This article develops a dynamic game model of a supply chain consisting of one manufacturer and one retailer to study the coordination mechanism and the effect of demand disruption on the coordination mechanism, where the market demand is sensitive to retail price and service. We assume that the supplier and the retailer only know the distribution of the disrupted amount after the demand disrup...

While pharmaceutical patent terms have increased in Canada, increases in patented drug spending have been mitigated by price controls and retrenchment of public prescription drug subsidy programs. We estimate the net effects of these offsetting policies on domestic pharmaceutical R&D expenditures and also provide an upper-bound estimate on the effects of these policies on Canadian pharmaceutica...

Under conventional models, subsidizing energy efficiency requires electricity to be priced below marginal cost. Its benefits increase when electricity prices increase to finance the subsidy. With high prices, subsidies are counterproductive unless consumers fail to make efficiency investments when private benefits exceed costs. If the gain from adopting efficiency is only reduced electricity sp...

fixed feed-in tariff An offer by government or a utility to purchase electricity from renewables producers at a fixed price, regardless of the producers’ costs of production. green (renewables) certificate A certificate, provided by a regulator to renewables producers for specified units of their electricity output; can be traded to other electricity producers who need it to meet their obligati...

We draw some lessons from the Tunisian experience of social reforms and associated civil conflict. Our main interest is the riots that occurred after subsidy cuts and their possible substitution of price subsidies by direct cash transfers. We propose new welfare indicators apt to assess policy reforms in situations of fragile states. Finally, using micro level data we show that the plausible po...

In this paper a vertical differentiation model is built in order to analyse the effects of subsidies to secondary airports, or of lower prices set by them, on the competition between LCC’s and FSC’s. The Ryanair/ Charleroi agreement is used as an example and as a basis for the model. The main findings are that subsidisation (or lower airport charges) benefits consumers and negatively affects in...

We consider the problem of allocating objects to a group of agents and how much agents should pay. Each agent receives at most one object and has non-quasi-linear preferences. Non-quasi-linear preferences describe environments where payments influence agents’ abilities to utilize objects or derive benefits from them. The “minimum price Walrasian (MPW) rule” is the rule that assigns a minimum pr...

We analyze a situation where a principal wants to induce two firms to produce an output, e.g. electricity from renewable energy sources. Firms can undertake non-contractible investments to reduce production cost of the output. Part of these investments spills over and also reduces production cost of the other firm. Comparing a general price subsidy and an innovation tournament, we find that the...

We study how competition among charities affects individuals’ giving behavior. We characterize a situation where a higher rebate subsidy shifts donations from one charity to another and increases total donations. We conduct two experiments: (i) individualized charitable giving where free riding incentives are shut down; and (ii) multi-donor charitable giving. We derive the demand for giving at ...