new human resource management practices complementarities and the impact on innovation performance in this paper we take our theoretical point of departure in recent work in organisational economics on systems of human resource management hrm practices we develop the argument that just as complementarities between new hrm practices influence financial performance positively there are theoretical reasons for expecting them also to influence innovation performance positively we examine this overall hypothesis by estimating an empirical model of innovation performance using data from a danish survey of 1 900 business firms using principal component analysis we identify two hrm systems which are conducive to innovation in the first one seven of our nine hrm variables matter almost equally for the ability to innovate the second system is dominated by firm internal and firm external training of the total of nine sectors that we consider we find that the four manufacturing sectors correlate with the first system firms belonging to wholesale trade and to the ict intensive service sectors tend to be associated with the second system

photovoltaic investment roadmaps and sustainable development abstract this paper analyzes the potential contributions of photovoltaic energy to sustainable development in its three dimensions environmental economic and social for that purpose the capacity deployments proposed by the main international institutions in the field are considered mainly the international energy agency the paper focuses on the monetary valuation of avoided co2 emissions and the assessment of the required financial funds the risk implied by the uncertain photovoltaic prices are dealt with and methods to manage it are suggested it is shown that valuing emission at a conservative price and properly discounted would be enough to finance on average the required investments thus a low carbon tax is all that would be required to finance the investments

non monotonic effects of market concentration on prices for residential solar photovoltaics in the united states abstract emerging renewable energy markets may become more concentrated over time as the most efficient firms accumulate market share the effects of this market concentration on prices are tested using a rich dataset of residential solar photovoltaic pv systems in the united states a novel hypothesis is explored that the effects of market concentration may be non monotonic prices may decline in market concentration due to efficiency gains associated with returns to scale but increase in concentration in already concentrated markets due to increasing market power the results of an econometric model provide evidence to support the non monotonic hypothesis however the data suggest that the relationship between prices and firm scale is nuanced and that both large and small scale pv installers may wield efficiency advantages

how do learning externalities influence the evaluation of ontario s renewables support policies abstract support programs for renewable electricity generation in ontario have been in place since 2005 including feed in tariffs and a competitive procurement process these programs have been criticized on a number of fronts in particular critics claim the level of support was excessive and creating surplus supply however prior studies have ignored one potential benefit of renewable energy support that it can help to promote cost reductions in new technologies through learning by doing this paper uses a recursive dynamic computable general equilibrium cge model featuring learning by doing effects to assess the renewable support programs provided in ontario our results in line with previous studies do not justify the high support rates paid in ontario given our core range of assumptions but our modeling approach allows us to identify the combination of key parameter values relating to learning effects and environmental damages that justify the observed rates these parameters are hard to measure empirically and our modeling approach introduces a new tool for examining the impact of variations in these parameters on policy analysis

dynamics of market structure advertising and profitability a var approach the purpose of this study is to provide an econometric characterization of the dynamic interrelationship among structure conduct and performance variables with a vector autoregressive var model particular attention will be given to the causality and response patterns of the variable involved in the light of our desire to ascertain descriptive characterizations of historical behaviour we let the data speak for itself the result suggests a weak realtionship existing between market structure and profitability

lifting the us crude oil export ban a numerical partial equilibrium analysis the upheaval in global crude oil markets and the boom in shale oil production in north america brought scrutiny on the us export ban for crude oil from 1975 the ban was eventually lifted in early 2016 this paper examines the shifts of global trade flows and strategic refinery investments in a spatial game theoretic partial equilibrium model we consider detailed oil supply chain infrastructure with multiple crude oil types distinct oil products as well as specific refinery configurations and modes of transport prices quantities produced and consumed as well as infrastructure and refining capacity investments are endogenous to the model we compare two scenarios an insulated us crude oil market and a counter factual with lifted export restrictions we find a significant expansion of us sweet crude exports with the lift of the export ban in the us refinery sector more imported heavy sour crude is transformed countries importing us sweet crude gain from higher product output while avoiding costly refinery investments producers of heavy sour crude e g the middle east are incentivised to climb up the value chain to defend their market share and maintain their dominant position

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

monitoring versus incentives abstract this paper analyzes the trade off between monitoring and incentives in a principal agent relationship with moral hazard we derive general results on the optimal monitoring incentives mix for the case where both parties are risk neutral and the agent faces a limited liability constraint we show that the principal uses less monitoring and stronger incentives if the agent s liability limit is relaxed or if monitoring costs increase to induce more effort on the part of the agent the principal resorts to more monitoring or to stronger incentives or both in particular there are cases where the cheapest way to induce more effort is to use lower powered money incentives but with much more precise monitoring

a re examination of the relationship between industry structure and economic performance the objective of this study is to develop a simultaneous equations model of profitability concentration advertising expenditures and research and development outlays the data used in the estimation are subjected to regression diagnostics in an effort to determine the importance to the estimation results of a subset of the data that can have a disproportionate influence the estimation results especially for the advertising expenditures relationship and the research and development outlays equation do change when a truncated data sample based on the omission of the outliers is used this serves partly to explain why there is some disagreement in the literature on market structure and economic performance with regard to the impact of several economic factors

emissions trading and technology deployment in an energy systems bottom up model with technology learning abstract an important criterion in the analysis of climate policy instruments is their ability to stimulate the technological change necessary to enable the long term shift towards a low carbon global energy system in this paper some effects of emissions trading on technology deployment when technology learning is endogenized are examined with a multi regional bottom up energy systems optimization markal model of the global energy system in this framework due to the action of spillovers of learning imposing emission constraints on a given region may affect the technology choice and emissions profiles of other unconstrained regions the effects depend on the geographical scale of the learning process but also on the presence of emissions trading the regions that join the trade system and their timing for doing so incorporating endogenous technology learning and allowing for spillovers across regions appears as an important mechanism for capturing the possibility of induced technological change due to environmental constraints in bottom up models

can technology specific deployment policies be cost effective the case of renewable energy support schemes can technology specific deployment policies be cost effective the case of renewable energy support schemes

is there a trade off between supervision and wages an empirical test of efficiency wage theory abstract the logic of efficiency wage theory suggests a trade off between wages and supervision this paper reports evidence that high levels of supervision are indeed associated with lower wage levels the empirical investigation centers on the effect that safety supervision by host employers has on the wages of contract maintenance workers in the petrochemical industry this narrow focus is important special institutional features of the contract employment relationship in petrochemicals make it possible to ameliorate econometric problems that may have influenced earlier studies

uncertainty and incentives empirical work testing for a trade off between risk and incentives has had at best mixed success this article provides two simple reasons associated with subjectivity of performance appraisals why we might not expect to see any negative relationship both reasons relate to empirically observed problems associated with monitoring i supervisors sometimes bias their evaluations based on their personal feelings toward their subordinates and ii supervisors will sometimes offer evaluations that reduce their costs these aspects of monitoring are ignored in the standard model and can reverse the usual negative trade off between risk and incentives

an empirical analysis of risk incentives and the delegation of worker authority the authors empirically test prendergast s 2002 theory that incorporates the delegation of worker authority into the principal agent model to explain the lack of consistent empirical support for a tradeoff between risk and incentives using data from the 1998 british wers the authors investigate whether there is 1 evidence of a risk incentives tradeoff as predicted by the principal agent model 2 evidence of a positive relationship between incentive pay and the delegation of worker authority 3 evidence of a positive relationship between risk and authority 4 support for the main testable implication of prendergast s model namely that the evidence favoring a risk incentives tradeoff should strengthen when authority controls are added to the empirical model the answers are affirmative for all four questions thereby providing evidence clarifying the relationship between risk and incentive pay and how managers optimally bundle incentive pay and the delegation of worker decision rights to cope with

pay performance sensitivity and production uncertainty abstract the pay performance sensitivity of linear incentive contracts can increase with increasing production uncertainty depending upon the timing and nature of this uncertainty this provides a possible explanation for the failure of empirical tests to yield convincing support for a negative relationship

industrial determinants of anti dumping in brazil protection competition and performance an analysis with binary dependent variable and panel data abstract this article investigates how sectorial characteristics determine the probability of industries receiving an anti dumping ad duty delving into the economic literature on the political economy of protection market competition and trade reform in brazil by focusing on when the ad was granted the article concentrates on the objective economic motivations for an industry to claim protection and which are instrumental to the decision of the trade defense authority the empirical strategy involves a panel of 93 industrial sectors from 1996 to 2007 to create four groups of explanatory variables collective action competition economic performance factors of production trade coefficients reflecting their structural characteristics market competition economic performance and political mobilization the econometric specifications apply binary dependent variable models logit with cluster robust and population averaged error correction the results show that structure of trade imports volume and tariffs economic performance productivity and investments and factor content labor and natural resources influence the probability of the ad political economy characteristics captured by interactive terms are also influential in determining the measure

r d market structure and profits a value based approach this paper considers a complex relation among r d market structure and a market value based measure of profits perhaps of greatest interest a positive effect of r d on profits emerges as does a negative r d concentration interaction effect both appear robust and support an intangible capital and rivalrous view of r d despite substantial interest in the question little direct evidence on research and development r d market structure and profits relations has appeared in the literature an important exception to this rule is grabowski and mueller hereafter g m 1978 who reported a strong effect of r d on adjusted profit rate data in addition to an equally strong negative r dmarket concentration interaction effect g m interpret their findings as support for an intangible capital and rivalrous view of r d alternatively they are also consistent with the hypothesis that firms in highly concentrated markets pursue r d less efficiently or take on riskier projects in any event g m s findings seem inconsistent with a view of r d as a barrier to entry see kamien and schwartz 1975 this study extends previous research in at least four respects first we adopt a market valued based measure of profits in order to avoid any bias inherent in accounting profit data due to an expense as incurred rather than capitalization and amortization treatment of r d advertising and similar expenditures second we evaluate simultaneous influences among profits r d advertising and concentration suggested but not tested previously third estimation results are derived using leamer s search technique which illustrates the sensitivity of estimates to alternate model specifications and fourth we consider an n 390 firm fortune 500 sample which is substantially larger than in previous studies including firms responsible for nearly 90 of private sector r d during 1977 estimation results should therefore be broadly indicative of the economic consequences of r d

advertising concentration and profitability in manufacturing advertising concentration and profitability in manufacturing i introduction economists have devoted much effort to empirically testing the hypothesized relationships between industrial concentration profits and advertising twenty years ago lester telser concluded that there is little empirical support for an inverse association between advertising and competition 1964 later other economists studying the relationship between advertising and concentration discovered a positive correlation between the four firm concentration ratio a measure of industry concentration and advertising intensity 1 strickland and weiss 1976 went further to show that there is a causal relationship between these elements increases in concentration cause advertising to intensify and conversely a rise in advertising intensity causes an increase in the level of concentration in recent years the empirical literature on advertising concentration and profitability has atrophied because of dissatisfaction with its theoretical basis as a new approach i adopt the theory of advertising developed by stigler and becker 1977 and extend it to incorporate the relationships among advertising concentration and profitability i then test its most important implications using data from the 1977 census of manufactures and the detailed input output structure of the u s economy 2 section ii examines the relationship between concentration and advertising intensity conventional theory known as the inverted u hypothesis asserts that advertising is expected to increase with concentration at first but to decrease at very high levels of concentration because collusion to avoid advertising costs becomes easier extending the stigler and becker theory i hypothesize that when concentration increases even if the large firms do not collude and continue to act independently they will eventually decrease their advertising intensity at high levels of concentration provided that the demand curve for the industry s products is relatively inelastic if the industry s demand curve is relatively elastic advertising intensity increases monotonically with concentration at all levels of concentration this hypothesis is supported by the 1977 data taken from the census and the input output structure of the u s economy section iii focuses on the relationship between advertising and profitability according to conventional theories advertising intensity promotes product differentiation leading to higher barriers to entry and higher profit margins in the past researchers e g strickland and weiss 1976 realized that contrary to the implications of barriers to entry theory the coefficient of advertising in a profit margin equation was longer for a sample of industries producing producer goods than for industries producing consumer goods they viewed this result as an anomaly inconsistent with both their theoretical reasoning and with other important empirical results already published i obtain a similar result which i am able to link to a theoretical structure thus contributing to the refutation of the barriers to entry hypothesis i begin by extending the stigler and becker theory to treat advertising and research and development r d as two complementary intangible capital goods the sample is divided into two groups producers of homogeneous goods who spend relatively more on r d and producers of heterogeneous goods who spend relatively more on advertising since we are unable to measure r d costs at the appropriate industry level it is not included among the regression variables if r d and advertising intensity are correlated we should expect the coefficient of advertising in the profitability equation in the homogeneous goods subsample to exceed the coefficient of advertising in the profitability equation in the heterogeneous goods subsample in this case the omission of the r d variable provides an implication for testing the new hypothesis

firm size and the nature of innovation within industries the case of process and product r d the effect of firm size on the allocation of r d effort between process and product innovation is examined it is hypothesized that relative to product innovations process innovations are less saleable in disembodied form and spawn less growth this implies that the returns to process r d will depend more on the firm s output at the time it conducts its r d than the returns to product r d incorporating this distinction in a simple model the authors derive and test predictions about how the fraction of r d devoted to process innovation varies with firm size within industries

understanding the reductions in us corn ethanol production costs an experience curve approach the us is currently the world s largest ethanol producer an increasing percentage is used as transportation fuel but debates continue on its costs competitiveness and energy balance in this study technological development of ethanol production and resulting cost reductions are investigated by using the experience curve approach scrutinizing costs of dry grind ethanol production over the timeframe 1980 2005 cost reductions are differentiated between feedstock corn production and industrial ethanol processing corn production costs in the us have declined by 62 over 30 years down to 100 2005 tonne in 2005 while corn production volumes almost doubled since 1975 a progress ratio pr of 0 55 is calculated indicating a 45 cost decline over each doubling in cumulative production higher corn yields and increasing farm sizes are the most important drivers behind this cost decline industrial processing costs of ethanol have declined by 45 since 1983 to below 130 2005 m3 in 2005 excluding costs for corn and capital equivalent to a pr of 0 87 total ethanol production costs including capital and net corn costs have declined approximately 60 from 800 2005 m3 in the early 1980s to 300 2005 m3 in 2005 higher ethanol yields lower energy use and the replacement of beverage alcohol based production technologies have mostly contributed to this substantial cost decline in addition the average size of dry grind ethanol plants increased by 235 since 1990 for the future it is estimated that solely due to technological learning production costs of ethanol may decline 28 44 though this excludes effects of the current rising corn and fossil fuel costs it is also concluded that experience curves are a valuable tool to describe both past and potential future cost reductions in us corn based ethanol production

picking winners modelling the costs of technology specific climate policy in the u s passenger vehicle sector abstract researchers debate the cost effectiveness of technology specific versus technology neutral climate policies but few quantify the differences using the case of low carbon vehicle technologies in the us passenger vehicle sector ethanol plug in electric and hydrogen we develop a technology adoption simulation model that represents increasing returns to adoption in both financial costs and consumer preferences representing uncertainty through monte carlo analysis we compare the policy costs tonne co2 out to 2050 of i a technology neutral carbon tax ii a somewhat neutral vehicle standard requiring low carbon vehicle sales but allowing competition among technologies and iii technology specific vehicle standards requiring sales of just one technology on average across simulations the carbon tax is twice as cost effective as the best vehicle standard in part because the tax more substantially affects vehicle use rates among the vehicle standards a technology specific standard that selects the right winner plug in electric vehicles is more cost effective than the neutral standard as it more quickly stimulates technology improvement however there is risk in a technology specific approach mistakenly forcing a loser technology hydrogen results in policy costs that are 2 to 5 times higher than other policies results can help policymakers trade off the costs and risks of different climate policy options

up scaling formative phases and learning in the historical diffusion of energy technologies the 20th century has witnessed wholesale transformation in the energy system marked by the pervasive diffusion of both energy supply and end use technologies just as whole industries have grown so too have unit sizes or capacities analysed in combination these unit level and industry level growth patterns reveal some consistencies across very different energy technologies first the up scaling or increase in unit size of an energy technology comes after an often prolonged period of experimentation with many smaller scale units second the peak growth phase of an industry can lag these increases in unit size by up to 20 years third the rate and timing of up scaling at the unit level is subject to countervailing influences of scale economies and heterogeneous market demand these observed patterns have important implications for experience curve analyses based on time series data covering the up scaling phases of energy technologies as these are likely to conflate industry level learning effects with unit level scale effects the historical diffusion of energy technologies also suggests that low carbon technology policies pushing for significant jumps in unit size before a formative phase of experimentation with smaller scale units are risky

a review of uncertainties in technology experience curves abstract the use of log linear experience curves or learning curves relating reductions in the unit cost of technologies to their cumulative production or installed capacity has become a common method of representing endogenous technical change in energy economic models used for policy analysis yet there are significant uncertainties in such formulations whose impact on key model results have been insufficiently examined or considered this paper reviews the major types of uncertainty in log linear experience curves and their effect on projected rates of cost reduction uncertainties are found not only in the learning rate parameter of a log linear model but also in the functional form that determines the shape of an experience curve evidence for alternative forms such as an s shaped curve is reviewed along with case studies that demonstrate the uncertainties associated with cost increases during early commercialization of a technology a phenomena that is widely recognized but rarely quantified or incorporated in learning models additional factors discussed include the effects of learning discontinuities institutional forgetting and the influence of social economic and political factors we then review other models of causality which aim to improve modelers ability to explain and predict the influence of other underlying processes that contribute to technology cost reductions in addition to learning ignoring other types of underlying mechanisms can create a false sense of precision and overestimate the true contribution of learning currently however uncertainties in such multi factor models remain large due to the difficulties of estimating key parameters such as private sector r d investments and extending models of a specific technology to a broader suite of technologies and cost projections pending the development and validation of more robust models of technological change we suggest ways to significantly improve the characterization and reporting of current learning model uncertainties and their impacts on the results of energy economic models to help reduce the potential for drawing inappropriate or erroneous policy conclusions

quantifying the long term economic benefits of european electricity system integration abstract this paper aims to quantify the long term economic benefits that arise from an increasing integration of the pan european electricity system by means of comparing model based decarbonization scenarios developed with the model limes eu it explicitly accounts for the interplay between transmission infrastructure and renewable generation capacity expansion we confirm earlier findings that on aggregate pan european transmission capacity expansion constitutes a no regret option for integrating increasing shares of variable renewables it leads to positive social returns on investment in all mitigation scenarios under analysis however the reduction in total discounted system costs stemming from transmission capacity expansion is modest in magnitude over the period 2010 2050 it reaches a maximum of 3 5 for a case with massive expansion compared to one in which the status quo remains in technical terms this means that the optimum is rather flat and taking into account regional and local benefits and distributional aspects could alter the evaluation of the economic benefits a crucial finding is that the configuration of pan european transmission infrastructure and the importance of specific country connections i e a southern versus a northern solution hinges on the relative development of specific investment costs for solar and wind technologies over the next decades

on the design of hierarchies coordination versus specialization we consider an economy that has to decide how assets are to be used agents have ideas but these ideas conflict we suppose that decision making authority is determined by hierarchy each asset ha

an economic perspective on experience curves and dynamic economies in renewable energy technologies this paper analyzes dynamic economies in renewable energy technologies the paper has two contributions the first is to test the robustness of experience in solar photovoltaic solar thermal and wind energy to the addition of an explicit time trend which has been done in experience studies for other industries but not for renewable energy technologies estimation is carried out on the assumption that cumulative capacity industry production average firm production and electricity generation affect experience and thus the fall in price the second contribution is to test the impact of r d on price reduction in general cumulative experience is found to be highly statistically significant when estimated alone and highly statistically insignificant when time is added to the model the effect of r d is small and statistically significant in solar photovoltaic technology and statistically insignificant in solar thermal and wind technologies

long term payoffs of near term low carbon deployment policies abstract recent climate change negotiations indicate that near term policies to address climate change are likely to vary across countries with countries employing a range of different policy options one option frequently mooted at the national level is to promote via policy the deployment of low carbon technologies promoting the deployment of low carbon technologies can involve a near term cost if such technologies are more expensive overall or require more upfront capital than emitting alternatives however it lowers future costs of emissions abatement by reducing emissions in the near term and potentially accelerating rates of improvement in targeted low carbon technologies we derive a globally cost effective near term international technology investment strategy to achieve a long term climate goal and show that it employs a diversified international technology investment portfolio across countries we also explore the degree to which independent national technology deployment policies align with collaboratively determined regimes we show that conditions exist under which there are substantial gains to international cooperation in the deployment of diverse low carbon technologies and also circumstances in which domestic outcomes align with the global outcome

a proximate mirror greenhouse gas rules and strategic behavior under the us clean air act the development of climate policy in the united states mirrors international developments with efforts to initiate a coordinated approach giving way to jurisdictions separately taking actions the centerpiece of us policy is regulation in the electricity sector that identifies a carbon emissions rate standard intensity standard for each state but leaves to states the design of policies including potentially the use of technology policies emissions rate averaging or cap and trade differences in policies among states within the same power market could promote predatory behavior resulting in a geographic shift in generation and investment in new resources this paper examines the coordination problem using a detailed partial equilibrium model of operations and investment we demonstrate that leading jurisdictions have available a rich set of design options including targetted output based allocation that would impose costs on neighbors and may protect against strategic predation

on the economics of renewable energy sources abstract with the global expansion of renewable energy re technologies the provision of optimal re policy packages becomes an important task we review pivotal aspects regarding the economics of renewables that are relevant to the design of an optimal re policy many of which are to date unresolved we do so from three interrelated perspectives that a meaningful public policy framework for inquiry must take into account first we explore different social objectives justifying the deployment of re technologies and review model based estimates of the economic potential of re technologies i e their socially optimal deployment level second we address pivotal market failures that arise in the course of implementing the economic potential of re sources in decentralized markets third we discuss multiple policy instruments curing these market failures our framework reveals the requirements for an assessment of the relevant options for real world decision makers in the field of re policies this review makes it clear that there are remaining white areas on the knowledge map concerning consistent and socially optimal re policies

structure conduct and performance a simultaneous equations investigation for the brazilian manufacturing industry the article investigated structure conduct performance scp relationships in the context of the brazilian manufacturing industry in 1996 for that purpose it considered a system with four equations pertaining concentration advertising r d and profitability that was estimated with simultaneous equation models in addition to the usual explanatory variables proxying barriers to entry and demand conditions the article considered organizational practices and incentive schemes variables the evidence indicated an important role for variables related to barriers to entry in affecting market structure an important and nonlinear effect of concentration on advertising a relevant impact of firm size on the propensity to exert r d effort and finally a significant positive impact of concentration on profitability and were similar to the previous evidence for developed countries additionally no important roles were detected for organizational practices and incentive schemes on the scp relationships

incentives in academics why is there tenure this paper models ancademic department as an internal labor market the major problem facing the university administration is to ensure that members of its departments are willing to hire the best possible candidates academic tenure is seen to be a necessary condition for this the analysis is also consistent with other aspects of the academic environment including tenure track appointments contract buy outs early retirement plans and when a budget crunch hits the elimination of entire departments the results extend in a simple way to other organizations in which members have an input into overall decisions

supervision and wages across industries this paper uses supervision data from a supplement to the 1977 wave of the panel survey of income dynamics to examine differences in supervision and wages across industries and to evaluate relationships between supervision practices and interindustry wage differentials the results demonstrate that workers in high wage industries are supervised with equal or greater stringency than secondary sector workers further the results offer no evidence that interindustry differences in monitoring contribute to interindustry wage differentials such findings appear to contradict explanations for industry wage premiums that are motivated by efficiency wage models of shirking copyright 1993 by mit press

endogeneity in the concentration price relationship causes consequences and curses the ordinary least squares estimator of the effect of concentration on price is biased for two reasons first performance feeds back into structure causing a simultaneous equations bias second as a function of outputs or revenues measured concentration is correlated with determinants of price that are at best measured with error so measured concentration is correlated with the error term with panel data fixed effects procedures can be combined with instrumental variables to eliminate bias from both sources in concentration price regressions for the airline industry the bias can be substantial and negative copyright 1993 by blackwell publishing ltd

on the sources of technological change assessing the evidence this paper uses a selective review of the economic literature on technological change to support four points that are important for interpreting and incorporating technological change into formal models of energy and the environment the review 1 supports the notion that no single source dominates the process of technological change it supports roles for rd 3 indicates that these spillovers are often indirect requiring own industry activities to utilize and 4 indicates that simple experience curve calibrations often used in formal models likely include a range of sources of technological change in addition to learning by doing some of which might not be induced by the sorts of policies typically considered in the climate context

the provision of incentives in firms i ncentives are the essence of economics despite many wide ranging claims about their supposed importance there has been little empirical assessment of incentive provision for workers the purpose of this paper is to critically overview existing work on the provision of incentives since the interests of workers and their employers are not always aligned a large theoretical literature has emphasized how firms design compensation contracts to induce employees to operate in the firm s interest this literature has reached into many areas of compensation and has pointed to a multitude of different mechanisms that can be used to induce workers to act in the interests of their employers these include piece rates options discretionary bonuses promotions profit sharing efficiency wages deferred compensation and so on my objective here is to evaluate this literature in the light of a growing empirical literature on compensation where possible i will address the literature from two perspectives first an underlying assumption of this literature is that individuals respond to contracts that reward performance accordingly i consider whether agents behave in this way and whether these responses are always in the firm s interest second i address whether firms write contracts with these responses in mind in other words do contracts look like the predictions of the theory incentives are provided to workers

a review of learning rates for electricity supply technologies a variety of mathematical models have been proposed to characterize and quantify the dependency of electricity supply technology costs on various drivers of technological change the most prevalent model form called a learning curve or experience curve is a log linear equation relating the unit cost of a technology to its cumulative installed capacity or electricity generated this one factor model is also the most common method used to represent endogenous technical change in large scale energy economic models that inform energy planning and policy analysis a characteristic parameter is the learning rate defined as the fractional reduction in cost for each doubling of cumulative production or capacity in this paper a literature review of the learning rates reported for 11 power generation technologies employing an array of fossil fuels nuclear and renewable energy sources is presented the review also includes multi factor models proposed for some energy technologies especially two factor models relating cost to cumulative expenditures for research and development r d as well as the cumulative installed capacity or electricity production of a technology for all technologies studied we found substantial variability as much as an order of magnitude in reported learning rates across different studies such variability is not readily explained by systematic differences in the time intervals geographic regions choice of independent variable or other parameters of each study this uncertainty in learning rates together with other limitations of current learning curve formulations suggests the need for much more careful and systematic examination of the influence of how different factors and assumptions affect policy relevant outcomes related to the future choice and cost of electricity supply and other energy technologies

impact of plasma arc reforming deployment on economic performance of a commercial coal to liquids process abstract coal remains integral to the supply of energy in many parts of the world despite the associated negative effects on the environment plasma arc reforming has the potential of making coal to liquids processes cleaner by reducing its greenhouse gas footprint however the chances of adoption without a clear understanding of how the process modification would affect economic performance are slim in this study financial models were built using an existing commercial coal to liquids process as a reference case economic analyses were done to evaluate the impact of deploying a plasma arc reformer on financial performance of a coal to liquids process in building the financial models the possibility of the introduction of a carbon tax was taken into consideration the results show that deploying plasma arc reforming reduces the oil price required for break even from 89 bbl to 82 bbl achieves a positive project npv and exceeds the hurdle rate for similar projects in the process it reduces vulnerability to the introduction of a carbon tax the requirement for extra low carbon electricity can be a hurdle to implementation however the alternative carbon tax related charges are less desirable overall it was concluded that the deployment of plasma arc reforming to coal to liquids processes is value adding the project demonstrates that by implementing a cleaner production initiative it is possible to reduce greenhouse gas emissions of coal to liquids without significantly losing shareholder value

the tenuous trade off between risk and incentives empirical work testing for a negative trade off between risk and incentives has not had much success the data suggest a positive relationship between measures of uncertainty and incentives rather than the posited negative trade off i argue that the existing literature fails to account for an important effect of uncertainty on incentives through the allocation of responsibility to employees when workers operate in certain settings firms are content to assign tasks to workers and monitor their inputs by contrast when the situation is more uncertain they delegate responsibility to workers but to constrain their discretion base compensation on observed output

uncertainty task environment and organization design an empirical investigation the paper addresses two broad research questions 1 how do internal uncertainty associated with the task environment and external uncertainty arising from market volatility impact organization design 2 what are the relationships among various elements of organization design delegation of decision making incentives monitoring and internal labor market practices promotion training employment security we expand on prendergast 2002a who challenged the conventional view of a tradeoff between risk and incentives and build a single unified framework for answering our two research questions using a uniquely rich dataset that contains detailed information about the task environment of core employees and organization design at the individual group and firms levels in 530 minnesota firms in the mid 1990s we first find support for prendergast s key argument that internal uncertainty over which employees have control affects directly the allocation of decision making and only indirectly incentives via allocation of decision making this confirms similar findings by foss and laursen 2005 devaro and kurtulus 2010 and shi 2011 we also find that internal uncertainty has much impact on organization design through the choice of delegation of decision making at the employee level less so at the group level and very little at the firm level whereas external market uncertainty has little effect on organization design especially at the individual and group level decision making monitoring various internal labor market practices and incentives are strongly related to each other through substitution and complementarity

monitoring motivation and management the determinants of opportunistic behavior in a field experiment economic models of incentives in employment relationships are based on a specific theory of motivation employees are rational cheaters who anticipate the consequences of their actions and shirk when the marginal benefits exceed costs we investigate the rational cheater model by observing how experimentally induced variation in monitoring of telephone call center employees influences opportunism a significant fraction of employees behave as the rational cheater model predicts a substantial proportion of employees however do not respond to manipulations in the monitoring rate this heterogeneity is related to variation in employee assessments of their general treatment by the employer jel d2 j2 l2 l8 m12

what s experience got to do with it sources of cost reduction in a large specialty chemicals producer conventional learning curves relating unit cost to measures of production experience are estimated for 221 specialty chemicals produced by a fortune 500 company detailed records on cost and r d coupled with insights from company personnel are used to explain the variation across products in the rate of cost reduction products that exhibited the strongest relationship between unit cost and measures of production experience were subject to specific initiatives particularly process r d the r d was not however generally motivated or informed by production experience however cumulative past output the most commonly used measure of production experience was related to expected future output which conditioned the expected future returns from r d and the choice of r d projects thus cumulative output was connected to unit costs through its role in conditioning incentives to undertake process r d rather than as a proxy for production experience this suggests that the strong relationship commonly found between unit cost and measures of production experience may reflect incentives to reduce cost as much as learning from production experience

opec saudi arabia and the shale revolution insights from equilibrium modelling and oil politics why did opec not cut oil production in the wake of 2014 s price fall this study aims at aiding the mostly qualitative discussion with quantitative evidence from computing quarterly partial market equilibria q4 2011 q4 2015 under present short term profit maximisation and different competition setups although the model performs reasonably well in explaining pre 2014 prices all setups fail to capture low prices which fall even beyond perfect competition outcomes this result is robust with respect to large variations in cost parameters rejecting present short term profit maximisation as well as a qualitative discussion of saudi arabian politics and the shale oil revolution lead to the conclusion that the price drop of 2014 16 was most plausibly the result of an attempt to defend market shares and to test for shale oil resilience besides being fuelled by other factors such as rising competitiveness of alternative technologies although shale oil might have increased competition permanently as supported by model results the agreement of december 2016 should not be misunderstood as an opec defeat

production costs of global conventional and unconventional petroleum abstract concerns about the costs of developing oil and gas from conventional and unconventional formations have led many commentators to assume that increasing prices are in the offing and may be a limiting factor for economic growth historically production costs have fluctuated as influenced by the cost increasing effects of depletion versus the cost reducing effects of technological progress this paper aims to review several methods for assessing current and long term costs despite the uncertainty of such estimation evidence shows that production costs in the foreseeable future might not increase dramatically and actually could decrease as petroleum development methods improve and additional supplies come online recent examples include the commercially viable production of unconventional oil and gas resources that has kept energy prices contained

the impact of r d on innovation for wind energy in denmark germany and the united kingdom this paper examines the impact of public research and development r d support on cost reducing innovation for wind turbine farms in denmark germany and the united kingdom uk first we survey the literature in this field the literature indicates that in denmark r d policy has been more successful than in germany or the uk in promoting innovation of wind turbines furthermore such studies point out that subsidy induced capacity expansions were more effective in the uk and denmark in promoting cost reducing innovation than in germany the second part of the paper describes the quantitative analysis of the impact of r d and capacity expansion on innovation this is calculated using the two factor learning curve 2flc model in which investment cost reductions are explained by cumulative capacity and the r d based knowledge stock time series data were collected for the three countries and organized as a panel data set the parameters of the 2flc model were estimated focusing on the homogeneity and heterogeneity of the parameters across countries we arrived at robust estimations of a learning by doing rate of 5 4 and a learning by searching rate of 12 6 the analysis underlines the homogeneity of the learning parameters enhancing the validity of the 2flc formulation

the making of an oligopoly firm survival and technological change in the evolution of the u s tire industry the number of producers in the u s tire industry grew for 25 years and then declined sharply and the industry evolved to be an oligopoly the role of technological change in shaping the industry s market structure is explored a model of industry evolution featuring technological change is used to derive predictions that are tested using a novel data set on firm entry exit size location distribution networks and technological choices prior to the shakeout of producers consistent with the model earlier entering and larger firms survived longer principally because of the influence of age and size on technological change

revisiting the techno economic analysis process for building mounted grid connected solar photovoltaic systems part two application part one in this two part paper identified monte carlo analysis as an improved approach over traditional deterministic techno economic methods for solar pv prosumers in deregulated markets in this

the future of fossil fuels is it the end contrary to the assumptions underlying many of current energy and climate policies the prices of fossil fuels have fallen and may remain at the new normal levels in the medium term iran and iraq have considerable potential to increase their outputs and the new shale technologies will gradually globalize longer term new technologies in electricity generation storage and smart demand side technologies together with electric cars and the shift towards digitalization and new electricity based technologies in manufacturing will increase demand for electricity but not fossil fuels these new and emerging technologies rather than international agreements and the promotion of current generation renewables will probably bring fossil fuel dominance to a gradual close to facilitate decarbonization energy policy should be directed at enhancing r d and next generation renewables instead of supporting existing ones

are we fracked the impact of falling gas prices and the implications for coal to gas switching and carbon emissions we discuss the environmental implications of the dramatic drop in the price of natural gas following the us shale gas boom due to the rise of modern hydraulic fracturing in the first part of the paper we argue that the ensuing drop in the price of natural gas has an ambiguous effect on global carbon emissions because of three countervailing effects coal to gas switching in the us electric power sector an increase in the relative cost of us renewable energy sources and an increase in us coal exports our position is that without a meaningful cap the shale gas boom is likely to increase global emissions and the period during which natural gas is used as a bridge fuel to clean energy should be limited in the second part of the paper we review recent environmental policies for the us electric power sector that have contributed to reducing carbon emissions and discuss the complex economics of the newly introduced clean power plan although the availability of cheap natural gas has been factored in us environmental policy and has helped electricity generators to achieve compliance with various rules and regulations it should not derail policy from its long run objective which is the transition to a less fossil fuel dependent economy

profit margins and business cycles in the brazilian industry a panel data study the paper investigates the relationship between profit margins and business cycle in the brazilian industry during the 1992 1998 period taking as reference a dynamic panel data model founded around a conjectural variation framework the empirical results indicate procyclical behaviour of profit margins for the aggregate business cycle but is less clear in the case of sector specific business cycle variables among the most robust results one can highlight the roles of lagged profitability and import intensity and the negligible role of union density schmalensee in 1985 american economic review 75 pp 341 51 outlined three theoretical interpretations associated with the empirical model classical revisionist and managerial econometric tests on the related restrictions do not allow one to exclusively legitimate any of the three interpretations

experience curve for natural gas production by hydraulic fracturing abstract from 2007 to 2012 shale gas production in the us expanded at an astounding average growth rate of over 50 yr and thereby increased nearly tenfold over this short time period alone hydraulic fracturing technology or fracking as well as new directional drilling techniques played key roles in this shale gas revolution by allowing for extraction of natural gas from previously unviable shale resources although hydraulic fracturing technology had been around for decades it only recently became commercially attractive for large scale implementation as the production of shale gas rapidly increased in the us over the past decade the wellhead price of natural gas dropped substantially in this paper we express the relationship between wellhead price and cumulative natural gas output in terms of an experience curve and obtain a learning rate of 13 for the industry using hydraulic fracturing technology this learning rate represents a measure for the know how and skills accumulated thus far by the us shale gas industry the use of experience curves for renewable energy options such as solar and wind power has allowed analysts practitioners and policy makers to assess potential price reductions and underlying cost decreases for these technologies in the future the reasons for price reductions of hydraulic fracturing are fundamentally different from those behind renewable energy technologies hence they cannot be directly compared and hydraulic fracturing may soon reach or maybe has already attained a lower bound for further price reductions for instance as a result of its water requirements or environmental footprint yet understanding learning by doing phenomena as expressed by an industry wide experience curve for shale gas production can be useful for strategic planning in the gas sector as well as assist environmental policy design and serve more broadly as input for projections of energy system developments

implications for the floor price of oil of aggressive climate policies abstract this paper identifies combinations of technical and behavioral measures that lead to progressively lower global demand for oil culminating with a scenario that eliminates global oil demand by 2060 in line with the broader requirement that anthropogenic co 2 emissions reach net zero by this date in order to have a 60 chance of staying below a global mean warming of 2 c above the pre industrial level the cumulative oil consumption from 2010 to the point when zero oil demand is achieved is compared with a recent oil supply marginal cost curve assuming that oil is consumed in order of increasing extraction cost the price of oil need not rise significantly above 25 35 bbl even substantially less aggressive efforts to reduce co 2 emissions need not see oil rise substantially above 50 bbl under aggressive climate policies the peak in oil demand occurs before the supply constrained peak in oil production would occur this would render expensive oil 50 bbl permanently uneconomic this includes oil from the canadian tar sands currently costing 65 95 bbl for new greenfield developments and most shale oil with current average oil play costs of 48 65 bbl this in turn implies that governments should not be promoting or permitting development of high cost oil and also provides a clear warning to private and institutional investors

the evolution of new industries and the determinants of market structure several empirical regularities concerning firm growth rates and industry firm size distributions have been developed by studying primarily mature industries the primary purpose of this article is to bring together and extend empirical regularities on the evolution of new industries and to use these regularities to gain further insight into the forces governing industry evolution to explain these regularities a model is constructed which emphasizes how factors governing the early evolution of industries may shape their market structure at maturity it stresses how chance events and exogenous factors that influence the number of potential entrants to the industry the growth rate of incumbents and the ease of imitation of industry leaders will influence the ultimate number and size distribution of firms in the industry

performance pay delegation and multitasking under uncertainty and innovativeness an empirical investigation it has been recently noted that the trade off between risk and incentives that agency theory predicts turns out to be rather weak we examine predictions from agency theory on the basis of data from a data set encompassing close to 1000 danish firms we find that the relation between performance pay and environmental uncertainty is indeed weak we examine the relation between delegation and environmental uncertainty and find that this relation is confirmed we also examine the multi tasking agency hypothesis that as risk increases the flexibility of agents is restricted we fail to find support for this hypothesis

worker cooperation and the ratchet effect workers paid by the piece should be happy to introduce new techniques that increase output but firms always seem to reduce the piece rate when workers start earning too much money workers respond by restricting output and keeping good new ideas to themselves we show that this outcome is inevitable in a competitive environment however there are noncompetitive situations where firms can use piece rates to get cooperation from their workers these predictions are consistent with case history evidence from the cotton spinning industry in england in the nineteenth century and the lincoln electric company in the united states even today

understanding cost reduction of china s biomass direct combustion power generation a study based on learning curve model abstract during the critical transition towards cleaner production cp the developing and transition countries should pay extra attention to displace traditional biomass utilization with cp concepts such as biomass direct combustion power bio dcp china has witnessed impressive growth in its bio dcp sector from 2006 to 2014 the further industrial expansion and policy making of bio dcp in china and other countries in transition call for a deeper understanding of cost reduction mechanisms in this study the learning curve models i e electricity production cost as a function of multiple factors including cumulative installed capacity operation maintenance costs feed in tariff and cogeneration were developed to i empirically estimate the learning rates of china s bio dcp and ii investigate the impacts of past technological developments and policies on the cost development main findings include i the overall learning rate of china s bio dcp is 4 54 over the period 2006 2014 ii the raised feed in tariff in 2010 shows a positive effect on the learning of bio dcp iii the circulating fluidized bed projects show a higher learning rate compared to that of the grate boiler projects based on the above results suggestions regarding the bio dcp s future development are offered including discriminative subsidies biomass waste supply chains cogeneration and multi industry parks

simultaneous equations models of the structure performance paradigm abstract this paper is concerned with determining the dimension of the simultaneous equations model surrounding the basic profits concentration relationship a very general model is considered and then simplified using a simple test for exogeneity and it is concluded that the model is nonlinear in concentration and that simultaneous interaction occurs between profits and foreign competition variables

effects of oil price fall on the betas in the unconventional oil gas industry abstract we examine the consequences of the oil prices movements started in july 2014 on the financial systematic risk proxied by betas of firms operating in the unconventional oil gas industry compared to that of the conventional oil gas players the analysis is developed using two cross section regressions performed before and after the 2014 oil price drop respectively the results look coherent with the reasonable belief that a sharp and sudden decrease in the oil price can generally lead to higher betas in the oil gas industry interestingly it emerged that the market tends to attribute an additional risk to unconventional firms and analyzing the regression coefficients evolution it appears that this circumstance has been substantially amplified by the 2014 oil price shock to our knowledge this is the first paper covering the topic treated

structure conduct and performance a simultaneous equations approach a simultaneous equations framework is used to study the relationship between structure conduct and performance in us manufacturing in the 1980s and 1990s the paper expands on earlier structure conduct performance studies by using a lag structure to signify that structure conduct and performance do not affect one another contemporaneously findings support some aspects of the traditional structure conduct performance model but challenge others first the data suggest that industry structure does not depend on current industry performance second little evidence is found that industry conduct proxied by advertising is affected by industry structure third results show that industry performance does not depend on industry conduct though it is sensitive to industry structure the main findings are that 1 concentration does not depend on firm profitability though profitability depends on concentration 2 advertising follows a process that is independent of the factors considered here and 3 ad

endogenous technological change in climate change modelling this article investigates the impact on optimal co2 abatement and carbon tax levels of introducing endogenous technological change in a macroeconomic model of climate change we analyse technological change as a function of cumulative capacity as incorporated recently in energy systems models our calculations confirm that including endogenous innovation implies earlier emission reduction to meet atmospheric carbon concentration constraints however the effect is stronger than suggested in the literature moreover the development of non fossil energy technologies constitutes the most important opportunity for emission reductions optimal carbon tax levels reducing fossil energy use are lower than usually advocated