organisation for Economic Co-operation and Development telecommunication reports, the paper provides estimates of gains in consumer welfare over the years. These direct gains are significant (hundreds of billions of dollars) and thus justify the public investment that goes into the telecommunication infrastructure improvement.     

Unequal Pricing in the Information Economy: Implications for Consumer Welfare

This article presents an economic analysis of information good pricing and consumer welfare, and discusses the implications of price discrimination in the information economy. It argues that network externalities, coupled with information asymmetry, enable a dominant marketer to price unequally, extracting late adopters surplus to compensate for the loss from early adopters. In the short term, the minority early adopters benefit by paying less, but in the long term, the majority late adopters suffer by paying more. Considering that late adopters are likely to be at a disadvantage in resources, this discriminatory pricing amounts to the poor subsidizing the rich. Based on this analysis, implications for consumer welfare are discussed.     

Consumer Risk Preferences and Higher Education Enrollment Decisions

Although there are widespread concerns that consumers are making poor choices regarding higher education, the fact that human capital investments are risky is often overlooked in the national conversation. Therefore, this research investigates the effect of risk preferences on higher education enrollment decisions. A sample from the 1997 cohort of the National Longitudinal Survey of Youth (NLSY97 ) was analyzed, and the results indicate that consumer risk preferences have a significant effect on the likelihood of enrollment. Specifically, there was a robust, positive relationship between risk tolerance and the likelihood of enrollment even after controlling for time preferences and risk perceptions. Consistent with previous findings, ability, parental education, family net worth and income, and being female were positively associated with the likelihood of enrollment. The results suggest that risk preferences may be an important source of omitted variable bias in previous studies of higher education investment choices.     

食品安全:风险感知和消费者行为——基于江苏省消费者的调查分析

举国震惊的三聚氰胺污染婴幼儿奶粉的重大安全事故,再次警示中国食品存在安全隐患.在此背景下,本文以江苏城镇居民为研究对象,就消费者对食品安全问题的认知和信息需求与使用行为展开了调查.结果表明,消费者普遍意识到存在食品安全问题,因而需要更完整准确的食品质量安全信息,甚至是食品生产全过程的信息,以满足购买安全食品的需求,并且在选择食品时通过关注质量认证标识、价格和品牌,来规避食品安全风险.     

“Economy Size” Labels and Consumer Welfare

The main purpose of the Fair Packaging and Labelling Act (FPLA) as stated in the act is “… to promote labeling and packaging practices with respect to packaged consumer commodities which will facilitate value comparisons by consumers.” Justification and actual implementation of the portion of the FPLA dealing with economy size labels are analyzed from the consumer's point of view. Because of loopholes and the limitation of enforcement activity to the manufacturer-level, the law fails to protect the consumer. Remedies to the existing situation are presented.     

Consumer Risk Response and Consumer Protection: An Economic Analysis of Seat Belt Usage

A utility analysis of decisions involving risk indicated that risk averse consumers would undertake a risk reduction strategy as long as the change in expected loss was equal to or greater than the costs of the strategy. Cost-benefit analysis of seat belt usage was conducted to test this hypothesis. The results indicated that drivers of all size classes would gain from using seat belts in the case of low user costs while the drivers of subcompacts and compacts would gain in the case of higher user costs. However, less than one-fifth of drivers wear seat belts. These results raise questions concerning the effectiveness of the informed buyer approach in areas of risk or uncertainty.     

Enforcement Activity in Consumer Protection Regulation in Croatia

The law regulating consumer protection in the Republic of Croatia began its intensive development through the process of harmonization of Croatian legislation with EU law. Apart from the approximation of Croatian legislation with the acquis, in the pre-accession process, Croatia also undertook obligations to introduce and develop corresponding mechanisms for the efficient enforcement of consumer protection in practice. The development of consumer protection policy was recognized as a priority area in Croatia, and even before full membership, the process of implementing new directives in the area of consumer protection ran almost in parallel to and at the same pace as that of the Member States. Alongside the harmonization of its legislation with the EU consumer acquis, Croatia started developing a regulatory enforcement structure, including a whole series of mechanisms to achieve individual and collective protection of consumer rights. Among other things, the satisfactory development of regulatory enforcement activities in consumer protection was one of the preconditions for the successful completion of the accession negotiations and for signing the accession treaty. At the same time, the article suggests that in the area of both the individual and collective realization of consumer protection, there is a need for further progress through, on the one hand, developing administrative capacities and enhancing access to justice, as well as developing a system of out-of-court settlement of consumer disputes on the other.