{"title":"The Supply Network and Price Dispersion in the Canadian Gasoline Market","authors":"Malloy Brandon","doi":"10.1515/RNE-2019-0016","DOIUrl":"https://doi.org/10.1515/RNE-2019-0016","url":null,"abstract":"This paper examines the impact of variation in transportation options – what I denote the “supply network” – on observed price differences between locations for a specific good, retail gasoline. I use a unique data set of weekly gasoline prices across 44 Canadian cities to analyze how the existence of variation in the available modes of transportation for gasoline between cities (via pipeline, marine tanker, rail or truck) accounts for observed price differences across locations. I find that the supply network is significant – cities connected by lower cost-per-unit methods like pipelines or seaports exhibit smaller mean- and weekly-price differences than those connected only by road or rail, after controlling for distance, regional effects and market size. A pipeline connection results in a reduction in weekly price dispersion equivalent to a 53% reduction in distance between cities, while a maritime connection has the equivalent effect of a 38% reduction in distance between cities.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"34 1","pages":"75-107"},"PeriodicalIF":0.7,"publicationDate":"2018-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81474907","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cards on the Table: Efficiency and Welfare Effects of the No-Surcharge Rule","authors":"David Henriques","doi":"10.1515/rne-2017-0036","DOIUrl":"https://doi.org/10.1515/rne-2017-0036","url":null,"abstract":"Abstract In Electronic Payment Networks (EPNs), the No-Surcharge Rule (NSR) requires that merchants charge at most the same amount for a payment card transaction as for cash. In this paper, I use a three-party model (consumers, local monopolistic merchants, and a proprietary EPN) with endogenous transaction volumes, heterogeneous card use benefits for merchants and network externalities of card-accepting merchants on cardholders to assess the efficiency and welfare effects of the NSR. I show that the NSR: (i) promotes retail price efficiency for cardholders, and (ii) inefficiently reduces card acceptance among merchants. The NSR can enhance social welfare and improve payment efficiency by shifting output from cash payers to cardholders. However, if network externalities are sufficiently strong, the reduction of card payment acceptance affects cardholders negatively and, with the exception of the EPN, all agents will be worse off under the NSR. This paper also suggests that the NSR may be an instrument to decrease cash usage, but the social optimal policy on the NSR may depend on the competitive conditions in each market.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"1 1","pages":"25 - 50"},"PeriodicalIF":0.7,"publicationDate":"2018-03-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88030692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Bundling, Vertical Differentiation, and Platform Competition","authors":"Keke Sun","doi":"10.1515/rne-2017-0046","DOIUrl":"https://doi.org/10.1515/rne-2017-0046","url":null,"abstract":"Abstract This paper studies the bundling strategies of two firms that each sell a horizontally differentiated platform and a complementary good. When the complementary goods are vertically differentiated, the firm that sells the superior one can commit to a more aggressive pricing strategy through bundling. In the presence of asymmetry in externalities between the two sides in the platform market, bundling may be profitable without foreclosing the rival when platforms implement cross subsidies from the high-externality side (developers) to the low-externality side (consumers). Bundling has a positive effect on welfare because it allows for better internalization of the indirect network effects and reduces the developer cost of multi-homing, but it also has a negative effect because some consumers consume less-preferred components. Consequently, bundling is socially desirable when platforms are not too differentiated and the vertical differentiation between the complementary goods is high.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"40 1","pages":"1 - 23"},"PeriodicalIF":0.7,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81544751","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Rise of Streaming Music and Implications for Music Production","authors":"R. S. Hiller, Jason M. Walter","doi":"10.1515/rne-2017-0064","DOIUrl":"https://doi.org/10.1515/rne-2017-0064","url":null,"abstract":"Abstract In this paper, we model the potential for streaming music, a non-durable product, to upend and displace durable music sales. As the popularity of streaming music increases producers will adjust their production to focus on the non-durable channel. We identify conditions under which the changes in music delivery will encourage musicians to release fewer songs, but at a higher quality, leading to market deepening and increased engagement. This change will complete the unbundling process in music production making the traditional bundled album of little importance. This tendency toward unbundling for individual musicians depends on a robust bundle from a delivery platform to provide value for consumer subscriptions. Beyond a model of consumer utility and producer profit, we analyze the most played songs of the large streaming music platform, Spotify, and compare those results to traditional album sales using Nielsen data.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"15 1","pages":"351 - 385"},"PeriodicalIF":0.7,"publicationDate":"2017-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87653550","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Value of Consumer Data in Online Advertising","authors":"M. Bourreau, B. Caillaud, Romain de Nijs","doi":"10.1515/rne-2017-0066","DOIUrl":"https://doi.org/10.1515/rne-2017-0066","url":null,"abstract":"Abstract In this paper we propose a model where consumer personal data have multidimensional characteristics, and are used by platforms to offer ad slots with better targeting possibilities to a market of differentiated advertisers through real-time auctions. A platform controls the amount of information about consumers that it discloses to advertisers, thereby affecting the dispersion of advertisers’ valuations for the slot. We first show by way of simulations that the amount of consumer-specific information that is optimally revealed to advertisers increases with the degree of competition on the advertising market and decreases with the cost of information disclosure for a monopolistic platform, competing platforms or a welfare-maximizing platform, provided the advertising market is not highly concentrated. Second, we exhibit different properties between the welfare-maximizing situation and the imperfectly competitive market situations with respect to how the incremental value of information varies: there are decreasing social returns to consumers’ data, while private returns may be increasing or decreasing locally.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"105 1","pages":"269 - 289"},"PeriodicalIF":0.7,"publicationDate":"2017-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80621165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Following the Code: Spillovers and Knowledge Transfer","authors":"Neil Gandal, Peter Naftaliev, Uriel Stettner","doi":"10.1515/rne-2017-0056","DOIUrl":"https://doi.org/10.1515/rne-2017-0056","url":null,"abstract":"Abstract Knowledge spillovers in Open Source Software (OSS) can occur via two channels: In the first channel, programmers take knowledge and experience gained from one OSS project they work on and employ it in another OSS project they work on. In the second channel, programmers reuse software code by taking code from an OSS project and employing it in another. We develop a methodology to measure software reuse in a large OSS network at the micro level and show that projects that reuse code from other projects have higher success. We also demonstrate knowledge spillovers from projects connected via common programmers.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"20 1","pages":"243 - 267"},"PeriodicalIF":0.7,"publicationDate":"2017-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88303797","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Paul Belleflamme, Alexandre de Cornière, Oliver Falck, A. Gautier
{"title":"Special Issue on “Economics of Digitization”","authors":"Paul Belleflamme, Alexandre de Cornière, Oliver Falck, A. Gautier","doi":"10.1515/rne-2018-0029","DOIUrl":"https://doi.org/10.1515/rne-2018-0029","url":null,"abstract":"The process of digitization has already had a profound impact on the functioning of the markets in the last decade, and it should bring even more interesting changes in the near future. This Special Issue on the Economics of Digitization includes four selected articles, which illustrate the implications of various aspects of digitization for consumers and firms. The analysis of price discrimination has recently taken a new – and very interesting – turn, almost one century after the concept was formally introduced (Pigou proposed the first taxonomy of price discrimination practices in his book “Economics of Welfare” in 1920). The reason for this renewed interest is to be found in the continuously decreasing costs of processing data and in improved data algorithms, which allow firms to know much more about their consumers’ willingness to pay. These technological developments have four important consequences for the economic analysis of price discrimination. First, perfect price discrimination is no longer seen as a theoretical benchmark but as a true possibility. Second, as consumers care about their privacy and can act to protect it, they become strategic players, meaning that firms must factor in the consumers’ potential reactions when they choose their pricing strategy. Third, as more firms can easily collect and process data, a more careful examination of competitive price discrimination is called for. Finally, as data is the necessary input for price discrimination, it becomes a commodity, whose trade needs to be analyzed. The article by Alexandre de Cornière and Rodrigo Montes (Consumer Privacy and the Incentives to Price-Discriminate in Online Markets) contributes to the first two issues: it studies the interaction between a monopoly firm, which can (imperfectly) identify consumers’ willingness to pay, and consumers, who can prevent","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"89 1","pages":"239 - 241"},"PeriodicalIF":0.7,"publicationDate":"2017-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82409703","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Underappreciated Connection between Rail Restructuring Strategies and Financing","authors":"R. Pittman","doi":"10.1515/rne-2017-0040","DOIUrl":"https://doi.org/10.1515/rne-2017-0040","url":null,"abstract":"Abstract The railways industry is a capital-intensive industry requiring very large initial and ongoing investment streams. Proposals to restructure the traditional state-owned monopoly railway in a particular country are often designed to address concerns not only regarding inefficient operations and monopoly stagnation but also the long-term unreliability of government financing, especially of the expensive infrastructure. In this regard, the connection between the particular rail restructuring strategy chosen by a country and the ability of the restructured entity to attract financing, especially private financing, merits a closer look.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"336 1","pages":"161 - 169"},"PeriodicalIF":0.7,"publicationDate":"2017-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75055740","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Public and Private Provision of Railway Services: A Case Study from Slovakia","authors":"M. Jurikovič, Z. Tomes","doi":"10.1515/rne-2017-0037","DOIUrl":"https://doi.org/10.1515/rne-2017-0037","url":null,"abstract":"Abstract This article analyses a case study of passenger rail transport in Slovakia when operation of a commuter line to the capital city was changed from a public operator to a private one. This change brought about significant changes in the organisation of services. The private operator RegioJet introduced new rolling stock, a regular and more frequent timetable, peak and off-peak pricing, and additional on-board services. The results were remarkable, with passenger ridership increasing by 156% in 3 years. The article aims to compare the performance of public and private operators on this line in order to identify the reasons for the increased ridership. A customer survey was conducted and passengers were asked questions about their former and present travel behaviour. Based on data from the survey, a logit model was estimated in order to identify the factors behind increased usage and satisfaction. The results indicate that all passengers most highly valued the speed and comfort of the rail services. The new passengers valued highly reliability and quality of the improved service. These factors appealed especially to women, students, and car owners who were newly attracted to rail commuting.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"92 1","pages":"187 - 201"},"PeriodicalIF":0.7,"publicationDate":"2017-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77271165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Rail Funding and Financing","authors":"L. Casullo","doi":"10.1515/rne-2017-0038","DOIUrl":"https://doi.org/10.1515/rne-2017-0038","url":null,"abstract":"Abstract Funding and financing arrangements for railway infrastructure in Europe are often perceived as complex and opaque. Given the large sums of public money involved, greater transparency on inputs and outputs is required. This paper aims to present an overview of rail infrastructure funding and financing in Europe based on recent evidence, and draws comparisons with the systems in the US and Japan. We also discuss a number of policy options to address the funding gap and ensure that European railways improve their financial viability and remain strong pillars of sustainable mobility in the future.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"40 1","pages":"125 - 141"},"PeriodicalIF":0.7,"publicationDate":"2017-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77723218","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}