green market expansion by reducing information asymmetries evidence for labeled organic food products abstract we investigate how the provision of objective information about the environmental and health impact of organic labels by policy makers can influence the willingness to pay of consumers for labeled organic apples in flanders belgium using a stated choice experiment we initially find that flemish consumers are willing to pay a positive price premium of some 33 eurocent per kilogram for labeled organic apples after the provision of information on the actual environmental and health effects of organic apple production this price premium becomes even more pronounced and increases to 57 eurocent per kilogram using a conditional logit model with covariates and a mixed logit model we find evidence of preference heterogeneity also the effect of information provision is more pronounced for certain groups of consumers such as non vegetarians infrequent buyers of organic products and members of a nature protection organization as such this paper illustrates that there is a role for policy makers and csr producers in providing more accurate and reliable information about socially responsible production processes moreover it is important to take the observed preference heterogeneity into account and tailor policies to specific consumer groups

a model of product line design and introduction sequence with reservation utility abstract cannibalization is a major concern for a firm when designing a product line in addition external options from outside the firm s product line may also play a significant role in this paper we investigate the impact of external options represented by reservation utility on product line design and introduction sequence we find that a heterogeneous reservation utility defines the relative attractiveness of segments and corresponding product line b reservation utility makes it more favorable to introduce products sequentially rather than simultaneously c aggregating segments is an effective way to mitigate cannibalization when it becomes too difficult to manage with different values of reservation utility across multiple segments and d introducing products in a non monotone order of quality can improve profit from simultaneous introduction when the value of reservation utility of a middle segment is particularly high

pricing market coverage and capacity can green and brown products co exist abstract environmental strains are causing consumers to trade up to greener alternatives and many brown products are losing market coverage to premium priced green rivals in order to tackle this threat many companies currently offering only brown products are contemplating the launch of a green product to complement their product portfolio this paper provides strategic insights into and tactical ramifications of expanding a brown product line with a new green product our analysis explicitly incorporates a segmented consumer market where individual consumers may value the same product differently the economies of scale and the learning effects associated with new green products and capacity constraints for the current production system it is shown that a single pricing scheme for the new green product limits a firm s ability to appropriate the value different customers will relinquish in a segmented market and or to avoid cannibalization a two level pricing structure can diminish and even completely avoid the salience of cannibalization however when resources are scarce a firm can never protect his products from the threat of cannibalization by just revising the pricing structure which can spell the end of his brown product s presence in the market or preclude the firm from launching the green product at this point the degree of cannibalization is higher for the brown product when the green product offers a sufficiently differentiated proposition to green segment consumers

interpreting the korean crisis financial liberalisation industrial policy and corporate governance as the interpretation of its economic miracle has been so the interpretation of the recent crisis in korea remains highly controversial 1 although there are many important issues which have been raised by the korean crisis such as exchange rate policy labour market policy and the architecture of the international financial system chang 1998a three issues have been especially controversial in the debate financial liberalization industrial policy and corporate governance

bundling retail products models and analysis we consider the impact of bundling products on retail merchandising we consider two broad classes of retail products basic and fashion for these product classes we develop models to calculate the optimal bundle prices order quantities and profits under bundling we use this analysis to establish conditions and insights under which bundling is profitable our analysis confirms that bundling profitability depends on individual product demands bundling costs and the nature of the relationship between the demands of the products to be bundled we also provide detailed numerical examples

the validity of the contingent valuation method perfect and regular embedding this article deals with one aspect of the validity claim of the contingent valuation method namely to what extent does the method produce different values in situations for which economic theory claims different values two aspects of this validity test perfect and regular embedding were tested in a field experiment comprising six samples of the dutch population perfect embedding occurs when the value for a specific good is similar to the value for a more inclusive good perfect embedding did not manifest itself in the experiment respondents considered a package of six goods as well as a package of two goods more valuable than one of these goods it is argued that this supportive evidence of the method s validity claim occurred because the goods involved were well defined regular embedding occurs when the same good receives a lower value if the value for it is inferred from the value for a more inclusive good rather than if that good is valued on its own regular embedding was only found when respondents were given the opportunity to value the inclusive good before valuing the specific good respondents who were given information on the inclusive good without valuing it did not state different values than respondents who were not given that information it seems that respondents perceive an inclusive good as being relevant to their valuation decision only when they are asked to value it further research is necessary to shed more light on the underlying processes that may account for this

the role of uncertainty in the relationship between fairness evaluations and willingness to pay participants in contingent valuation studies may be uncertain about a number of aspects of the policy and survey context the uncertainty management model of fairness judgments states that individuals will evaluate a policy in terms of its fairness when they do not know whether they can trust the relevant managing authority or experience uncertainty due to insufficient knowledge of the general issues surrounding the environmental policy similarly some researchers have suggested that not knowing how to answer wtp questions participants convey their general attitudes toward the public good rather than report well defined economic preferences these contentions were investigated in a sample of 840 residents in four urban catchments across australia who were interviewed about their wtp for stormwater pollution abatement four sources of uncertainty were measured amount of prior issue related thought trustworthiness of the water authority insufficient scenario information and wtp response uncertainty a logistic regression model was estimated in each subsample to test the main effects of the uncertainty sources on wtp as well as their interaction with fairness and proenvironmental attitudes results indicated support for the uncertainty management model in only one of the four samples similarly proenvironmental attitudes interacted rarely with uncertainty to a significant level and in ways that were more complex than hypothesised it was concluded that uncertain individuals were generally not more likely than other participants to draw on either fairness evaluations or proenvironmental attitudes when making decisions about paying for stormwater pollution abatement

the implications of costs capacity and competition on product line selection we consider a situation in which a manufacturer has to select the product s to sell as well as the selling price and production quantity of each selected product there are two substitutable products in the consideration set where product 2 has a higher quality and reservation price than that of product 1 by considering the cannibalization effect that depends on the selling price of each product the manufacturer needs to evaluate the profit function associated with three different product line options sell both products or only one of the 2 products in order to examine the impact of costs capacity and competition on the optimal product line selection optimal price and optimal production quantity analytically we present a stylized model in this paper so that we can determine the conditions under which a particular option is optimal

the political economy of industrial policy in korea the article aims to provide some additional empirical support and theoretical consolidation for the emerging alternative interpretation of the korean developmental experience which emphasizes the role of the state after briefly reviewing some mainstream interpretations it presents a detailed account of state intervention in korea where it is revealed that industrial policy played the central role then it explains how the korean state was able to avoid some of the obvious dangers of such a policy which is often associated with economic failures in developing countries it then explores the basis of state power in korea which provided a background for such an outcome copyright 1993 by oxford university press

market segmentation self selection and product line design the purpose of this paper is to develop a theory of market segmentation based on consumer self selection the extant theory is based on the third degree price discrimination model of pigou central assumptions of which are that the firm can directly address individual segments and isolate them by using consumer self selection i am relaxing these assumptions in the context of a monopolist designing a product line i show that this relaxation has significant implications for how the products and prices are chosen and what they look like in particular segments may be aggregated even though there are no economies of scale furthermore consumer self selection enables us to model cannibalization and competition among firms

valuing riverside wetlands the case of the donau auen national park abstract for two decades the establishment of the donau auen national park east of vienna has been on the political agenda in austria since 1991 concrete proposals have been worked out for several variants of a national park including hydraulic engineering concepts and hydroelectric power stations within this planning process a cost benefit analysis was carried out to estimate the economic impacts of the proposed projects one crucial question was how to value the ecological quality of wetlands these environmental goods were valued by means of a willingness to pay wtp survey two different kinds of variables were defined 1 costs and benefits depending on direct anthropocentric use including energy production with hydroelectric power stations shipping groundwater protection stabilisation of the river bed to stop channel erosion visitors benefits forestry farming fishing hunting and the costs of establishing a national park based on these variables the net present value for variants with hydroelectric power stations is higher than for variants without electricity production on the contrary the internal interest rate and the benefit cost ratio is higher for a pure national park without electricity production 2 taking also the austrians wtp for the donau auen national park as a substitute measure for ecological values into account only 20 percent of the wtp which was measured by means of contingent valuation is needed to make the net present value of the best national park variant equal to that of the best hydroelectric power variant this shows that the protection of natural goods like wetlands in a natural state might be more efficient from an economic viewpoint than development projects

a classification of the literature on the planning of substitutable products abstract a company s assortment of products and corresponding inventory levels are constrained by available resources such as production capacity storage space and capital to acquire the inventory thus customers may not always be able to find a most preferred product at the time of purchase this unsatisfied demand is often substituted with an alternative in the extant literature there have been an increasing number of studies that consider product substitution when planning product assortment inventory and capacity in conjunction with pricing in this paper we classify the literature on the planning of substitutable products published in the major om and marketing journals during the past thirty years 1974 2013 and present a comprehensive taxonomy of the literature one criterion is adopted to discuss modeling objectives and three major criteria are provided to define the nature of product substitution including substitution mechanism substitution decision maker and direction of substitutability we also identify research gaps to provide guidance for related research in the future

the economics of product variety a survey demand for variety may arise from a taste for diversity in individual consumption and or from diversity in tastes even when each consumer chooses a single variant the full degree of variety potentially demanded will not in general be supplied because scale economies even to a small degree mean that the potential welfare or revenue gain from greater variety must be balanced against the lower unit production costs with fewer variants the economics of product variety consists essentially in analysing the effect of this balance in different situations and comparing the degree of product variety for different market structures with each other and with the optimum the survey commences with the work on market structures with single product firms generalized monopolistic competition tracing modern developments in both the chamberlinian and hotelling traditions the latter has been particularly fruitful due to the expansion of the original locational ideas into virtual spaces in product characteristics the emphasis in recent work on product variety has been on multiproduct firms in both monopolistic and oligopolistic structures including strategic market preemption although most work has been in a full information context there have been advances in product variety under imperfect information either by consumers to properties of the firms products or firms as to consumers demands

the asian debt and development crisis of 1997 causes and consequences abstract interpretations of the asian crisis have coalesced around two rival stories the death throes of asian state capitalism story about internal real economy causes and the panic triggering debt deflation in a basically sound but under regulated system story that gives more role to external and financial system causes the paper presents the stories and assesses the evidence the evidence in particular the chronology of the crisis supports the second rather better than the first the paper discusses the interests driving capital account liberalization without a framework of regulation the single most irresponsible act of public authorities in the whole crisis us and uk financial firms allied with their treasuries and with the imf the wto and the oecd saw themselves at a chronic disadvantage in the asian system of long term relationships and patient capital this alliance supported by segments of asian political and financial elites achieved dramatic domestic financial sector liberalization and capital account opening in asia over the 1990s setting up the conditions for crisis paradoxically the crisis may be looked back upon not as the triumph of benign globalization and neoliberal economic doctrine but as the beginning of its end

korea the misunderstood crisis abstract the article argues against the conventional wisdom that the current korean crisis is a crisis from underregulation rather than from overregulation it argues that ill managed financial liberalization abandonment of investment coordination and poor exchange rate management were the underlying causes of the crisis it then argues that while certain structural changes made such policy shifts somewhat inevitable there were also poor strategic choices and ideological prejudices involved the article finally discusses whether the current international monetary fund program of institutional reform in the anglo american direction will be able to revive the korean economy in the long run

the impact of information on environmental commodity valuation decisions a conceptual model is developed which provides insight into how information affects willingness to pay for environmental commodities a refutable hypothesis of the effects of a specific information type on the magnitude of willingness to pay for an environmental commodity is developed this hypothesis is tested using a contingent valuation method experiment results indicate that information affects willingness to pay in a theoretically plausible manner the results support the contention that information is important for accurate environmental commodity consumer valuations

on the relationship between inventory costs and variety benefits in retailassortments consider a category of product variants distinguished by some attribute such as color or flavor a retailer must construct an assortment for the category i e select a subset variants to stock and determine purchase quantities for each offered variant we analyze this problem using a multinomial logit model to describe the consumer choice process and a newsboy model to represent the retailer s inventory cost we show that the optimal assortment has a simple structure and provide insights on how various factors affect the optimal level of assortment variety we also develop a formal definition of the level of fashion in a category using the theory of majorization and examine its implications for category profits

protest responses in contingent valuation a significant number of respondents to contingent valuation surveys tend to either state a zero bid or refuse to state a bid at all for reasons associated with the process of valuation these protest responses are routinely removed from contingent valuation samples because it is assumed that they are not indicative of respondents true values the censoring of protest responses has led to the emergence of a definitional controversy one view is that the definition of protest responses and the rules for censoring them are dependent on whether the practitioner conceives of the contingent valuation survey as a market or as a referendum however what is not acknowledged is the possibility that protest responses and their meaning may vary according to the type of good being valued the elicitation format and the interaction between these elements and external factors this potential renders the development of unambiguous rules for censoring protest responses difficult moreover when willingness to pay is viewed as a behavioural intention it becomes important to determine what the responses actually mean this approach does not assume an interpretative position a priori against which the responses should be judged but seeks to inform an existing understanding which is inadequate

effects of different descriptions of the ecological good on willingness to pay values abstract the contingent valuation cv method is a survey based method that is used to put a price on ecological goods due to its hypothetical character the validity of the cv method forms part of an ongoing debate this article deals with one aspect of this validity viz the proper description of the ecological good of interest the question is whether and if so to what extent different descriptions meant as representations of the same good influence respondents willingness to pay wtp do different descriptions of the ecological good result in the same representation of that good or will these descriptions result in different images of the good and consequently in different values if the latter occurs a validity problem arises a field experiment was conducted to study the effects of three descriptions of the good a clean environment around the year 2015 the results of this experiment show that rather large differences in the description of this good have a significant effect on wtp values as well as on the number of protest bidders smaller differences in the description however do not show such an effect it seems as if certain information thresholds have to be overcome in order to affect wtp values

commodity specification and the framing of contingent valuation questions contingent valuation studies comprise a process of information transfer a researcher through a survey instrument conveys information about the item being valued and repondents in turn provide information about the value they place on this item considering contingent valuation from this perspective nearly all of the research evaluating the validity of this valuation method is in a general sense focused on examining the effects of information structures on value estimates a comparison of various questioning techniques represents such an examination boyle and bishop 1988 randall hoehn and tolley 1981 smith desvousges and fisher 1986 on a more specific level the selection of a payment vehicle also forms part of the information set and may affect statements of value greenley walsh and young 1982 1985 mitchell and carson 1985 these examples suggest that the validity of estimated contingent values relies heavily on the information conveyed to survey respondents since varying information structures can affect the magnitude of estimated values

households willingness to pay for reliable electricity services in ghana abstract access to reliable electricity is important in increasing the living standards of households and promoting sustainable development however ghanaian households have had to grapple with frequent power outages and poor quality electricity services in recent times this study examines the factors influencing households willingness to pay for reliable electricity services in ghana using data collected from 950 households in the cape coast metropolitan area and the tobit regression technique it was revealed that monthly income prior notice on power outages business ownership separate meter ownership household size and education significantly affect willingness to pay for reliable electricity services on the average households were prepared to pay 44 percent gh 6 80 us 3 42 more relative to the mean monthly electricity bill in the sample to improve electricity services it is envisaged that the findings would be used by policy makers and utility companies to make electricity generation and distribution more sustainable and efficient

new product introduction and capacity investment by incumbents effects of size on strategy we analyze a duopoly where capacity constrained firms offer an established product and have the option to offer an additional new and differentiated product we show that the firm with the smaller capacity on the established market has a higher incentive to innovate and reaches a larger market share on the market for the new product an increase in capacity of the larger firm can prevent its competitor from innovating whereas an increase in capacity of the smaller firm cannot prevent innovation of its larger competitor in equilibrium the firm with smaller capacity on the established market might outperform the larger firm with respect to total payoffs

new perspectives on east asian development conventional explanations of rapid growth in east asia have focused on the efficient allocation of resources resulting from market led outward oriented strategies this study challenges that approach east asian success has centred around the accumulation dynamic both because of its direct importance to the growth process and also because of its close and interdependent linkages with exports on this basis the study considers the institutions and policies which were used to manage economic rents in support of rapid growth and to ensure a more strategic and orderly integration into the world economy the study also examines the contribution of regional trade and investment flows to east asian industrialisation the potential for replicating similar strategies is considered

assortment planning and inventory decisions under a locational choice model we consider a single period assortment planning and inventory management problem for a retailer using a locational choice model to represent consumer demand we first determine the optimal variety product location and inventory decisions under static substitution and show that the optimal assortment consists of products equally spaced out such that there is no substitution among them regardless of the distribution of consumer preferences the optimal solution can be such that some customers prefer not to buy any product in the assortment and such that the most popular product is not offered we then obtain bounds on profit when customers dynamically substitute using the static substitution for the lower bound and a retailer controlled substitution for the upper bound we thus define two heuristics to solve the problem under dynamic substitution and numerically evaluate their performance this analysis shows the value of modeling dynamic substitution and identifies conditions in which the static substitution solution serves as a good approximation