asymmetric bidding in second price common value auctions abstract two comparative static characterizations for common value auctions under second price rules are extended to heterogeneous bidders the willingness to pay of the two highest bidders is enhanced on average by the release of public information and best responses are less aggressive when facing more rival bidders

stochastic convergence in per capita fossil fuel consumption in u s states abstract this study examines the stochastic convergence of per capita fossil fuel consumption across u s states including the district of columbia utilizing lm and rals lm unit root tests with allowance for endogenously determined structural breaks our results indicate that with the exception of nevada the evidence from two break and one break lm and rals lm unit root tests rejects the null hypothesis of a unit root in the relative per capita fossil fuel consumption in the u s this finding indicates the presence of stochastic convergence in relative per capita fossil fuel consumption in the u s states

conditional convergence in australia s energy consumption at the sector level abstract we examine the convergence of energy consumption per capita at the sector level in australia over the period 1973 74 to 2013 14 to do so we employ recently developed lm and rals lm unit root tests that accommodate up to two endogenously determined structural breaks we find support for energy consumption per capita convergence for six of seven sectors in australia

information competition and markets one of the dominant characteristics of modern capitalist economies is the important role played by competition not the peculiar static form of pure price competition embodied in the arrow debreu model but rather a dynamic competition more akin to the kind of competition represented by sports contests and other races including patent races in recent years there have been several attempts to explain why firms often base the pay of their workers and managers on relative performance see for example edward lazear and sherwin rosen 1981 such compensation schemes become desirable when three conditions are satisfied a the input effort of workers managers must not be directly observable at least without cost thus firms must either expend resources to monitor inputs or devise reward structures in which compensation is a function of variables such as output or profits which are themselves functions of inputs but are less costly to observe b the relationship between input and output must be stochastic so that by observing output one cannot perfectly infer what the input was c finally the stochastic disturbances which affect the relationship between input and output of different firms must be correlated by looking at the performance of one worker relative to that of others one can make better inferences about his effort than one can make without using this information not only can competition provide a basis of comparison which enables the design of reward structures that can simultaneously provide a high level of incentives with relatively low level risk but compensation schemes based on relative performance have the further advantage of automatically adjusting incentives to changes in the economic environment we refer to this as built in flexibility in a first best world with perfect information concerning the nature of the technology but where it is still costly to monitor individuals activities the compensation scheme would vary from time to time as the environment changed such changes in the compensation scheme are costly to implement and the information required to do so is seldom available when a task is easier the individual s rewards for performing the task should be reduced if pay is based on relative performance although all individuals perform better when they exert the same level of effort their compensation is automatically adjusted thus teachers frequently grade on the curve and a significant fraction of the pay of successful salesmen often consists of bonuses based on relative performance

second sourcing and the experience curve price competition in defense procurement we examine a dynamic model ofprice competition in defense procurement that incorporates the experience curve asymmetric cost information and the availability of a higher cost alternative system we model acquisition as a two stage process in which initial production is governed by a contract between the government and the developer competition is then introduced by an auction in which a second source bids against the developer for remaining production we characterize the class of production contracts that are cost minimizing for the government and that induce the developer to reveal private cost information when high costs are revealed these contracts result in a credible cutoff of new system production in favor of the still higher cost alternative system

the relationship between gdp and electricity consumption in 10 asian countries the purpose of this study is to estimate the relationships between gdp and electricity consumption in 10 newly industrializing and developing asian countries using both single data sets and panel data procedures the empirical results from single data set indicate that the causality directions in the 10 asian countries are mixed while there is a uni directional short run causality running from economic growth to electricity consumption and a bi directional long run causality between electricity consumption and economic growth if the panel data procedure is implemented these empirical findings imply that electricity conservation policies through both rationalizing the electricity supply efficiency improvement to avoid the wastage of electricity and managing demand side to reduce the electricity consumption without affecting the end user benefits could be initiated without adverse effect on economic growth the findings on the long run relationship indicate that a sufficiently large supply of electricity can ensure that a higher level of economic growth

effects of brand preference product attributes and marketing mix variables in technology product markets we develop a demand model for technology products that captures the effect of changes in the portfolio of models offered by a brand as well as the influence of the dynamics in its intrinsic preference on that brand s performance to account for the potential correlation in the preferences of models offered by a particular brand we use a nested logit model with the brand e g sony at the upper level and its various models e g mavica fd dsc etc at the lower level of the nest relative model preferences are captured via their attributes and prices we allow for heterogeneity across consumers in their preferences for these attributes and in their price sensitivities in addition to heterogeneity in consumers intrinsic brand preferences together with the nested logit assumption this allows for a flexible substitution pattern across models at the aggregate level the attractiveness of a brand s product line changes over time with entry and exit of new models and with changes in attribute and price levels to allow for time varying intrinsic brand preferences we use a state space model based on the kalman filter which captures the influence of marketing actions such as brand level advertising on the dynamics of intrinsic brand preferences hence the proposed model accounts for the effects of brand preferences model attributes and marketing mix variables on consumer choice first we carry out a simulation study to ensure that our estimation procedure is able to recover the true parameters generating the data then we estimate our model parameters on data for the u s digital camera market overall we find that the effect of dynamics in the intrinsic brand preference is greater than the corresponding effect of the dynamics in the brand s product line attractiveness assuming plausible profit margins we evaluate the effect of increasing the advertising expenditures for the largest and the smallest brands in this category and find that these brands can increase their profitability by increasing their advertising expenditures we also analyze the impact of modifying a camera model s attributes on its profits such an analysis could potentially be used to evaluate if product development efforts would be profitable

household energy consumption versus income and relative standard of living a panel approach our fundamental premise is that energy consumption at the household level is a key indicator of standard of living we employ state of the art panel cointegration techniques to evaluate the nature of the relationship between income measures and energy consumption measures for seven east indian ocean countries the general finding is that income and household electricity consumption are not cointegrated given this finding we conclude that standard of living measures that rely on income measures and do not include household level energy consumption information will necessarily miss important indications of both levels and changes of standard of living

meat consumption and production analysis of efficiency sufficiency and consistency of global trends abstract the sustainability challenges that the food system is facing are ever increasing the traditional approach to monitoring these changes considers economic societal and environmental sustainability a strong case has been made however that a fourth dimension ethical should also be considered conventionally two main strategies have been used to assess the improvements in sustainability efficiency and sufficiency efficiency is usually linked with technological improvements and sufficiency is connected with a reduction in production or consumption we introduce a third strategy to the analysis namely consistency that is related mainly to the ethical dimension of sustainability trends of the indicators related to the three strategies are calculated on both a global and regional scale from 1962 to 2009 efficiency measured as land requirement for animal products has increased by about 13 percent globally sufficiency measured as the amount of meat consumed has declined by 91 percent and consistency measured as the number of animals slaughtered has declined by 264 percent in addition convergence analysis emphasizes that industrialized and developing countries are moving towards similar patterns of animal products consumption such results suggest that measures should be taken to develop a food system that is not only efficient but also ethically just

auctioning incentive contracts this paper draws a remarkably simple bridge between auction theory and incentive theory it considers the auctioning of an indivisible project among several fi rms the firms have private information about their future cost at th e bidding stage and the selected firm ex post invests in cost reduct ion the authors show that 1 the optimal auction can be implemented by a dominant strategy auction that uses information about both the first bid and the second bid 2 the winner faces a linear incenti ve contract 3 the fixed transfer to the winner decreases with his announced expected cost and increases with the second lowest announce d expected cost and 4 the share of cost overruns borne by the winn er decreases with the winner s announced expected cost copyright 1987 by university of chicago press

the impact of electricity supply on economic growth in sri lanka abstract yang energy econ 22 2000 309 has found a bi directional causal relationship between gross domestic product and electricity consumption in taiwan roc this study applies yang s model to examine the impact of electricity supply on economic growth in sri lanka morimoto and hope an extended cba model of hydro projects in sri lanka 2001 have found that the expected increase in economic output due to increased electricity supply parameter eo plays a crucial role in their cost benefit analysis model this study shows that the application of yang s regression analysis is one possible approach to estimate a better range for the parameter eo the estimated figure is that an extra output of rs 88 000 137 000 us1120 1740 for every 1 mw h increase in electricity supply

convergence in per capita energy use among oecd countries abstract unlike previous studies which mainly focus on the integration properties of energy consumption and production this study examines the convergence of per capita energy use among 25 oecd countries over the period 1960 to 2010 in particular newly developed lm and rals lm unit root tests with allowance for two endogenously determined structural breaks are employed the results indicate significant support for per capita energy use convergence among oecd countries

defensive marketing strategies this paper analyzes how a firm should adjust its marketing expenditures and its price to defend its position in an existing market from attack by a competitive new product our focus is to provide usable managerial recommendations on the strategy of response in particular we show that if products can be represented by their position in a multiattribute space consumers are heterogeneous and maximize utility and awareness advertising and distribution can be summarized by response functions then for the profit maximizing firm it is optimal to decrease awareness advertising it is optimal to decrease the distribution budget unless the new product can be kept out of the market a price increase may be optimal and even under the optimal strategy profits decrease as a result of the competitive new product furthermore if the consumer tastes are uniformly distributed across the spectrum a price decrease increases defensive profits it is optimal at the margin to improve product quality in the direction of the defending product s strength and it is optimal at the margin to reposition by advertising in the same direction in addition we provide practical procedures to estimate 1 the distribution of consumer tastes and 2 the position of the new product in perceptual space from sales data and knowledge of the percent of consumers who are aware of the new product and find it available competitive diagnostics such as the angle of attack are introduced to help the defending manager this article was originally published in marketing science volume 2 issue 4 pages 319 360 in 1983

a club convergence analysis of per capita energy consumption across australian regions and sectors we examine convergence in per capita energy consumption across nine sectors and seven states and territories in australia over the period 19902016 using the phillips sul club convergence approach we find evidence of multiple convergence clubs for aggregate energy consumption per capita and for energy consumption per capita in eight of the nine sectors with full club convergence in the case of electricity the presence of multiple equilibria for most sectors reflect that states with similar features in terms of climate economic activities and population size among others tend to exhibit similar energy consumption patterns our results highlight the need to tailor policies designed to reduce energy consumption in specific sectors to the consumption convergence paths unique to particular clusters of states

non hbox co _2 co 2 generating energy shares in the world cross country differences and polarization the aim of this paper is to examine the spatial distribution of non hbox co 2 generating energy sources in the world for the period 1990 2009 paying special attention to the evolution of cross country disparities to this end after carrying out a classical convergence analysis a more thorough investigation of the entire distribution is presented by examining its external shape the intra distribution dynamics and the long run equilibrium distribution this analysis reveals the existence of a weak rather insignificant convergence process and that large cross country differences are likely to persist in the long run next as polarization indicators are a proper way of appraising potential conflict in international environmental negotiations we test whether or not the distribution dynamics concurs with the presence of polarization our results indicate that two poles can be clearly differentiated one with high and other with low non hbox co 2 generating energy shares in view of these findings and to ensure a fair transition to a sustainable energy system the paper calls for the development of an ambitious clean energy agenda especially in countries with low non hbox co 2 generating energy shares

simple menus of contracts in cost based procurement and regulation in an influential paper jean jacques laffont and jean tirole 1986 formulated a principal agent model of cost based procurement and regulation and showed that the principal can implement the optimal mechanism by offering the agent a menu consisting of a continuum of linear contracts two related problems with applying this theory in practice have been that the economic logic and the underlying mathematics involved in calculating the optimal menu are quite complex and the principal must be able to specify the agent s entire disutility of effort function in order to calculate the optimal menu as a result the model has not been widely used in practice to either calculate actual incentive contracts or even to develop useful qualitative guidance about the nature of the optimal solution and how it is affected by various economic factors the purpose of this paper is to show that dramatically simpler menus which are easy to understand and calculate and which have lower informational requirements can at least in some cases capture a substantial share of the gains achievable by the fully optimal complex menu in particular this paper considers two item menus where one item is a cost reimbursement contract and the other item is a fixed price contract such menus are called fixed price cost reimbursement fpcr menus for the case where the agent s utility is quadratic and the agent s type is distributed uniformly it is shown that the optimal fpcr menu always captures at least three quarters of the gain that the optimal complex menu achieves where the gain is measured relative to the result of using a cost reimbursement contract this paper s research was originally motivated by a policy issue in defense procurement in the united states the department of defense dod purchases almost all major weapons systems from sole source contractors using contracting methods that essentially amount to using cost reimbursement contracts the best way to understand why dod uses costreimbursement contracting methods is that they perform precisely the function identified in laffont and tirole s principal agent model they guarantee in a situation that amounts to a bilateral monopoly that dod and the firm can reach an agreement i e they guarantee that the agent will always produce the good of course the use of cost reimbursement contracting methods

divergence in technical efficiency of electric utilities evidence from the sapp abstract this paper investigates the convergence pattern of technical efficiency of the south africa power pool sapp utilities over the period april 2003 march 2010 by means of parametric and non parametric techniques technical efficiency scores are computed via both stochastic frontier analysis and data envelopment analysis mixed results are obtained from the neoclassical convergence approaches in addition distribution dynamics methods reveal some evidence of club formation and this result is supported with the occurrence of divergence taken as a whole technical efficiency is found to diverge among the utilities operating in the power pool

bargaining and regulation with asymmetric information about demand and supply abstract rate regulation is studied as a bargaining process in which consumers and the firm negotiate output and payments under asymmetric information the feasible set of transactions given incentive compatibility and individual rationality constraints is characterized the set of interim incentive efficient mechanisms for the direct revelation game is also characterized sufficient conditions are given for efficient mechanisms to be full information efficient efficient mechanisms are identified which correspond to nonlinear monopoly pricing monosony compensation schedules and the baron myerson regulation model

how much does the market value an improvement in a product attribute a firm contemplating improvements to its product attributes would be interested in the dollar value the market attaches to any potential product modification in this paper we derive a measure of market value such that the comparison of the measure against the incremental unit cost of the attribute improvement is key in deciding whether or not the attribute improvement is profitable competition from other brands the potential for market expansion and heterogeneity in customer preference structures are explicitly modeled using the multinomial logit framework the analysis yields a closed form expression for the market s value for an attribute improvement mvai a key result we obtain is that customers should be differentially weighted based on their probability of purchasing the firm s product in particular customers who exhibit a very high or very low probability of choosing the firm s product should receive less weight in detemining mvai because the probability of choice varies across products the answer to the question of how much the market values an improvement depends on which firm is asking the question it is shown that customers whose utilities have a greater random component should be weighted less furthermore the measure developed is robust to the influence of outliers in the sample an empirical illustration of the mvai measure in the context of a new product development study is provided the study illustrates the advantages of the proposed measure over currently used approaches and explores the possibility of competitive price reactions

awarding monopoly franchises the authors analyze how to award a monopoly franchise when the objective is to maximize expected consumers surplus net of transfer payments to the producer potential producers initially possess independent private information about uncertain production costs only the chosen producer subsequently observes realized production costs after awarding the franchise to the producer with the lowest expected costs prices are optimally set above realized marginal cost these ex post distortions foster more competitive bidding ex ante the distortions for any bid cost pair are invariant to the number of bidders n though expected distortions and profits decline with n copyright 1987 by american economic association

electricity consumption and economic growth a time series experience for 17 african countries abstract while the availability of electricity by itself is not a panacea for the economic and social problems facing africa the supply of electricity is nevertheless believed to be a necessary requirement for africa s economic and social development this paper tests the long run and causal relationship between electricity consumption per capita and real gross domestic product gdp per capita for 17 african countries for the period 1971 2001 using a newly developed cointegration test proposed by pesaran et al 2001 and using a modified version of the granger causality test due to toda and yamamoto 1995 the advantage of using these two approaches is that they both avoid the pre testing bias associated with conventional unit root and cointegration tests the empirical evidence shows that there was a long run relationship between electricity consumption per capita and real gdp per capita for only 9 countries and granger causality for only 12 countries for 6 countries there was a positive uni directional causality running from real gdp per capita to electricity consumption per capita an opposite causality for 3 countries and bi directional causality for the remaining 3 countries the result should however be interpreted with care as electricity consumption accounts for less than 4 of total energy consumption in africa and only grid supplied electricity is taken into account

valuation of patented product features ultimately patents have value to the extent to which the product features enabled by the patents have economic value in the marketplace products that are enhanced by inclusion of patented features should generate incremental profits incremental profits can be assessed by considering demand for products with patented features and contrasting that demand with demand for the same product without the patented features profit calculations must be based on valid estimates of demand as well as assumptions about how competitive forces affect demand via computation of market equilibria a conjoint survey can be used to estimate demand recently conjoint methods have been applied in the patent setting but the measures of value used are purely demand based and do not involve equilibrium profit calculations we illustrate our method using the market for digital cameras and show that current methods can overstate the value of a patent

bidder solicitation adverse selection and the failure of competition we study a common value first price auction in which the number of bidders is endogenous the seller auctioneer knows the value and solicits bidders at a cost the number of bidders which is unobservable may thus depend on the true value therefore being solicited conveys information this solicitation effect may soften competition and impede information aggregation under certain conditions there is an equilibrium in which the seller solicits many bidders yet the resulting price is not competitive and fails to aggregate any information more broadly these ideas are relevant for markets with adverse selection in which informed traders initiate contacts

design competition through multidimensional auctions this article studies design competition in government procurement by developing a model of two dimensional auctions wherefirms bid on both price and quality and bids are evaluated by a scoring rule designed by a buyer three auction schemes first score second score and second preferred offer are introduced and related to actual practices if the buyer can commit to a scoring rule in his best interest the resulting optimal scoring rule underrewards quality relative to the buyer s utility function and implements the optimal outcome for the buyer underfirst and second score auctions absent the commitment power the onlyfeasible scoring rule is the buyer s utility function under which 1 all three schemes yield the same expected utility to the buyer and 2 first and second score auctions induce the first best level of quality which turns out to be excessive from the buyer s point of view

entry and competition effects in first price auctions theory and evidence from procurement auctions motivated by several interesting features of the highway mowing auction data from the texas department of transportation tdot we study three competing procurement auction models with endogenous entry our entry and bidding models provide several interesting implications for the first time we show that even within an independent private value paradigm as the number of potential bidders increases bidders equilibrium bidding behaviour can become less aggressive and the expected procurement cost may rise because the entry effect is always positive and may dominate the negative competition effect we then develop structural models of entry and bidding corresponding to the three models under consideration controlling for unobserved auction heterogeneity and use the recently developed semi parametric bayesian estimation method to analyse the data we select the model that best fits the data and use the corresponding structural estimates to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost copyright 2009 wiley blackwell

electricity consumption and economic growth in china abstract this paper applies the error correction model to examine the causal relationship between electricity consumption and real gdp for china during 1971 2000 our estimation results indicate that real gdp and electricity consumption for china are cointegrated and there is unidirectional granger causality running from electricity consumption to real gdp but not vice versa in order to overcome the constraints on electricity consumption the chinese government has to speed up the nation wide interconnection of power networks to upgrade urban and rural distribution grids and to accelerate rural electrification

a note on the causal relationship between energy and gdp in taiwan abstract this paper re examines the causality between energy consumption and gdp by using updated taiwan data for the period 1954 1997 as a secondary contribution we investigate the causal relationship between gdp and the aggregate as well as several disaggregate categories of energy consumption including coal oil natural gas and electricity applying granger s technique we find bidirectional causality between total energy consumption and gdp we find further that different directions of cause exist between gdp and various kinds of energy consumption

optimal search for product information consumers often need to search for product information before making purchase decisions we consider a tractable continuous time model of gradual learning in which consumers incur search costs to learn further product information and update their expected utility of the product at each search occasion we characterize the optimal stopping rules for either purchase or no purchase as a function of search costs and of the importance informativeness of each attribute this paper also characterizes how the likelihood of purchase changes with the ex ante expected utility search costs and the importance informativeness of each attribute we discuss optimal pricing the impact of consumer search on profits and social welfare and how the seller chooses its price to strategically affect the extent of the consumers search behavior we show that lower search costs can hurt the consumer because the seller may then choose to charge higher prices discounting creates asymmetry in the purchase and no purchase search thresholds and may lead to lower prices if search occurs in equilibrium or higher prices if there is no search in equilibrium this paper also considers searching for signals of the value of the product heterogeneous importance of attributes endogenous intensity of search and social learning this paper was accepted by pradeep chintagunta marketing

is there convergence in per capita renewable energy consumption across u s states evidence from lm and rals lm unit root tests with breaks abstract given the federal and state policy initiatives to curb fossil fuel consumption and expand the use of renewable energy sources in the u s this study investigates the convergence properties of per capita renewable energy consumption across u s states including the district of columbia in addition to cross sectional tests of and convergence our study employs lm and rals lm unit root tests with endogenously determined structural breaks to test for stochastic convergence traditional cross sectional tests indicate that both and convergence of per capita renewable energy consumption exists across u s states moreover our results also provides clear support for stochastic convergence of per capita renewable energy consumption for a majority of u s states including the district of columbia once allowance is made for structural breaks

auctionin entry into tournaments a research tournament model with heterogeneous contestants is presented for a large class of contests the optimal number of competitors is two this insight makes designing the tournament easier and highlights the importance of selecting highly qualified contestants while customary uniform price and discriminatory price auctions are intuitively appealing mechanisms for solving this adverse selection problem in practice they generally will not be efficient mechanism for selecting contestants instead we propose an alternative auction format that is equally simple to implement and efficiently selects the most qualified contestants to compete regardless of the form of contestant heterogeneity

price as a stimulus to think the case for willful overpricing consumers aware of a new benefit will often experience uncertainty about its personal relevance or usage value this paper shows that the decision to deliberate further to resolve this uncertainty and reach a polarized judgment of personal relevance critically depends on the posted price in particular a price above the consumer s initial willingness to pay might be thought provoking and enhance the perception of relevance with a certain probability this behavioral mechanism is introduced formally and by way of an experiment with reference to the purchase of organic lettuce and fair trade coffee accounting for the effect of price as a stimulus to think a monopolistic firm should either over price transgressive pricing or under price regressive pricing in comparison to the consumer s willingness to pay under certain circumstances the firm should also empower consumers with means that reduce the effort of deliberation

disaggregated industrial energy consumption and gdp the case of shanghai 1952 1999 abstract this paper investigates the causal relationship between various kinds of industrial energy consumption and gdp in shanghai for the period 1952 1999 using a modified version of the granger 1969 causality test proposed by toda and yamamoto j econ 66 1995 225 the empirical evidence from disaggregated energy series seems to suggest that there was a uni directional granger causality running from coal coke electricity and total energy consumption to real gdp but no granger causality running in any direction between oil consumption and real gdp

convergence in energy consumption per capita among asean countries abstract we test for convergence in energy consumption per capita among asean countries over the period 1971 to 2011 using the panel kpss stationarity test and panel lagrange multiplier lm unit root test the results for the panel stationarity and unit root tests with structural breaks find support for energy convergence in asean

optimal design of research contests procurement of an innovation often requires substantial effort by potential suppliers motivating effort may be difficult if the level of effort and quality of the resulting innovation are unverifiable if innovators cannot benefit directly by marketing their innovations and if the buyer cannot extract up front payments from suppliers we study the use of contests to procure an innovation in such an environment an auction in which two suppliers are invited to innovate and then bid their prizes is optimal in a large class of contests if contestants are asymmetric it is optimal to handicap the most efficient one

electricity consumption in g7 countries a panel cointegration analysis of residential demand elasticities this article applies recently developed panel unit root and panel cointegration techniques to estimate the long run and short run income and price elasticities for residential demand for electricity in g7 countries the panel results indicate that in the long run residential demand for electricity is price elastic and income inelastic the study concludes that from an environmental perspective there is potential to use pricing policies in the g7 countries to curtail residential electricity demand and thus curb carbon emissions in the long run

simple cost sharing contracts we extend rogerson s 2003 intriguing analysis of the performance of simple procurement contracts to consider settings where the supplier s innate production cost is not necessarily distributed uniformly although the simple contract that rogerson analyzes performs remarkably well when the smaller cost realizations are relatively likely it can perform poorly when the larger cost realizations are relatively likely we show that in all settings under consideration though a fairly simple pair of contracts one that involves linear cost sharing and one that involves full cost reimbursement can always secure more than 73 of the gain achieved with a fully optimal contract

the causal relationship between electricity consumption and economic growth in the asean countries abstract this paper investigates the causal relationship between electricity consumption and economic growth among the association of south east asian nations asean 4 members namely indonesia malaysia singapore and thailand using modern time series techniques for the period 1971 2002 the results indicate that there is a bi directional causality between electricity consumption and economic growth in malaysia and singapore this means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries however uni directional causality runs from economic growth to electricity consumption in indonesia and thailand without any feedback effect thus electricity conservation policies can be initiated without deteriorating economic side effects in the two countries

electricity consumption and economic growth evidence from korea abstract this paper investigates the short and long run causality issues between electricity consumption and economic growth in korea by using the co integration and error correction models it employs annual data covering the period 1970 2002 the overall results show that there exists bi directional causality between electricity consumption and economic growth this means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption

cointegration and causality between electricity consumption and gdp empirical evidence from malawi abstract the granger causality gc and error correction ecm techniques were applied on 1970 1999 data for malawi to examine cointegration and causality between electricity consumption kwh and respectively overall gdp agricultural gdp agdp and non agricultural gdp ngdp cointegration was established between kwh and respectively gdp and ngdp but not with agdp the gc results detect bi directional causality between kwh and gdp suggesting that kwh and gdp are jointly determined but one way causality running from ngdp to kwh the ecm results detect causality running one way from gdp also from ngdp to kwh suggesting that a permanent rise in gdp may cause a permanent growth in electricity consumption

managing a product family under stochastic technological changes abstract this paper characterize a decision framework by which a firm can manage generational product replacements under stochastic technological changes first we characterize an optimal threshold based product replacement policy that maximizes the firm s expected total profit for a finite planning horizon with this policy the firm should optimally replace its current product when the performance gap of the product is above a threshold upon each product replacement we also show that the firm should adopt the latest technology for the new product second using stochastic ordering concepts we quantify the negative impact from the accelerated technological changes on the expected total profit finally we provide an analytical example based on a consumer choice model and characterize a technology follower s joint product replacement and pricing decisions upon the arrival of each innovation from a technology leader

using cost observation to regulate firms the paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier 1 has superior information about the cost of the project and 2 invests in cost reduction the main result states that under risk neutrality the supplier announces an expected cost and is given an incentive contract linear in cost overruns this optimal contract moves toward a fixed price contract as the announced cost decreases an investment choice is then introduced and the use of a rate of return regulation is studied

cost reducing investment optimal procurement and implementation by auctions the authors analyze a model in which potential suppliers invest in research and development r d and then compete for a procurement contract from a buyer if the buyer is able to commit to a procurement mechanism before the investment stage the full information solution can be uniquely implemented by first price and second price sealed bid auction mechanisms when the r d technology exhibits decreasing returns to scale if the procurement mechanisms and the levels of investment are chosen simultaneously the full information solution cannot be implemented the authors discuss how the second best equilibrium contract varies with the number of suppliers copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

towards a common renewable future the system gmm approach to assess the convergence in renewable energy consumption of eu countries abstract this paper investigates whether the contribution of renewable energy sources to primary energy consumption is characterized by a convergence process across core european union eu countries over the period from 1990 to 2014 the system generalized method of moments gmm methodology is employed for 5 year span panel data of 14 eu members the findings indicate strong evidence for both the absolute unconditional and conditional convergence of renewables share in primary energy consumption across eu 14 countries moreover the control variables namely co2 emissions per gdp fdi inward stock and electricity prices contribute to the speed of convergence hence the implicit rate of conditional convergence is higher than that of absolute convergence the empirical evidence suggests that the energy mixes of core eu members have a tendency to become similar in the long run as the shares of res in primary energy consumption converge to the average level nonetheless it does not necessarily imply that this average would be 20 target which is to be achieved by 2020 according to eu directive 2009 28 ec

optimal incentive contracts with multiple agents abstract a setting in which a single principal contracts with two agents who possess perfect private information about their own productivity is considered with correlated productivities each agent s private information also provides a signal about the other agent s productivity in contrast to the setting in which there is only one agent it is shown that such private information may be of no value to the agents it is only if the agents are risk averse that their private information may allow them to command rents moreover when the agents are constrained only to reveal their private information truthfully as a nash equilibrium the pareto optimal incentive scheme may induce the agents to adopt strategies other than truth telling this leads to the consideration of truth telling equilibria that are not pareto dominated in the subgame played by the agents among all such equilibria the one preferred by the principal restricts one agent to tell the truth as a dominant strategy and the other as a nash response to truth

energy demand convergence in apec an empirical analysis this paper empirically examines the cross country convergence of per capita energy and electricity usage in apec a significant economic bloc to this end the study applies conventional panel unit root tests and sequential panel selection model spsm procedure based on the panel kss unit root with a fourier function for robustness analysis the results from conventional unit root test results indicate that per capita energy usage and electricity consumption are converging for all apec countries in line with improving living standards in apec the findings also provide some support for policies to promote energy integration among apec countries according to spsm analysis evidence of energy convergence is found for 15 out of 19 apec countries and evidence of electricity convergence is found for 17 out of 19 apec countries pursuit of policies to achieve energy supply stability can move divergent countries toward convergence

electricity consumption and economic growth in india abstract this paper tries to examine the granger causality between electricity consumption per capita and gross domestic product gdp per capita for india using annual data covering the period 1950 51 to 1996 97 phillips perron tests reveal that both the series after logarithmic transformation are non stationary and individually integrated of order one this study finds the absence of long run equilibrium relationship among the variables but there exists unidirectional granger causality running from economic growth to electricity consumption without any feedback effect so electricity conservation policies can be initiated without deteriorating economic side effects

repeated auctions of incentive contracts investment and bidding parity with an application to takeovers this article considers a two period model of natural monopoly and second sourcing the incumbent supplier invests in the first period after observing the incumbent s first period performance the buyer may break out in the second period the investment may or may not be transferable to the second source and it may be monetary or take the form of human capital we determine whether the incumbent should be favored at the reprocurement stage and how the slope of his incentive scheme should evolve over time we find that the gains from second sourcing are not so large as one might hope finally we reinterpret the second source as a raider and the breakout as a takeover we discuss the desirability of defensive tactics and obtain a rich set of testable implications concerning the size of managerial stock options the extent of defensive tactics the firm s performance and the probability of a takeover

on delegating price authority to a regulated firm this article models a regulatory environment in which the regulated firm possesses better information about demand conditions than does the regulator the regulator would like to tie prices to the firm s private information in a socially optimal way to do so the regulator must induce the firm either truthfully to reveal private information or equivalently unilaterally to set socially optimal prices this is accomplished by assessing lump sum subsidies or taxes that depend in an appropriate way on the prices announced by the firm this mechanism can be reinterpreted as a two part tariff scheme whereby both the service fee and price per unit respond to shifting demand conditions

competitive positioning in markets with nonuniform preferences we investigate the nature of competitive equilibrium for brands competing in a multi attribute product space when consumer preferences for product attributes follow nonuniform distributions we establish subgame perfect equilibria in a two stage game where firms choose positions in the first stage and prices in the second stage two types of entry scenarios are investigated in the first the number of brands is given exogenously and all of them choose positions simultaneously in the second scenario firms enter in sequence and the early entrants can choose strategies to deter the entry of later entrants we find the equilibria for two three and four brands for consumer preferences that follow a beta distribution nonuniform distributions result in equilibrium configurations that are substantially different from those obtained for uniform consumer distributions in the two brands case for sufficiently concentrated distributions we find asymmetric position equilibria with one firm at the corner of the market and one firm at an interior position in the case of three brands for sufficiently concentrated preferences we find symmetric equilibria that do not yield maximal differentiation we also establish an equilibrium for the case of four competing brands in addition we characterize entry deterring positioning strategies and examine how they vary with the distribution of consumer preferences

product positioning under price competition this paper presents a consumer based methodology for new product pricing and positioning in the face of price competition the price competition is modelled as a nash equilibrium for which two complementary approaches are employed an analytical approach of duopoly provides qualitative insights into the competitive behavior and a numerical approach of general oligopoly provides quantitative solutions under a wide variety of market scenarios the optimal product positioning is formulated as a stackelberg nash leader followers equilibrium which can be solved numerically using recent advances in the field of variational inequalities a small example concerning analgesics is used to illustrate this methodology

the world per capita electricity consumption distribution signs of convergence abstract considering residential per capita electricity consumption as one of the most suitable economic welfare indicators the aim of this paper is to explore worldwide differences on this variable over the period 1980 2007 the paper adds to the standard practice of and convergence analysis by tracking the external shape and time evolution of the entire distribution applying nonparametric techniques density functions and stochastic kernels to a sample of 98 countries the main finding is that a weak process of electricity consumption convergence has taken place this reduction of disparities is clearly related to at least three issues firstly the rapid economic changes experienced by some developing countries secondly the energy conservation policies implemented by most developed countries following the first oil shock and thirdly the growing awareness on energy issues in rich countries notwithstanding this the ergodic distribution on per capita electricity consumption indicates that large cross country disparities will persist in the long run

incentive and sampling effects in procurement auctions with endogenous number of bidders abstract we study an auction contest for a procurement of innovation firms exert effort and the resulting quality of innovation is ex ante uncertain given this uncertainty there is a trade off regarding the number of participating firms in the contest increasing the number of firms reduces each firm s chance of winning the auction leading the firms to reduce effort level meanwhile the chance of obtaining a high quality of innovation increases with the number of firms due to the randomness of the quality thus the procurer faces a nontrivial problem of how many firms to invite we show that in the high level of randomness it is optimal for the procurer to invite many firms as the randomness vanishes however inviting only two firms is optimal we also show that a fixed prize tournament may outperform the auction when the randomness is large

auctions when bidders prepare by investing in ideas abstract we consider auctions assuming bidders spend resources to increase their valuations standard auctions are efficient yet reserve price requirements entail a double inefficiency moreover optimal auctions differ from the well known static optimum finally we sketch the impact of information spillovers

full extraction of the surplus in bayesian and dominant strategy auctions we consider auctions for a single indivisible object in the case where the bidders have information about each other which is not available to the seller we show that the seller can use this information to his own benefit and we completely characterize the environ ments in which a well chosen auction gives him the same expected payoff as that obtainable were he able to sell the object with full information about each bidder s willingness to pay we provide this characterization for auctions in which the bidders have dominant strate gies and for those where the relevant equilibrium concept is bayesian nash in both set ups the existence of these auctions hinges on the possibility of constructing lotteries with the correct properties we consider the situation in which an agent the seller possesses one indivisible unit of a good to which he attaches no value but the good has value to a number of potential buyers and its transfer to one of them would increase social welfare in particular the transfer to the buyer with the highest valuation maximizes social welfare in this paper we completely characterize environments in which the seller can design an auction that will enable him to capture for himself the full increase in social welfare induced by the transfer of the good to the bidder with the highest willingness to pay if the seller had full information about the reservation prices of potential buyers his optimal selling strategy would be very simple he would announce a price equal or very close to the highest reservation value the optimal strategy for the bidder with the highest evaluation would be to accept the offer note that we are treating a situation in which the seller can commit himself to a price as a result of the exchange the utility of the seller increases by the full amount of the increase in social welfare and he has been able to fully extract the surplus in many circumstances however a seller has only imperfect knowledge of the buyers willingnesses to pay in this case he must find some mechanism or auction which will enable him to maximize his benefit from the sale of the object the auction literature starts with this observation and shows how the seller can by an astute choice of auction extract the largest possible fraction of the surplus in general the literature has shown that this proportion is strictly less than one in some circumstances the bidders will have information about each other which is not available to the seller for instance in auctions for petroleum drilling rights bidders know the results of geological tests which they have

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

new brand positioning and pricing in an oligopolistic market the positioning and pricing of a new brand requires knowledge about the relationship of both demand and cost with potential attribute locations and prices this paper addresses this problem and illustrates it in the context of the automobile market multi attribute expected utility theory which allows for consumer uncertainty about the brands is used to model individuals behavior attribute weights are estimated from market survey data on brands attributes and preferences using linmap as an estimation procedure expected utility is then updated using the multinomial logit model and choice data to account for the observation that stated preferences do not perfectly reflect the eventual choice it is hypothesized that when faced with an actual choice price may become more important to the consumer while other attributes may become more or less important than is reflected in stated preferences the resulting estimated choice probabilities are aggregated to form demand functions facing each brand which depend on all brands prices and attribute space locations assuming there is a price equilibrium in the existing market and that firms have the same variable cost function variable costs as a function of a brand s attribute levels are estimated given the demand and cost functions facing each firm including the potential new entrant the profit maximizing positioning and pricing of a new brand is analyzed using a game theoretic approach a solution is sought under the assumption that incumbents react to entry by changing their prices possible approaches to the translation of the perceptual attribute positioning of the new brand to physical and engineering attributes are reviewed improvements and future extensions of the study are discussed

digging for golden carrots an analysis of research tournaments contracting for research is often infeasible because research inputs are unobservable and research outcomes cannot be verified by a court sponsoring a research tournament can resolve these problems a model is presented in which contestants compete to find the innovation of highest value to the tournament sponsor the winner receives a prespecified prize the tournament game has a unique subgame perfect equilibrium free entry is not optimal because equilibrium effort by each researcher decreases in the number of contestants an optimally designed research tournament balances the probability of overshooting the first best quality level against the probability of falling short copyright 1995 by american economic association