We build a model of credit card pricing that explicitly takes into account credit functionality. We show that a monopoly card network always selects an interchange fee that exceeds the level that maximizes consumer surplus. If regulators only care about consumer surplus, a conservative regulatory approach is to cap interchange fees based on retailers’ net avoided costs from not having to provid...

The World Wide Web makes it easy for users to access various services online, such as online shopping in e-commerce, online financing in P2P lending networks, and even working online on freelancing platforms. A fundamentally important function of web applications is Online Service Allocation (OSA), which means matching service consumers with ‘appropriate’ goods (i.e., products/loans/jobs) from ...

The equitable division of a joint cost (or a jointly produced output) among agents with different shares or types of output (or input) commodities, is a central theme of the theory of cooperative games with transferable utility. Ever since Shapley’s seminal contribution in 1953, this question has generated some of the deepest axiomatic results of modern microeconomic theory. More recently, the ...

A model of surplus values within information ecosystems is presented. The model is based on the classical definition of surplus value. However, as this definition was developed within a manufacturing industry context, some modifications are necessary to adopt it to the context of information ecosystems, e.g., by taking into account that products are “virtual” rather than physical. Just as in ag...

Despite the growing research interest in Internet auctions, particularly those on eBay, little is known about the quantifiable consumer welfare accrued from such mechanisms. Using an ongoing novel field experiment, we collect and examine a unique dataset to empirically quantify and understand determinants of consumer surplus in eBay auctions. Our analysis, based on a sample of 5157 eBay auction...

This paper provides alternative measures of federal budget surpluses over 10-year and long-term horizons. Official baseline budget forecasts are based on a series of statutory requirements that may be at variance with reasonable expectation. More plausible notions of current policy toward discretionary spending, taxes and retirement trust funds imply that surpluses over the next 10 years will b...

Consider the problem stated at the beginning of section 4.5, which involves choosing the distribution of posteriors F that maximizes (1 − α) 1 0 w(π) 1 − π 1 − π0 dF (π) expected surplus claimed by L +α 1 0 w(π) π π0 dF (π) expected surplus claimed by H −c 1 0 w(π) π π0 − 1 − π 1 − π0 dF (π) gap between expected surplus claimed by L and H 1 0 w(π) π π 0 − 1 − π 1 − π 0 dF (π) ≤ C(¯ m|L). To mak...

Poor communities sometimes resist private investment and destroy economic surplus even if the government has the willingness and ability to redistribute. We interpret such acts of resistance as demands for redistribution: Destruction contains credible information about how affected groups value surplus, which helps the government in implementing the optimal redistribution policy. Destruction is...

An examination of the economic impacts of the diagnosis of Actinobacillus pleuropneumoniae on grower/finisher swine operations indicated that reduced pork production, associated with the diagnosis of A. pleuropneumoniae on the operation, diminished consumer surplus by $53+/-52 million, and resulted in a total loss of $32+/-30 million to the US economy in 1995. Most of the economic surplus lost ...

This report is an e ort to consolidate two di erent avors of a surplus inventory matching problem encountered in the steel industry: Surplus Un nished Inventory Matching, and Surplus Finished Inventory Matching. This report is compiled from two other reports that describe the heuristic solution approaches developed for a real world application of these problems [1, 2]. The focus here is to moti...