In a standard procurement model I show that consumer surplus can increase after rival sellers consummate profitable merger generates no cost savings. This finding contrasts sharply with conventional wisdom in antitrust horizontal mergers without efficiencies must enhance sellers’ market power to be profitable, thereby harming buyers. The fits industries which individual buyers conduct distinct ...

Marketers often stress the importance of treating customers as partners. A fundamental premise of this perspective is that all parties can be weakly better off if they work together to increase joint surplus and reach Pareto-efficient agreements. For marketing managers, this implies organizing marketing activities in a manner that maximizes total surplus. This logic is theoretically sound when ...

I identify assumptions under which policies that maximize expected surplus are Pareto Optimal–even when expected consumer surplus does not even locally represent preferences over price-income lotteries. Besides the oft-made partial equilibrium assumptions that only one price varies, and that income changes do not affect demand, the two other assumptions are that every consumer’s indirect utilit...

Slotting allowances, which are lump-sum transfers paid by food manufacturers to grocery retailers in return for various retail concessions, are becoming increasingly common in wholesale grocery markets. This article extends the literature on slotting allowances by considering two features that previously have been ignored: the role of food processors in determining these pricing arrangements, a...

Geographically dispersed sellers in electronic reverse-marketplaces such as those hosted by Freemarkets are uncertain about the number of others sellers in any given market session. Over the course of several market sessions, they learn about the competitive structure of their market. How sellers learn to reduce the level of market structure uncertainty, is dependent on the market transparency ...

We embed the principal–agent model in a model of spatial differentiation with correlated consumer preferences to investigate the competitive implications of personalized pricing and quality allocation (PPQ), whereby duopoly firms charge different prices and offer different qualities to different consumers, based on their willingness to pay. Our model sheds light on the equilibrium productline p...

The importance of user benefits in transport projects assessments is well-known by transport planners and economists. Generally they have the greatest impact on the result of costbenefit analysis. It is common practice to adopt the consumer surplus measure for calculating transport user benefits. Normally the well-known “Rule of a Half”, as a practical approximation for the integral of the dema...