multimarket contact imperfect monitoring and implicit collusion abstract this paper presents a theoretical foundation to the possibility that multimarket contact enhances firms ability to sustain implicit collusion when firms operate in a single market and cannot perfectly monitor their opponents choices it is impossible to achieve efficiency even if these firms have a long term strategic relationship we show that when firms encounter each other in a number of distinct markets and the extent of this market contact is large efficiency can be approximately sustained by a perfect equilibrium this efficiency with imperfect monitoring holds under almost the same condition on the discount factor as with perfect monitoring journal of economic literature classification numbers c70 c72 c73 d43 l11 l22 l41

what aspects of formality do workers value evidence from a choice experiment in bangladesh this study uses a choice experiment among 2 000 workers in bangladesh to elicit willingness to pay wtp for job attributes a contract termination notice working hours paid leave and a pension fund using a stated preference method allows calculation of wtp for benefits in this setting despite the lack of data on worker transitions and the fact that many workers are self employed which makes it difficult to use revealed preference methods workers highly value job stability the average worker would be willing to forego a 27 percent increase in income to obtain a 1 year contract relative to no contract or to forego a 12 percent increase to obtain thirty days of termination notice there is substantial heterogeneity in wtp by type of employment and gender women value shorter working hours more than men while government workers place a higher value on contracts than do private sector employees

the effects of prior beliefs and learning on consumers acceptance of genetically modified foods abstract new food products using genetically modified crops appeared in u s supermarkets starting in 1996 and consumers perceived some risks this paper examines the role of consumers prior beliefs about genetic modification and of diverse new information on their willingness to pay for foods that might be genetically modified we use data from economics experiments and show that participants who had informed prior beliefs discounted gm labeled food products more highly than those who had uninformed prior beliefs uninformed participants were especially susceptible to information from interested and third parties in contrast informed participants were generally not affected significantly by new information

oil depletion what does this mean for scottish tourism over the next 10 years scottish tourism is expected to grow by 50 one of the keys to that growth is transport which is a sector that is dependent upon oil this paper considers oil and the global economy and its relationship to scottish tourism consideration is given to the key variables such as oil forecasts security of supply cost of production world demand alternative forms of energy including renewables and nuclear power the combination of these facts means that high oil prices are here to stay two scenarios are constructed called energy inflation and paying for climate change these were developed using a triangulation of methods including the use of systems thinking models to construct the scenarios to computable general equilibrium modelling to analyse the impact of oil and energy price rises on scottish tourism the energy inflation scenario presumes mass belief in the plenitude of available oil reserves and the failure to respond quickly enough to alter demand this triggers a sudden and prolonged period of economic shocks political instability and environmental disasters the paying for climate change scenario assumes rising energy prices combined with conservation measures such as carbon taxes both scenarios raise a number of policy issues for the future including oil and fossil fuels being the main sources of energy as there is no real alternative renewables and nuclear power will continue to grow and countries will try to reduce further their reliance on oil rising oil prices are also noted as a positive feature driving innovation and new technologies which will become more economic as oil prices rise for scottish tourism the impact of rising oil prices could mean a bumpy ride with carbon taxes more wind farms and the possible end of the low cost carrier

repeated partnership games with imperfect monitoring and no discounting in a partnership game each player s utility depends on the other players actions through a commonly observed consequence e g output profit price which is itself a function of the players actions and an exogenous stochastic environment if a partnership game is repeated infinitely and each player s payoff in the infinite game supergame is the long run average of his expected one period utilities then efficient combinations of one period actions can be sustained as nash equilibria of the supergame even if the players cannot observe other players actions or information but can only observe the resulting consequences

the eco efficiency of tourism the use of fossil energy is one of the major environmental problems associated with tourism and travel consequently the need to limit fossil energy use has been highlighted as a precondition for achieving sustainable tourism development however tourism is also one of the most important sectors of the world economy and fears have thus been expressed by the tourist industry and its organisations that increasing energy prices for example as a result of eco taxes could substantially decrease the economic welfare of countries and destinations in this article the interplay of environmental damage and economic gains is thus analysed within the context of tourism carbon dioxide equivalent emissions are assessed in relation to the revenues generated allowing for conclusions about the eco efficiency of tourism

estimating local welfare generated by an nfl team under credible threat of relocation this study offers the opportunity to examine the welfare contribution of the minnesota vikings to minnesota households in the context of a credible threat of team relocation we find the credibility of the threat of relocation is essential to providing unbiased estimates of welfare this study utilizes contingent valuation methodology cvm and a random utility model rum to analyze minnesotans decision making mechanisms for supporting a new stadium initiative while previous studies have attempted to measure the welfare associated with a sports franchise we develop and discuss bias that may be imparted to estimates when the researcher fails to calculate a choke price further we develop an unbiased approach to identify welfare when respondents perceive a risk of losing the franchise the range of welfare contribution by the vikings to households in minnesota is 445 3 million to 1 571 3 million according to a 95 confidence interval based on our study

preservation or use a contingent valuation study of wilderness designation in utah evidence of strong opposition to wilderness proposals in utah suggested that the non market value of retaining those areas in multiple use management might be significant a contingent value analysis of both supporters and opponents of the two major proposals for wilderness designation in utah indicated that there existed significant non market willingness to pay on the part of opponents and that standard contingent valuation practice which does not explicitly consider these values could lead to a mis estimation of aggregate willingness to pay

willingness to pay attitudes and fundamental values on the cognitive context of public preferences for diversity in agricultural landscapes abstract our study set out to investigate if and how willingness to pay both hypothetical and actual might reflect individuals wider cognitive networks we draw on the idea of cognitive hierarchies i e the notion that concrete preferences and attitudes are embedded in networks of more abstract beliefs and values and explore if willingness to pay wtp as expressed through contingent valuation can be understood as part of such hierarchies to this end we elicited stated and actual wtp in a survey of public preferences and attitudes towards the establishment of an agri environmental payment scheme in northeim germany that rewards farmers for the provision of riparian buffer strips two main findings emerged from the study first only a very small proportion of those stating positive wtp did actually transfer the money second contrary to our hypotheses results from a structural equation model suggest that stated wtp was only poorly connected to attitudes towards the payment scheme and other potentially relevant more abstract beliefs and values this casts doubts on the meaningfulness of such statements of the ten different fundamental value types included only universalism and conformity played a significant role in the cognitive hierarchy and informed generalised environmental beliefs as well as attitudes towards the payment scheme as attitudes seemed to be better integrated in the cognitive network than wtp we discuss if surveys of public preferences should rely on attitude statements rather than solely on monetary values

paying for pollution how general equilibrium effects undermine the spare the air program policy makers have relied on non coercive mechanisms to achieve socially preferred outcomes in a variety of contexts when prices fail to ration scarce resources amid heightened concern about environmental damage and climate change public appeals for cooperation and pecuniary incentives are frequently used to achieve resource conservation and other prosocial behavior yet the relative effectiveness of these two instruments is poorly understood when pecuniary incentives are small this paper examines the extent to which free transit fares and appeals for car trip avoidance reduce car pollution on smoggy days using data on freeway traffic volumes and transit ridership public appeals for cooperation are shown to have no significant effect on car trip demand free transit fares however do have a significant effect on car trip demand but the effect is perverse in that it generates an increase in car trips and related pollution free fares also increase transit ridership these results suggest that free transit rides do not induce motorists to substitute to transit but instead subsidize regular transit rides and additional trips appeals for cooperation have no affect on carpooling behavior

status quo maintenance reconsidered changing or incomplete preferences after reviewing the evidence for status quo maintenance sqm i consider how to reconcile sqm with traditional consumer theory behavioural economists usually let agents preferences change as a function of their endowments treating the same person with different endowments as a set of distinct agents many properties of preferences then become immune to empirical test and it becomes impossible to judge whether an agent s decisions make the agent better or worse off this impedes prediction of when decision rules are likely to change sqm can alternatively be explained with unchanging preferences if preferences are incomplete sqm is then consistent with self interest and there is no reason why it should not persist

efficiency results in n player games with imperfect private monitoring abstract we demonstrate that efficiency is achievable in a certain class of n player repeated games with private almost perfect monitoring our equilibrium requires only one period memory and can be implemented by two state automata furthermore we show that this efficiency result holds with any degree of accuracy of monitoring if private signals are hemiindependent whereas most existing research focuses on two player cases or only a special example of n player games our results are applicable to a wide range of n player games of economic relevance such as trading goods games and price setting oligopolies

firm reputation and horizontal integration author s cai hongbin abstract we study effects of horizontal integration on firm reputation in an environment where customers observe only imperfect signals about firms effort quality choices firms cannot maintain reputations of high quality and earn quality premium forever even when firms are choosing high quality effort there is always a possibility that a bad signal is observed in this case firms must give up their quality premium at least temporarily as punishment a firm s integration decision is based on the extent to which integration attenuates this necessary cost of maintaining a good reputation horizontal integration leads to a larger market base for the merged firm and may allow better monitoring of the firm s choices hence improving the punishment scheme for deviations on the other hand it gives the merged firm more room for sophisticated derivations we characterize the optimal level of integration and provide sufficient conditions under which nonintegration dominates integration we show that the optimal size of the firm is smaller when 1 trades are more frequent and information is disseminated more rapidly or 2 the deviation gain is smaller than the honesty benefit or 3 customer information about firm choices is more precise

energy projects in iceland advancing the case for the use of economic valuation techniques to evaluate environmental impacts decision making in iceland has occurred without reference to economic valuations of the environmental impacts of energy projects environmental impact assessments a legal requirement for nearly all energy projects in iceland since 1994 have played an important role in identifying the environmental impacts of energy projects and proposing mitigation measures however a purely qualitative description of environmental impacts is insufficient to ensure that they are accounted for equivalently with all of the other costs and benefits of a proposed project instead as monetary information concerning the welfare gains or losses of proposed projects is not currently required to be provided to the licensing body orkustofnun there is the potential for sub optimal decision making to occur as this paper sets out a broad variety of non market valuation techniques already exist and could be applied to estimate the value of environmental benefits sacrificed to accommodate such developments these methods and their outcomes could be incorporated within mandatory cost benefit assessments for proposed icelandic energy projects communicating an estimate of the full welfare implications of approvals to decision makers and the public alike and fulfilling an oecd demand for the country to commence such processes

the risk of contagion from multimarket contact abstract it is conventional wisdom that the strategic linkage of markets that is enabled by multimarket contact typically increases the profitability of cooperation among rivals we find to the contrary that a strong force against strategic linkage results from imperfect monitoring of adherence to cooperation with such imperfections strategically linking markets can lower payoffs by permitting the impact of adverse shocks in one market to spread to others consequently players of repeated games on more than one front may find it strictly advantageous to avoid linking strategies on a front with clear monitoring to outcomes on a front with error prone monitoring one implication is that antitrust competitive strategy and foreign policy analyses have presumed too broadly that multimarket contact fosters cooperation the game theoretic equilibria characterized here shed light on why players such as firms and nations sometimes strategically link fronts in their rivalry and sometimes take care to articulate that some fronts of particularly volatile conflicting interests will not trigger broader adverse moves against the rival

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

global oil gas depletion an overview abstract the world s production of conventional hydrocarbons will soon decline hydrocarbon shortages are inevitable unless radical changes occur in demand or in the supply of non conventional hydrocarbons the details are as follows global conventional oil supply is currently at political risk this is because the sum of conventional oil production from all countries in the world except the five main middle east suppliers is near the maximum set by physical resource limits should middle east suppliers decide to substantially curtail supply the shortfall cannot be replaced by conventional oil from other sources world conventional oil supply will soon be at physical risk the middle east countries have only little spare operational capacity and this will be increasingly called upon as oil production declines elsewhere large investments in middle east production if they occur could raise output but only to a limited extent a partial exception is iraq but even here there would be significant delays before prospects are confirmed and infrastructure is in place if demand is maintained and if large investments in middle east capacity are not made the world will face the prospect of oil shortages in the near term even with large investments resource limits will force middle east production to decline fairly soon and hence also global conventional oil production the date of this resource limited global peak depends on the size of middle east reserves which are poorly known and unreliably reported best estimates put the physical peak of global conventional oil production between 5 and 10 years from now the world contains large quantities of non conventional oil and various oil substitutes but the rapidity of the decline in the production of conventional oil makes it probable that these non conventional sources cannot come on stream fast enough to fully compensate the result will be a sustained global oil shortage for conventional gas the world s original endowment is probably about the same in energy terms as its endowment of conventional oil since less gas has been used so far compared to oil the world will turn increasingly to gas as oil declines but the global peak in conventional gas production is already in sight in perhaps 20 years and hence the global peak of all hydrocarbons oil plus gas is likely to be in about 10 or so years

role of linking mechanisms in multitask agency with hidden information we investigate the adverse selection problem where a principal delegates multiple tasks to an agent we characterize the virtually implementable social choice functions by using the linking mechanism proposed by jackson and sonnenschein 2007 that restricts the message spaces the principal does not require any incentive wage schemes and can therefore avoid any information rent and welfare loss we show the resemblance between the functioning of this message space restriction and that of incentive wage schemes we also extend the results of the single agent model to the multi agent model

global cartels leniency programs and international antitrust cooperation in this paper we analyze cartel formation and self reporting incentives when firms operate in several geographical markets and face antitrust enforcement in different jurisdictions we are concerned with the effectiveness of leniency programs and the benefits of international antitrust cooperation between agencies when international antitrust prosecution is uncoordinated multi market contact allows firms to reduce the amount of self reporting in equilibrium and sustain cartels more effectively we then discuss the effects of information sharing among antitrust authorities as a function of how much and which type of information is exchanged we show that extensive information sharing might have an adverse effect on self reporting by cartel members

the folk theorem with imperfect public information the authors study repeated games in which players observe a public outcome that imperfectly signals the actions played they provide conditions guaranteeing that any feasible individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with sufficiently little discounting the central condition requires that there exist action profiles with the property that for any two players no two deviations one by either player give rise to the same probability distribution over public outcomes the results apply to principal agent partnership oligopoly and mechanism design models and to one shot games with transferable utilities copyright 1994 by the econometric society

exploring methods and practicalities of conducting sector wide energy consumption accounting in the tourist accommodation industry abstract sector wide environmental accounting is an important mechanism for determining areas of poor environmental performance that need to be targeted to reduce resource consumption and the production of waste output however to date little attention has been paid to the practicalities of conducting sector wide environmental accounting in fragmented service oriented industry sectors that comprise a diversity of small to medium sized enterprises smes this study explores such practicalities through a series of independent energy audits conducted in the australian tourist accommodation industry three distinct energy consumption accounting techniques are reviewed in the light of findings made from 35 energy audits and more than 200 telephone and face to face interviews held with various accommodation sector representatives the three sector wide energy consumption accounting methods reviewed are the floor area method the multiple regression method and the mandatory reporting method in light of different business structures different in house environmental accounting practices and other major factors affecting resource consumption mandatory reporting is found to be the most efficient and effective method to facilitate its use it is recommended that a governments consider requiring commercial resource consumption or waste production figures to be made generally accessible b businesses are required to collect energy consumption data over several years to provide the basis for calculating relatively accurate models that capture the factors driving energy consumption and c standardised accounting spreadsheets are developed to facilitate data collection for different types of enterprises

optimal collusion under imperfect monitoring in multimarket contact abstract we investigate optimal collusion in repeated multimarket contact under imperfect public monitoring where two firms operate in m markets and in each market each firm s decision and public signals are binary we show that in an optimal pure strategy strongly symmetric perfect public equilibrium the size of efficiency loss is equal to that in the market with the most tempting deviation under single market contact furthermore we show a sufficient condition under which the symmetric equilibrium is optimal for joint payoff maximization among any perfect public equilibrium

the citizen versus consumer distinction an exploration of individuals preferences in contingent valuation studies abstract contingent valuation has been used extensively in estimating the value of environmental goods one criticism of this approach however is that respondents in referendum style contingent valuation surveys may express citizen assessments that take into account benefits to others rather than benefits that accrue purely to the respondent themselves within this context the aim of this paper is to examine to what extent individuals express different preferences when adopting a personal or a social citizen perspective while this paper provides some support for the hypothesis that individuals express different preferences when adopting collective as opposed to personal choices reported willingness to pay wtp was found to be insensitive to whether or not the respondents were asked the wtp question from a personal or social perspective

universal health insurance in the clinton plan coverage as a tax financed public good the financing arrangements embodied in the clinton health reform plan involve some important differences in the way in which public goods are usually financed the subsidies to small low wage firms mandated to provide benefits distort markets in both labor and products and offer incentives for the creation of small firms in addition the financing scheme implicitly envisions a head tax on families at modest income levels but offers a possible rationale for it nevertheless the main reason for many of the financing features appears to be an attempt to hold down the apparent budgetary cost of universal coverage

measuring the effectiveness of voluntary emission reduction programmes this paper examines the evaluation of state environmental policies aimed at reducing ground level ozone in order to meet air quality standards set by the us environmental protection agency several states with metropolitan areas that violate federal air quality regulations have adopted voluntary emission reduction programmes these programmes focus on emissions from mobile sources with the chief source being the automobile states are allowed to claim credit towards bringing their metro areas closer to compliance with regulations only if they can provide credible evidence that these voluntary programmes are successful in reducing emissions a model is developed to forecast aggregate traffic volumes so that one can assess the impact of the programme in reducing traffic flows during ozone action days background information on the difficulties of measuring the ozone problem and on the recent policies adopted by the us epa is provided using data from the atlanta georgia metropolitan area the accuracy o

the contingent valuation debate why economists should care t he contingent valuation method involves the use of sample surveys questionnaires to elicit the willingness of respondents to pay for generally hypothetical projects or programs the name of the method refers to the fact that the values revealed by respondents are contingent upon the constructed or simulated market presented in the survey a spirited and occasionally mean spirited battle over such methods is currently being waged involving competing factions within the federal government economists and lawyers representing business and environmental groups and interested academics as well at issue is a seemingly quite specific question should environmental regulations currently under development at both the department of the interior and the department of commerce sanction the use of the contingent valuation method in estimating the damage done by spills of oil chemicals or other substances covered by federal law more generally the debate raises broad questions about what economists have to say about the values that individuals place on public or private goods the two papers that follow this one make cases for and against the use of the contingent valuation method my aim here is to provide an overview of the technique and the debate surrounding it i also want to suggest why this debate should matter to economists both professionally and in their roles as citizens and consumers

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

leniency programs for multimarket firms the effect of amnesty plus on cartel formation we examine the effect of amnesty plus on dynamic cartel formation in a multimarket setting the amnesty plus program has been adopted as part of the us corporate leniency policy in 1999 and is now vigorously advertised as one of the most compelling tools in generating successful cartel investigations amnesty plus is aimed at attracting amnesty applications by encouraging firms convicted in one market to report their collusive agreements in other markets we show that amnesty plus has two opposite effects on firms ability and incentives to collude which are both increasing in the fine reduction granted first amnesty plus can reduce the deterrence of cartel activities by making it easier for firms to sustain multimarket collusion through strategies involving self reporting after a first cartel detection second it can reduce the expected duration of cartels or delay their formation by increasing firms incentives to self report after a first cartel detection

the trade off between money and travel time a test of the theory of reference dependent preferences we formulate a model of reference dependent preferences based on the marginal rate of substitution at the reference point of a reference free utility function using binary choices on the trade off between money and travel time reference dependence is captured by value functions that are centered at the reference the model predicts a directly testable relationship among four commonly used valuation measures willingness to pay wtp willingness to accept wta equivalent gain eg and equivalent loss el moreover we show that the model allows recovering the underlying reference free value of time based on a large survey data set we estimate an econometric version of the model allowing for both observed and unobserved heterogeneity in a series of tests of high statistical power we find that the relationship among the four valuation measures conforms to our model and that the constraints on the parameters implied by the model are met the gap between wtp and wta is found to be a factor of four loss aversion plays an important role in explaining responses moreover participants are more loss averse in the time dimension than the cost dimension we further find evidence of asymmetrically diminishing sensitivity finally we show that the fraction of mistakes in the sense that participants are observed to sometimes select dominated options varies systematically in a way consistent with the model of reference dependence the results of the paper have important implications for the evaluation of infrastructure investment and pricing reforms in the transport sector

oil prices tourism income and economic growth a structural var approach for european mediterranean countries abstract in this study a structural var model is employed to investigate the relationship among oil price shocks tourism variables and economic indicators in four european mediterranean countries in contrast with the current tourism literature we distinguish between three oil price shocks namely supply side aggregate demand and oil specific demand shocks overall our results indicate that oil specific demand shocks contemporaneously affect inflation and the tourism sector equity index whereas these shocks do not seem to have any lagged effects by contrast aggregate demand oil price shocks exercise a lagged effect either directly or indirectly to tourism generated income and economic growth the paper does not provide any evidence that supply side shocks trigger any responses from the remaining variables results are important for tourism agents and policy makers should they need to create hedging strategies against future oil price movements or plan for economic policy developments

low energy efficiency in rental properties asymmetric information or low willingness to pay abstract asymmetric information may explain low energy efficiency in rented properties energy ratings while a solution to the information problem will only lead to higher efficiency levels if renter s willingness to pay wtp exceeds landlord s investment costs using a sample of renters from one university this paper estimates this wtp using a discrete choice experiment where respondents choose from a hypothetical set of single bedroom apartments that differ according to a number of attributes including the energy rating results show that there is a strong disutility associated with the least efficient properties and that renters will pay significantly more for efficiency improvements at the lower end of the efficiency scale importantly our wtp estimates are calculated in a setting where respondents were informed about the energy rating system prior to choosing and where the rating was shown for every property therefore in order to maximise the impact of energy rating systems policymakers are encouraged to ensure that both these informational characteristics are in place

monetary valuation of ecosystem services it matters to get the timeline right in the abundant literature dealing with the monetary valuation or monetization of ecosystem services mes with very few exceptions the concept is presented as having emerged in 1997 in fact there is a long history starting in the late fifties but largely ignored of sustained attempts to assign monetary values to nature s services these early efforts encountered many conceptual and methodological roadblocks which could not be resolved and led a number of researchers to argue that monetary valuation was not a fruitful approach it is in that context that mes was hailed by some in 1997 as a promising way to integrate environmental goods and services into the logic of economic markets knowledge of the full timeline casts a very different light in particular on the difficulties currently encountered in the practice of mes far from being the expected growing pains of a young discipline these difficulties turn out to be long standing problems that have eluded solution over the last half century and appear intrinsically unresolvable this perspective suggests that at this point it is advisable to look at alternatives to mes for the integration of nature into economic decisions

on the theory of repeated games with private information part ii revelation through communication abstract we consider repeated games with private information discounting and communication similarly to abreu et al 1986 1987 we characterize supergame equilibrium allocations with truthful revelation in the two player case efficiency cannot be attained with supergame equilibria with truthful revelation

contingent valuation a new perspective after several decades of academic research on the contingent valuation cv method a consistent behavioral explanation of hypothetical bias is still lacking based on evidence from economics economic psychology and the political sciences i propose an explanation that is based on two simple working hypotheses about respondent behaviour in contingent valuation surveys the first hypothesis is that survey respondents are unable to form consistent preferences about unfamiliar goods unless the choice context offers reliable informative cues that can be rationally exploited in simplified heuristics the second hypothesis is that the probability and impact of strategic responses in dichotomous choice questions about public goods depends on the extent to which the presented hypothetical costs differ from the actual costs the literature on hypothetical bias is revisited in the light of these behavioral hypotheses i find that the hypotheses are generally supported by the empirical data moreover the hypotheses are able to explain several important empirical phenomena that previous research has not been able to explain in particular they solve the puzzle that pre election polls but not cv surveys are able to predict actual referendum outcomes and they explain why income effects on willingness to pay are lower in cv responses than in actual votes if confirmed by further studies the hypotheses will have important implications for future research and practice first the hypothetical costs presented in the dichotomous choice question should to be close enough to the actual costs to be credible to all respondents this can be achieved by specifying the costs as a percentage rather than absolute change in taxes second the respondents should be given the option to answer based on information about the positions of large parties and interest groups with known political orientation rather than based on the raw policy information theory and evidence suggest that this new survey paradigm largely eliminates the fundamental problems of the conventional stated preference methods

risk management instruments for debt driven conservation efforts the case of india s project tiger abstract project tiger has been india s premier case of conservation success since mid 1990s select project tiger reserves in india were chosen for intensive funding by the global environment facility the international development agency ida and the government of india under the india eco development project this project marked a modest shift towards debt based funding the gef project has become a benchmark for tiger conservation in india both in terms of management outcomes and scale and scope of funding however in the absence of large scale budgetary support or self generating income flows it becomes difficult for the gef type of project to be replicated in other tiger reserves of the country debt instruments hold promise as enablers of conservation finance the paper proposes issue of tiger bonds to meet the financial requirements of tiger reserves though attractive as a debt instrument a tiger bond could nevertheless entail interest rate and default risks bioprospecting activities form good revenue sources for tiger reserves to pay off their debts however bioprospecting activities do not provide assured returns to tiger reserves pharmaceutical companies that prospect for genetic resources and practice real options approach to r d investment planning adopt multi phased investment systems and sequential searches that gives them the flexibility to abandon r d projects from the point of view of genetic resource providing entities like project tiger reserves the postponement value generated by real options enables a drug company to tap substitutes for the genetic resources that form the subject matter of bioprospecting contracts to obviate possible repayment risks by tiger reserves the paper advocates the institution of put bonds as a risk management tool for project tiger reserves in order to hedge themselves against loan defaults arising from possible loss in bioprospecting income the paper also brings out the mechanics of the issue of tiger bonds in the indian context it is argued that a put bond not only hedges default risks but would also aid value discovery and payment for ecosystem services as far as the project tiger reserves of india are concerned

implications of a long term increase in oil prices for tourism it is expected that global oil prices will increase in the future assessing the overall economic impacts on tourism is difficult as oil price rises will be concomitant with global changes in other commodity prices exchange rates and incomes a general equilibrium perspective is therefore presented in this paper the model couples a global general equilibrium model with a purpose built cge model of new zealand which focuses on describing tourism supply and demand in some detail the results indicate a decrease in real gross national disposable income of 1 7 for a doubling of oil price and a 9 reduction in the real value of tourism exports as a result of segment specific price increases and differing income and exchange rate effects and elasticities the reduction in demand for tourism in new zealand by 18 segments differs substantially the greatest reduction in demand is observed for tourists from the united kingdom

quality of life and the wtp for an increased life expectancy at an advanced age abstract in this study we report an attempt to measure the value adult swedes impute to an increased survival probability at high ages a rating scale between the worst possible quality of life 1 and the best possible quality of life 10 is used to indicate the quality of life a person expects to achieve at an advanced age we find a highly significant correlation between this quality measure and the insurance premium a person is willing to pay in exchange for a programme increasing the expected length of life by one year conditional on having survived until the age of 75 years the maximum insurance premium the average person is willing to pay for such a programme is less than 1500 the willingness to pay increase with a person s age but at a low rate the implied average marginal rate of time preference is about 1 percent

contingent valuation of ecotourism in annapurna conservation area nepal implications for sustainable park finance and local development abstract to determine willingness to pay wtp for candidate entry fees contingent valuation surveys were administered to 315 foreign visitors to the annapurna conservation area nepal during april and may of 2006 the results of logit regression showed that the bid amount family size visitors satisfaction the use of a guide and group size were the most significant predictors of wtp results suggest that most visitors would be willing to pay an entry fee considerably higher than the current fee of 27 u s dollars usd the mean and median wtp were 69 2 and 74 3 usd respectively the most common explanation for wtp by respondents was a desire to better protect the environment the most common explanation for unwillingness to pay was that the bid was simply too expensive two models were developed based upon different predictions of visitor numbers an optimistic case and pessimistic case to calculate the expected revenue production and likely gross local economic impact of candidate entry fees based on this analysis we recommend an increase in the entry fee to usd 50 in the optimistic scenario this higher entry fee leaves a budget surplus in the pessimistic scenario it would reduce current budget deficits

the challenge of revenue sharing with bundled pricing an application to music bundling can increase revenue and profits relative to selling products on a standalone basis and this is an especially attractive strategy for zero marginal cost information products despite the clear benefits of bundling it has one major problem bundling produces revenue that is not readily attributable to particular pieces of intellectual property creating a revenue division problem the shapley value provides a well motivated solution to this problem and we use unique survey data to create measures of bundle value and in turn to estimate shapley values for each of 50 bundle elements we then evaluate feasible revenue sharing schemes including equal sharing proportional sharing and the modified shapley value of ginsburgh and zang 2003 2004 we first document that the shapley value is highly incentive compatible all bundle elements fare better inside the bundle than they do outside on a standalone basis we then evaluate the feasible schemes according to both their incentive compatibility and their similarity with the shapley value we find not surprisingly that the feasible schemes are less incentive compatible than the shapley value among the feasible schemes the gz scheme performs best while equal sharing performs worst

repeated games with private monitoring two players we investigate two player infinitely repeated games where the discount factor is less than but close to unity monitoring is private and players cannot communicate we require no condition concerning the accuracy of players monitoring technology we show the folk theorem for the prisoners dilemma with conditional independence we also investigate more general games where players private signals are correlated only through an unobservable macro shock we show that efficiency is sustainable for generic private signal structures when the size of the set of private signals is sufficiently large finally we show that cartel collusion is sustainable in price setting duopoly

an example of a repeated partnership game with discounting and with uniformly inefficient equilibria in this note we present an example of a repeated partnership game with imperfect monitoring in which all supergame equilibria with positive discount rates are bounded away from full efficiency uniformly in the discount rate provided the latter is strictly positive on the other hand if the players do not discount the future then every efficient one period payoff vector that dominates the one period equilibrium payoff vector can be attained by an equilibrium of the repeated game thus the correspondence that maps the players discount rate into the corresponding set of repeated game equilibrium payoff vectors is discontinuous at the point at which the discount rate is zero

how to measure the economic impact of vector borne diseases at country level vector borne diseases vbds are widespread in less developed countries and reemerging in developed ones available economic studies agree that vbds have significant effects on countries economic outcomes and affirm that a systematic evaluation of such effects is crucial for the efficient allocation of resources to health related priorities this paper provides a comparative assessment of available methodologies for measuring the economic impact of vbds at national level we review both macroeconometric and micro based approaches and examine advantages and disadvantages of current methods we conclude by suggesting possible areas for future research

using neuroeconomics to understand environmental valuation contingent valuation choice experiments and other stated preference methods are frequently used to capture the nonmarket valuation of natural resources and ecosystem services the emerging field of neuroeconomics which assesses the neuroscience underlying decision making plots a promising course to explore the mechanisms underlying complex environmental valuation decisions neuroeconomic methods offer a unique capacity to isolate value components that contribute to willingness to pay wtp separating an individual s response to natural resource attributes that are of interest to economists from other attributes or influences on the decision process neuroimaging data can also aid in understanding differences in response between preference elicitation techniques and identifying the use of different decision processes and heuristics during valuation this article surveys the benefits and limitations of using neuroeconomics methods to assess the value of environmental goods and focuses on three examples where neuroeconomics may inform environmental valuation protest responses comparison of hypothetical and consequential choice contexts and the evaluation of environmental attributes and optimization of study design in stated choice experiments neuroeconomics methods offer a foundation for positive collaboration between environmental economists and cognitive neuroscientists yielding metrics that complement and augment current stated preference methods of determining environmental valuation

multimarket contact competition and pricing in banking abstract in this paper we assess the impact of multimarket contact of banks on their market power by means of a simultaneous equation model in which the divergence of price from marginal cost is a function of multimarket linkages the model is estimated using aggregate data from the italian regions for the years 1997 2009 our results show that multimarket contact is positively and significantly correlated to the market power index and is also connected to both home and non home market concentration the evidence is robust to changes in model specification and multimarket contact measures and supports the idea that firms which have a greater amount of contact are more likely to collude

developing indicators for managing tourism in the face of peak oil abstract in its present form tourism is dependent on the availability of oil and is comparatively oil intensive while forecasts for future tourism growth are optimistic there is also increasing evidence about the imminence of a peak in oil production and the economic effects that this would cause globally and on a destination level it will be necessary to consider how a transition towards fossil fuel free economies might look like for tourism it is therefore timely and prudent for the tourism sector to consider its current oil requirements and derive indicators for monitoring its oil consumption in particular destinations need indicators of the amount of oil consumed by the various markets from which they receive visitors new zealand is used as an example for assessing the oil intensity of its top 10 countries of origin based on the 10 indicators overall the least exposed markets for new zealand with respect to oil are australia china singapore and taiwan although a more detailed analysis would be required for markets that display very heterogeneous travel behaviour among the indicators eco efficiency is particularly important as it allows comparison of resource inputs with economic outputs

incorporating psycho social considerations into health valuation an experimental study abstract this study used multiple elicitation question modes and group discussions to value psycho social considerations associated with public perceptions of health risks values for saving 100 statistical lives in six different policy contexts varied by 50 largely due to psycho social considerations of choice and control a currency effect was found value of life differentials were smaller when questions were framed directly in the currency of lives saved rather than willingness to pay or public spending to save lives discussions reduced but did not eliminate inconsistencies and slightly increased the relative valuations of health interventions involving less choice and control by those at risk

multimarket contact in continuous time games abstract this paper investigates whether multimarket contact is effective in increasing the value of collusion we show that for any discount rate the set of equilibrium payoffs average per market expands through multimarket contact in continuous time games

valuing environmental factors in cost benefit analysis using data envelopment analysis abstract environmental cost benefit analysis ecba is used for the social evaluation of investment projects and policies that involve significant environmental impacts economic valuation of environmental impacts forms one of the critical steps of ecba we develop a new method for this purpose which does not require price estimation for environmental impacts using stated or revealed preference methods our approach is based on data envelopment analysis dea which is modified to ecba by using absolute shadow prices instead of relative prices we also discuss how the method can be used for sensitive analysis in ecba we illustrate the method by means of a hypothetical numerical example

the effect of decisions under uncertainty on imperfect monitoring games abstract the study of repeated games with imperfect public information began with abreu d pearce d stacchetti e 1986 optimal cartel equilibria with imperfect monitoring journal of economic theory 39 251 269 using dynamic decomposition and was settled in fudenberg d levine d maskin e 1994 the folk theorem with imperfect public information econometrica 62 997 1039 however we suggest that if the effect of uncertainty and irreversibility are considered when punishment is exercised the set of perfect public equilibria and their payoffs would change

hypothetical actual bid calibration of a multigood auction abstract evidence suggests the calibration of hypothetical and actual behavior is good specific we examine whether clustering commodities into mutual categories can reduce the burden while we reject a common calibration across sets of commodities a sport specific calibration function cannot be rejected

use value of cultural events the case of the christmas markets the christmas market in meran italy is one of the top 27 european christmas markets attracting around 2000 visitors a day for 50 days the christmas market is a cultural and retail event that creates a recreational value for visitors this paper using the travel cost method estimates the recreational use value of the meran christmas market for one day and multiple day visitors the aim is to estimate the economic or social value consumer surplus of the christmas market to understand in what way the event creates a benefit for society as a whole the empirical data were collected via a survey administered at the end of a visit at the christmas market during the 2011 2012 season the empirical findings highlight that the use value differs other than according to travel costs according to the type of visit experience and to the perceived authenticity

demand elasticity estimates for new zealand tourism demand elasticities for new zealand tourism are estimated for 16 different international visitor segments segments are differentiated by origin purpose of visit and travel style elasticities for both international visitor arrivals and on the ground expenditure per arrival are estimated for each segment using time series data in general on the ground consumption per arrival is more price sensitive than number of arrivals and asian market segments are found to be more price sensitive both in terms of arrivals and on the ground expenditure compared to international visitors from other regions an application of the results is presented giving the total effect of exchange rate changes on expenditure by international visitors in new zealand and management implications are discussed

the cross price effect on willingness to pay estimates in open ended contingent valuation abstract previous literature has shown that potential buyers use a reference price or product to form their opinion about the value of a new product therefore the pricing decision is an interactive process we investigate the two generalizations of the cross price effect the neighborhood price effect and the asymmetric price effect on consumer willingness to pay wtp for multiple similar products in an open ended contingent valuation context results show that the cross price effect on wtp is prominent with the neighborhood price effect holding in contingent valuation no conclusions are reached about the asymmetric price effect

vacation behaviour under high travel cost conditions a stated preference of revealed preference approach abstract this paper investigates vacation behaviour under high travel cost conditions we estimate discrete portfolio vacation choice models on data obtained in a novel free format stated preference of revealed preference sp off rp choice experiment the substantive contribution of this paper is that we develop new insights into vacation behaviour under high travel cost conditions we find that vacationers exhibit considerable diminishing marginal disutility of vacation travel costs furthermore we have identified significant interactions effects across the following vacation choice dimensions destination length of stay accommodation type and mode of transport therefore a substantial increase in travel costs is likely to have marked consequences for the tourism industry reaching beyond the transportation side of tourism methodological contributions of this paper are twofold 1 it proposes a choice experiment in which sp alternatives are constructed by pivoting of late consideration set alternatives rather than only of a chosen alternative and 2 it proposes and illustrates the use of a generalization of a recently proposed sp off rp estimation procedure

a comparison of stated preference methods for environmental valuation this paper presents an empirical comparison of contingent valuation cvm and choice experiments which are used to value environmental quality changes both of these methods require individuals to state their preferences for environmental qualities however choice experiments differ from cvm in that environmental attributes are varied in an experimental design which requires respondents to make repeated choices between bundles of attributes the empirical application involved the effect of environmental quality changes arising from forest management practices on recreational moose hunting values significant differences were found between the values derived from the two methods however detailed examination of the implied choice behaviour suggested that respondents ignored substitute recreation areas in the cvm question restricting the choice experiment model to consider only the one site where quality was varied resulted in welfare estimates similar to the cvm model this highlights the importance of substitutes in environmental valuation and suggests that choice experiments may be more appropriate than cvm in some cases