{"title":"Cost Optimization in the SIS Model of Infectious Disease with Treatment","authors":"S. Goldman, J. Lightwood","doi":"10.2202/1538-0653.1007","DOIUrl":"https://doi.org/10.2202/1538-0653.1007","url":null,"abstract":"Abstract We consider the intertemporal social optimization problem of minimizing the present value of the costs incurred from both disease and treatment. Though the analysis is complicated by the analytical failure of concavity, we are able to substantially characterize both the long run equilibria and the adjustment paths. The cost minimizing program is shown to exhibit decreased levels of treatment at higher disease levels. The socially optimal program is compared to individually rational behavior and the inefficiencies in private behavior from the infection externality are shown to cause increases in the equilibrium rate of infection.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-04-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1007","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555834","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Costs of A Medicare Prescription Drug Benefit","authors":"D. Goldman, G. Joyce, J. Malkin","doi":"10.2202/1538-0653.1028","DOIUrl":"https://doi.org/10.2202/1538-0653.1028","url":null,"abstract":"Abstract Medicare does not have an outpatient prescription drug benefit. Recently, there has been renewed interest in adding a prescription drug benefit to the program. In this paper, we present a microsimulation model to predict drug expenditures in 2001 for a representative cohort of Medicare beneficiaries under the status quo and three different plans: (1) a catastrophic plan modeled on the Medicare Catastrophic Coverage Act (PL 100-360), which was passed in 1988 but repealed one year later after higher-income Medicare beneficiaries protested new premiums, (2) a zero-deductible plan that caps out-of-pocket expenses at $4,000 per year, and (3) a zero-deductible plan that does not cap out-of-pocket expenses. We use data from a representative sample of Medicare Part B beneficiaries from the 1995 Medicare Current Beneficiary Survey (MCBS) Cost and Use file. Under the status quo, drug expenses average $1,459 per beneficiary, out-of-pocket costs average $646, and 8.2% of the population has very high expenses (defined as more than $2,000 out-of-pocket for drugs). Under a catastrophic plan, average annual drug expenses are $1,344, out-of-pocket costs are $645, and 6.8% of beneficiaries have very high expenses. Under a zero-deductible plan that does not cap out-of-pocket expenses average annual drug expenses are $1,395, out-of-pocket expenses are $459, and 5.3% of beneficiaries would have very high expenses. Under a zero-deductible plan that caps out-of-pocket expenses at $4,000 per year, average annual drug expenses are $1,414, out-of-pocket expenses are $442, and 5.5% of beneficiaries have very high expenses.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1028","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555698","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Ambient environmental inspections and commitment towards enforcement policies: substitutes or complements?","authors":"L. Franckx","doi":"10.2202/1538-0653.1026","DOIUrl":"https://doi.org/10.2202/1538-0653.1026","url":null,"abstract":"Abstract We consider an inspection game between polluting firms and an environmental enforcement agency that can inspect ambient pollution before inspecting individual firms. We assume that the enforcement agency's objectives do not perfectly correspond with the objectives of the legislative body who determines the standards for compliance and the fines for non-compliance, and that the enforcement agency can determine its inspection policy independently. However, contrary to Franckx (2002), we assume that the agency can commit to inspection probabilities. We show that this commitment power radically changes the value of ambient inspections. If the legislator imposes an infinite fine, commitment power and ambient inspections are perfect substitutes: both allow the agency to obtain perfect compliance without actually inspecting firms. However, with upper limits to the fine, ambient inspections and commitment power are complements. Indeed, if the agency does not conduct ambient inspections, it can only obtain perfect compliance by announcing high probabilities of firm inspections. With stringent upper limits to the fine, this implies high inspection costs. However, if the agency conducts ambient inspections, it can announce probabilities of firm inspections that are conditional on behavior that will not be observed in equilibrium, and all firms will comply.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1026","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Optimal Provision of Services in National Parks","authors":"R. Turner","doi":"10.2202/1538-0653.1041","DOIUrl":"https://doi.org/10.2202/1538-0653.1041","url":null,"abstract":"Abstract A national park provides recreational opportunities and also provides a pure public good. This paper presents an intergenerational model in which a club good and a pure public good are provided jointly. The focus is on optimality conditions for services provided by park managers. At the margin, the cost of providing the services should be balanced by the benefits of services. Services can directly enhance visitor enjoyment, both immediately and in the future; they can also affect congestion currently and in the future; they can affect the quality of park resources; and they can affect the pure public good provision. The framework developed in this paper suggests what information should be used by the National Park Service when deciding on the level and kind of services to provide.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-01-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1041","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"System Components, Network Effects, and Bundling","authors":"M. Clements","doi":"10.2202/1538-0653.1046","DOIUrl":"https://doi.org/10.2202/1538-0653.1046","url":null,"abstract":"I investigate the competition between suppliers of components of a system for which there are network effects among users. Bundling one of these components with an outside good reduces the cost to consumers of using the system. This cost reduction is not necessarily welfare-enhancing, and bundling can also reduce welfare by decreasing innovation incentives. The model is used to evaluate Microsoft’s bundling of Windows with Internet Explorer and its effect on competition with Netscape.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"61 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1046","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"On Vertical Differentiation Under Bertrand and Cournot: When Input Quality has Upward Sloping Supply","authors":"Mark R. Frascatore","doi":"10.2202/1538-0653.1002","DOIUrl":"https://doi.org/10.2202/1538-0653.1002","url":null,"abstract":"This paper compares Bertrand and Cournot duopolies in which firms can vertically differentiate their products and in which input quality has upward sloping supply. Contrary to previous results, if supply is either linear or convex with a high coefficient, firms differentiate their products equally under Bertrand and Cournot, with one firm choosing the minimum quality. If supply is convex with a low coefficient, firms differentiate more under Bertrand. Profit and welfare implications are discussed, as is the strategic choice of quality as an entry deterrence strategy.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1002","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Uncertain Wage - Effort Hypothesis and Wage Secrecy","authors":"L. Gan","doi":"10.2202/1538-0653.1040","DOIUrl":"https://doi.org/10.2202/1538-0653.1040","url":null,"abstract":"In this paper, we introduce uncertainty into Akerlof and Yellen (1990)’s fair wage effort hypothesis. In this uncertain fair wage hypothesis, employers do not have perfect information concerning an employee’s perception of a fair wage, but assume the perceived fair wage is distributed as a random variable with a known distribution. Our wage model, built on this hypothesis, is applied to analyze the widely adopted policy of wage secrecy, suggesting a wage secrecy policy is more likely to produce higher satisfaction for employees and higher profit for employers.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2002-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1040","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555733","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Trade Tax Reform in a Small Open Economy with Distributional Objectives and Distortionary Taxation","authors":"J. Edwards","doi":"10.2202/1538-0653.1022","DOIUrl":"https://doi.org/10.2202/1538-0653.1022","url":null,"abstract":"Abstract The paper shows that, if two conditions are satisfied, both radial contraction and concertina trade tax reforms continue to be desirable in a small open economy that differs from the one usually considered by having distributional objectives and using distortionary taxes to raise revenue. The first condition is that some optimisation in the choice of commodity taxes takes place - at a minimum, taxes on nontraded goods must be optimally chosen while taxes on traded goods keep the consumer prices of such goods constant. The second is that pure profits are absent from every household's budget constraint. These conditions mean that some care is required in arguing the case for simple trade tax reforms in small open economies.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2001-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1022","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555464","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Neutrality of Interchange Fees in Payment Systems","authors":"J. Gans, Stephen P. King","doi":"10.2202/1538-0653.1069","DOIUrl":"https://doi.org/10.2202/1538-0653.1069","url":null,"abstract":"Abstract There has been considerable public debate over the effect of interchange fees on credit card transactions. Regulators in Australia and Europe have argued that these fees can be set by banks to have an anticompetitive effect. In the US, it has been argued that these fees, together with a rule that prevents a surcharge for credit purchases, might create a cross subsidy between cash and credit customers. Academics have noted that, in particular circumstances, interchange fees have no real effects in the absence of such a no-surcharge rule. This paper demonstrates that the potential neutrality of interchange fees is a general result. We show that in the absence of a no surcharge rule or, alternatively, if there is perfect competition at the merchant level, interchange fees can be changed without leading to any real effects. This result does not depend on the degree or nature of competition at either the bank or the merchant level. We conclude that the elimination of no surcharge rules may provide practical policy solutions for authorities concerned about the level of interchange fees.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"3 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2001-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1069","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555518","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Pension systems in integrated capital markets","authors":"Alessandra Casarico","doi":"10.2202/1538-0653.1017","DOIUrl":"https://doi.org/10.2202/1538-0653.1017","url":null,"abstract":"Abstract The paper studies the effects on factor prices and welfare of the integration in a perfect world capital market of countries that differ in the degree of funding of their pension systems. It focuses on two large economies running respectively a pay-as-you-go and a fully funded pension system and it first analyzes the open economy implications of the different pension designs under the assumption that the pay-as-you-go system is balanced and in steady state equilibrium. It then elaborates on the institutional structure of the pay-as-you-go system to analyze how its degree of maturity, its expenditure profile and the presence of debt financing affect factor prices and welfare in open economy. Finally, it focuses on pension reform issues. The paper shows that, under perfect capital mobility, the differences in the degree of funding of the pension systems cause divergent welfare effects across generations and across countries. It shows that the design features of the pay-as-you-go scheme play a role in the world equilibrium and it identifies which of them can amplify or reduce the open economy linkages operating through the pension schemes.","PeriodicalId":87841,"journal":{"name":"Topics in economic analysis & policy","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2001-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2202/1538-0653.1017","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68555401","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}