optimal incentive schemes with many agents the grossman hart principal agent model of moral hazard is extended to the multiple agent case to explore the use of relative performance in optimal incentive contracting under the assumption that the principal chooses incentive schemes to implement agent actions as nash equilibria necessary and sufficient conditions are derived for the optimality of independent contracts of rank order tournaments and for attainability of the first best in this context the relation of the principal s welfare to the correlation between the underlying randomness in outputs of different agents is also investigated finally some problems with the nash equilibrium implementation assumption are discussed in this paper we extend the grossman hart analysis of the principal agent problem to a multiple agent setting in this version of the problem a risk neutral principal is assumed to observe the output or a performance index for each risk averse agent the output of any agent depends on a privately observable action chosen by the agent and an exogenous random variable the realization of which is not observed either by the principal or by the agent before choosing its action we especially focus attention on the role of relative performance evaluation in optimal incentive contracts and the way this depends on properties of the underlying production technology and the joint distribution of the random variables affecting the outputs of different agents in section 2 of the paper we consider the principal s problem of finding an optimal incentive scheme and an action tuple for agents subject to the constraint that the latter be implemented as a nash equilibrium between agents by the chosen incentive scheme where agents must attain at least their reservation utilities a characterization of optimal incentive schemes is derived analogous to the grossman hart characterization for the single agent problem this characterization is then utilized to find sufficient and generically necessary conditions for a optimal contracts for any agent to be independent of the performance of other agents and b optimality of rank order tournaments where payments depend solely on ordinal comparisons of output across agents we then describe a necessary and sufficient condition for the principal to extract maximum advantage from relative performance clauses i e achieve the first best level of expected utility in the multiagent situation an implication of this result is that under fairly weak conditions perfect correlation in the underlying production uncertainties for different agents enables the principal to attain the first best if and only if sufficiently heavy penalties can be inflicted on agents we then enquire what happens in intermediate cases of non perfect correlation it turns out that while in general the principal s welfare is a continuous function of the correlation coefficient it is not always nondecreasing in the latter because the correlation coefficient is not a general measure of association between two random variables but rather a measure of linear association between them

modeling overlapping generations in a complementarity format abstract this paper provides an introduction to numerical simulation of overlapping generations models with perfect foresight and finite lifetimes the exposition presents the fundamental characteristics of this class of problems and gams programs illustrate how models can be formulated in applied research using the complementarity framework issues addressed in the paper include how to calibrate to baseyear data and how to represent international trade bequests government tax and expenditure policies and a labor leisure choice with endogenous retirement

tax distortions and global climate policy abstract we consider the efficiency implications of policies to reduce global carbon emissions in a world with pre existing tax distortions we first note that the weak double dividend the proposition that the welfare improvement from a tax reform where environmental taxes are used to lower distorting taxes must be greater than the welfare improvement from a reform where the environmental taxes are returned in a lump sum fashion need not hold in a world with multiple distortions we then present a large scale computable general equilibrium model of the world economy with distortionary taxation we use this model to evaluate a number of policies to reduce carbon emissions we find that the weak double dividend is not obtained in a number of european countries results also demonstrate the point that the interplay between carbon policies and pre existing taxes can differ markedly across countries thus one must be cautious in extrapolating the results from a country specific analysis to other countries

expert opinion and compensation evidence from a musical competition pianists who achieve high scores in the queen elizabeth musical competition are rewarded by subsequent success this is not surprising in itself but it is not immediately clear whether this is caused by the score or because those who have high scores are better pianists data on eleven consecutive competitions make it possible to distinguish between the two explanations since an unexpected situation allows us to use an instrumental variable the randomly assigned order in which musicians appear at the competition uncorrelated with ability but correlated with the results of the competition

competition among contests when several contests compete for the participation of a common set of players a contest s allocation of prizes not only induces incentive effects but also participation effects our model predicts that an increase in the sensitivity with which contest outcomes depend on players efforts makes flatter prize structures more attractive to participants in equilibrium contests that aim to maximize the number of participants will award multiple prizes if and only if this sensitivity is sufficiently high moreover the prize awarded to the winner is decreasing in the contests sensitivity we provide empirical evidence from professional road running using race distance as a measure of sensitivity we show that steeper prize structures are more attractive to top ranked runners in longer that is less sensitive races in line with our theory longer races do in fact offer steeper prize structures

an empirical examination of quality certification in a lemons market i introduction researchers have long understood that a variety of mechanisms may be used to overcome problems of adverse selection stigler 1961 224 notes that s ome forms of economic organization may be explicable chiefly as devices for eliminating uncertainties in quality and akerlof 1970 cites independent groups such as the consumers union and united laboratories that test and certify the quality of goods there is however little empirical evidence that illustrates the effectiveness of such mechanisms in this article we examine the effect certification has on a market characterized by adverse selection using data from the market for young thoroughbreds we compare the performance of sales where auction houses provide certification services with sales where certification is absent the thoroughbred racehorse market consists of two distinct types of public auctions certified and noncertified sales in a certified sale auction houses physically inspect the horses nominated to their sales selling only the horses they conclude are from the upper end of the quality distribution in noncertified sales auction houses sell all horses nominated to a sale our empirical strategy is to perform tests that indicate whether adverse selection affects market outcomes in either certified or noncertified sales a finding that adverse selection is present in noncertified sales but absent in certified sales is consistent with the hypothesis that certification alleviates problems of adverse selection we adopt three approaches to test for the presence of adverse selection 1 the first approach is in the spirit of chiappori and salanie 2000 who examine the relationship between unobservable factors from participation and performance equations we model adverse selection as a case of sample selection bias and examine the correlation between errors in participation and price equations 2 to accomplish this we use a unique data set that allows us to estimate how breeder decisions to sell or retain horses affect market prices the data set consists of a 10 random sample of all thoroughbreds born in 1993 and includes both horses retained by their breeders who own a horse at the time of its birth and horses that breeders chose to sell our second test follows genesove 1993 and chezum and wimmer 1997 by examining the relationship between seller characteristics and price theoretically when observable seller characteristics are correlated with seller incentives to select goods adversely prices should reflect these differences chezum and wimmer observe that some breeders sell all of their horses whereas others retain a portion to race they find that market prices are inversely related to the extent of a breeder s involvement in racing concluding that adverse selection affects market outcomes we extend this work in two respects first we isolate the effect seller characteristics have on price through the decision to sell or retain a horse second we compare the effect seller characteristics have on observed prices in certified and noncertified sales our last test follows bond 1982 who attempts to identify adverse selection in the market for used trucks by comparing the repair records of trucks that were sold with the records of trucks retained by their original owners because the horses in our sample had not begun their racing careers at the time they were sold we use data on racetrack earnings as an ex post measure of quality and compare the quality of horses sold in noncertified sales with certified horses and horses retained by their breeders the results from each approach are consistent with certification alleviating problems of adverse selection we find that holding observable attributes constant horses that would receive unusually high market prices in noncertified sales are even more valuable in other options and are less likely to be sold in a noncertified sale

approximating infinite horizon models in a complementarity format a primer in dynamic general equilibrium analysis abstract we demonstrate the advantages of the complementarity formulation for approximating infinite horizon equilibria in neoclassical growth models as compared with techniques originally developed for optimal planning models the complementarity approach does not require an ex ante specification of the growth rate in the terminal period and is therefore suitable for models with endogenous growth or short time horizons we also consider approximation issues in models with multiple infinitely lived agents changes in net indebtedness over a finite period are estimated as part of the model to obtain a precise approximation of the infinite horizon equilibria with a small number of time periods

the causal impact of medals on wine producers prices and the gains from participating in contests the main objective of this article is to estimate the causal effect of wine medals on producers prices our data set combines information on transactions between wine producers and wholesale traders these data are registered by a wine broker who acts as a middleman in this market with records from eleven important wine competitions our identification strategy exploits a particularity in our data namely that medals are not only awarded before transaction dates but sometimes also thereafter regressing price on dummies indicating past and future medals plus controls allows under weak restrictions to consistently estimate causal effects of medals by simply calculating differences in the two types of dummy estimates in addition the estimates of future medal coefficients can be interpreted as partial correlations between unobserved quality and medal indicators our preferred estimate indicates that producers having earned a medal at a competition can increase their price by 13 the impact for gold is much larger than for silver and bronze but we cannot reject that the correlation with quality is the same across the three colors we then calculate expected profits obtained by producers from participating in competitions and find that the incentives to participate are high finally we investigate the efficiency of contests by measuring to what extent attributed awards are good quality indicators only a minority of competitions attribute medals that are significantly correlated with quality primarily the ones founded a long time ago and whose judges are required to evaluate relatively few wines per day

fiscal consolidation and climate policy an overlapping generations perspective abstract this paper examines the distributional and efficiency impacts of public debt consolidation financed through a carbon tax employing a dynamic general equilibrium model with overlapping generations of the u s economy the numerical model features government taxes and spending and a multi sectoral production structure including intermediate production specific detail on the energy sector both in terms of primary energy carriers and energy intensive industries and sector and fuel specific carbon inputs in contrast to revenue neutral carbon tax swaps using the carbon revenue for deficit reduction implies a relaxation of future public budgets as debt repayment results in lower future interest obligations while intergenerational welfare impacts depend importantly on what tax recycling instrument is used we find that combining public debt consolidation with a carbon policy entails the possibility of sustained welfare gains for future generations if social discount rates are sufficiently low or if social preferences exhibit a large aversion with respect to intergenerational inequality combining fiscal consolidation and climate policy may offer the chance for societal gains even without considering potential benefits from averted climate change

critical barriers in implementing reverse logistics in the chinese manufacturing sectors reverse logistics rl is gaining momentum worldwide due to global awareness and as a consequence of resource depletion and environmental degradation firms encounter rl implementation challenges from different stakeholders both internally and externally on the one hand various governmental agencies are coming out with different environmental regulations while on the other hand academics and researchers are contributing solutions and suggestions in different country contexts in a real sense however the benefits of rl implementation is not yet fully realized in the emerging economies this paper proposes a theoretical rl implementation model and empirically identifies significant rl barriers with respect to management financial policy and infrastructure in the chinese manufacturing industries such as automotive electrical and electronic plastics steel construction textiles and paper and paper based products key barriers from our study with respect to these four categories are within management category a lack of reverse logistics experts and low commitment within financial category a lack of initial capital and funds for return monitoring systems within policy category a lack of enforceable laws and government supportive economic policies and finally within infrastructure category a the lack of systems for return monitoring contingency effect of ownership was carried out to understand the similarities and differences in rl barriers among the multinational firms and domestic firms investigated

the impact of remanufacturing in the economy very few durable goods are recovered at the end of their useful lives however this situation could reverse with the development of a stronger remanufacturing industry in the economy this paper evaluates the impact of remanufacturing in a hypothetical situation where remanufacturing holds a significant share of the economy presently dominated by the original manufacturing industries it would have direct impacts on the demand for several inputs we adapt the inter industry input output framework with the development of a methodology to consider these changes subsequently we apply the model to the 30 sector aggregation of the french input output national data to illustrate the nethod and to evaluate the impact that remanufacturing may have on the economy the analysis assumes that remanufacturing sectors substitute labor and transport services for the usual inputs such as raw materials and semi finished goods we find that remanufacturing may satisfy the same final demand from all sectors requiring fewer intermediate resources with proportionally higher demand of labor

inventory management under joint product recovery and cap and trade constraints abstract the influence of environmental legislation in inventory control policies is explored previous work on product recovery is extended using the introduction of a cap and trade mechanism in an infinite horizon inventory system in which demand and returns are uncertain demand is met through two different sources namely manufacturing and remanufacturing which differ in cost and greenhouse gas emissions the main contributions of this paper are 1 comparison of system operation in terms of cost and environmental performance under conventional and green inventory policies and 2 managerial insights into the structure of green inventory policies to illustrate the impact of a cap and trade scheme a numerical example is used we solved the problem as a markov decision process and characterized the inventory policies based on the optimal replenishment strategy we also conducted a sensitivity analysis to examine the effect of underlying environmental parameters such as the emission cap and the allowance price in the policy structures the results indicate that decisions are sensitive to carbon prices the inventory policy could play an important role in compliance with environmental legislation although there is threshold carbon price beyond which the company must focus on strategic decisions rather than tactical decisions

evaluating remanufacturing industry of china using an improved grey fixed weight clustering method a case of jiangsu province abstract remanufacturing industry can solve the issues of resource depletion and environment deterioration by reducing consumptions of raw materials and minimizing emissions of wastes it has been strongly promoted by chinese government in recent years however its current development situation has been unsatisfactory all the time the aim of this paper is to evaluate development level of remanufacturing industry of china and point out future directions of industrial improvement to achieve the above objective this paper establishes an evaluation index system of remanufacturing industry and puts forward an improved grey fixed weight clustering method which is suitable for assessing remanufacturing industry then taking jiangsu province of china as a practical case this method is used to evaluate its remanufacturing industry and identify rank order of improvement measures for each city research results show that overall development level of remanufacturing industry is still low and development unbalance is remarkable two more important findings are as follows the first is that rank orders of improvement measures for all cities are different from each other and decision maker should adopt differentiated industrial policies and improvement measures the second is that the cities which belong to the 2nd and 3rd grey class should paid more attention to improvement measures for four evaluation sub indices annual sale of remanufacturing industry total assets of remanufacturing enterprise total investment of under construction and total number of research institution and university participated in remanufacturing the major contribution of this study is to offer an effective decision making approach for evaluation of remanufacturing industry it helps in classifying development levels of remanufacturing industry in different cities and providing decision makers with a scientific basis for adopting appropriate industrial policies and improvement measures which will efficiently enhance remanufacturing industry in the future

the incentive effects of tournaments revisited evidence from the european pga tour this analysis of data from the 1987 european men s professional golf association pga tour strongly supports the hypothesis that the level and structure of prizes in pga tournaments influence players performance specifically players performance appears to vary positively with both the total money prizes awarded in a tournament and the marginal return to effort in the final round of play a value that varies among players largely depending on how the prize money is allocated among finishers of different ranks the authors suggest that these results together with the similar results of their earlier study of the 1984 u s men s pga tour may have implications for the design of compensation systems for certain groups of workers such as corporate executives college professors and salespeople

tax distortions and global climate policy with mustafa babiker and john reilly we consider the efficiency implications of policies to reduce global carbon emissions in a world with preexisting tax distortions we first note that the weak double dividend the proposition that the welfare improvement from a tax reform where environmental taxes are used to lower distorting taxes must be greater than the welfare improvement from a reform where the environmental taxes are returned in a lump sum fashion need not hold in a world with multiple distortions we then present a large scale computable general equilibrium model of the world economy with distortionary taxation we use this model to evaluate a number of policies to reduce carbon emissions we find that the weak double dividend is not obtained in a number of european countries results also demonstrate the point that the interplay between carbon policies and pre existing taxes can differ markedly across countries thus one must be cautious in extrapolating the results from a country specific analysis to other countries r 2003 elsevier science usa all rights reserved

the economic and budgetary impact of climate policy in portugal carbon taxation in a dynamic general equilibrium model with endogenous public sector behavior the objective of this paper is to study hbox co 2 taxation in its dual role as a climate and fiscal policy instrument using a dynamic general equilibrium model of the portuguese economy which highlights the mechanisms of endogenous growth and incorporates a detailed modeling of public sector behavior and accounts in addition to the conventional marginal abatement cost curve we present a pair of complementary marginal abatement cost curves which highlight the impact hbox co 2 taxation has on economic performance and public debt and are therefore directly relevant to the terms of the policy debate these marginal abatement cost curves provide an effective tool for understanding the rate at which the environmental effectiveness economic costs and budgetary effects change with the tax level our results indicate that hbox co 2 taxes can be an important policy instrument for reducing emissions and promoting fiscal consolidation although this will come at a cost in terms of economic performance simulation results suggest that a tax of 17 00 euros per hbox tco 2 can satisfy existing climate policy targets the tax revenue effects together with reductions in public spending yield a 4 8 reduction in public debt these desirable outcomes come at the cost of a 1 3 reduction in gdp over the long term our analysis highlights that limiting public consumption expenditures can contribute to larger reductions in public debt albeit at a marginally greater cost to economic activity in turn reducing public investment although effective in reducing public debt produces a much larger negative economic impact this evokes an important trade off particularly pronounced in the present debates regarding austerity measures in the eu between fiscal consolidation efforts and efforts to promote convergence to eu standards of living these results further highlight that modeling assumptions with respect to public spending decision are not innocuous an exogenous trajectory for public spending suggests substantially smaller gdp effects and substantially larger public debt effects for any given emissions target

analyzing internal barriers for automotive parts remanufacturers in china using grey dematel approach abstract automotive industries have attracted attention from international sectors recently this attention to the industry results in many innovative technologies being integrated in these manufacturing arenas in developing countries such as the bric brazil russia india and china countries especially china who is a global leader in automotive sales and production researchers see substantial attempts to increase economic and societal values in automotive sectors through the use of many sustainable strategies among these sustainable strategies remanufacturing has witnessed much debate in recent years in china automotive parts remanufacturing is still in a nascent stage but the country is striving hard to implement a strategy in industries to result in cleaner production additionally remanufacturing yields high financial societal and environmental returns and it provides advantages such as reducing costs compared to virgin products an increase in jobs and the conservation of scare resources some earlier studies examined chinese remanufacturing issues but they only focused on modeling concepts without considering significant barriers to bridge this gap this paper analyzes internal barriers met by automotive parts remanufacturers and evaluates causal barriers by a proposed model framework this objective is illustrated by employing the grey decision making trial and evaluation laboratory dematel approach by virtue of these findings remanufacturers can eradicate major internal barriers and can increase the chances of practicing more productive remanufacturing in the chinese automotive environments this study extends the scope of this problem through varied applications of different techniques such as a fuzzy approach matrix laboratory and operations research tools by diversifying and including additional barriers

macroeconomic effects from government purchases and taxes for u s annual data that include world war ii the estimated multiplier for temporary defense spending is 0 4 0 5 contemporaneously and 0 6 0 7 over 2 years if the change in defense spending is permanent gauged by ramey s defense news variable the multipliers are higher by 0 1 0 2 since all estimated multipliers are significantly less than 1 greater spending crowds out other components of gdp particularly investment the lack of good instruments prevents estimation of reliable multipliers for nondefense purchases multipliers in the literature of two or more likely reflect reverse causation from gdp to nondefense purchases increases in average marginal income tax rates measured by a newly constructed time series have significantly negative effects on gdp when interpreted as a tax multiplier the magnitude is around 1 1 the combination of the estimated spending and tax multipliers implies that the balanced budget multiplier for defense spending is negative we have some evidence that tax changes affect gdp mainly through substitution effects rather than wealth effects

the second dividend and the demographic structure the demographic structure of a country influences economic activity the second dividend modifies growth accordingly in general equilibrium the second dividend and the demographic structure are interrelated this paper aims at assessing empirically the second dividend in a dynamic empirical and intertemporal setting that allows for measuring its impact on growth its intergenerational redistributive effects and its interaction with the demographic structure the paper uses a general equilibrium model with overlapping generations an energy module and a public finance module that distinguishes between non ageing related public spending and a pension regime policy scenarios compare the consequences of different scenarios of recycling a carbon tax through lower proportional income taxes rather than higher public lump sum expenditures they are computed for two countries with different demographics france and germany results suggest that the magnitude of the second dividend is significantly related with the demographic structure the more concentrated the demographic structure on cohorts with higher income and saving rate the stronger the effect on capital supply of the second dividend the second dividend weighs on the welfare of relatively aged working cohorts it fosters the wellbeing of young working cohorts and of future generations the more concentrated the demographic structure on aged working cohorts the higher the intergenerational redistributive effects of the second dividend

contest theory and sport contrary to most sports fans economists tend to view tournaments not only as a mechanism to identify the most able and most talented athlete s but also as an instrument to increase the athletes effort levels by designing an adequate compensation system that takes into account the specificities of the contest under consideration the paper proceeds in two different steps first it reviews the available evidence on sports contests and identifies some puzzles that have not yet been resolved in the literature the empirical separation of selection and incentive effects and the impact of incentive pay in team settings second it addresses these puzzles and offers some new evidence supporting the basic assumptions offered by economic theory copyright 2003 oxford university press

the optimal allocation of prizes in contests we study a contest with multiple not necessarily equal prizes contestants have private information about an ability parameter that affects their costs of bidding the contestant with the highest bid wins the first prize the contestant with the second highest bid wins the second prize and so on until all the prizes are allocated all contestants incur their respective costs of bidding the contest s designer maximizes the expected sum of bids our main results are 1 we display bidding equlibria for any number of contestants having linear convex or concave cost functions and for any distribution of abilities 2 if the cost functions are linear or concave then no matter what the distribution of abilities is it is optimal for the designer to allocate the entire prize sum to a single first prize 3 we give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function

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

executive compensation and principal agent theory the empirical literature on executive compensation generally fails to specify a model of executive pay on which to base and test hypotheses regarding its determinants in contrast this paper analy

adverse selection in electronic markets evidence from online stamp auctions we analyze adverse selection costs in online stamp auctions based on a comparison of prices on ebay with those of matched stamps at a specialty stamps auction site in the u s michael rogers inc mr which we know a priori has low quality uncertainty we find that buyer prices are 10 15 lower on ebay as compared to mr and the price difference increases with the value of the stamps consistent with this adverse selection discount we find that the seller reputation mechanism on ebay has an economically modest although statistically significant effect on auction price and probability of sale

distributional effects of fiscal consolidation if public goods and transfers are relatively more valuable to the poor the elderly poor stand to lose from public debt reduction achieved through spending cuts when long term surpluses produced by debt reduction are recycled into higher provision of public goods and transfers future generations of poor could gain if future surpluses are recycled through lower labour taxes working households in the future would be positively affected the impact of debt reduction on vertical equity is ambiguous yet inter rather than intragenerational equity is likely to pose the greatest obstacle to fiscal consolidation based on majority voting by self interested households debt reduction is unlikely to occur jel classification d91 e62 h23 h63

the strategic choice of managerial incentives do firms with separate owners and managers maximize profits we address this question for an oligopoly where managers compete in quantities or prices as in the cournot or bertrand models and owners choose their managers incentives we find that there is a strategic aspect in the problem of selecting incentives and that profit maximizing behavior does not result in particular in the oligopoly we study the behavior of firms competing in quantity price more closely resembles perfectly competitive collusive behavior than cournot bertrand behavior

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

quality disclosure and certification theory and practice this essay reviews the theoretical and empirical literature on quality disclosure and certification after comparing quality disclosure with other quality assurance mechanisms and describing a brief history of quality disclosure we address two sets of theoretical issues first why don t sellers voluntarily disclose through a process of unraveling and given the lack of unraveling is it desirable to mandate seller disclosure second when we rely on certifiers to act as the intermediary of quality disclosure do certifiers necessarily report unbiased and accurate information we further review empirical evidence on these issues with a particular focus on healthcare education and finance the empirical review covers quality measurement the effect of third party disclosure on consumer choice and seller behavior as well as the economics of certifiers jel d18 k32 l15 m31

simulating fundamental tax reform in the united states this paper uses a new large scale dynamic life cycle simulation model to compare the welfare and macroeconomic effects of transitions to five fundamental alternatives to the u s federal income tax including a proportional consumption tax and a flat tax the model incorporates intragenerational heterogeneity and a detailed specification of alternative tax systems simulation results project significant long run increases in output for some reforms for other reforms namely those that seek to insulate the poor and initial older generations from adverse welfare changes long run output gains are modest

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

a framework linking intangible resources and capabilities to sustainable competitive advantage this article is concerned with the role of intangible resources in business strategy in particular it is concerned with identifying the intangible sources of sustainable competitive advantage sustainable competitive advantage results from the possession of relevant capability differentials regulatory and positional capabilities are concerned with intangible assets functional and cultural capabilities are concerned with competencies a framework linking intangible resources to capabilities has been devised and is used as the basis of a new technique for identifying the relative contribution which the different intangible resources make to competitive advantage the results of the use of this technique in six case studies are reported

the cost of climate policy in the united states abstract we re evaluate prospects for us economic growth and the likely costs of advanced technologies given recent developments and then apply the mit emissions prediction and policy analysis eppa model to evaluate three core ghg policy scenarios for the us that cap emissions at different levels the three policy scenarios involve allowance allocations that through 2050 are 1 constant at present emissions levels 2 linearly reduced to 50 below present 3 linearly reduce emissions to 80 below present the cumulative allowance allocations over the horizon of the policy are 287 203 and 167 gt of co 2 equivalent respectively we compare the results to previous analysis of these same policy scenarios to evaluate how the changed growth and technology prospects affect the results we focus on 203 and 167 gt scenarios because current proposals envision deep cuts in emissions from present the 167 gt scenario is closest to proposals currently being considered by congress and supported by the us administration however we do not attempt to model specific details of actual proposals we test results to alternative assumptions about program coverage and banking behavior measured in terms of changes in economic welfare the economic cost of 203 and 167 gt cases is in the range of 2 to 3 by 2050 with co 2 prices between 48 and 67 in 2015 rising to between 190 and 266 by 2050 implementation details matter when an idealized economy wide cap and trade is replaced by coverage omitting some sectors or if the credibility of long term target is weak limiting banking behavior prices and welfare costs change substantially

on the impacts of carbon tax and technological progress on china using a dynamic national computable general equilibrium model we investigate the impact of carbon tax and energy efficiency improvement on the economy and environment of china the chinese social

an analysis of the war of attrition and the all pay auction we study the war of attrition and the all pay auction when players signals are affiliated and symmetrically distributed we a find sufficient conditions for the existence of symmetric monotonic equilibrium bidding strategies and b examine the performance of these auction forms in terms of the expected revenue accruing to the seller under our conditions the war of attrition raises greater expected revenue than all other known sealed bid auction forms journal of economic literature classification numbers d44 d82 1997 academic press

comparative statics of contests and rent seeking games this paper develops the comparative statics properties of a contest encountered in patent races and rent seeking games the author shows that symmetric equilibrium expenditure and profit per player decrease with the number of competitors and the discount rate but increase with the value of the prize a fundamental lemma established in the paper shows that a stability condition usually imposed on the model is automatically satisfied the author identifies a class of likelihood or hazard rate functions for which aggregate expenditure increases with the number of competitors and total profits converge to zero copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

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