Vertical Product Differentiation, Entry-Deterrence Strategies, and Entry Qualities, September 2005

We analyze the entry of a new product into a vertically differentiated market in which an entrant and an incumbent compete in prices. Here the entry-deterrence strategies of the incumbent firm rely on “limit qualities.” With a sequential choice of quality, a quality-dependent marginal production cost, and a fixed entry cost, we relate the entry-quality decision and the entry-deterrence strategies to the level of entry cost and the degree of consumer heterogeneity. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well as an incumbent’s aggressive entry-deterrence strategies of increasing its quality level toward potential entry. Welfare evaluation confirms that social welfare is not necessarily improved when entry is encouraged rather than deterred.

Managing Quality under Heterogeneous Consumer Demand and Product Quality, October 2005

Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service profit chain approaches to marketing. The model is then used to explain several empirical results pertaining to the marketing literature by explicitly articulating the trade-offs between customer satisfaction and costs (including opportunity costs) of quality. In this environment firms will find it optimal to allow some customers to go unsatisfied. We show that the relationship between the expected number of repeated purchases by an individual customer is endogenous to the choice of quality by the firm, indicating that the number of purchases cannot be chosen freely to estimate a customer’s lifetime value.

Discounting Spotted Apples: Investigating Consumers’ Willingness to Accept Cosmetic Damage in an Organic Product, November 2006

Organic producers have limited methods of avoiding plant diseases that result in cosmetic damage to produce. Therefore, the appearance of organic produce is often less than perfect. We use an experimental auction to investigate how cosmetic damage affects consumers’ willingness to pay for organic apples. We find that 75% of the participants are willing to pay more for organic than for conventional apples given identical appearance. However, at the first sight of any imperfection in the appearance of the organic apples, this segment is significantly reduced. Furthermore, we find that there is a significant effect of interaction between cosmetic damage and product methods. Even though most consumers say they buy organic products to avoid pesticides, we find that cosmetic damage has a larger impact on the willingness to pay for organic apples than for conventional apples.

Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets, 2007

Projections of U.S. ethanol production and its impacts on planted acreage, crop prices, livestock production and prices, trade, and retail food costs are presented under the assumption that current tax credits and trade policies are maintained. The projections were made using a multi-product, multi-country deterministic partial equilibrium model. The impacts of higher oil prices, a drought combined with an ethanol mandate, and removal of land from the Conservation Reserve Program (CRP) relative to baseline projections are also presented. The results indicate that expanded U.S. ethanol production will cause long-run crop prices to increase. In response to higher feed costs, livestock farmgate prices will increase enough to cover the feed cost increases. Retail meat, egg, and dairy prices will also increase. If oil prices are permanently $10-per-barrel higher than assumed in the baseline projections, U.S. ethanol will expand significantly. The magnitude of the expansion will depend on the future makeup of the U.S. automobile fleet. If sufficient demand for E-85 from flex-fuel vehicles is available, corn-based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices. The direct effect of higher feed costs is that U.S. food prices would increase by a minimum of 1.1% over baseline levels. Results of a model of a 1988-type drought combined with a large mandate for continued ethanol production show sharply higher crop prices, a drop in livestock production, and higher food prices. Corn exports would drop significantly, and feed costs would rise. Wheat feed use would rise sharply. Taking additional land out of the CRP would lower crop prices in the short run. But because long-run corn prices are determined by ethanol prices and not by corn acreage, the long-run impacts on commodity prices and food prices of a smaller CRP are modest. Cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the Corn Belt under any of the scenarios. This is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of cornbased ethanol. So long as producers can choose between soybeans for biodiesel, switchgrass for ethanol, and corn for ethanol, they will choose to grow corn. Cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial-sized ethanol facility.

Improving Transition Outcomes: MyTransitionIowa.org Resource Mapping Product

Information about Improving Transition Outcomes statewide resource mapping product.

Asphalt Cement Concrete Longitudinal Joint Adhesive Crafco PN 34524 (Iowa DOT New Product C-98-7), HR-2084, 2000

The joint between two lanes of asphalt pavement is often the first area of a roadway which shows signs of deterioration and requires maintenance. As the final lift of hot asphalt is being placed in a construction project, it is being forced p against the adjoining lane of cold asphalt, forming the longitudinal joint. The mating of the two lanes, to form a high quality seal, is often not fully successful and later results in premature stripping or raveling as water enters the unsealed joint. The application of a hot poured rubberized asphaltic joint sealant along the joint face in the final stage of construction should help to form a watertight joint seal. A new product, especially formulated for the longitudinal joint in asphalt pavements was proposed to improve joint sealing. The following describes the experimental application of the new product, Crafco, PN 34524.

Development of an Improved Agricultural-Based Deicing Product, TR-581, 2010

Snow and ice removal on public streets is a critical part of the work of departments of transportation in northern U.S. states, including Iowa. Iowa is also a state rich in agricultural resources, some of which undergo industrial processes that generate a number of byproducts, e.g., in converting corn to ethanol or soy to biodiesel. It would be desirable to find those that, with a minimum of additional processing, can be used as a deicing compound, either alone or in combination with products currently in use. The focus of this work is therefore to investigate by-products from agricultural processes that may be suitable for use as deicing applications. This topic has been investigated in the past by others, with many patented products described in the literature. An initial screening was carried out to assess the potential acceptability of selected commercial products, as well as a glycerol developed for this project. Based on the variety of parameters tested, the product combination that shows the greatest promise for future application consists of 80% glycerol with 20% NaCl.

Time-Temperature Strength-Reaction Product Relationships in Lime-Bentonite-Water Mixtures, HR-111, 1965

The interrelation of curing time, curing temperature, strength, and reactions in lime-bentonite-water mixtures was examined. Samples were molded at constant density and moisture content and then cured for periods of from 1 to 56 days at constant temperatures that ranged from 5C to 60C. After the appropriate curing time the samples were tested for unconfined compressive strength. The broken samples were then analyzed by x-ray diffractometer and spectrophotometer to determine the identity of the reaction products present after each curing period. It was found that the strength gain of lime-clay mixtures cured at different temperatures is due to different phases of the complex reaction, lime & clay to CSH(gel) to CSH(II) to CSH(I) to tobermorite. The farther the reaction proceeds, the higher the strength. There was also evidence of lattice substitutions in the structure of the calcium silicate hydrates at curing temperatures of 50C and higher. No consistent relationship between time, temperature, strength, and the S/A ration of reaction products existed, but in order to achieve high strengths the apparent C/S ration had to be less than two. The curing temperature had an effect on the strength developed by a given amount of reacted silica in the cured lime-clay mixture, but at a given curing temperature the cured sample that had the largest amount of reacted silica gave the highest strength. Evidence was found to indicate that during the clay reaction some calcium is indeed adsorbed onto the clay structure rather than entering into a pozzolanic reaction. Finally, it was determined that it is possible to determine the amount of silica and alumina in lime-clay reaction products by spectrophotometric analysis with sufficient accuracy for comparison purposes. The spectrophotometric analysis techniques used during the investigation were simple and were not time consuming.

Biofuel Co-Product Uses for Pavement Geo-Materials Stabilization, TR-582, 2010

The production and use of biofuels has increased in the present context of sustainable development. Biofuel production from plant biomass produces not only biofuel or ethanol but also co-products containing lignin, modified lignin, and lignin derivatives. This research investigated the utilization of lignin-containing biofuel co-products (BCPs) in pavement soil stabilization as a new application area. Laboratory tests were conducted to evaluate the performance and the moisture susceptibility of two types of BCP-treated soil samples compared to the performance of untreated and traditional stabilizer-treated (fly ash) soil samples. The two types of BCPs investigated were (1) a liquid type with higher lignin content (co-product A) and (b) a powder type with lower lignin content (co-product B). Various additive combinations (co-product A and fly ash, co-products A and B, etc.) were also evaluated as alternatives to stand-alone co-products. Test results indicate that BCPs are effective in stabilizing the Iowa Class 10 soil classified as CL or A-6(8) and have excellent resistance to moisture degradation. Strengths and moisture resistance in comparison to traditional additives (fly ash) could be obtained through the use of combined additives (co-product A + fly ash; co-product A + co-product B). Utilizing BCPs as a soil stabilizer appears to be one of the many viable answers to the profitability of the bio-based products and the bioenergy business. Future research is needed to evaluate the freeze-thaw durability and for resilient modulus characterization of BCP-modified layers for a variety of pavement subgrade and base soil types. In addition, the long-term performance of these BCPs should be evaluated under actual field conditions and traffic loadings. Innovative uses of BCP in pavement-related applications could not only provide additional revenue streams to improve the economics of biorefineries, but could also serve to establish green road infrastructures.