Background: Our research assumes that the software quality affects the product validity. This assumption also refers to embedded software. Objectives: This paper analyses the Stackelberg equilibrium in which the consumer is the leader and the producer of embedded software is the follower. Methods/Approach: A comparative statics analysis of a producer's reaction is carried out and confirms our i...

We examine the welfare effects of price and disclosure regulation in a model where firms can shroud add-on costs, such as penalty fees for consumer financial products. Such regulation can increase or decrease welfare even when there are no direct costs. There are, however, strong complementarities between price controls and disclosure mandates: conditional on disclosure be­ ing mandated, price ...

This paper considers the dynamic producer and consumer benefits from improving habitat that supports a commercial fishery under two different fishery management institutions. By coupling state equations that represent the effects of estuarine eutrophication on fish populations with a multispecies, two-patch spatial bioeconomic model that endogenizes output price through residual demand, the ana...

Changes in total surplus and deadweight loss are traditional measures of economic welfare. We propose necessary and sufficient conditions for rationalizing consumer demand data with a quasilinear utility function. Under these conditions, consumer surplus is a valid measure of consumer welfare. For nonmarketed goods, we propose necessary and sufficient conditions on market data for efficient pro...

In this paper we estimate the welfare associated with the Medicare HMO program, now known as Medicare+Choice. We find that the Medicare HMO program contributed over $5.8 billion (1998 dollars) to consumer and producer surplus from 1993 to 1998. We estimate that the HMO program generates positive net societal welfare as long as the cost of treating HMO enrollees in the Medicare fee-for-service (...