Preventives are sold ex ante, before disease status is realized, while treatments are sold ex post. Even if the mean of the ex ante distribution of consumer values is the same as that ex post, the shape of the distributions may differ, generating a difference between the surplus each product can extract. If, for example, consumers differ only in ex ante disease risk, then a monopolist would hav...

This paper estimates the demand for nature based tourist visits to Zambia and the willingness of international tourists to pay to visit Zambia using a single site individual travel cost model. The model estimated is corrected for both truncation of the dependent variable and endogenous stratification that arises due to on-site sampling. We find a negative binomial specification provides stable ...

By exploring of the multi-stage network design problem of comprehensive traffic, the paper proposes a bi-level programming model with uncertain demand. The upper level problem is to maximize the consumer surplus of all demand scenarios with budget constraint. While under the network investment decisions of the upper level problem, the lower level problem is to maximize the consumer surplus of e...

It is often alleged that high auction prices inhibit build-out. We investigate this claim under the extreme case of budget-constrained bidders. Low prices maximize overall the gains from trade. If there are n licenses, the price where the budget constraint just binds maximizes consumer surplus if the elasticity of demand is less than one plus 1/n. If demand is elastic, auctions maximize consume...

Suppose an intermediary provides a benefit to buyers when they purchase from sellers using the intermediary’s technology. We develop a model to show that the intermediary will want to restrict sellers from charging buyers more for transactions it intermediates. We show that this restriction can reduce consumer surplus and welfare, sometimes to such an extent that the existence of the intermedia...

We analyze the impact of insurer competition on health care markets using a model of premium setting, hospital-insurer bargaining, household demand for insurance, and individual demand for hospitals. Increased insurer competition may lead to lower premiums; it may also increase health providers’ leverage to negotiate higher prices, thereby mitigating premium reductions. We use detailed Californ...

In the United States, health insurance for those under age 65 is typically provided through group plans purchased by employers from commercial insurers. In the health insurance market, insurers provide complex multi-attribute services, and search frictions arise as employers undertake the costly process of finding appropriate health insurance for their workers. These frictions distort market ou...