The costs and benefits in an unusual symbiosis: experimental evidence that bitterling fish (Rhodeus sericeus) are parasites of unionid mussels in Europe

Interspecific symbiotic relationships involve a complex network of interactions, and understanding their outcome requires quantification of the costs and benefits to both partners. We experimentally investigated the costs and benefits in the relationship between European bitterling fish (Rhodeus sericeus) and freshwater mussels that are used by R. sericeus for oviposition. This relationship has hitherto been thought mutualistic, on the premise that R. sericeus use mussels as foster parents of their embryos while mussels use R. sericeus as hosts for their larvae. We demonstrate that R. sericeus is a parasite of European mussels, because it (i) avoids the cost of infection by mussel larvae and (ii) imposes a direct cost on mussels. Our experiments also indicate a potential coevolutionary arms race between bitterling fishes and their mussel hosts; the outcome of this relationship may differ between Asia, the centre of distribution of bitterling fishes, and Europe where they have recently invaded.

International transport costs and the margins of Intra-Latin American maritime trade.

This paper focuses on the analysis of the relationship between maritime trade and transport cost in Latin America. The analysis is based on disaggregated (SITC 5 digit level) trade data for intra Latin maritime trade routes over the period 1999-2004. The research contributes to the literature by disentangling the effects of transport costs on the range of traded goods (extensive margin) and the traded volumes of goods (intensive margin) of international trade in order to test some of the predictions of the trade theories that introduce firm heterogeneity in productivity, as well as fixed costs of exporting. Recent investigations show that spatial frictions (distance) reduce trade mainly by trimming the number of shipments and that most firms ship only to geographically proximate customers, instead of shipping to many destinations in quantities that decrease in distance. Our analyses confirm these findings and show that the opposite pattern is observed for ad-valorem freight rates that reduce aggregate trade values mainly by reducing the volume of imported goods (intensive margin).

Workers' compensation in the United States: high costs, low benefits

Studies suggest that income replacement is low for many workers with serious occupational injuries and illnesses. This review discusses three areas that hold promise for raising benefits to workers while reducing workers' compensation costs to employers: improving safety, containing medical costs, and reducing litigation. In theory, workers' compensation increases the costs to employers of injuries and so provides incentives to improve safety. Yet, taken as a whole, research does not provide convincing evidence that workers' compensation reduces injury rates. Moreover, unlike safety and health regulation, workers' compensation focuses the attention of employers on individual workers. High costs may lead employers to discourage claims and litigate when claims are filed. Controlling medical costs can reduce workers' compensation costs. Most studies, however, have focused on costs and have not addressed the effectiveness of medical care or patient satisfaction. Research also has shown that workers' compensation systems can reduce the need for litigation. Without litigation, benefits can be delivered more quickly and at lower costs.

A Characterization of First-Order Definable Subsets on Classes of Finite Total Orders

We give an explicit and easy-to-verify characterization for subsets in finite total orders (infinitely many of them in general) to be uniformly definable by a first-order formula. From this characterization we derive immediately that Beth's definability theorem does not hold in any class of finite total orders, as well as that McColm's first conjecture is true for all classes of finite total orders. Another consequence is a natural 0-1 law for definable subsets on finite total orders expressed as a statement about the possible densities of first-order definable subsets.

"Call for prices": Strategic implications of raising consumers' costs

Many consumer durable retailers often do not advertise their prices and instead ask consumers to call them for prices. It is easy to see that this practice increases the consumers' cost of learning the prices of products they are considering, yet firms commonly use such practices. Not advertising prices may reduce the firm's advertising costs, but the strategic effects of doing so are not clear. Our objective is to examine the strategic effects of this practice. In particular, how does making price discovery more difficult for consumers affect competing retailers' price, service decisions, and profits? We develop a model in which a manufacturer sells its product through a high-service retailer and a low-service retailer. Consumers can purchase the retail service at the high-end retailer and purchase the product at the competing low-end retailer. Therefore, the high-end retailer faces a free-riding problem. A retailer first chooses its optimal service levels. Then, it chooses its optimal price levels. Finally, a retailer decides whether to advertise its prices. The model results in four structures: (1) both retailers advertise prices, (2) only the low-service retailer advertises price, (3) only the high-service retailer advertises price, and (4) neither retailer advertises price. We find that when a retailer does not advertise its price and makes price discovery more difficult for consumers, the competition between the retailers is less intense. However, the retailer is forced to charge a lower price. In addition, if the competing retailer does advertise its prices, then the competing retailer enjoys higher profit margins. We identify conditions under which each of the above four structures is an equilibrium and show that a low-service retailer not advertising its price is a more likely outcome than a high-service retailer doing so. We then solve the manufacturer's problem and find that there are several instances when a retailer's advertising decisions are different from what the manufacturer would want. We describe the nature of this channel coordination problem and identify some solutions. © 2010 INFORMS.

Improving supply chain performance: Real-time demand information and flexible deliveries

In some supply chains, materials are ordered periodically according to local information. This paper investigates how to improve the performance of such a supply chain. Specifically, we consider a serial inventory system in which each stage implements a local reorder interval policy; i.e., each stage orders up to a local basestock level according to a fixed-interval schedule. A fixed cost is incurred for placing an order. Two improvement strategies are considered: (1) expanding the information flow by acquiring real-time demand information and (2) accelerating the material flow via flexible deliveries. The first strategy leads to a reorder interval policy with full information; the second strategy leads to a reorder point policy with local information. Both policies have been studied in the literature. Thus, to assess the benefit of these strategies, we analyze the local reorder interval policy. We develop a bottom-up recursion to evaluate the system cost and provide a method to obtain the optimal policy. A numerical study shows the following: Increasing the flexibility of deliveries lowers costs more than does expanding information flow; the fixed order costs and the system lead times are key drivers that determine the effectiveness of these improvement strategies. In addition, we find that using optimal batch sizes in the reorder point policy and demand rate to infer reorder intervals may lead to significant cost inefficiency. © 2010 INFORMS.

The impact of geologic variability on capacity and cost estimates for storing CO 2 in deep-saline aquifers

While numerous studies find that deep-saline sandstone aquifers in the United States could store many decades worth of the nation's current annual CO 2 emissions, the likely cost of this storage (i.e. the cost of storage only and not capture and transport costs) has been harder to constrain. We use publicly available data of key reservoir properties to produce geo-referenced rasters of estimated storage capacity and cost for regions within 15 deep-saline sandstone aquifers in the United States. The rasters reveal the reservoir quality of these aquifers to be so variable that the cost estimates for storage span three orders of magnitude and average>$100/tonne CO 2. However, when the cost and corresponding capacity estimates in the rasters are assembled into a marginal abatement cost curve (MACC), we find that ~75% of the estimated storage capacity could be available for<$2/tonne. Furthermore, ~80% of the total estimated storage capacity in the rasters is concentrated within just two of the aquifers-the Frio Formation along the Texas Gulf Coast, and the Mt. Simon Formation in the Michigan Basin, which together make up only ~20% of the areas analyzed. While our assessment is not comprehensive, the results suggest there should be an abundance of low-cost storage for CO 2 in deep-saline aquifers, but a majority of this storage is likely to be concentrated within specific regions of a smaller number of these aquifers. © 2011 Elsevier B.V.

Physical and economic potential of geological CO2 storage in saline aquifers.

Carbon sequestration in sandstone saline reservoirs holds great potential for mitigating climate change, but its storage potential and cost per ton of avoided CO2 emissions are uncertain. We develop a general model to determine the maximum theoretical constraints on both storage potential and injection rate and use it to characterize the economic viability of geosequestration in sandstone saline aquifers. When applied to a representative set of aquifer characteristics, the model yields results that compare favorably with pilot projects currently underway. Over a range of reservoir properties, maximum effective storage peaks at an optimal depth of 1600 m, at which point 0.18-0.31 metric tons can be stored per cubic meter of bulk volume of reservoir. Maximum modeled injection rates predict minima for storage costs in a typical basin in the range of $2-7/ ton CO2 (2005 U.S.$) depending on depth and basin characteristics in our base-case scenario. Because the properties of natural reservoirs in the United States vary substantially, storage costs could in some cases be lower or higher by orders of magnitude. We conclude that available geosequestration capacity exhibits a wide range of technological and economic attractiveness. Like traditional projects in the extractive industries, geosequestration capacity should be exploited starting with the low-cost storage options first then moving gradually up the supply curve.

The price of innovation: new estimates of drug development costs.

The research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.

R&D Costs and Returns to New Drug Development: A Review of the Evidence

© 2012 by Oxford University Press. All rights reserved.This article reviews the extensive literature on R&D costs and returns. The first section focuses on R&D costs and the various factors that have affected the trends in real R&D costs over time. The second section considers economic studies on the distribution of returns in pharmaceuticals for different cohorts of new drug introductions. It also reviews the use of these studies to analyze the impact of policy actions on R&D costs and returns. The final section concludes and discusses open questions for further research.

Carbon mitigation costs for the commercial building sector: Discrete-continuous choice analysis of multifuel energy demand

We estimate a carbon mitigation cost curve for the U.S. commercial sector based on econometric estimation of the responsiveness of fuel demand and equipment choices to energy price changes. The model econometrically estimates fuel demand conditional on fuel choice, which is characterized by a multinomial logit model. Separate estimation of end uses (e.g., heating, cooking) using the U.S. Commercial Buildings Energy Consumption Survey allows for exceptionally detailed estimation of price responsiveness disaggregated by end use and fuel type. We then construct aggregate long-run elasticities, by fuel type, through a series of simulations; own-price elasticities range from -0.9 for district heat services to -2.9 for fuel oil. The simulations form the basis of a marginal cost curve for carbon mitigation, which suggests that a price of $20 per ton of carbon would result in an 8% reduction in commercial carbon emissions, and a price of $100 per ton would result in a 28% reduction. © 2008 Elsevier B.V. All rights reserved.

The dynamic efficiency costs of common-pool resource exploitation

We conduct the first empirical investigation of common-pool resource users' dynamic and strategic behavior at the micro level using real-world data. Fishermen's strategies in a fully dynamic game account for latent resource dynamics and other players' actions, revealing the profit structure of the fishery. We compare the fishermen's actual and socially optimal exploitation paths under a time-specific vessel allocation policy and find a sizable dynamic externality. Individual fishermen respond to other users by exerting effort above the optimal level early in the season. Congestion is costly instantaneously but is beneficial in the long run because it partially offsets dynamic inefficiencies.

Impact of coverage-dependent marginal costs on optimal HPV vaccination strategies.

The effectiveness of vaccinating males against the human papillomavirus (HPV) remains a controversial subject. Many existing studies conclude that increasing female coverage is more effective than diverting resources into male vaccination. Recently, several empirical studies on HPV immunization have been published, providing evidence of the fact that marginal vaccination costs increase with coverage. In this study, we use a stochastic agent-based modeling framework to revisit the male vaccination debate in light of these new findings. Within this framework, we assess the impact of coverage-dependent marginal costs of vaccine distribution on optimal immunization strategies against HPV. Focusing on the two scenarios of ongoing and new vaccination programs, we analyze different resource allocation policies and their effects on overall disease burden. Our results suggest that if the costs associated with vaccinating males are relatively close to those associated with vaccinating females, then coverage-dependent, increasing marginal costs may favor vaccination strategies that entail immunization of both genders. In particular, this study emphasizes the necessity for further empirical research on the nature of coverage-dependent vaccination costs.