Welfare maximization, pricing, and allocation with a product performance or environmental quality standard: Illustration for the gasoline and additives market

• Published in: International journal of production economics Vol. 101; no. 2; pp. 230 - 245
• Main Authors: Gallagher, Paul W., Shapouri, Hosein, Price, Jeffrey
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.06.2006; Elsevier; Elsevier Sequoia S.A
• Series: International Journal of Production Economics
• Subjects: Blending; Competition; Economic models; Ethanol; Gasoline; Gasoline additives; Pricing; Pricing policies; Processing; Regulation; Studies; Supply & demand; Regulation; Blending; Ethanol; Gasoline additives; Pricing; Processing

Programming models approximate market prices and quantities when regulations constrain firm choices, because market outcomes result when welfare is appropriately defined and includes performance and environmental constraints. This study discusses market operation in quality-constrained sectors, like...