price discrimination in broadway theater a common thread in the theory literature on price discrimination has been the ambiguous welfare effects for consumers and the rise in profit for firms relative to uniform pricing in this study i resolve the ambiguity for consumers and quantify the benefit for a firm i describe a model of price discrimination that includes both second degree and third degree price discrimination using data from a broadway play i estimate the structural model and conduct various experiments to investigate the implications of alternative pricing policies the observed price discrimination may improve the firm s profit by approximately 5 relative to uniform pricing while the difference for aggregate consumer welfare is negligible also i show that the gain from changing prices in the face of fluctuating demand is small under the observed price discrimination

pro environmental households and energy efficiency in spain the residential building sector is a major driver of current and future energy consumption and associated emissions which can be potentially mitigated through significant energy efficiency ee improvements in both emerging and developed countries yet there are several persistent barriers that hinder the attainment of ee improvements in this area using data from a 2008 national representative survey of spanish households this paper is interested in the determinants of ee related decisions in particular a discrete choice model empirically analyzes whether pro environmental households are more likely to invest in ee and to adopt daily energy saving habits we show that households with eco friendly behaviors are more likely to investment in well differentiated ee measures as well as to steer daily habits towards energy savings however no effects are found for households with environmental attitudes based on stated willingness to pay to protect the environment in addition to this households belonging to higher income groups and education levels are more likely to invest in ee but not to adopt energy saving habits while households with older members are less likely to invest in ee and show fewer eco friendly habits

is our everyday comfort for sale preferences for demand management on the electricity market in a european perspective the electricity markets have been experiencing major changes via deregulation new technologies and changes in the production mix together with the daily and seasonal peak hours on the demand side the changing markets put pressure on increased flexibility to handle and sustain balance in the grid systems this paper focuses on the demand side and analyzes preferences related to demand management of swedish households energy use in a web based choice experiment respondents were faced with three hypothetical electricity contracts the choices of preferred contracts revealed preferences for attributes related to external control of heating household electricity and information dissemination integrity the results show that people put a substantial value on not being controlled illustrated by compensations up to thousands of sek for accepting a contract characterized by external control of energy use in various dimensions in addition the results show that household composition age gender and income play a role for the perceived discomfort from the external control and information dissemination

analyzing the welfare impacts of full line forcing contracts theoretical investigations have examined both anti competitive and efficiency inducing rationales for vertical bundling making empirical evidence important to understanding its welfare implications we use an extensive dataset on full line forcing contracts between movie distributors and video retailers to empirically measure the impact of vertical bundling on welfare we identify and measure three primary effects of full line forcing contracts market coverage leverage and efficiency we find that bundling increases market coverage and efficiency but has little impact on one distributor s gaining leverage over another as a result we estimate that full line forcing contracts increased consumer and producer surplus in this application

exploring the potential for energy conservation in french households through hybrid modeling although the building sector is recognized as having major potential for energy conservation and carbon dioxide emissions mitigation conventional bottom up and top down models are limited in their ability to capture the complex economic and technological dynamics of the sector this paper introduces a hybrid framework developed to assess future household energy demand in france res irf a bottom up module of energy consumption for space heating has several distinctive features i a clear separation between energy efficiency i e investment in energy efficient technologies and sufficiency i e changes in the utilization of energy consuming durables which allows the rebound effect to be assessed ii the inclusion of barriers to energy efficiency in the form of intangible costs consumer heterogeneity parameters and the learning by doing process iii an endogenous determination of retrofitting which represents trade offs between retrofit quantity and quality subsequently res irf is linked to the imaclim r computable general equilibrium model this exercise shows that compared to a 37 reduction in final energy demand achievable in business as usual in existing dwellings an additional reduction of 14 could be achieved if relevant barriers to efficiency and sufficiency were overcome

exploring additional determinants of energy saving behaviour the influence of individuals participation in cultural activities abstract consumer behaviour towards energy saving has attracted growing attention in several national policy measures and has been discussed in a large number of interdisciplinary studies in this paper we argue that cultural capital specifically individuals participation in cultural activities is significantly related to pro environmental behaviour and is therefore a relevant additional driver of electricity saving behaviours we apply a heckman two step selection strategy approach to microdata gathered from the latest sample of the annual aspects of daily life survey for the year 2014 conducted by the italian national institute of statistics our results besides confirming the role of the socio demographic determinants already investigated in the extant literature also provide evidence that individuals who participate in some cultural activities show a higher probability of adopting electricity saving behaviours at home furthermore the sign of such a relationship is differentiated depending on the characteristics of the cultural activity some policy implications are derived from the analysis

measuring heterogeneous reservation prices for product bundles this paper develops a model for capturing continuous heterogeneity in the joint distribution of reservation prices for products and bundles our model is derived from utility theory and captures both within and among subject variability furthermore it provides dollarmetric reservation prices and individual level estimates that allow the firm to target customers and develop customized and nonlinear pricing policies our experiments show that regardless of whether the products are durables or nondurables the model captures heterogeneity and predicts well models that assume homogeneity perform poorly especially in predicting choice of the bundle furthermore the methodology is robust even when respondents evaluate few profiles self stated reservation prices do not have any informational content beyond that contained in the basic model the direct elicitation method appears to understate overstate the variation in reservation prices across consumers for low priced high priced products and bundles hence this method yields biased demand estimates and leads to suboptimal product line pricing policy the optimization results show that the product line pricing policy depends on the degree of heterogeneity in the reservation prices of the individual products and the bundle a uniformly high price strategy for all products and bundles is optimal when heterogeneity is high otherwise a hybrid strategy is optimal

electricity curtailment behaviors in greek households different behaviors different predictors abstract this paper argues that electricity curtailment behaviors i e frequent and or low cost or free energy saving behaviors in households are distinct from one another and they thus should be analyzed and promoted we test this claim with data from telephone interviews with greek households in the capital city of athens n 285 analyzing the impact of a number of demographical structural psychological based on the theory of planned behavior and moral based on norms activation predictors though hierarchical binary logistic regression modeling we find that that each electricity curtailment behavior depends on a different mix of predictors with age gender and perceived behavioral control being statistically significant for most behaviors overall the psychological and the demographical structural clusters of variables substantially contribute to the explained variance of electricity curtailment behaviors the moral cluster s contribution is not statistically significant since moral concerns are largely interwoven in the psychological constructs

policy implications of the purchasing intentions towards energy efficient appliances among china s urban residents do subsidies work incentive policies are always used to sway purchase retail stocking and production decisions toward energy efficient products by many countries or regions so the effectiveness of such subsidies has been of much concern to scholars this research focused on whether or not subsidy policies have guided people s intentions and behaviours we investigated 436 urban residents from 22 provinces in china covering the seven major geographic regions and made an empirical analysis of the factors influencing chinese urban residents purchasing intentions towards energy efficient appliances based on the structural equation model on theoretical aspect we developed the theory of planned behaviour our results show that the variable policy is insignificant which indicates that policy environment and media propaganda in china do not have significant effect on chinese residents willingness to pay for energy efficient appliances while the residents environmental awareness past purchasing experiences social relationships age and level of education all exert a significant influence on chinese residents purchasing intentions finally based on the above research results the corresponding policy suggestions which mainly focus on the time of subsidy the object of subsidy and the method of subsidy are offered for policy makers

technology invention and diffusion in residential energy consumption a stochastic frontier approach traditional large appliances absorb a large share of residential electricity consumption and represent important targets of energy policy strategies aimed at achieving energy security despite being characterized by rather mature technologies this group of appliances still offers large potential in terms of efficiency gains due to their pervasive diffusion in this paper we analyse the electricity consumption of a set of four traditional white goods in a panel of ten eu countries observed over 21 years 1990 2010 with the aim of disentangling the amount of technical efficiency from the overall energy saving the technical efficiency trend is modelled through a set of technology components representing both the invention and adoption process by the means of specific patents weighted by production and bilateral import flows which allows to overcome the rigid stochastic frontier framework in modelling the effect of technical change our results show that the derived energy demand and inefficiency trends are both related to changes in the amount of available technology embodied in energy efficient appliances the effect is significant both in its domestic and international components and suggests an active role of innovation and trade policies for achieving efficiency targets which directly impact the amount of electricity consumed by households

bundling as an optimal selling mechanism for a multiple good monopolist abstract multiple objects may be sold by posting a schedule consisting of one price for each possible bundle and permitting the buyer to select the price bundle pair of his choice we identify conditions that must be satisfied by any price schedule that maximizes revenue within the class of all such schedules we then provide conditions under which a price schedule maximizes expected revenue within the class of all incentive compatible and individually rational mechanisms in the n object case we use these results to characterize environments mainly distributions of valuations where bundling is the optimal mechanism in the two and three good cases

determinants and policy implications for household electricity saving behaviour evidence from beijing china this research sets out to explore the possibilities for further saving in household electricity consumption through a study of the residents willingness and behavioural characteristics in electricity saving as applied within a chinese context based on an extensive literature review the authors argue that economic benefits policy and social norms and past experience may have a positive correlation with household electricity saving behaviour while the discomfort caused by electricity saving activities may exert a negative effect on it through a sample of 816 randomly selected residents in beijing the propositions are examined using logit regression analysis the conclusions support the ideas concerning both the positive influence of economic benefits policy and social norms and past experience as they affect broader electricity saving behaviour and the negative influence of the discomfort caused by electricity saving activities finally some inferences are drawn and suggestions are offered for policy makers and further studies

bundle size pricing as an approximation to mixed bundling multiproduct firms can set separate prices for all possible bundled combinations of its products mixed bundling however this is impractical for firms with more than a few products because the number of prices increases exponentially with the number of products we find that simple pricing strategies are often nearly optimal specifically we show that bundle size pricing setting prices that depend only on the size of bundle purchased tends to be more profitable than offering the individual products priced separately and tends to closely approximate the profits from mixed bundling jel d24 d42 l11 l13 l25

price discrimination by a many product firm determining the optimal selling strategy for a multiproduct firm facing consumers with unknown tastes is a difficult task this paper aims to show how almost optimal nonlinear tariffs can often be found when the number of products becomes large

simple menus of contracts in cost based procurement and regulation in an influential paper jean jacques laffont and jean tirole 1986 formulated a principal agent model of cost based procurement and regulation and showed that the principal can implement the optimal mechanism by offering the agent a menu consisting of a continuum of linear contracts two related problems with applying this theory in practice have been that the economic logic and the underlying mathematics involved in calculating the optimal menu are quite complex and the principal must be able to specify the agent s entire disutility of effort function in order to calculate the optimal menu as a result the model has not been widely used in practice to either calculate actual incentive contracts or even to develop useful qualitative guidance about the nature of the optimal solution and how it is affected by various economic factors the purpose of this paper is to show that dramatically simpler menus which are easy to understand and calculate and which have lower informational requirements can at least in some cases capture a substantial share of the gains achievable by the fully optimal complex menu in particular this paper considers two item menus where one item is a cost reimbursement contract and the other item is a fixed price contract such menus are called fixed price cost reimbursement fpcr menus for the case where the agent s utility is quadratic and the agent s type is distributed uniformly it is shown that the optimal fpcr menu always captures at least three quarters of the gain that the optimal complex menu achieves where the gain is measured relative to the result of using a cost reimbursement contract this paper s research was originally motivated by a policy issue in defense procurement in the united states the department of defense dod purchases almost all major weapons systems from sole source contractors using contracting methods that essentially amount to using cost reimbursement contracts the best way to understand why dod uses costreimbursement contracting methods is that they perform precisely the function identified in laffont and tirole s principal agent model they guarantee in a situation that amounts to a bilateral monopoly that dod and the firm can reach an agreement i e they guarantee that the agent will always produce the good of course the use of cost reimbursement contracting methods

does environmental concern change the tragedy of the commons factors affecting energy saving behaviors and electricity usage electricity consumption produces private goods such as heat for homes but fossil fuel consumption impacts the public goods of clean air and water while self interests can increase usage social interests such as global climate change can impact an individual s attitude toward energy consumption this paper examines the tragedy of the commons using household data and compares the impact of self and social interests in predicting electricity consumption using both stated and observed behavioral data the results show that self interests have a greater impact on energy saving behaviors and electricity use we extend the analysis to control for an individual s environmental concern and perceived behavioral impact finding similar results and supporting the notion that the tragedy of the commons occurs regardless of a person s perception or environmental concern these findings may explain why pro environmental attitudes do not necessarily lead to pro environmental behaviors and it contributes to our understanding of the motivating factors for energy savings and electricity use by examining both stated and observed behaviors policies aimed at electricity reduction may have a greater impact if they focus on private interests such as pricing rebates subsidies and taxes rather than social interests alone

energy saving in swedish households the relative importance of environmental attitudes the objectives for energy saving in the housing sector set by recent swedish energy and climate policies are quite demanding this article uses nation wide swedish survey data from 2004 to 2007 to explore the potential for achieving those targets earlier findings that socio economic characteristics such as age housing type and income are strongly linked to higher propensities to save on heating and hot water usage are confirmed by ordered logistic regression models however general environmental attitudes are also found to play a crucial role when assessing the relative importance of socioeconomic factors and environmental attitudes the effect on energy saving is generally greater for the former than the latter in addition important interaction effects are identified in relative terms the effect of environmental attitudes is clearly stronger among households in apartment blocks than among those in detached housing and stronger among households with higher income than among those with lower income we end by discussing the implications for the selection and targeting of policy measures to tap the energy savings potential in the population

exploring the role of households hurdle rates and demand elasticities in meeting danish energy savings target abstract the eu s energy efficiency directive eed sets a binding target for energy savings in eu member states the eed further requires member states to perform ex ante evaluations of energy efficiency policies implemented to achieve these savings however ex ante evaluation of energy efficiency policies is difficult as it requires detailed modelling of end users investment and energy demand behaviour this paper details the danish interact modelling approach for ex ante evaluation of energy efficiency policies directed at residential heating interact integrates the energy system model times dk into a computable general equilibrium framework the paper explores the potential for meeting denmark s eed target through a policy induced increase in households investments in energy efficiency retrofits the paper considers the effect of energy efficiency policies on households investment behaviour by applying different levels of hurdle rates on households investments in energy efficiency retrofits the paper shows that reducing the hurdle rate from 25 to 4 could meet more than a third of danish energy saving requirements for the period 2021 2030 this result includes a direct rebound effect of 31 finally the paper demonstrates that reducing the hurdle below 10 has a substantial negative impact on households disposable income making such policy less viable from a policy perspective

a probabilistic approach to pricing a bundle of products or services the authors propose a probabilistic approach to optimally price a bundle of products or services that maximizes seller s profits their focus is on situations in which consumer decision making is o

norms and economic motivation in the swedish green electricity market abstract the purpose of this paper is to provide an econometric analysis of the most important determinants of swedish households choice to pay a price premium for green electricity we draw on recent developments in the literature on integrating norm motivated behavior into neoclassical consumer theory and assume that individuals have a preference for keeping a self image as a morally responsible person consumer behavior in the green market place will then be heavily determined by how purchases of different goods affect this self image the analysis is based on postal survey responses from 655 swedish households which are analyzed within a binary choice econometric framework the results indicate that the impact of choosing green on the household budget largely influences the choice between green and brown electricity as does the degree of perceived personal responsibility for the issue and the felt ability to affect the outcome in a positive way we find limited support for the notion that perceptions about others behavior in general affect individual moral norms and ultimately expressed behavior but this is also complemented by the influence of explicit social influence the difficulty in observing others purchases makes it however difficult to distinguish between social and moral norms in the case of green electricity

do environmental benefits matter evidence from a choice experiment among house owners in germany residential buildings strongly contribute to global co2 emissions due to the high energy demand for electricity and heating particularly in industrialised countries within the eu decentralised heat generation is of particular relevance for future climate policy as its emissions are not covered by the eu ets we conducted a choice experiment concerning energy retrofits for existing houses in germany in the experiment the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home we used standard and mixed logit specifications to analyse the choice data we found environmental benefits to have a significant impact on choices of heating systems however they played no role in terms of insulation choices based on the estimated mixed logit model we further obtained willingness to pay wtp measures for co2 savings

extremal analysis of currency crises in taiwan we employ extreme value theory to identify currency crises in taiwan the new approach is able to identify severe currency crises and at the same time avoid the crisis misclassification problem of markov switching models signal accounting indicates that currency crises in taiwan are preceded by rapid expansion of domestic credit and other monetary aggregates implying that financial excesses stressed by the third generation crisis model are the main causes of these currency crises

bundling information goods of decreasing value consumers average value for information goods websites weather forecasts music and news declines with the number consumed this paper provides simple guidelines to optimal bundling marketing strategies in this case if consumers values do not decrease too quickly we show that bundling is approximately optimal if consumers values to subsequent goods decrease quickly we show by example that one should expect bundling to be suboptimal

the effectiveness of english auctions abstract we study the performance of the english auction under different assumptions about the seller s degree of bayesian sophistication we define the effectiveness of an auction as the ratio between the expected revenue it generates for the seller and the expected valuation of the object to the bidder with the highest valuation total surplus we identify tight lower bounds on the effectiveness of the english auction for general private values environments and for private values environments where bidders valuations are non negatively correlated for example when the seller faces 12 bidders who the seller believes have non negatively correlated valuations whose expectations are at least as high as 60 of the maximal possible valuation an english auction with no reserve price generates an expected price that is more than 80 of the value of the object to the bidder with the highest valuation

identifying electricity saving potential in rural china empirical evidence from a household survey in recent years there has been a fast growing body of literature examining energy saving potential in relation to electricity however empirical studies focusing on non western nations are limited to fill this gap this study intends to examine the electricity saving potential of rural households in china using a unique data set from the china residential electricity consumption survey crecs in collaboration with the china general social survey cgss conducted nationwide at the household level in rural china we use a stochastic frontier model which allows us to decompose residential electricity consumption into the minimum necessary amount of consumption based on physical characteristics e g house size house age number of televisions or refrigerators and estimate the consumption slack i e the amount of electricity consumption that could be saved which depends on various factors we find that rural households in china are generally efficient in electricity saving and the saving potential is affected by fast information feedback and social demographic characteristics instead of by the averaged electricity price or energy efficiency labelling signals in addition we find no evidence of regional heterogeneity on electricity saving potential for rural households policy implications are derived

household responsiveness to residential demand response strategies results and policy implications from a swedish field study abstract to realize the benefits of smart grids residential demand response dr aims to increase demand flexibility by influence household electricity consumption although price based dr programs have shown potential there is a need to further investigate the effectiveness of dr in energy strategy and policy development the evaluation of dr has focused on the impact on overall power demand assuming that consumers are economically rational decision maker however recent findings suggest that consumer responses have been insufficient and calls have been made to identify novel evaluation approaches that better reflect the human dimension of energy consumption continuing this line of enquiry this paper aims to investigate the effectiveness of dr and explore the potential of environmental incentives for increased consumer engagement we propose an interdisciplinary evaluation framework to understand variations in household responsiveness to dr strategies which is tested in a swedish dr field trial covering 136 households during 2017 results suggest that the effectiveness of dr varies widely across household type ranging from substantial reductions in overall consumption and during peak periods to increases in consumption during peak periods furthermore a clear favor of price incentives compared to environmental incentives as the most efficient strategy to increase demand flexibility was observed

ensuring effectiveness of information to influence household behaviour abstract the behaviour of household members has a significant impact on the resulting energy consumption of a household studies show that within the same buildings with the same installations energy consumption can be reduced by an average of 37 by a more economical behaviour there exists therefore a large potential to reduce the demand by influencing behaviour the question remains how this potential can be addressed vito conducted in collaboration with the catholic university of louvain la neuve the serec project this project investigated the socio economic factors influencing residential energy consumption furthermore in the larger framework different tools have been developed several were tested and evaluated in a number of dwellings in this research they address both energy consumption for heating as well as electricity consumption the tools are completely different but all were designed to help make householders aware of their energy related behaviour and to provide recommendations on energy saving measures for each case potential changes in habits were followed up the observed range is quite large as full scale audits of every dwelling were performed as general comparisons of annual consumption were made to gain more insight into the effectiveness of the tools several families participated in in depth sociological interviews the overall results show the strengths and weaknesses of the different tools more generally the results reveal some of the key properties of recommendations that are necessary to ensure effectiveness for behavioural change

gaussian demand and commodity bundling in an important and widely cited essay adams and yellen 1976 examine the use of package selling as a price discrimination device they consider a monopolist producing two goods with constant unit costs and facing buyers with diverse tastes the marginal utility of a second unit of either good is assumed to be zero for all buyers the two goods are independent in demand for all buyers so that any buyer s reservation price for the first unit of either good is independent of the market price of the other thus the maximum amount any buyer would pay for a bundle consisting of one unit of each good is the sum of the two reservation prices and buyers are completely described by the values of those two prices 2 resale markets are assumed away in order to obtain comparative results for alternative pricing strategies the distribution of reservation prices in the adams yellen framework is assumed to be bivariate normal implications of gaussian demand are explored pure bundling is shown to operate by reducing buyer diversity thus facilitating the capture of consumers surplus it generally makes buyers worse off than unbundled sales it is more profitable if average reservation prices are high enough mixed bundling combines advantages of both pure bundling and unbundled sales and it is generally strictly more profitable than either bundling which treats goods symmetrically seems most attractive under symmetric reservation price distributions i am indebted to severin borenstein for superb research assistance to the ford motor company for research support through a grant to m i t and to the harvard economics department for housing me as a visiting scholar while most of this research was performed of course only i can be held responsible for this essay s shortcomings 1 the first clear recognition of this possibility seems to have been by stigler 1968 but also see burstein 1960 2 paroush and peles 1981 relax the assumption that consumers purchase at most one unit of each good but they consider only two types of buyers both with linear demand functions they retain the assumption that demands are independent for all buyers telser 1979 and phillips 1981 use different frameworks to analyze bundling policies spence 1980 explores the relation between bundling across commodities as here and bundling multiple units of the same

energy saving in italy in the late 1990s which role for non monetary motivations abstract the paper studies the relationship between energy saving behaviour monetary drivers and non monetary motivations in italy in a period the end of the 1990s when the energy industry was not yet liberalized there were no energy saving incentive schemes and the environmental sensitivity and information were lower we consider as dependent variable the frequency with which individuals switch the light off when leaving a room as monetary drivers income and perceived energy costs while non monetary motives in our model are measured by proxies of pro environmental attitudes environmental information social pressure and pro social behaviours the analysis is based on probit and logit models estimated on a sample from the multipurpose household survey dataset conducted by the italian statistical office we find that individuals who were less concerned about environmental issues were also more attentive in energy saving behaviour suggesting together with results about income and perceived energy costs that monetary motivations were primary in driving this energy saving behaviour such findings are robust to the inclusion of variables accounting for pro social behaviours altruism by individuals who claim to be more concerned about broad environmental externalities may have adversely affected their propensity to optimize energy consumption

the value of social networks in the diffusion of energy efficiency innovations in uk households abstract the uk government has policy goals for increasing energy efficiency in existing homes however there are doubts that standard technology and behavioural innovations will be adopted widely enough in time to achieve the targets diffusion of innovation theory states that the communication of information on innovations through a social system encourages adoption social capital theory states that interpersonal communication is a key means of gaining resources such as information on energy efficiency innovations for attaining certain goals case study research of three british communities was conducted in 2009 in order to understand the influence of social capital on information diffusion regarding the adoption of household energy efficiency measures the findings show that while standard campaigns may account for two thirds of information seeking behaviour they may not be addressing up to one third of information seekers who would prefer to speak to people they know findings also indicate that seeking information amongst personal contacts is often associated with adoption of energy efficiency innovations increasing the likelihood of adoption by up to four times but that there are important differences between types of innovations and communities tailoring campaigns to communities communication channels is therefore imperative these findings have important implications for informing community based energy efficiency programmes

a multi criteria evaluation of policy instruments for climate change mitigation in the power generation sector of trinidad and tobago even as small island developing states sids like trinidad and tobago t t increase industrialization and grapple with the challenges of increased pollution few studies provide guidance to policy makers of such countries on appropriate policy measures and instruments that can be implemented to mitigate greenhouse gas emissions here we apply a multi criteria evaluation methodology to ascertain preferences for policy measures and instruments in the power generation sector four broad policy measures and twelve policy instruments are assessed on criteria of environmental performance feasibility of implementation and political acceptability this method proves useful in t t since typical to many sids the intensive data required by other policy assessment methods is unavailable results indicate little difference in preference among the four policy measures thereby indicating that a multi pronged approach on several policy fronts is required the most preferred policy instruments to operationalize measures included provision of subsidies for energy saving technologies creating an industry wide carbon trading scheme and implementing a feed in tariff to increase the use of renewable energy sources this study therefore provides specific insights for policy makers in trinidad and tobago while also providing power generation sector specific guidance to other rapidly industrializing small island developing states

estimating multiple discrete choice models an application to computerization returns buyers in many markets face multiple discrete choices they can purchase multiple units as well as multiple brands at the same time this paper presents a multiple discrete choice model for the analysis of differentiated products demand users maximize profits by choosing the number of units of each brand they purchase i estimate the model using micro level data on the demand for personal computers i use the estimated demand structure to assess the welfare gains from computerization and technological innovation in peripherals the estimated return on investment in personal computers is 92 moreover a 10 increase in the performance to price ratio of microprocessors leads to a 2 2 gain in the estimated user surplus the personal computer pc market is of interest to industrial organization economists because of its size the continual technological change and above all because of the farreaching implications of pcs on the economy as a whole several distinct features make pc demand difficult to model pcs are a differentiated durable good in constant technological evolution moreover buyers make multiple discrete choices firms according to our data spread their purchases of pcs over different brands at the same time they buy pcs in blocks several units of each brand that they have chosen the aim of the paper is to present a model that captures these features and to use this model to estimate the welfare gains from computerization classical discrete choice models allow one choice among mutually exclusive alternatives in contrast the proposed framework allows users to demand multiple units and multiple brands the model can be applied to other cases of multiple discrete choices e g the composition of airline fleets car holdings per household the fields of the faculty in economics departments household cereals consumption or any other good consumed in more than one variety during a relevant time period although pervasive multiple discrete choice problems have received little attention because of their complexity a central issue regarding the pc market is the current controversy in the economics literature about the computerization puzzle this puzzle stems from the empirical finding that computerization has had no effect on firm productivity griliches and siegel 1991 and morrison and berndt 1990 contrary to those results hendel 1994 and lichtenberg 1995 using more disaggregate data than most previous studies report excess returns to computerization this indicates that data aggregation may have created the computerization puzzle in this paper i present a model consistent with the basic

the welfare effects of bundling in multichannel television markets we measure how the bundling of television channels affects short run welfare we estimate an industry model of viewership demand pricing bundling and input market bargaining using data on ratings purchases prices bundles and input costs we conduct simulations of a la carte policies that require distributors to offer individual channels for sale to consumers we estimate that negotiated input costs rise by 103 0 percent under a la carte these higher input costs offset consumer benefits from purchasing individual channels mean consumer and total surplus change by an estimated 5 4 to 0 2 percent and 1 7 to 6 0 percent respectively jel d12 l11 l51 l82 m31

the influences of financial and non financial factors on energy saving behaviour a field experiment in japan abstract this study examines the influences of financial and non financial factors on electricity conservation behaviour a random sample of 236 japanese households participated in the field experiment and the participants were offered two interventions such as monetary rewards depending on their reduction in electricity consumption and comparative feedback the average saving rates of the i reward intervention group 5 9 and the ii reward with comparative feedback group 8 2 are statistically larger than those of the iii control group 1 7 our study demonstrates the following first our econometric analysis confirmed a significant response by households to financial incentives but a more inconclusive response to the treatment that provided non financial additional information second we found a positive influence of treatment externalities across time and households on energy saving third there is a heterogeneous treatment effect in the reward intervention group with the households having a high new ecological paradigm nep score being more likely to respond to the reward programme and save electricity than those that do not finally and most interestingly differences in responses to the questionnaire before and after the experiment suggest that the participants had underestimated the marginal costs of saving electricity before they actually started to do so

music for a song an empirical look at uniform song pricing and its alternatives economists have well developed pricing theories that challenge the wisdom of the common practice of uniform song pricing this paper explores the profit and welfare implications of various alternatives including song specific pricing various forms of bundling two part tariffs nonlinear pricing and third degree price discrimination using survey based data on nearly 500 students valuations of 50 popular songs in early january 2008 we find that various alternatives including simple schemes such as pure bundling and two part tariffs can raise both producer and consumer surplus revenue could be raised by nearly 10 percent relative to profit maximizing uniform pricing and by over a fifth relative to current 0 99 uniform pricing moreover revenue could be increased by a tenth while maintaining consumer surplus at the high level accompanying current 0 99 uniform song pricing while person specific uniform pricing can raise revenue by three quarters none of the non discriminatory schemes raise revenue s share of surplus above 35 percent even with sophisticated pricing much of the area under the demand curve for this product cannot be appropriated as revenue

when should sellers use auctions the simultaneous bid auction is a standard method for sellers to solicit offers from buyers a simple alternative is for a seller to ask buyers to make offers sequentially if it is costly for buyers to participate the sequential mechanism will tend to be more efficient than the simultaneous auction because later potential buyers can condition their participation decisions on earlier bids however the sequential mechanism s greater efficiency may not produce higher revenues because while the possibility of deterring later potential entrants can lead early bidders to bid aggressively the fact that later firms might be deterred will tend to reduce revenues the relative revenue performance of the mechanisms will therefore depend on whether the threat of potential future competition which can raise bids in the sequential mechanism is more valuable to the seller than actual competition which will tend to be greater in the simultaneous auction the relative revenue performance of these alternative mechanisms has direct implications for how assets should be sold in the case of how to structure the sale of corporations this question has attracted attention from practitioners and commentators since the delaware supreme court s 1986 revlon decision charged a board overseeing the sale of a company with the duty of getting the best price for the stockholders revlon v mcandrews and forbes holdings 1986 in practice

pricing regulation and imperfect competition on the massachusetts health insurance exchange abstract we analyze insurance pricing regulation under imperfect competition on the massachusetts health insurance exchange differential markups lead to price variation apart from cost variation coarse insurer pricing strategies identify consumer demand younger consumers are twice as price sensitive as older consumers older consumers thus face higher markups over costs modified community rating links prices for consumers differing in both costs and preferences and changes the marginal consumer firms face stricter regulations transfer resources from low cost to high cost consumers reduce firm profits and increase overall consumer surplus

profitability of product bundling using copulas to model the stochastic dependence of values this article establishes new general conditions for the profitability of product bundling a multiproduct monopolist generally achieves higher profit from mixed bundling than from separate selling if consumer values for two of its products are negatively dependent are independent or have sufficiently limited positive dependence the profitability of monopoly bundling also extends to situations where a multiproduct firm competes with a single product rival

residential energy efficient technology adoption energy conservation knowledge and attitudes an analysis of european countries abstract relationships between measures of household energy use behavior and household characteristics are estimated using a unique dataset of approximately 5000 households in 10 eu countries and norway family age composition patterns are found to have a distinct impact on household energy use behavior households with young children are more likely to adopt energy efficient technologies and energy conservation practices and place primary importance on energy savings for environmental reasons by contrast households with a high share of elderly members place more importance on financial savings and have lower levels of technology adoption energy conservation practice use and knowledge about household energy use education levels also matter with higher levels associated with energy efficient technology adoption and energy conservation practice use similarly university education increases the stated importance of energy savings for greenhouse gas reductions and decreases the stated importance for financial reasons education impacts also vary greatly across survey countries and there is some evidence of an eastern western european divide with respect to attitudes towards energy savings these cross country differences highlight the need to balance a common eu energy efficiency policy framework with flexibility for country specific policies to address unique constraints to energy efficient technology and conservation practice adoption

sellers with misspecified models principals often operate on misspecified models of their agents preferences when preferences are such that non local incentive constraints may bind in the optimum even slight misspecification of the preferences can lead to large and non vanishing losses instead we propose a two step scheme whereby the principal 1 identifies the model optimal menu and 2 modifies prices by offering to share with the agent a fixed proportion of the profit she would receive if an item were sold at the model optimal price we show that her loss is bounded and vanishes smoothly as the model converges to the truth finally two step mechanisms without a sharing rule like 2 will not yield a valid approximation

price environment and security exploring multi modal motivation in voluntary residential peak demand response peak demand on electricity grids is a growing problem that increases costs and risks to supply security residential sector loads often contribute significantly to seasonal and daily peak demand demand response projects aim to manage peak demand by applying price signals and automated load shedding technologies this research investigates voluntary load shedding in response to information about the security of supply the emission profile and the cost of meeting critical peak demand in the customers network customer willingness to change behaviour in response to this information was explored through mail back survey the diversified demand modelling method was used along with energy audit data to estimate the potential peak load reduction resulting from the voluntary demand response a case study was conducted in a suburb of christchurch new zealand where electricity is the main source for water and space heating on this network all water heating cylinders have ripple control technology and about 50 of the households subscribe to differential day night pricing plan the survey results show that the sensitivity to supply security is on par with price with the emission sensitivity being slightly weaker the modelling results show potential 10 reduction in critical peak load for aggregate voluntary demand response

the devil is in the details household electricity saving behavior and the role of information abstract the purpose of this paper is to analyze swedish households willingness to increase their daily efforts to save electricity the analysis builds on a broad theoretical framework which embraces both economic and norm based motivations in explaining household behavior the paper pays particular attention to the role of information about the availability of different behavioral changes that can be undertaken at the household level the empirical results are based on a postal survey that was sent out to 1200 swedish households and the econometric analysis is carried out within a so called ordered probit framework our results indicate that costs environmental attitudes and social interactions are all important determinants of electricity saving activities within swedish households we tested the hypothesis that information about available savings measures that is presented in a more concrete and specific way is more likely to affect stated behavior than is more general information and the data collected support this notion the paper ends by discussing some implications of these results for the design of future informative policy measures in the energy efficiency field

a graphical analysis of bundling by comparing the demand for a bundle and the vertical sum of the demands for its components this article analyzes the profitability and welfare consequences of bundling if it does not lower costs bundling tends to be profitable when reservation values are negatively correlated and high relative to costs if bundling lowers costs and costs are high relative to average reservation values positively correlated reservation values increase the incentive to bundle bundling and charging a price equal to the sum of the components prices lowers consumer surplus bundling can however increase consumer surplus when it results in lower prices copyright 1995 by university of chicago press

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

estimating energy conservation patterns of greek households abstract this paper develops an empirical model to investigate the main determinants of household energy conservation patterns in greece employing cross section data in the empirical analysis household energy conserving choices models are employed using a discrete and a latent trait variable respectively as a dependent variable the results show that socio economic variables such as consumers income and family size are suitable to explain differences towards energy conservation preferences in addition the results suggest that electricity expenditures and age of the respondent are negatively associated with the number of energy conserving actions that a consumer is willing to adopt finally other variables such as environmental information feedback and consciousness of energy problems are characteristics of the energy saver consumer by evaluating consumer s decision making process with regards to energy conservation measures we are able to formulate and propose an effective energy conservation framework for greece an energy policy framework is among the main prerequisites not only to achieve sustainable development but also to maintain consumers quality of life

citizens views on electricity use savings and production from renewable energy sources a case study from a greek island abstract a country s economic growth is closely linked to the availability generation distribution and use of energy at the same time the increased rate of global energy consumption is a risk to development and to the efforts to safeguard people s living standards for the future the production of electricity from res substantially contributes to the energy security of states and to environmental protection greece has a valuable and exploitable potential in several res and can significantly increase their use however various significant institutional changes have taken place in greece over the last decades involving changes to the energy mix the penetration of res and attracting foreign investment the present research took place on the island of andros greece with the help of a questionnaire and face to face interviews it is noted that the respondents agree with the need to save energy and to expand the use of green energy they say they are slightly satisfied by the messages given through the mass media they have insufficient information regarding res systems that can be used in households and believe that a major subsidy from the state would lead to their purchase

determinants of the price premium for green energy evidence from an oecd cross section using data from a survey of households in 11 oecd countries this paper investigates the determinants of preferences for a completely green residential electricity system three important questions are addressed i how much are households willing to pay to use only renewable energy ii does willingness to pay wtp vary significantly across household groups and countries and iii what drives the decision to enter the hypothetical market for green energy and given entry what drives the level of wtp the analysis here differs from previous studies on green energy in two ways first data and analyses are comparable across countries and second a comprehensive attempt is made to understand 0 wtp and to accommodate using a censored quantile regression cqr framework unobserved heterogeneity the survey data indicate a low wtp at 11 12 of current electric bill this study also addresses a key question how important is income for understanding wtp relative to more attitudinal determinants the effect of income overall appears ambiguous with tobit like models indicating that income is not significant while the cqr indicates that income exerts a significant effect near the center of the distribution of wtp across all frameworks used a key determinant of wtp appears to be environmental attitudes particularly membership in an environmental organization

multiple discreteness and product differentiation demand for carbonated soft drinks for several of the largest supermarket product categories such as carbonated soft drinks canned soups ready to eat cereals and cookies consumers regularly purchase assortments of products within the category consumers often purchase multiple products and multiple units of each alternative selected on a given trip this multiple discreteness violates the single unit purchase assumption of multinomial logit and probit models the misspecification of such demand models in categories exhibiting multiple discreteness would produce incorrect measures of consumer response to marketing mix variables in studying product strategy these models would lead to misleading managerial conclusions we use an alternative microeconomic model of demand for categories that exhibit the multiple discreteness problem recognizing the separation between the time of purchase and the time of consumption we model consumers purchasing bundles of goods in anticipation of a stream of consumption occasions before the next trip we apply the model to a panel of household purchases for carbonated soft drinks