This study investigates an original equipment manufacturer's (OEM's) outsourcing choice between a competing manufacturer (CP) and a non‐competing manufacturer (NP). We develop a benchmark ...self‐produce strategy and two outsourcing strategies to differentiate two manufacturing service providers, and examine the optimal strategy alongside an analysis of the respective incentives (e.g., a lump‐sum payment) from the two service providers. The optimal strategy depends on the difference in production efficiency, degree of product substitution, and joint effect of the transfer payments. The transfer payments contribute to a greater range of Pareto improvements, increasing the possibility of outsourcing cooperation while highlighting the role of competition intensity on the model and outsourcing cooperation partner. Effect analysis shows that in the absence of transfer payment, the optimal strategy is beneficial to social welfare. With transfer payment, the optimal strategy is changed and the firms will be more profitable, but at the expense of customers' surplus, which may result in worse social welfare. An extended analysis of mixed strategies, in which the OEM produces part of the products and outsources the rest to CP/NP, shows that while the mixed‐CP strategy can be an optimal choice, the mixed‐NP strategy will degenerate to either self‐produce or complete outsourcing to NP under certain conditions.
With the rapid advent of e-commerce in China, the technological innovation of third-party payment has experienced explosive growth. This important technological innovation, initiated by emerging ...Internet companies, is helping the traditional financial industry's payment business—represented by commercial banks—expand in both depth and breadth. Meanwhile, there is also a large degree of substitution, competition and crowding out among these banks in terms of the traditional financial industry's basic payment and settlement functions, potential customers, deposit and loan services and traditional intermediary business. This paper explores the impact (episodic and long-term steady-state) of the technological innovation of payment on commercial banks. It also considers the impact of technological innovation on industrial evolution to clarify whether technological innovation offsets the advantages of traditional industries or promotes industrial development. This study adopts the Vector Auto-Regression (VAR) impulse response model to analyze the impact of Internet Third-Party Payment (TPP) on the traditional financial industry from 2007 to 2014. The empirical results suggest that in China, third-party payments have had a significant positive correlation with the value creation capabilities of traditional financial industries, and that this relationship tends to remain in a steady state in the long term. Based on these findings, this paper confirms that the technological innovation of methods of payment in emerging economies, such as China, has promoted the development of the financial industry and accelerated the process of industrial evolution. We conclude the paper with feasible policy suggestions.
•Technology innovation is more driven by demand rather than supply.•Technology innovation drives the development of financial industry.•Innovation affected financial industrial development in both short and long terms.
Protecting households from high out-of-pocket (OOP) payments for health care is an important health system goal. High OOP payments can push households into poverty and make them vulnerable to ...catastrophic health expenditures. This study, based in India, aims to: (a) estimate OOP payments for health and related impoverishment across economic groups; (b) decompose OOP payments and relate the contribution of their components to impoverishment; and (c) examine how well recently introduced national insurance schemes meant for the poor are able to provide financial protection. The analysis of nationally representative data from India shows that 3.5% of the population fall below the poverty line and 5% households suffer catastrophic health expenditures. The poverty deepening impact of OOP payments was at a maximum in people below the poverty line in comparison with those above (Rs. 10.45 vs. Rs. 1.50, respectively). Medicines constitute the main share (72%) of total OOP payments. This share reaches 82% for outpatient care, compared with 42% for inpatient care. Removing OOP payments for inpatient care leads to a negligible fall in the poverty headcount ratio and poverty gap. However, if OOP payments for either medicines or outpatient care are removed then only 0.5% people fall into poverty due to spending on health. These findings suggest that insurance schemes which cover only hospital expenses, like those being rolled out nationally in India, will fail to adequately protect the poor against impoverishment due to spending on health. Further, issues related to identifying the poor and their targeting also constrain the scheme's impact. A broader coverage of benefits, to include medicines and outpatient care for the poor and near poor (i.e. those just above the poverty line), is necessary to achieve significant protection from impoverishment.
•Theories about PES impact pathways have become more nuanced over time.•PES outcomes are often determined by known scheme design and context factors.•PES research still lacks a systematic evidence ...base.•A stronger social-ecological perspective is needed in PES research.
We adopt a theory-based approach to synthesize research on the effectiveness of payments for environmental services in achieving environmental objectives and socio-economic co-benefits in varying contexts. Our theory of change builds on established conceptual models of impact pathways and highlights the role of (1) contextual dimensions (e.g., political, institutional, and socio-economic conditions, spatial heterogeneity in environmental service values and provision costs, and interactions with pre-existing policies), and (2) scheme design (e.g., payment type and level, contract length, targeting, and differentiation of payments) in determining environmental and socio-economic outcomes. To shed light on the overall effectiveness of payment schemes, and its determinants, we review counterfactual-based empirical evaluations, comparative analyses of case-studies, and meta-analyses. Our review suggests that program effectiveness often lags behind the expectations of early theorists. However, we also find that theory has advanced sufficiently to identify common reasons for why payment schemes fail or succeed. Moreover, payment schemes are often rolled out along with other policy instruments in so-called policy mixes. Advances in theory and evaluation research are needed to improve our understanding of how such policy mixes interact with the targeted social-ecological systems.
This study aimed to examine the effects of perceived risk, perceived benefits, and trust on consumers’ intention to use mobile payment, or m‐payment. In addition, different effects of some ...demographic factors (e.g., income, age, education) on m‐payment usage were examined. The sample of 457 respondents was used to analyze the causal relationships between the variables and the mean differences of demographic factors in consumer intention to use m‐payment. The results supported the negative relationship between perceived risk, trust, and consumer intention to use m‐payment. A positive relationship between perceived benefits and trust was found. This study revealed that trust mediated consumer intention to use m‐payment. In individual differences of m‐payment adoption, education influenced the relationship between perceived risk and intention to use m‐payments as well as the relationship between trust and intention to use m‐payment. This study provided insights into consumer differences regarding m‐payment adoption and the mediating role of trust between perceived benefits, perceived risk, and intention to use m‐payment.
PurposeThis study aims to investigate the actual usage (AU) of digital payment systems by the consumers during the period of demonetization (from November 9, 2016 to December 30, 2016) in ...India.Design/methodology/approachThe conceptual frame work for this study is based on the unified theory of acceptance and use of technology (UTAUT 2) and innovation resistance theory. A total of 766 sample respondents were surveyed using a pre-tested questionnaire. The empirical validation of the framework and analysis was done using partial least squares (PLS)-structural equation modeling (SEM) technique.FindingsThe results suggest that the behavioral intention (BI) to use and innovation resistance (IR) affect the usage of digital payment systems. The relation between BI to use digital payment systems and the AU of digital payment systems is moderated by the stickiness to cash payments.Research limitations/implicationsThis cross-sectional study is limited by geographic constraints and highlights the AU of digital payment systems by using the UTAUT 2 and IR theory only during the demonetization period.Practical implicationsThis study offers valuable insights to the economists, policymakers and digital payment service providers regarding the usage of digital payment systems by consumers during demonetization.Originality/valueThis study assumes importance as it empirically examines the influence of BI and IR on the AU of digital payment systems during the demonetization period in India. This study empirically validates the moderating influence of stickiness to cash payments on the AU of digital payment systems.
Policy Points
The predominantly fee‐for‐service reimbursement architecture of the US health care system contributes to waste and excess spending.
While the past decade of payment reforms has ...galvanized the adoption of alternative payment models and generated moderate savings, uptake of truly population‐based payment systems continues to lag, and interventions to date have had limited impact on care quality, outcomes, and health equity.
To realize the promise of payment reforms as instruments for delivery system transformation, future policies for health care financing must focus on accelerating the diffusion of value‐based payment, leveraging payments to redress inequities, and incentivizing partnerships with cross‐sector entities to invest in the upstream drivers of health.
Does the payment scheme have an effect on inventory decisions in the newsvendor problem? Keeping the net profit structure constant, we examine three payment schemes that can be interpreted as the ...newsvendor's order being financed by the newsvendor herself (scheme O), by the supplier through delayed order payment (scheme S), and by the customer through advanced revenue (scheme C). In a laboratory study, we find that inventory quantities exhibit a consistent decreasing pattern in the order of schemes O, S, and C, with the order quantities of scheme S being close to the expected-profit-maximizing solution. These observations are inconsistent with the expected-profit-maximizing model, contradict what a regular or hyperbolic time-discounting model would predict, and cannot be explained by the loss aversion model. Instead, they are consistent with a model that underweights the order-time payments, which can be explained by the "prospective accounting" theory in the mental accounting literature. A second study shows that the results hold even if all physical payments are conducted at the same time, suggesting that the framing of the payment scheme is sufficient to induce the prospective accounting behavior. We further validate the robustness of our model under different profit conditions. Our findings contribute to the understanding of the psychological processes involved in newsvendor decisions and have implications for supply chain financing and contract design.
This paper was accepted by Christian Terwiesch, operations management.
Payers are considering bundled payments for inpatient surgery, combining provider reimbursements into a single payment for the entire episode. We found that current Medicare episode payments for ...certain inpatient procedures varied by 49-130 percent across hospitals sorted into five payment groups. Intentional differences in payments attributable to such factors as geography or illness severity explained much of this variation. But after adjustment for these differences, per episode payments to the highest-cost hospitals were higher than those to the lowest-cost facilities by up to $2,549 for colectomy and $7,759 for back surgery. Postdischarge care accounted for a large proportion of the variation in payments, as did discretionary physician services, which may be driven in turn by variations in surgeons' practice styles. Our study suggests that bundled payments could yield sizable savings for payers, although the effect on individual institutions will vary because hospitals that were relatively expensive for one procedure were often relatively inexpensive for others. More broadly, our data suggest that many hospitals have considerable room to improve their cost efficiency for inpatient surgery and should look for patterns of excess utilization, particularly among surgical specialties, other inpatient specialist consultations, and various types of postdischarge care.
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