To save content items to your account,
please confirm that you agree to abide by our usage policies.
If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account.
Find out more about saving content to .
To save content items to your Kindle, first ensure firstname.lastname@example.org
is added to your Approved Personal Document E-mail List under your Personal Document Settings
on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part
of your Kindle email address below.
Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations.
‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi.
‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
This article examines the issue of prices from a sociological standpoint. We show that, contrary to popular belief, price setting is always the result of social practices. We identify two main perspectives in the relevant literature. The first deals with the central notion of quality: price setting is a matter of judgement, arbitration and equipment. The second focuses on measurement practices, such as valuation and pricing, which occur before or during the transaction. These two complementary perspectives reveal a variety of processes that both determine prices and can be used to construct a typology based on two criteria: the moment of price setting, and the level of competition. Four different types of pricing mechanisms are distinguished: self-regulated, administered, composed, and bargained. We use examples to describe these different pricing types, and to show how such an approach contributes to our understanding of the economy.
Bismarckian health systems are mainly governed by social health insurers, but their role, status, and power vary across countries and over time. We compare the role of health insurers in three distinct social health insurance systems in improving health systems' efficiency. In France, insurers work together as a single payer within a highly regulated context. Although this gives insurers substantial bargaining power, collective negotiations with providers are highly political and do not provide appropriate incentives for efficiency. Both Germany and the Netherlands have introduced competition among insurers to foster efficiency. However, the rationale of insurer competition in Germany is unclear because contracts are mostly concluded at a collective level and individual insurers have little power to influence health system efficiency. In the Netherlands, insurer competition is substantially more effective, but primarily focused on price and cost containment. In all three countries, the role of insurers has been transforming slowly to respond to common challenges of assuring care quality and continuity for an ageing population. To assure sustainability, they need to ensure that care providers cooperate with the same quality and efficiency objectives, but their capacity to do so has been limited by insufficient support to enforce public information on provider quality.
Since 2011, the prices for all new drugs in Germany are negotiated based on a benefit assessment. The purpose of this study was to analyze the price regulation of drugs with unproven additional benefit.
Benefit assessment procedures from 2011 to 2020 were reviewed and selected through AMNOG Monitor and Lauer Taxe. Negotiated annual therapy costs, the annual costs of the most cost-efficient appropriate comparative therapy (ACT) and the potential budget impact for 33 included procedures were calculated.
55% of the included drugs achieved a negotiated price higher than the most cost-efficient ACT, 3% were identified as equal and 42% showed lower negotiated prices. The potential savings exceeded expenditures by around EUR 523.5 m. After price flexibility was adopted by the legislator in 2017, the overall potential savings still outweighed the expenditures by around EUR 62 m.
Our analysis shows that making price negotiations more flexible by law does not undermine the fundamental aim of the AMNOG, which is to avoid additional expenditure without increased patient benefit. The regulation can thus fulfill the objective provided by the legislature of keeping drugs without proven additional benefits in the German healthcare system.
Government policy guidance in Victoria, Australia, encourages schools to provide affordable, healthy foods in canteens. This study analysed the healthiness and price of items available in canteens in Victorian primary schools and associations with school characteristics.
Dietitians classified menu items (main, snack and beverage) using the red, amber and green traffic light system defined in the Victorian government’s School Canteens and Other School Food Services Policy. This system also included a black category for confectionary and high sugar content soft drinks which should not be supplied. Descriptive statistics and regressions were used to analyse differences in the healthiness and price of main meals, snacks and beverages offered, according to school remoteness, sector (government and Catholic/independent) size, and socio-economic position.
State of Victoria, Australia
A convenience sample of canteen menus drawn from three previous obesity prevention studies in forty-eight primary schools between 2016 and 2019.
On average, school canteen menus were 21 % ‘green’ (most healthy – everyday), 53 % ‘amber’ (select carefully), 25 % ‘red’ (occasional) and 2 % ‘black’ (banned) items, demonstrating low adherence with government guidelines. ‘Black’ items were more common in schools in regional population centres. ‘Red’ main meal items were cheaper than ‘green’% (mean difference –$0·48 (95 % CI –0·85, –0·10)) and ‘amber’ –$0·91 (–1·27, –0·57)) main meal items. In about 50 % of schools, the mean price of ‘red’ main meal, beverages and snack items were cheaper than ‘green’ items, or no ‘green’ alternative items were offered.
In this sample of Victorian canteen menus, there was no evidence of associations of healthiness and pricing by school characteristics except for regional centres having the highest proportion of ‘black’ (banned) items compared with all other remoteness categories examined. There was low adherence with state canteen menu guidelines. Many schools offered a high proportion of ‘red’ food options and ‘black’ (banned) options, particularly in regional centres. Unhealthier options were cheaper than healthy options. More needs to be done to bring Victorian primary school canteen menus in line with guidelines.
Spain incorporated in 2020 changes in its health technology assessment (HTA), pricing, and reimbursement system for medicines including publishing reports, development of networks of experts, or consultation with stakeholders. Despite these changes, it is unclear how deliberative frameworks are applied and the process has been criticized for not being sufficiently transparent. This study analyses the level of implementation of deliberative processes in HTA for medicines in Spain.
We review the grey literature and summarize the Spanish HTA, pricing, and reimbursement process of medicines. We apply the deliberative processes for HTA checklist, developed to assess the overall context of the deliberative process, and identify the stakeholders involved and type of involvement following the framework for evidence-informed deliberative processes, a framework for benefit package design that aims to optimize the legitimacy of decision making.
In the Spanish HTA, pricing, and reimbursement process deliberation takes place in order to exchange viewpoints and reach common ground, mainly during the prioritization, assessment, and appraisal steps. It is closed to the public, not clearly summarized in published documents and limited to the Ministry of Health, the regulatory agency, other Ministries, and experts with mostly clinical and/or pharmaceutical background. The views of stakeholders are only represented through consultation. Communication is the most commonly used form of stakeholder engagement.
Despite improvements in transparency of the Spanish HTA process for evaluating medicines, aspects related to stakeholder involvement and implementation of deliberative frameworks need further attention in order to achieve further legitimacy of the process.
This paper proposes an approach to determine efficient release prices on the Bordeaux en primeur (primary) market. The model exploits information from the secondary market to estimate efficient release prices. We apply the model to a representative sample of wines from the 2021 vintage. The results show that most chateaux released their wines at prices that were too high. The median overpricing is 5.2% but exceeds 30% for some wines. This situation may be partially attributed to excessively uniform pricing caused by the tendency of chateaux with similar status to release their wines at similar price levels.
This essay is a review of and tribute to the life and contributions of Nina Shapiro, who passed away this year. Shapiro was an American Post-Keynesian economist, who was a bridge figure in radical economics, connecting Marx to Keynes, Schumpeter to Kaldor, the behavior of the firm to the dynamics of the macroeconomy, and the process of innovation to the organization of production and accumulation. She was seminal to important moments in the history of radical economics in the US, including the formation of the Hegel-inspired journal Social Concept in the 1980s and the Rutgers University’s Post-Keynesian circle in the 1980s and 1990s. Shapiro’s deeply philosophical and dialectical approach to firm behavior, innovation, and business cycles led her to theorize the “revolutionary character” of Post-Keynesian economics and to formulate a critique of the competitive neoclassical firm which, she argued, is at odds with the logic of capitalism in which firms seek to make profit and grow.
In previous chapters, the book considered instances of lacking access to vaccines, attributable to supra-competitive pricing or skewed allocation of limited doses. This chapter shifts the narrative toward emerging scenarios in which different types of barriers stand in the way of the ultimate goal of having robust vaccine distribution and uptake among all populations in need.
Most people want to live long and they want to live well. Quantity of life is experienced through the lens of quality – surviving is not enough without thriving. And the whole idea of quality only exists within the broader reality of the scarcity and uncertainty that is inherent in life. We can acknowledge this truth without allowing it to paralyze us. We can live with the knowledge that life is finite and that its end – in both timing and circumstances – is uncertain. Still, living in constant fear of illness and death can wreck an otherwise good span of years.
In this chapter, we seek to understand key economic consequences of network effects. First, in Section 3.1, we analyze the impacts that network effects have on the demand for participation on a platform. The main lesson we draw is that the interdependence between individual demands leads to unconventional aggregate demands; in particular, we show that a given price for accessing the platform may be compatible with several levels of participation. Next, in Section 3.2, we explore the pricing of access to a platform, which is made complex by the presence of network effects. Finally, in Section 3.3, we discuss other strategic decisions that platforms need to combine with pricing to manage network effects; in particular, a platform has to decide the extent to which its services are compatible with alternative services.
Digital platforms controlled by Alibaba, Alphabet, Amazon, Facebook, Netflix, Tencent and Uber have transformed not only the ways we do business, but also the very nature of people's everyday lives. It is of vital importance that we understand the economic principles governing how these platforms operate. This book explains the driving forces behind any platform business with a focus on network effects. The authors use short case studies and real-world applications to explain key concepts such as how platforms manage network effects and which price and non-price strategies they choose. This self-contained text is the first to offer a systematic and formalized account of what platforms are and how they operate, concisely incorporating path-breaking insights in economics over the last twenty years.
SARS-CoV-2 has unleashed an unprecedented global crisis that has caused the demand for essential goods, such as medical and sanitation products, to soar while simultaneously disrupting the very supply chains that allow individuals and institutions to obtain those essential goods. This has resulted in stark price increases and accusations of price gouging. We survey the existing philosophical literature that examines price gouging and identify the key arguments for regulators permitting such behavior and for regulators restricting such behavior. We demonstrate how the existing accounts are designed for localized emergencies rather than global persistent crises such as the coronavirus pandemic. In light of this, we highlight an understudied justification for price gouging that is much more salient during global crises: incentivizing increased production of essential goods. Furthermore, we pinpoint three conditions that help determine whether authorities should restrict price gouging during the coronavirus pandemic and similar global crises.
Here we study a fairly general jump–diffusion price process. We investigate the existence of equivalent martingale meaures, derive the Hansen–Jagannathan bounds, and extend the theory to include dividends. Completeness questions are discussed in some detail, and we also develop the theory for change of numeraire.
We present an introductory example featuring a stock price process driven by a Poisson process. This is analyzed in some detail using both the classical Black–Scholes and the modern martingale technique.
This chapter considers the key characteristics of the digitalised business models discussed in Chapter 2 and outlines seven key challenges to the current international tax system devised by the 1920s compromise. These are the vanishing ability to tax business profits, the use of data (and the corresponding difficulties of assessing contribution and value), the reliance and mobility of intellectual property, the characterisation of income, the failure of transfer pricing in certain multinational transactions, the inadequacy of residence-based taxation and, lastly, competition by states.These issues remain, making the current international tax system fragile to the expansion of highly digitalised business notwithstanding the outstanding and prompt action by the OECD on the BEPS action plan.
In most industrialised countries, one of the major societal challenges is the demographic change coming along with the ageing of the population. The increasing life expectancy observed over the last decades underlines the importance to find ways to appropriately cover the financial needs of the elderly. A particular issue arises in the area of health, where sufficient care must be provided to a growing number of dependent elderly in need of long-term care (LTC) services. In many markets, the offering of life insurance products incorporating care options and LTC insurance products is generally scarce. In our research, we therefore examine a life annuity product with an embedded care option potentially providing additional financial support to dependent persons. To evaluate the care option, we determine the minimum price that the annuity provider requires and the policyholder’s willingness to pay for the care option. For the latter, we employ individual utility functions taking account of the policyholder’s condition. We base our numerical study on recently developed transition probability data from Switzerland. Our findings give new and realistic insights into the nature and the utility of life annuity products proposing an embedded care option for tackling the financing of LTC needs.
Enhancing research and development and ensuring equitable pricing and access to cutting-edge treatments are both vital to a biopharmaceutical innovation system that works in the public interest. However, despite delivering numerous therapeutic advances, the existing system suffers from major problems: a lack of directionality to meet key needs, inefficient collaboration, high prices that fail to reflect the public contribution, and an overly-financialized business model.
This chapter provides further context to the impact of project finance mechanisms by examining the Ugandan Bujagali Hydroelectric Power Project referred to in the Preface. This case study is different from the others. It focusses on the interface of contractual and policy instruments with indigenous peoples’ rights to land and then casts the net wider to examine how complex pricing terms and the inequitable negotiation of concessionary power purchase agreements (PPA), in which the government is the end buyer, will have implications for overall vulnerability; for example, by locking governments into an overall bad deal in which all the risk is passed onto the state which has little control over spiralling electricity costs. Thinking about these debt contract–community linkages and what might be done within the context of an important negotiated contract such as the PPA is crucial for two reasons: that of the spread of supposedly cleaner and greener hydroelectric projects worldwide to meet energy demand and the growth of the ‘people first’ trend in public-private partnerships in the quest to mobilise the private sector towards the Sustainable Development Goals.
This work quantitatively assesses the potential reasons behind the difference in prices paid by care home residents in England. Evidence suggests that the price paid by private payers is higher than that paid for publicly supported residents, and this is often attributed to the market power wielded by local authorities as the dominant purchaser in local markets. Estimations of private prices at the local authority level are used to assess the difference in price paid between private and public prices, the fees gap, using data from 2008 to 2010. Controlling for local area and average care home characteristics, the results indicate that both care home and local authority market power play a role in the price determination of the market.