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We study price competition and entry of platforms in multi-sided markets. Utilizing the simplicity of the equilibrium pricing formula in our setting with heterogeneity of customers’ membership benefits, we demonstrate that in the presence of externalities, the standard effects of competition can be reversed: as platform competition increases, prices, and platform profits can go up and consumer surplus can go down. We identify economic forces that jointly determine the social inefficiency of the free-entry equilibrium and provide conditions under which free entry is socially excessive as well as an example in which free entry is socially insufficient.

To explore the current landscape of seasonal influenza vaccination across China, and estimate the budget of implementing a national “free-at-the-point-of-care” vaccination program for priority populations recommended by the World Health Organization. In 2014 and 2016, we conducted a survey across provincial Centers for Disease Control and Prevention to collect information on regional reimbursement policies for influenza vaccination, estimated the national uptake using distributed doses of influenza vaccines, and evaluated the budget using population size and vaccine cost obtained from official websites and literatures. Regular reimbursement policies for influenza vaccination are available in 61 mutually exclusive regions, comprising 8 provinces, 45 prefectures, and 8 counties, which were reimbursed by the local Government Financial Department or Basic Social Medical Insurance (BSMI). Finance-reimbursed vaccination was offered mainly for the elderly, and school children for free in Beijing, Dongli district in Tianjin, Karamay, Shenzhen and Xinxiang cities. BSMI-reimbursement policies were limited to specific medical insurance beneficiaries with distinct differences in the reimbursement fractions. The average national vaccination coverage was just 1.5–2.2% between 2004 and 2014. A free national vaccination program for priority populations (n=416million), would cost government US$ 757million (95% CI 726–789) annually (uptake rate=20%). An increasing number of regional governments have begun to pay, partially or fully, for influenza vaccination for selected groups. However, this small-scale policy approach has failed to increase national uptake. A free, nationwide vaccination program would require a substantial annual investment. A cost-effectiveness analysis is needed to identify the most efficient methods to improve coverage.

We study centralized many-to-many matching in markets where agents have private information about (vertical) characteristics that determine match values. Our analysis reveals how matching patterns reflect cross-subsidization between sides. Agents are endogenously partitioned into consumers and inputs. At the optimum, the costs of procuring agents-inputs are compensated by the gains from agents-consumers. We show how such cross-subsidization can be achieved through matching rules that have a simple threshold structure, and deliver testable predictions relating the optimal price schedules to the distribution of the agents' characteristics. The analysis sheds light on the practice of large matching intermediaries, such as media and business-to-business platforms, advertising exchanges, and commercial lobbying firms.

During the first wave of the COVID-19 pandemic, in France, people cleared the shelves of butter; in Italy, it was pasta; in Great Britain, it was chicken. While there may be cultural disagreement on what is essential, clearly, in times of crisis, consumers stockpile the ‘essentials’. We address the problem of “panic buying”, which is characterized by increasing demand in the face of diminishing inventory. In such cases, prices may hike and firms (retailers) selling the high-demand product are quantity takers, in terms of supply, and price setters. We consider a manufacturer who sells a scarce product to a single retailer. The retailer seeks to maximize her profit, while in contrast, the manufacturer pursues a social objective of regulating and lowering the amount that the end customer (consumer) pays (including the cost of traveling to obtain the scarce product). By analyzing the competition between the two parties, retailer and manufacturer, we find that even when the regulator (manufacturer) makes a significant social commitment, neither subsidizing the retailer nor subsidizing the consumers necessarily curbs price hikes. Furthermore, there is a threshold ratio (i.e., proportion of the end price subsidized by the regulator) that determines the minimal budget that the regulator would need to allocate in order for subsidization to make a difference to consumers.

Production-linked payments are used to support farmers' incomes and sustain production in atrophic sectors. Economic analysis tools allow the identification of undesirable side effects of using this instrument and determining the conditions for its effectiveness in achieving set goals. The study aims to recognize the mechanism by which production-linked payments stimulate the inputs of production factors in agriculture and the mechanism for transforming subsidies granted in the form of these payments into remuneration for production factors. The research methods used are economic modeling and marginalist analysis. It was demonstrated that production-linked payments change the allocation of resources compared to the allocation that results from the market mechanism, as well as influence the amount and structure of remuneration for production factors in agriculture. A theoretical decomposition of the remuneration of production factors into land rent and the remuneration of factors other than land was performed.

In recent years, public authorities around the world have used incentive strategies to encourage the renovation of the existing building stock to meet the set carbon neutrality targets. However, the design of the incentives typically does not consider that the subsidized energy efficiency measures should result in robust long-term improvements with respect to various objectives. Moreover, building energy retrofit analyses are commonly conducted at the individual building level rather than at urban scale, which could instead significantly accelerate the renovation rate. In this context, the current research aims to combine these different factors to support the design of building energy retrofit programs. We developed 21 subsidization strategies and their impact was evaluated on a parametric multi-objective optimization with respect to energy, economic, and environmental performance for a district located in Bolzano, Northern Italy. The optimization was performed considering a set of energy efficiency measures, pertaining to building envelope, climate change, economic scenarios, and two types of energy supplies. The results showed that (1) the impact of climate change is limited for the climate of Bolzano; (2) the type of energy supply strongly influences the economic feasibility of the retrofit investments; (3) when the investment is profitable, the optimal solutions include those measures with the largest impact on energy efficiency; and (4) subsidization strategies modify the number and composition of the Pareto solutions.

The Ethiopian health system is largely financed through household out-of-pocket payments and external donor support, increasing the risk of catastrophic health expenditures. To address these challenges, the government introduced two health insurance schemes: Community-Based Health Insurance (CBHI) targeting the informal sector and a still to be implemented Social Health Insurance (SHI) scheme for the formal sector. Although designed to operate separately, the long-term goal is to integrate them into a unified national risk pool. Achieving this integration requires cross-group solidarity, especially as formal sector employees may subsidize CBHI. This study investigates the willingness of formal sector workers to support CBHI, which is critical for long-term financial sustainability in the Ethiopian health insurance landscape. The paper is based on a survey of 1,919 formal sector workers and pensioners in major administrative regions of Ethiopia. A survey-based experiment was used to elicit support for CBHI. Respondents were randomly assigned to one of five cases that varied by the information provided on CBHI subsidies and benefits. Descriptive statistics and logit models were used to analyze willingness to support CBHI. There is strong support from urban formal sector employees for the CBHI. Regardless of the scenario presented, after adjusting for non-response, at least 66% of participants supported the scheme. Regional variations were observed, and knowledge of health insurance was positively associated with support. Existing access to formal insurance was linked with lower support. Strong evidence of solidarity among formal sector workers bodes well for further expansion of the CBHI. Despite supporting CBHI, formal sector employees are resisting SHI due to cost concerns and skepticism about its benefits, unlike CBHI's known outcomes. SHI resistance signals the need for targeted communication and trust-building as the country moves toward achieving universal health coverage.

The materials presented in the article reflect changes in the mechanism of cross-subsidization in the electric power industry, where price discrimination of consumers has taken place until recently. Historically, the established practice has been expressed in the redistribution of the burden of paying for electric energy between consumer groups, ensuring the containment of tariff growth. However, the reduction of tariffs for some categories of citizens was achieved by increasing them for others, social justice was violated and, for some buyers, the price is set above marginal costs, and for others—lower, although, in general, it led to prices corresponding to average costs. This policy was considered by the state as a measure of social support for the population but, at the same time, led to some negative consequences. The presented conceptual provisions for the creation of unified energy zones aimed at ensuring a fair redistribution of cross-subsidization between electricity consumers and a gradual reduction in its consumption will make it possible to form a unified energy space of Russia. On a concrete example, the socio-economic effects of the introduction of the author’s approach to the distribution of cross-subsidization between groups of consumers of electric power transmission services are identified and shown. They show the degree of influence of the amount of cross-subsidization paid by the consumer company on the cost of the final products that this company produces. The price of electric energy, which is part of the cost of production, significantly changes the consumer cost of energy-intensive production. The implementation of the proposals contained in the article will create economic incentives for the development of economically lagging regions and will make it possible to form an effective state tariff policy in the process of regulating the socio-economic development of the Russian Federation, defining an effective state tariff policy.

PurposeSignificant unexplored research gaps exist in relation to assessing how governments influence innovations in the logistics and supply chains of SMEs to mitigate risks. This study emphasizes the impacts of regulatory coercion and government subsidization on logistics and supply chain innovations and the corresponding effect of logistics and supply chain innovations on financial performance, logistics and supply chain robustness, green competitiveness, social and environmental responsibilities.Design/methodology/approachUsing a quantitative approach, partial least square structural equation modeling and a survey research design, data were collected and analyzed on 210 logistics and manufacturing firms.FindingsThe results support the fundamentals of the stakeholder theory and natural resources-based view (NRBV) regarding the positive impacts of regulatory coercion and government subsidization on logistics and supply chain innovations. Furthermore, logistics and supply chain innovations significantly influenced firm performance (financial performance, logistics and supply chain robustness and green competitiveness) and societal impact (social and environmental responsibilities). Particularly, while logistics and supply chain innovations had insignificant influence on social and environmental responsibilities, the effects of logistics and supply chain robustness were significant.Originality/valueThe study presents empirical findings on the impact of government influences on logistics and supply chain management and the corresponding implications for firms and society. Thus, this study contributes to corporate social responsibility (CSR) and logistics and supply chain literature and provides guidance for policymakers, industry players, scholars and practitioners.

Previous research on capital investment has identified a tendency in multibusiness firms toward cross-subsidization from well-performing to poorly performing divisions, a phenomenon that has previously been attributed to principal-agent conflicts between headquarters and divisions (Stein, 2003). In this paper, we argue that cross-subsidization reflects a more general tendency toward even allocation over all divisions in multibusiness firms that is driven, at least in part, by the cognitive tendency to naively diversify when making investment decisions (Benartzi and Thaler, 2001). We observe that this tendency also leads to partition dependence in which capital allocations vary systematically with the divisions and subdivisions into which the firm is organized or over which capital is allocated. Our first study uses archival data to show that firms' internal capital allocations are biased toward equality over the number of business units into which the firm is partitioned. Two further experimental studies of experienced managers examine whether this bias persists when participants are asked to allocate capital to various divisions of a hypothetical firm. This methodology eliminates the possibility of agency conflicts. Nevertheless, allocations varied systematically with the divisional and subdivisional structure of the firm and with a centralized or decentralized capital allocation manner.