an economic theory of self control the concept of self control is incorporated in a theory of individual intertemporal choice by modeling the individual as an organization the individual at a point in time is assumed to be both a farsighted planner and a myopic doer the resulting conflict is seen to be fundamentally similar to the agency conflict between the owners and managers of a firm both individuals and firms use the same techniques to mitigate the problems which the conflicts create this paper stresses the implications of this agency model and discusses as applications the effect of pensions on saving saving and the timing of income flows and individual discount rates

international sourcing and supply chain stability an international supply chain is conceptualized as a complex dynamic system in which disruptions interact with long shipping and lead times to generate costs findings from a case study and simulation model indicate that demand related disruptions created substantial and unexpected costs in terms of expedited shipping high inventories and lower demand fulfillment production related disruptions declined over time but demand related disruptions did not implications for management are discussed

habit formation interdependent preferences and demographic effects in the almost ideal demand system the authors model myopic habit formation interdependence of preferences among consumers and demographic effects as taste shifters in a micro consumer demand model of the almost ideal demand variety the model is estimated for dutch micro data the authors investigate the dynamic properties of the model and find that it behaves very differently from models without interdependence of preferences the implications for micro macro modeling are discussed copyright 1991 by royal economic society

falling behind the joneses relative consumption and the growth savings paradox abstract concern for individual consumption relative to per capita consumption can induce a fear of falling behind which increases precautionary savings this fear intensifies as societal income growth increases allowing for a positive effect of growth on savings rates

tax evasion on a social network abstract we relate tax evasion behavior to a substantial literature on social comparison in judgements taxpayers engage in tax evasion as a means to boost their expected consumption relative to others in their social network the unique nash equilibrium of the model relates optimal evasion to a bonacich measure of network centrality more central taxpayers evade more given that tax authorities are now investing heavily in big data tools that aim to construct social networks we investigate the value of acquiring network information we do this using networks that allow for celebrity taxpayers whose consumption is seen widely and who are systematically of higher wealth we show that there are pronounced returns to the initial acquisition of network information especially in the presence of celebrity taxpayers

tax policy and aggregate demand management under catching up with the joneses this paper examines the role for tax policies in productivity shock driven economies with catching up with the joneses utility functions the optimal tax policy is shown to affect the economy countercyclically via procyclical taxes i e cooling down the economy with higher taxes when it is overheating in booms and stimulating the economy with lower taxes in recessions to keep consumption up thus models with catching up with the joneses utility functions call for traditional keynesian demand management policies but for rather unorthodox reasons

public goods in networks this paper considers incentives to provide goods that are non excludable along social or geographic links we find first that networks can lead to specialization in public good provision in every social network there is an equilibrium where some individuals contribute and others free ride in many networks this extreme is the only outcome second specialization can benefit society as a whole this outcome arises when contributors are linked collectively to many agents finally a new link increases access to public goods but reduces individual incentives to contribute hence overall welfare can be higher when there are holes in a network

production chains and aggregate output volatility abstract a production chain s aggregate output volatility depends upon a number of factors including the number of firms in a chain the management strategy of the firms the point at which products are differentiated lead times and the persistence of demand shocks the influence of these factors is quantified here with an n firm model of the production chain under pure production to stock pts the firms in the chain respond simultaneously to a demand shock producing a positive covariance across firms that raises aggregate volatility under production to order pto the chain s response to a demand shock is staggered but when demand shocks are persistent there is a catch up effect that raises the volatility of each firm s production above that of a firm that under pts nevertheless pto chains typically exhibit less volatility than pts chains thanks to the covariance effect further simulations demonstrate that the production chain stabilizes as the number of production cycles in an observation period increases

the analysis of bullwhip effect in a hmms type supply chain the aim of the paper is to investigate the well known bullwhip effect of supply chains control theoretic analysis of bullwhip effect is extensively analyzed in the literature with the laplace transform this paper tries to examine the effect for an extended holt modigliani muth simon model a two stage supply chain supplier manufacturer is studied with quadratic costs functional it is assumed that both firms minimize the relevant costs the order of the manufacturer is delayed with a known constant two cases are examined supplier and manufacturer minimize the relevant costs decentralized and a centralized decision rule the question is answered how to decrease the bullwhip effect

the social basis of interdependent preferences abstract most economists are sympathetic to the idea that concerns for relative position are an important aspect of many economic problems there has traditionally been a reluctance to include such concerns primarily because models that included them often allow such a broad range of behavior that there are few if any restrictions on equilibrium behavior and hence such models would have little or no predictive power in this paper we discuss how reduced form models may naturally give rise to utility functions that depend in part on relative standing there are several advantages of modelling concern for relative standing in reduced form utility functions even when there is no similar concern in the deep preferences it provides structure and constraints on the way that relative standing affects utility and further it can yield testable implications about the way that changes in the underlying environment affect the concern for relative standing we discuss the advantages and disadvantages of modelling social concerns in this way and provide examples that illustrate how concerns for relative standing can affect savings investment and labor choice decisions

the impact of forecasting methods on the bullwhip effect abstract this paper considers the impact of forecasting methods on the bullwhip effect for a simple replenishment system in which a first order autoregressive process describes the customer demand and an order up to inventory policy characterizes the replenishment decision a bullwhip effect measure is derived for the optimal forecasting procedure that minimizes the mean squared forecasting error for the specified demand process similar measures are obtained for the moving average and exponential smoothing methods the findings indicate that different forecasting methods lead to bullwhip effect measures with distinct properties in relation to lead time and underlying parameters of the demand process moreover a simple rule is established to help managers select a forecasting method that yields the lowest inventory cost

relativity rank and the utility of income relative utility has become an important concept in several disjoint areas of economics i present a cardinal model of income utility based on the supposition that agents care about their rank in the income distribution and that utility is subject to adaptation over time utility levels correspond to the leyden individual welfare function while utility differences yield a version of the prospect theory value function thereby providing a new and shared derivation of each i offer an explanation of some long standing paradoxes in the wellbeing literature and an insight into the links between relative comparisons and loss aversion

no taxation without information deterrence and self enforcement in the value added tax abstract claims that the vat facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread vat adoption worldwide but there is surprisingly little evidence this paper analyzes the role of third party information for vat enforcement through two randomized experiments among over 400 000 chilean firms announcing additional monitoring has less impact on transactions that are subject to a paper trail indicating the paper trail s preventive deterrence effect this leads to strong enforcement spillovers up the vat chain these findings confirm that when taking evasion into account significant differences emerge between otherwise equivalent forms of taxation jel d83 h25 h26 k34 o17

the evolution of engel curves and its implications for structural change theory the tendency for expenditure engel curves to flatten out at high income levels is frequently cited as evidence that major shifts in household spending patterns take place as households become more affluent empirically little has been done to examine i how pervasive this tendency is across the engel curves of different goods and services ii whether the rate at which engel curves flatten out may significantly change over time and iii how robust engel curves are in the face of changes in the income distribution of households using data from the uk family expenditure survey we find evidence that the tendency for engel curves to flatten out which we dub saturation is indeed widespread across a wide range of goods and services however a tendency for their shape to shift over time and for these shifts to co move with changes in the income distribution of households casts some doubt on whether the declining slope of engel curves can be used to predict slowdowns in the growth rate of demand for particular goods and services

evaluating alternative capacity strategies in semiconductor manufacturing under uncertain demand and price scenarios abstract because product demand is very volatile and machine and process technologies are advanced at a rapid pace capacity planning and investment in the semiconductor industry is a challenging task many studies have addressed mid and short term machine portfolio planning tasks of capacity planning however capacity planning should be considered in a framework of strategy planning in order to address the whole problem this paper describes a method of analysis for adapting capacity strategy to changing business environment the paper has three major parts in the first part empirical data analysis of a case study company yields predictive formulas for production and capacity costs the uncertainty of demand is also calibrated using the geometric brownian motion process in the second part experiments are designed to simulate demand and profit scenarios for comparing two capacity strategies in the third part the resultant data of simulation are analysed to gain insights to the relative performance of the two strategies in various scenarios the analysis method provides a framework for formulating capacity strategy and for integrating capacity planning with business planning

the effect of inventory record inaccuracy in information exchange supply chains abstract the goal of this paper is to quantify the impact of inventory record inaccuracy on the dynamics of collaborative supply chains both in terms of operational performance i e order and inventory stability and customer service level to do so we model an information exchange supply chain under shrinkage errors in the inventory item recording activity of their nodes present the mathematical formulation of such supply chain model and conduct a numerical simulation assuming different levels of errors results clearly show that inventory record inaccuracy strongly compromises supply chain stability particularly when moving upwards in the supply chain important managerial insights can be extracted from this analysis such as the role of benefit sharing strategies in order to guarantee the advantage of investments in connectivity technologies

individual morality and reputation costs as deterrents to tax evasion abstract empirical evidence suggests some taxpayers never evade evasion increases with the tax rate and evasion decisions are interdependent these findings are not easily explained by the existing theory which models evasion as an independently made amoral gamble this paper uses nonpecuniary costs of evasion to reconcile theory with evidence once individuals are assumed to differ by an honesty characteristic taxpayers dichotomise into groups the more honest of which responds to a tax change as the evidence suggests a further extension is to introduce an endogenous reputation cost this suggests a positive relationship between the number of evaders and the tax rate

a supply chain as a series of filters or amplifiers of the bullwhip effect abstract the bullwhip effect refers to the phenomenon of amplification and distortion of demand in a supply chain by eliminating or controlling this effect it is possible to increase product profitability reducing useless costs such as stock out and obsolescence costs the main focus of this work is to study a single product serial supply chain in which a control parameter can switch the chain from a series of filters to a series of amplifiers of the bullwhip effect and to analyse how the optimal values of the parameters change when discontinuities in order policy are considered furthermore it is also shown that the bullwhip itself it is not a good index of the chain s performance because it does not consider the oscillations that occur in the inventories which also may affect the supply chain performance

the production and inventory behavior of the american automobile industry understanding inventory movements is central to an understanding of business cycles this paper presents an empirical study of the behavior of inventories in the automobile industry it finds that inventory behavior is well explained by the assumption of intertemporal optimization with rational expectations the underlying cost structure appears to have substantial costs of changing production as well as substantial costs of being away from target inventory thelatter being a function of current sales given this cost structure whether inventory behavior is stabilizing or destabilizing depends on the characteristics of the demand process in the automobile industry inventory behavior is destabilizing the variance of production is larger than the variance of sales

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

income distribution and equilibrium multiplicity in a stigma based model of tax evasion abstract this paper incorporates continuous income distribution into the stigma based model of tax compliance the paper investigates the effect of income distribution on the existence of multiple equilibria and characterizes the conditions under which multiple equilibria emerge precisely multiple equilibria exist if taxpayer incomes are sufficiently homogeneous because the social coordination effect dominates the individual characteristics effect numerical simulations show that the main proposition is robust to allowing two step audit policies on the part of the tax agency under the presumption that the best or good equilibrium is selected whenever there are multiple equilibria as a byproduct the effect of various forms of tax reforms on the optimal two step audit policy the equilibrium compliance and fiscal revenue is analyzed

small sample uncertainty aspects in relation to bullwhip effect measurement abstract the bullwhip effect as a concept has been known for almost half a century starting with the forrester effect the bullwhip effect is allegedly observed in many supply chains and it is generally accepted as a potential malice despite this the bullwhip effect still seems to be first and foremost a conceptual phenomenon some even simply denies that the phenomenon exists at all in practice this of course makes it important to perform measurements because only what gets measured gets done as the saying goes in analytics few measurements are reported in the literature however typically based on standard statistical assumptions in the case of a standard measurement of the bullwhip effect independence amongst the participating variables are required amongst others but this is definitely known not to be perfectly true if any systematic control at all have taken place in the supply chain this paper analyses the bullwhip measurement implications in case the standard test assumptions are violated and illustrates how to improve on the testing setup this is further done with a special emphasis on the unavoidable small sample aspects relating to such measurement in practice which typically renders all statistical asymptotic or robust arguments quite unusable it is shown how h 0 95 confidence test intervals still easily can be obtained numerically in such cases

hierarchical choice in economics abstract the paper examines the relevance for economic issues of choice which is not characterized by unlimited substitutability after showing that hierarchical choice is common in other social sciences like psychology the paper proceeds with an examination of such choice and of its different categories subsequently the implications for hierarchical choice for specific economic issues are analysed in particular there is discussion and literature review of demand theory engel curves the theory of the firm and social choice theory finally some suggestions for the application to other economic problems are considered

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

the economic consequences of social network structure we survey the literature on the economic consequences of the structure of social networks we develop a taxonomy of macro and micro characteristics of social interaction networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning diffusion decisions and resulting behaviors we also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors

a human experiment on inventory decisions under supply uncertainty abstract controlled human experiments are adopted in this paper to investigate the impact of supply uncertainty on buyers inventory management the experiments aim at assessing the impact of one specific source of supply chain uncertainty namely stochastic lead times on inventory holdings and the extent of the bullwhip effect three experimental treatments are run within the framework of the beer game manipulating variability in demand and in lead times results confirm that the bullwhip effect arises in all experimental treatments and that the variance of orders is higher under stochastic lead times analysis of players behaviour in the course of the game suggests that players react to higher uncertainty by holding fewer inventories a behaviour consistent with the predictions of some psychological models of choice under ambiguity

closed loop supply chains what reverse logistics factors influence performance this paper analyses the inventory and order flow dynamics in closed loop supply chains clscs in this kind of supply chains the reverse flow of materials entering the system for recycling purposes complicates the way in which inventories should be managed and replenishment policies should be designed specifically we analyse the relationships between some reverse logistics factors remanufacturing lead time return rate of recycled products reverse order policy and number of supply chain tiers on the order and inventory variance amplification we firstly perform a systematic literature review of the related studies secondly by adopting a difference equation math approach and design of experiment we perform a robust what if analysis of a clsc under a variety of operational and market conditions results show that ceteris paribus clsc outperforms a forward supply chain both in mono echelon and multi echelon structures and under both stationary and turbulent market demands furthermore reducing remanufacturing lead time and promoting information transparency may be crucial to improve clsc dynamics finally we use the research findings to provide interesting managerial consideration about how to reduce unnecessary operational members costs

the role of forecasting on bullwhip effect for e scm applications abstract the bullwhip effect represents the information distortion in customer demand between orders to supplier and sales to the buyer demand forecasting is one of the main causes of the bullwhip effect the purpose of this study is to analyze the impact of exponential smoothing forecasts on the bullwhip effect for electronic supply chain management e scm applications a simulation model is developed to experiment the different scenarios of selecting right parameters for the exponential smoothing forecasting technique it is found that longer lead times and poor selection of forecasting model parameters lead to strong bullwhip effect in e scm in contrast increased seasonality helps to reduce the bullwhip effect the most significant managerial implication of this study lies in the need to reduce lead times along the e supply chain to mitigate the bullwhip effect while high seasonality would reduce the forecast accuracy it has a positive influence on the reduction of bullwhip effect e scm managers are therefore strongly suggested to utilize exponential smoothing by selecting lower values for and and a mid value for to keep the bullwhip ratio low while at the same time to increase forecast accuracy

running to keep in the same place consumer choice as a game of status if individuals care about their status defined as their rank in the distribution of consumption of one positional good then the consumer s problem is strategic as her utility depends on the consumption choices of others in the symmetric nash equilibrium each individual spends an inefficiently high amount on the status good using techniques from auction theory we analyze the effects of exogenous changes in the distribution of income in a richer society almost all individuals spend more on conspicuous consumption and individual utility is lower at each income level in a more equal society the poor are worse off

on the implications of jointness in a normative model of behavior based on an activity hierarchy t he widespread belief that it is often useful to kill two birds with one stone makes it clear that most consumers recognize that there exists considerable scope for using an input gainfully in the production of more than one consumption activity however economic theorists often forget this lay belief as they set up their formal models and consequently they come to inappropriate conclusions this recently occurred in coursey s 1985 normative analysis of consumer behavior in this journal where he models priority based choice over activities this article indicates how the implications of his model may be modified if activities use a common input 2 in contrast to coursey we show that priority based choice does not necessarily imply that 1 an increase in an individual s income will lead to a reduction in the percentage of a consumer s budget spent on inframarginal activities or 2 a change in the price of a commodity producing a marginal activity will only lead to changes in an individual s consumption of marginal and extramarginal commodities put simply it appears that coursey s general results are valid only when one adopts his implicit assumption that there is no jointness in production

an almost ideal demand system incorporating habits an analysis of expenditures on food and aggregate commodity groups breusch t s and a r pagan the lagrange multiplier test and its applications to model specification in econometrics the review of economic studies 47 jan 1980 239 254 eden benjamin the insurance buying gambler economic inquiry 18 july 1980 504 508 henderson charles f estimation of variance and covariance components biometrics 9 june 1953 226 252 hill daniel h deborah a ott lester d taylor and james m walker incentive payments in time of day electricity pricing experiments the arizona experiment this review 65 feb 1983 59 65 maddala g s and t d mount a comparative study of alternative estimators for variance components models used in econometric applications journal of the american statisticalassociation 68 june 1973 324 328 selby e b and w beranek sweepstakes contests analysis strategies and survey american economic review 71 mar 1981 189 195 spence michael and richard zeckhauser the effect of the timing of consumption decisions and the resolution of lotteries on the choice of lotteries econometrica 40 mar 1972 401 403 wallace thomas d and ashiq hussain the use of error components models in combining cross section with time series data econometrica 37 jan 1969 55 72 winett richard a and michael t nietzel behavioral ecology contingency management of consumer energy use american journal of community psychology 3 june 1975 123 133

transfer function analysis of forecasting induced bullwhip in supply chains the present paper analyses the bullwhip problem generated by exponential smoothing algorithms in both stand alone passing on orders mode and within inventory controlled feedback systems results are predicted from transfer function analysis and then confirmed by simulation via the bullwhip explorer supply chain software a novel feature of the paper is the introduction of the matched filter concept into the exponential smoothing algorithm this adjusts the value of the smoothing constant depending on whether the constant linear or quadratic forecasting model is used it is shown that matching the filter via noise bandwidth equalises the output variance when the demand is a random signal hence some of the unwanted effects of using the linear and quadratic forecasting models are attenuated however there is little benefit obtained by using sophisticated forecasting methods within inventory controlled feedback systems as their tracking ability is reduced

managing the trade off implications of global supply abstract the cost versus response trade off is a growing logistics issue due to many markets being increasingly characterised by demand uncertainty and shorter product life cycles this is exacerbated further with supply increasingly moving to low cost global sources however the poor response implications of global supply are often not addressed or even acknowledged when undertaking such decisions consequently various practical approaches to minimising postponing or otherwise managing the impact of the demand uncertainty are often only adopted retrospectively even though such generic solutions are documented through case examples we lack effective tools and concepts to support the proactive identification and resolution of such trade offs this paper reports on case based theory building research involving three cases from the uk and usa used in developing a conceptual model with associated tools in support of such a process

inventory performance under pack size constraints and spatially correlated demand abstract motivated by a problem facing a large retailer we consider the impact of pack size on the performance of a periodic review inventory system in the presence of spatial i e between retailers correlation of demand which we model using an equicorrelated multivariate poisson distribution employing simulation we utilise a full factorial experiment to provide support for decisions on product and supplier selection and whether or not packs should be split during distribution we consider variables such as pack size correlation and the number of branches and discuss how they and their interactions impact performance metrics such as inventory and shortage levels and the bullwhip effect

the impact of information enrichment on the bullwhip effect in supply chains a control engineering perspective this paper examines the beneficial impact of information sharing in multi echelon supply chains we compare a traditional supply chain in which only the first stage in the chain observes end consumer demand and upstream stages have to base their forecasts on incoming orders with an information enriched supply chain where customer demand data e g epos data is shared throughout the chain two types of replenishment rules are analysed order up to out policies and smoothing policies policies used to reduce or dampen variability in the demand for the class of out policies we will show that information sharing helps to reduce the bullwhipeffect variance amplification of ordering quantities in supply chains significantly especially at higher levels in the chain however the bullwhip problem is not completely eliminated and it still increases as one moves up the chain for the smoothing policies we show that information sharing is necessary to reduce order variance at higher levels of the chain the methodology is based on control systems engineering and allows us to gain valuable insights into the dynamic behaviour of supply chain replenishment rules we also introduce acontrolengineering based measure to quantify the variance amplification bullwhip or variance reduction

an empirically simulated investigation of the impact of demand forecasting on the bullwhip effect evidence from u s auto industry this study empirically examines the impacts of three major aspects of demand forecasting on the magnitude of the bullwhip effect three research questions are addressed to investigate the association between 1 forecast accuracy 2 aggregate forecasting and 3 responsive forecasting and the bullwhip effect using forecasted demand generated from popular time series forecasting models and real life demand data the study investigates the relationship between the forecasted results and the consequential bullwhip effect the findings show that the forecasting methods used lead to the variation of the bullwhip effect moreover the lead time reduction and the stable demand forecast are beneficial to reduce the bullwhip effect however our empirical results differ from previous findings in two ways i improving forecast accuracy does not necessarily reduce the bullwhip effect and ii aggregate forecasting does not always reduce the bullwhip effect

eliciting gps preferences for pecuniary and non pecuniary job characteristics abstract this study examines general practitioners preferences for pecuniary and non pecuniary job characteristics in the context of choosing a general practice in which to work a discrete choice experiment is used to test hypotheses about the nature of the utility function marginal rates of substitution between income and non pecuniary characteristics are calculated the results suggest that policies aimed at influencing general practitioners location choices should take account of both non pecuniary and pecuniary factors particularly out of hours work commitments

the equilibrium distribution of income and the market for status this paper explores the implications for risk taking behavior and the equilibrium distribution of income of assuming that the desire for status positions is a powerful motive and that it raises the marginal utility of consumption in contrast to previous analyses we consider the case in which status positions are sold in a hedonic market we show that such a complete hedonic market in status positions can be perfectly replicated by a simpler arrangement with a status good and a social norm that assigns higher status to those that consume more of this good the main result is that for a wide range of initial conditions the equilibrium distribution over income status and consumption is the same that this allocation requires inequality of income and consumption and that this allocation coincides with the optimum of a utilitarian planner

demand fluctuation and chaotic behaviour by interaction between customers and suppliers this paper presents an investigation on simulation of interaction between customers and suppliers in a three tier supply chain system in the simulation customers respond to the price discount offer made by the supplier and the supplier makes adjusts the price according to stock held the simulation shows that the behaviour of such interaction exhibits deterministic chaos it is found that the attractors of the model move with the environment and the initial states thus the bifurcating points in such a system are unable to provide a guideline in system design to avoid chaos

a novel time varying bullwhip effect metric an application to promotional sales abstract bullwhip effect is a problem of paramount importance that reduces competitiveness of supply chains around the world a significant effort is being devoted by both practitioners and academics to understand its causes and to reduce its pernicious consequences nevertheless limited research has been carried out to analyse potential metrics to measure it that typically are summarized in the coefficient of variation ratio of different echelons demand this work proposes a new metric based on a time varying extension of the aforementioned bullwhip effect metric by employing recursive estimation algorithms expressed in the state space framework to provide at each single time period a real time bullwhip effect estimate in order to illustrate the results a case study based on a serially linked supply chain of two echelons from the chemical industry is analysed particularly this metric is employed to analyse the effect of promotional campaigns on the bullwhip effect on a real time fashion the results show that effectively the bullwhip effect is not constant along time but interestingly it is reduced during the promotional periods and it is bigger before and after the promotion takes place

relative consumption and tax evasion abstract relative consumption effects or status concerns that feature jealousy in the sense of dupor and liu 2003 boost consumption expenditure if consumption is financed by labour income such status considerations increase labour supply and hence the tax base a higher taxable income in turn can make tax evasion more attractive we show for various specifications of preferences that the tax base effect generally dominates consequently relative consumption effects tend to reduce tax evasion this is true irrespective of whether tax parameters are exogenous guarantee a balanced budget or are set optimally

ecosystems contingent valuation and ethics the case of wetland re creation this paper addresses a current issue in environmental valuation namely the extent to which environmental preferences depart from the usual economic paradigm to incorporate some lexicographic elements after a theoretical discussion the paper reviews attempts to explore this question empirically by supplementing contingent valuation analyses with an exploration of the motives behind willingness to pay responses including zero bids and refusals to answer this is followed by the presentation of new evidence investigating respondents willingness to pay for the creation of a wetland taken from 713 personal interviews of the british public 2000 elsevier science b v all rights reserved

quantifying the bullwhip effect using two echelon data a cross industry empirical investigation the bullwhip effect denotes the phenomenon whereby demand variability is amplified from a downstream site buyer to an upstream site supplier in the supply chain this paper contributes to the literature that empirically investigates the bullwhip effect by providing new evidence regarding its prevalence and magnitude in contrast to previous work we use a two echelon approach which allows us to observe variations at both the upstream and the downstream sites by drawing on a financial accounting standard regarding information disclosure about major customers we are able to link 5494 buyers and suppliers in the u s between 1976 and 2009 we merge this information with quarterly financial accounting data to form a sample of 14 933 buyer supplier dyad observations we correct for sample selection bias using propensity score matching and estimate the average bullwhip effect in our sample to be 1 90 i e 90 demand variability amplification between echelons a significant bullwhip effect is observed across industries mining manufacturing wholesale and retail and is supported by several robustness checks we investigate and discuss how these results can be generalized beyond our sample

rogue seasonality detection in supply chains rogue seasonality or unintended cyclic variability in order and other supply chain variables is an endogenous disturbance generated by a company s internal processes such as inventory and production control systems the ability to automatically detect diagnose and discriminate rogue seasonality from exogenous disturbances is of prime importance to decision makers this paper compares the effectiveness of alternative time series techniques based on fourier and discrete wavelet transforms autocorrelation and cross correlation functions and autoregressive model in detecting rogue seasonality rogue seasonalities of various intensities were generated using different simulation designs and demand patterns to evaluate each of these techniques an index for rogue seasonality based on the clustering profile of the supply chain variables was defined and used in the evaluation the fourier transform technique was found to be the most effective for rogue seasonality detection which was also subsequently validated using data from a steel supply network

economic perspectives on the development of complex products for increasingly demanding customers rival firms produce products with a variety of characteristics it is typically assumed that consumers purchase those products that most closely match their ideal set of characteristics orthodox production theory economics offers no analysis of how to divide limited product development budgets between different characteristics furthermore orthodox consumer economics assumes buyers make compensatory trade offs between different product characteristics this approach ignores problems caused by bounded rationality that in complex choice environments leads buyers to formulate simplifying heuristics such as hierarchical non compensatory preferences over characteristics an integrative analytical framework is developed drawing upon orthodox economics behavioural economics and evolutionary economics implications for the relationship between incremental product development and the firm s evolving capabilities are emphasized

predictive analytics and the targeting of audits the literature on audit strategies has focused on random audits or on audits conditioned only on income declaration in contrast tax authorities employ the tools of predictive analytics to identify taxpayers for audit with a range of variables used for conditioning the paper explores the compliance and revenue consequences of the use of predictive analytics in an agent based model that draws upon a behavioral approach to tax compliance the taxpayers in the model form subjective beliefs about the probability of audit from social interaction and are guided by a social custom that is developed from meeting other taxpayers the belief and social custom feed into the occupational choice between employment and two forms of self employment it is shown that the use of predictive analytics yields a significant increase in revenue over a random audit strategy

rational habit formation abstract this paper discusses consumer demand under rational habit formation if consumer tastes change endogenously through habit stocks depending on past consumption the rational consumer will make allowance of the future habit forming effects of current consumption a model with rational habit formation is made formally equivalent to an intertemporal consumer model without habit formation by redefining the cost of consumption and wealth the cost of consumption is obtained by adding the cost of future induced consumption to the rental price of the commodity the extended wealth concept is obtained by subtracting the cost of the initial stocks of habits and the cost of future physically necessary consumption from wealth the paper also investigates the implication of rational habit formation for constructing one period cost of living indices

the effects of social networks on employment and inequality we develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts we show that employment is positively correlated across time and agents moreover unemployment exhibits duration dependence the probability of obtaining a job decreases in the length of time that an agent has been unemployed finally we examine inequality between two groups if staying in the labor market is costly and one group starts with a worse employment status then that group s drop out rate will be higher and their employment prospects will be persistently below that of the other group

on bullwhip in supply chains historical review present practice and expected future impact abstract demand amplification or bullwhip as it is now called is not a new phenomenon since evidence of its existence has been recorded at least as far back as the start of the 20th century and is well known to economists yet industry worldwide still has to cope with bullwhip measured not just in terms of the 2 1 amplification which is frequently quoted but sometimes it is as high as 20 1 from end to end in the supply chain this can be very costly in terms of capacity on costs and stock out costs on the upswing and stockholding and obsolescence costs on the downswing in this paper we have identified 10 published causes of bullwhip all of which are capable of elimination by re engineering the supply chain we offer evidence on the present health of a family of supply chains and pinpoint much good practice this is in anticipation that such excellence will become normative in the near future as the learning experience gathers momentum and provided that human factors are properly addressed

who compares to whom the anatomy of income comparisons in europe this article provides unprecedented direct evidence from large scale survey data on both the intensity how much and direction to whom of income comparisons income comparisons are considered to be at least somewhat important by three quarters of europeans they are associated with both lower levels of subjective well being and a greater demand for income redistribution the rich compare less and are happier than average when they do which latter is consistent with relative income theory with respect to the direction of comparisons colleagues are the most frequently cited reference group those who compare to colleagues are happier than those who compare to other benchmarks

on the private provision of public goods on networks abstract this paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors provisions we present a proof of the existence and uniqueness of a nash equilibrium for general networks and best reply functions in addition we investigate the neutrality result of warr 38 and bergstrom blume and varian 6 whereby consumers are able to undo the impact of income redistribution as well as public provision financed by lump sum taxes to this effect we show that the neutrality result has a limited scope of application beyond a special network architecture in the neighborhood of the set of contributors

tax evasion and social interactions the paper extends the standard tax evasion model by allowing for social interactions in manski s manski c f 1993 identification of endogenous social effects the reflection problem review of economic studies 60 3 531 542 nomenclature our model takes into account endogenous interactions i e social conformity effects exogenous interactions i e fairness effects and correlated effects our model is tested using experimental data participants must decide how much income to report given individual and group tax rates and audit probabilities and given a feedback on the other members reporting behavior myopic and self consistent expectations are considered in the analysis in the latter case the estimation is based on a two limit simultaneous tobit with fixed group effects a unique social equilibrium exists when the model satisfies coherency conditions in line with brock and durlauf brock w a durlauf s n 2001b interactions based models in j heckman and e leamer eds handbook of econometrics 5 elsevier science b v 3297 380 the intrinsic nonlinearity between individual and group responses helps identify the model our results provide evidence of fairness effects but reject social conformity

a pragmatic approach to the design of bullwhip controllers it is well known that forecasting mechanisms can greatly increase bullwhip demand variance amplification of orders as processed by both human and algorithmic decision makers this paper is concerned with the application of the well established apiobpcs decision support system a variant of the order up to rule in such circumstances it has two feedback controls based on the inventory and the orders in pipeline respectively with gains set equal according to the deziel eilon rule there is one feed forward control based on exponential forecasting although this is not a restriction on the application of this system we consider the pragmatic role of apiobpcs in the situation where the echelon decision maker may be handling a wide range of sku s in a non altruistic environment where upmarket information may either be withheld or simply unavailable under such circumstances it has been established via site based studies that the decision makers output the orders reflect a wide range of strategies or maybe ignorance three strategies may be regarded as appropriate i e pass orders along demand smoothing and level scheduling depending on context apiobpcs can be adapted to each of these modus operandi in the first case with the added capability of smoothing the sharp edges with a modicum of inventory variation and in the last case with the advantage of built in trend detection players in non altruistic supply chains must be able to cope with added uncertainties due to lead time variations we show that apiobpcs may be well matched to such situations and is hence copable as well as capable the paper includes recommended parameter settings according to desired decision making policies

measuring and avoiding the bullwhip effect a control theoretic approach an important contributory factor to the bullwhip effect i e the variance amplification of order quantities observed in supply chains is the replenishment rule used by supply chain members first the bullwhip effect induced by the use of different forecasting methods in order up to replenishment policies is analysed variance amplification is quantified and we prove that the bullwhip effect is guaranteed in the order up to model irrespective of the forecasting method used thus when production is inflexible and significant costs are incurred by frequently switching production quantities up and down order up to policies may no longer be desirable or even achievable in the second part of the paper a general decision rule is introduced that avoids variance amplification and succeeds in generating smooth ordering patterns even when demand has to be forecasted the methodology is based on control systems engineering and allows important insights to be gained about the dynamic behaviour of replenishment rules

migration incentives migration types the role of relative deprivation the authors explore the role of relative deprivation versus absolute income as an incentive for migration in developing countries in section i of this paper we outline the relative deprivation model of migration and present an illustration of the divergent policy implications of a relative deprivation model versus an absolute income model an attempt is made to identify distinct empirical implications of relative and absolute income motives for migrating in section ii a migration decision model is estimated and is used to explore absolute and relative income motives for internal and international migration in a sample of rural mexican households as well as to test the extent to which discontinuity in labour markets shapes the choice of migrant destination in section iii we present our conclusions excerpt