Payment Card Interchange Fees and Price Discrimination

We consider the implications of platform price discrimination in the context of card platforms. Despite the platform's ability to price discriminate, we show that it will set fees for card usage that are too low, resulting in excessive usage of cards. We show this bias remains even if card fees (or rewards) can be conditioned on each type of retailer that the cardholder transacts with. We use our model to consider the European Commission's objection to the rules card platforms have used to sustain differential interchange fees across European countries.     

Will Voluntary and Educational Programs Meet Environmental Objectives? Evidence from a Survey of New York Dairy Farms

This paper presents the results from a survey of New York dairy farms that links manure management practices and farmer willingness to participate in voluntary environmental programs, focusing on those operations that are not automatically designated as Concentrated Animal Feeding Operations. A wide divergence is found between actual and recommended manure management practices on individual dairy farms (high), the apparent ability of farms to divert financial resources to environmental practices (mixed), and the willingness to participate in voluntary programs at various annual costs per cow (low). These findings have policy implications for the USDA/USEPA National Strategy for Animal Feeding Operations.     

Analyzing Transportation Reconstruction Network Strategies: A Full Cost Approach

Policymakers interested in evaluating the costs and benefits of earthquake retrofit and reconstruction strategies require a way to measure the benefits (costs avoided) of competing proposals. This requires an integrated, operational model of losses due to earthquake impacts on transportation and industrial capacity, and how these losses affect the metropolitan economy. Our approach to this problem advances the information provided by transportation and activity system analysis techniques in ways that help capture the most important economic implications of earthquakes. These full cost results have four dimensions: structure damage, business interruption, network performance, and infrastructure damage. Preliminary results for all four measures are summarized for a hypothetical magnitude 7.1 earthquake on the Elysian Park blind thrust fault in Los Angeles.     

Capitalized amenity value of urban wetlands: a hedonic property price approach to urban wetlands in Perth,Western Australia*

Up to 60 per cent of potable water supplied to Perth, Western Australia, is extracted from the groundwater system that lies below the northern part of the metropolitan area. Many of the urban wetlands are groundwater‐dependent and excessive groundwater extraction and climate change have resulted in a decline in water levels in the wetlands. In order to inform decisions on conserving existing urban wetlands, it is beneficial to be able to estimate the economic value of the urban wetlands. Applying the Hedonic Property Price approach to value urban wetlands, we found that distance to the nearest wetland and the number of wetlands within 1.5 km of a property significantly influence house sales price. For a property that is 943 m away from the nearest wetland, which is the average distance to the wetland in this study, reducing the wetland distance by 1 m will increase the property price by AU$42.40. Similarly, the existence of an additional wetland within 1.5 km of the property will increase the sales price by AU$6976. For a randomly selected wetland, assuming a 20 ha isolated circular wetland surrounded by uniform density housing, the total sales premium to surrounding properties was estimated to be around AU$140 million (AU$40 million and AU$230 million).     

Carry Trade Returns and Segmented Risk Pricing

Atlantic Economic Journal - The returns to carry trades are controversially discussed. There seems to be no unifying risk-based explanation of currency returns and stock returns, while the...     

The marketing firm and co-creation: An empirical study of marketer and customer's co-creation process

This study empirically investigates the marketer and customer's co-creation process within the context of the marketing firm. Based on principles from bilateral contingencies, findings from a conjoint study (n = 98) indicate that utilitarian and informational reinforcing consequences from the marketer have a stronger impact on customers' co-creation behavior relative to informational reinforcing consequences from other customers. Consequently, analyzing the impact of important reinforcing contingencies through the lens of bilateral contingencies expands our understanding of how and why co-creation outcomes might occur. Also, a good co-creation process may increase the business companies' research and intelligence and, as a consequence, strengthen their competitiveness.