estimating a model of strategic network choice the convenience store industry in okinawa this paper investigates a determinant of location choice for multistore retailing firms the trade off between the business stealing effect and the cost saving effect from clustering their own stores i present an empirical model of network choice by two multistore firms i use lattice theoretical results to address the computational burden of solving for an equilibrium in store networks the framework integrates the static entry game of complete information with post entry outcome data while using simulations to correct for the selection of entrants i present an application of the model to the case of the convenience store industry in okinawa island japan using unique cross sectional data on store networks and revenues i use parameter estimates to examine the impact of a hypothetical horizontal merger on store configurations costs and profits results suggest a retailer s trade off between cost savings and lost revenues from clustering its stores is positive across markets and negative within a market i find an acquirer of a hypothetical merger of two multistore firms would decrease its number of stores in suburbs but increase its number in the city center

climate coalitions and international trade assessment of cooperation incentives by issue linkage this paper investigates climate control coalition games it studies whether incentives exist for non cooperating nations like the usa to join a coalition based upon issue linkage issue linkage is considered through increased r d expenditures triggering improved technological innovations that advance energy efficiencies model calculations demonstrate that incentives exist for non cooperating countries like the usa to join a climate control coalition if nations cooperate on technological innovations restrictions on trade such as sanction mechanisms against non cooperating countries are not necessarily an incentive to join a coalition technological spillover effects lead to improved economic situations and increased energy efficiencies in non cooperating countries

input versus emission taxes environmental taxes in a mass balance and transaction costs perspective the standard policy recommendation to limit pollution is to use taxes or tradeable quotas on emissions a general emphasis on emissions does not however take proper account of the characteristics of the material flow through the economy an analysis of the relationships between transaction costs and features of this flow shows that it may be less costly to tax inputs into the economy the paper focuses on the advantages of a mass flow perspective in environmental economics the trade off between the precision of an environmental regulation and its implementation costs and develops criteria for choosing between input and emission related instruments

credible spatial preemption it is often argued that incumbent firms may deter entry by preemptive investment in new goods we show that these conclusions are reversed when multiproduct incumbentfirms may exit in response to entry once entrants are in an industry an incumbent will often want to withdraw some goods to prevent competition with the entrant from reducing profits on other goods such a reaction makes entry more attractive to a potential entrant the equilibrium industry structure is less likely to be monopolistic as the goods are better substitutes as exit costs are low and as the competition between producers of the same good is more intense

the economics of urban sprawl theory and evidence on the spatial sizes of cities many commentators believe that the phenomenon of urban sprawl which is characterized by vigorous spatial expansion of urban areas is a symptom of an economic system gone awry by transforming pastoral farmland into often unattractive suburbs sprawl is thought to disrupt a natural balance between urban and non urban land uses leading to a deplorable degradation of the landscape this sentiment is often translated into policy through zoning restrictions designed to inhibit the conversion of land from agricultural to urban use see bryant and conklin 1975 the economist s view of urban expansion stands in stark contrast to this emotionally charged indictment of sprawl economists believe that urban spatial size is determined by an orderly market process which correctly allocates land between urban and agricultural uses the model underlying this view which was originally developed by muth 1969 and mills 1972 and more completely analyzed by wheaton 1974 suggests that urban spatial size is determined in a straightforward way by a number of exogenous variables by showing empirically that urban size is related to the given variables population income agricultural rent and commuting cost in the manner predicted by the model the present paper achieves two goals first the empirical results suggest that the economist s view of urban sprawl is justified rather than being determined by a process which indiscriminately consumes agricultural land urban sizes are the result of an orderly market equilibrium where competing claims to the land are appropriately balanced 2 second by confirming the urban size predictions of the underlying model the empirical results constitute yet another piece of evidence validating the basic framework of urban economic analysis 3 the plan of the paper is as follows section ii sketches the structure of the muth mills model and presents the main comparative static results relevant to urban sprawl with the model s predictions in focus section iii discusses the sample and the data and section iv presents the empirical results section v offers conclusions

closing coal economic and moral incentives climate policy requires that much of the world s reserves of fossil fuels remain unburned this paper makes the case for implementing this directly through policy to close the global coal industry coal is singled out because of its high emissions intensity low rents per unit value local environmental costs and sheer scale direct supply policy the sequenced closure of coal mines may lead to less policy leakage across countries and time than other policies based on demand or price management it also has the advantage of involving relatively few players and leading to clear cut and observable outcomes appropriately sequenced closure of the world coal industry could we suggest create the moral force needed to mobilize collective international action

residential construction using the urban growth model to estimate housing supply abstract this article presents an empirical model of housing supply derived from urban growth theory this approach describes new housing construction as a function of changes in house prices and costs rather than as a function of the levels of those variables which previous studies have used empirical tests support this specification over the leading alternative models our estimates show that a 10 rise in real prices leads to an 0 8 increase in the housing stock which is accomplished by a temporary 60 increase in the annual number of starts spread over four quarters

supply versus demand side policies in the presence of carbon leakage and the green paradox we consider a climate coalition that seeks to reduce global emissions in the presence of carbon leakage and resource exhaustibility we show that a credible announcement of future unilateral supply side policies delays foreign emissions and we derive the optimal combination of consumer taxes and producer taxes when we consider leakages from free riders both within periods and across periods the tax shares generally differ over time a decline in the present value of the social cost of carbon over time supports a time path where the consumers tax share of the total carbon tax also declines over time we illustrate our findings with a numerical model

trade in fossil fuel deposits for preservation and strategic action abstract in the world economy with interdependent markets for fossil fuel deposits and extracted fossil fuel some coalition of countries may fight climate change by purchasing and preserving fossil fuel deposits which would be exploited otherwise assuming that deposits are traded on a market with a uniform price we find that the outcome is efficient if the coalition is a price taker in both markets but inefficient if it acts strategically in the deposit market but not in the fuel market or acts strategically in both markets the latter result demonstrates that harstad s 2012 theorem 1 efficiency despite strategic action result is not robust with respect to changes in the concepts of the deposit market and market or bargaining power in a simplified parametric version of the game a strategically acting coalition buys fewer deposits consumes more fuel and puts up with higher climate damage than in first best

invited paper even the rich can make themselves poor a critical examination of iv methods in marketing applications marketing is a field that is rich in data our data is of high quality often at a highly disaggregate level and there is considerable variation in the key variables for which estimates of effects on outcomes such as sales and profits are desired the recognition that in some general sense marketing variables are set by firms on the basis of information not always observable by the researcher has led to concerns regarding endogeneity and widespread pressure to implement instrumental variables methods in marketing problems the instruments used in our empirical literature are rarely valid and the iv methods used can have poor sampling properties including substantial finite sample bias and large sampling errors given the problems with iv methods a convincing argument must be made that there is a first order endogeneity problem and that we have strong and valid instruments before these methods should be used if strong and valid instruments are not available then researchers need to look toward supplementing the information available to them for example if there are concerns about unobservable advertising or promotional variables then the researcher is much better off measuring these variables rather than using instruments such as lagged marketing variables that are clearly invalid ultimately only randomized variation in marketing variables with proper implementation and large samples can be argued to be a valid instrument without further assumptions

games of climate change with international trade we analyse games of greenhouse gas emission reduction in which the emissions and the emission reduction costs of one country depend on other countries emission abatement in an analytically tractable model we show that international trade effects on costs and emissions can either increase or decrease incentives to reduce emissions and to cooperate on emission abatement in some specifications optimal emission reduction is unaffected by trade we therefore specify the model further calibrating it to larger models that estimate the costs of emission reduction trade effects and impacts of climate change if trade effects are driven by total emission reduction costs of other countries cooperation is slightly more difficult than in the case without trade effects if trade effects are determined by relative emission reduction efforts in other countries cooperation becomes easier carbon leakage does not affect our qualitative insights although it does change the numbers

bottom up world climate policies preserving fossil fuel deposits vs capping fuel consumption the policy of purchasing fossil fuel deposits for preservation is an alternative to the demand side climate policies that predominate in practice and in professional studies this paper analyzes the deposit purchase approach and compares it to the standard demand side policy in a model with international trade and non cooperative governments that account for the effects of their policies on equilibrium prices we investigate how the two regimes differ with respect to their equilibrium allocations and in particular with respect to the countries mitigation effort and welfare if countries are symmetric mitigation is stronger in the demand side than in the supply side regime and the transition from the latter to the former is welfare enhancing for all countries if countries have different endowments of deposits in a two country economy the country with higher extraction costs does not purchase deposits for preservation and the country with lower extraction costs is better off with the supply side than with the demand side policy finally we consider the case of combined policies and find surprisingly that no equilibrium in pure strategies exists when heterogeneous countries apply both policy instruments politiques climatiques mondiales ascendantes preservation des gisements de combustibles fossiles par opposition a la limitation de la consommation de carburant la politique d achat de gisements de combustibles fossiles aux fins de preservation represente une alternative aux politiques climatiques axees sur la demande predominant a la fois dans la pratique mais aussi dans les etudes professionnelles cet article analyse l approche fondee sur l achat de gisements et la compare a la politique standard axee sur la demande dans un modele de commerce international et de gouvernements non cooperatifs prenant en compte les effets de leurs politiques sur les prix d equilibre nous avons recherche en quoi les deux regimes differaient relativement a leur repartition de l equilibre et notamment relativement a l effort d attenuation et a la protection sociale si les pays sont symetriques l attenuation est plus prononcee dans un systeme axe sur la demande comparativement a un systeme axe sur l offre et la transition du second au premier systeme permet d ameliorer la protection sociale pour tous les pays dans une economie a deux pays differemment dotes en matiere de gisements le pays ayant les couts d extraction les plus eleves n achete pas de gisements a des fins de preservation tandis que le pays ayant les couts d extraction les moins eleves se retrouve en meilleure posture dans une politique axee sur l offre plutot que sur la demande pour terminer nous examinons le cas des politiques combinees et etonnamment nous constatons qu il n existe aucun equilibre en matiere de strategies pures lorsque des pays heterogenes appliquent les deux moyens d action

the long term effect of marketing strategy on brand sales few studies have considered the relative role of the integrated marketing mix advertising price promotion product and place on the long term performance of mature brands instead emphasizing advertising and price promotion thus little guidance is available to firms regarding the relative efficacy of their various marketing expenditures over the long run to investigate this issue the authors apply a multivariate dynamic linear transfer function model to five years of advertising and scanner data for 25 product categories and 70 brands in france the findings indicate that the total short term plus long term sales elasticity is 1 37 for product and 74 for distribution conversely the total elasticities for advertising and discounting are only 13 and 04 respectively this result stands in marked contrast to the previous emphasis in the literature on price promotions and advertising the authors further find that the long term effects of discounting are one third the magnitude of the short term effects the ratio is reversed from other aspects of the mix in which long term effects exceed four times the short term effects underscoring the strategic role of these tools in brand sales

marginal tax reform externalities and income distribution the paper examines welfare improving and revenue neutral directions marginal policy reforms for an economy with nonidentical individuals and an externality that has a feedback effect on the consumption of taxed goods it considers three types of policy instruments the indirect taxes the uniform poll transfer and public abatement this extends the framework set up by ahmad and stern 1984 bovenberg and de mooij 1994 and schob 1996 the theoretical model is illustrated for a specific externality namely congestion caused by peak car transport

pioneering plus a broad product line strategy higher profits or deeper losses previous research suggests firms can build a market share advantage by preempting later entrants with a broad product line and expanding rapidly into related markets whether such a strategy leads to a pioneering profit advantage relative to followers also depends on its cost effects in this paper we examine when the market share advantage of a pioneering firm with a broad product line strategy translates into a profit advantage by examining the cost effects of this strategy using the profit impact of marketing strategies data and an estimation method that controls for various unobserved factors we find significant differences between different industry settings from these contrasting findings we generate an emerging theoretical framework that we subject to empirical testing we conjecture and empirically verify that creating a broad product line with a versioning strategy creating variety from a standard product in anticipating customer demand does not increase the pioneering cost disadvantage and thus results in a pioneering profit advantage on the other hand with a tailoring strategy creating variety by customizing a product to actual customer demand a broad product line substantially increases the pioneering cost disadvantage thereby making a preemption strategy counterproductive

location choice product proliferation and entry deterrence within a slightly modified version of hotelling s model we reconsider the claim that the threat of entry induces existing firms to produce a larger number of products than they would otherwise we show that entry deterrence although optimal need not be achieved through product proliferation in some cases the incumbent monopolist resorts to an entry deterring strategy based on location choice rather than product proliferation we also show that in some cases the number of products chosen by the incumbent facing the threat of entry is strictly greater than the minimum number required to deter entry

efficient climate policy with internationally mobile firms a major concern in the design of an incomplete climate agreement is thatfirms that use fossil fuels intensively may respond to emission regulationsby relocating their plants from cooperating to non cooperating countries this paper analyses how the cooperating countries might deal with the issueof firm delocation through emission taxes trade provisions and alocalisation subsidy to mobile firms it is shown that firms should not beinduced to stay in the cooperating countries by lowering emission taxesbelow the pigouvian tax rate incentives to stay should be given partlythrough trade provisions and partly through a localisation subsidy a secondbest solution without localisation subsidies is also discussed in thatcase the efficient emission tax is lower than the pigouvian tax rate finally the paper discusses the implications of the first best and thesecond best policy regimes for the pattern of firm localisation

the abatement market a proposal for environmental cooperation among asymmetric countries we present a model of interaction among technologically asymmetriccountries whose use of an open access environmental resource generatesmutual externalities we show that countries can improve bothenvironmental quality and their individual welfare levels by buying sellingpollution abatement this market mechanism which reduces incentive forfree riding is more effective the larger the technological gap betweencountries

environmental consciousness and moral hazard in international agreements to protect the environment abstract a group of countries that can potentially commit to cooperation to protect the environment are identified as environmentally conscious countries conditions are examined under which they can provide self financing side payments too a second group of less environmentally conscious countries so that the two groups form a global or partial stable coalition that agrees to reduce emissions a mechanism that detects cheating is also developed in order to induce the desired emissions even when the emissions level of an individual country cannot be observed by the rest of the participating countries

the triple inefficiency of uncoordinated environmental policies when pollution is transboundary and there is international trade a domestic inefficiency may arise in addition to the well known inefficiencies at the international level more precisely there will be a nash equilibrium in which each country chooses a policy that gives it lower welfare than would otherwise be possible given the emission levels of all countries however there will also be a nash equilibrium in which each country chooses tradable emission quotas as its policy instrument to achieve its desired level of emissions in this nash equilibrium welfare in each country is maximised given the emission levels of all countries

agency theory and franchising some empirical results this article provides an empirical assessment of various agency theoretic explanations for franchising including risk sharing one sided moral hazard and two sided moral hazard the empirical models use proxies for factors such as risk moral hazard and franchisors need for capital to explain both franchisors decisions about the terms of their contracts royalty rates and up front franchise fees and the extent to which they use franchising in this article i exploit several new sources of data on franchising to construct a cross section of 548 franchisors involved in various business activities in the united states in 1986 the data are most consistent with a model based on two sided moral hazard the empirical models are also more successful at explaining the extent to which franchisors choose to franchise stores than at explaining the terms of franchise contracts finally contrary to the predictions of several theoretical models i find that royalty rates and franchise fees are not negatively related

is 75 of the sales promotion bump due to brand switching no only 33 is abstract several researchers have decomposed sales promotion elasticities based on household scanner panel data a key result is that the majority of the sales promotion elasticity approximately 74 on average is attributed to secondary demand effects brand switching and the remainder is attributed to primary demand effects timing acceleration and quantity increases the authors demonstrate that this result does not imply that if a brand gains 100 units in sales during a promotion the other brands in the category lose 74 units the authors offer a complementary decomposition measure based on unit sales the measure shows the ratio of the current cross brand unit sales loss to the current own brand unit sales gain during promotion the authors report empirical results for this measure they also derive analytical expressions that transform the elasticity decomposition into a decomposition of unit sales effects these expressions show the nature of the difference between the two decompositions to ga

a look on the cost side market share and the competitive environment in this paper we develop a model relating market share to average costs we start with a theoretical model of the factors that affect the firm s average cost curve partitioning these factors into a measurable firm and competitive environment characteristics and b unobserved factors that are either fixed random or follow a first order autoregressive process we then link this theoretical model to an empirical model in which we specify three average cost equations for the organizational areas of purchasing production and marketing main effects for initial lagged market share position as well as their interactions with factors characterizing the firm s competitive environment represent the variables of key theoretical interest in our equations we estimate these equations using pims data and control for fixed contemporaneous and autoregressive unobservable factors our results suggest that market share can often lead to market power in the form of lower average costs however the firm s operating environment greatly moderates the effect of market share on average cost in particular we find that market share position only leads to lower average costs when the organizational unit operates in a competitive environment that gives it both motivation and ability to realize power from its market share position

supply side climate policy on the role of exploration and asymmetric information in the world economy with interdependent markets for fossil fuel deposits and extracted fossil fuel a coalition of countries may fight climate change by purchasing fossil fuel deposits for preservation harstad j polit econ 120 77 115 2012 has shown that the coalition s supply side climate policy implements the first best the present paper focuses on the role exploration and asymmetric information with respect to climate damage plays for the efficiency of unilateral supply side climate policy under the assumption of non strategic exploration and truthful reporting of climate damage the deposit policy turns out to be efficient if exploration is used strategically or the coalition misreports its climate damage however the deposit policy becomes inefficient

deconstructing the pioneer s advantage examining vintage effects and consumer valuations of quality and variety several studies have demonstrated an order of entry effect on market share suggesting that pioneers outperform later entrants however other research has pointed out the limitations of these studies and found evidence that many pioneers fail or have low market share given this background the purpose of this research is to understand the conditions under which pioneers are more likely and also less likely to have an advantage we propose a game theoretic model that includes important sources of pioneer advantages as well as disadvantages specifically we incorporate a pioneer advantage due to preemption in markets with heterogeneous tastes in addition we incorporate a potential pioneer disadvantage due to technology vintage effects where later entrants utilizing improved technology can have lower costs and higher quality the model allows us to evaluate the extent of vintage effects necessary to overcome a pioneer s advantage key relationships are found between the magnitude of the pioneer advantage or disadvantage and consumer valuations of product attributes e g variety and quality we empirically validate the model with vintage effect data in 36 product categories and measures of consumer valuations of product variety and quality for 12 of these 36 categories the results show that pioneers do better in product categories wherevariety is more important and worse in categories where productquality is more important pioneers in categories with high vintage effects are shown to have lower market shares and higher failure rates similar results appear when analyzing persistence of market leadership over time further validating our model s major implications we also present two case studies that illustrate key elements of the model

compact or spread out cities urban planning taxation and the vulnerability to transportation shocks this paper shows that cities made more compact by transportation taxation are more robust than spread out cities to shocks in transportation costs such a shock indeed entails negative transition effects that are caused by housing infrastructure inertia and are magnified in low density cities distortions due to a transportation tax however have in absence of shock detrimental consequences that need to be accounted for the range of beneficial tax levels can therefore be identified as a function of the possible magnitude of future shocks in transportation costs these taxation levels which can reach significant values reduce city vulnerability and prevent lock ins in under optimal situations

efficient climate policy in the presence of free riders abstract if all countries participate in a climate agreement policies affecting the supply of fossil fuels have identical economic consequences as policies affecting the demand of fossil fuels this is no longer true when there is limited participation in an international agreement in the paper it is assumed that a group of countries commit themselves to cooperating while the remaining countries act independently and in pure self interest the paper compares supply and demand policies in this context and demonstrates that policies which affect only demand or only supply of carbon generally are inferior to policies affecting both demand and supply of carbon the optimal mix of supply and demand policies is derived in the paper with particular emphasis on carbon taxes an important result is that if the marginal environmental costs of total emissions are sufficiently high in the cooperating countries then both production and consumption of carbon should be taxed at a positive rate if on the other hand the marginal environmental costs of total emissions are sufficiently low it may be optimal to subsidize production or consumption in this case production should be subsidized if the cooperating countries are net importers of carbon while consumption should be subsidized if the cooperating countries are net exporters of carbon another important conclusion of the paper is that the cooperating countries should try to induce the non cooperating countries through appropriate transfers to tax consumption and production of carbon at the same rate as in the cooperating countries

order of market entry established empirical generalizations emerging empirical generalizations and future research three established and four emerging empirical generalizations are identified below the first established generalization is that there is a negative relationship between order of market entry and market share second for consumer packaged goods and prescription anti ulcer drugs the entrant s market share divided by the first entrant s share roughly equals one divided by the square root of order of market entry third in mature markets market pioneer share advantages slowly decline over time while the emerging generalizations require additional research support the initial findings suggest 1 for consumer packaged goods order of market entry has a stronger negative relationship with trial penetration than with repeat purchase 2 market pioneers have broader product lines than late entrants 3 skill and resource profiles differ across market pioneers early followers and late entrants and 4 order of market entry is not related to long term survival rates future research topics are also dis

entry deterrence in markets with consumer switching costs in many markets consumers have transaction or learning switching costs between functionally undifferentiated brands new entry into such markets may be deterred either by large customer bases and or large switching costs which deny customers to an entrant or by small customer bases and or small switching costs which mean an incumbent will respond aggressively to an entrant an incumbent threatened by entry may therefore price either lower or higher than otherwise a firm with the right to enter early may make less profits over time than an otherwise identical firm that is unable to enter the market until later

buy coal a case for supply side environmental policy free riding is at the core of environmental problems if a climate coalition reduces its emissions world prices change and nonparticipants typically emit more they may also extract the dirtiest type of fossil fuel and invest too little in green technology the coalition s second best policy distorts trade and is not time consistent however suppose that the countries can trade the rights to exploit fossil fuel deposits as soon as the market clears the above mentioned problems vanish and the first best is implemented in short the coalition s best policy is to simply buy foreign deposits and conserve them

on the efficiency of green trade policy the paper derives conditions for second best environmental policy when there are foreign countries which fail to implement appropriate environmental regulations it is shown that in such cases efficiency in the global economy will not be achieved unless domestic environmental regulations are supplemented by trade provisions the result is independent of whether environmental problems are local or international furthermore when trade provisions are implemented efficiency requires that domestic environmental taxes are fixed at the pigouvian tax rate the results imply that there is an economic rationale for regulating the trade between signatories and non signatories of international environmental agreements efficient trade regulations will either take the form of trade restrictions or trade promotions depending on whether the environmental problem is created by production or consumption activities and whether the net import of the relevant commodity is positive or negative it is argued that an efficient climate agreement signed by a group of fuel importing countries e g the oecd countries should include a subsidy on the import of fossil fuels

cost effective unilateral climate policy design size matters given the bleak prospects for a global agreement on mitigating climate change pressure for unilateral abatement is increasing a major challenge is emissions leakage border carbon adjustments and output based allocation of emissions allowances can increase effectiveness of unilateral action but introduce distortions of their own we assess antileakage measures as a function of abatement coalition size we first develop a partial equilibrium analytical framework to see how these instruments affect emissions within and outside the coalition we then employ a computable general equilibrium model of international trade and energy use to assess the strategies as the coalition grows we find that full border adjustments rank first in global cost effectiveness followed by import tariffs and output based rebates the differences across measures and their overall appeal decline as the abatement coalition grows in terms of cost the coalition countries prefer border carbon adjustments countries outside the coalition prefer output based rebates

property tax and urban sprawl theory and implications for us cities this article attempts a formal analysis of the connection be tween property tax and urban sprawl in u s cities we develop a theoretical model that includes households who are also landlords and land developers in a regional land market we then test the model empirically based on a national sample of urbanized areas the results we obtained from both theoretical and empirical analyses indicate that increasing property tax rates reduces the size of urbanized areas j e l classification h3 h71 r14

behaviors and housing inertia are key factors in determining the consequences of a shock in transportation costs this paper investigates the consequences of a sudden increase in transportation costs when household behaviors and building inertia are accounted for a theoretical framework is proposed capturing the interactions between behaviors transportation costs and urban structure numerical simulations show that changes in households and landowners choices reduce significantly the long term adverse effects of a shock in transportation costs indeed the shock translates over the long run into a more concentrated housing that limits households utility losses and maintains landowners income but because of building inertia the shock leads first to a long transition during which the adjustment is constrained by a suboptimal housing supply structure then households support larger losses than in the final stage though lower than with no behavior adjustment and landowners experience a large decrease in their aggregate income and an important redistribution of wealth thus behaviors and building inertia are key factors in determining the vulnerability to transportation price variability and to the introduction of climate policies our policy conclusions are that i if a long term increase in transportation costs is unavoidable because of climate change or resource scarcity a smooth change prevents to some extent the negative transition effects and ii fast growing cities of the developing world can reduce their future vulnerability to shocks in transportation costs through the implementation of policies that limit urban sprawl

no regret potentials and technical innovation a viability approach to integrated assessment of climate policies abstract this paper aims to demonstrate the advantages of a sequential approach to decision making in climate policies this sequential approach is necessary because of the uncertainties regarding both the avoided costs of climate change and the costs of ghg emission abatement this assessment focuses on the minimization of learning time the reduction of technical and institutional inertia and the possible unexpected non linearities in abatement curves a stylized representation of so called no regret short term potentials of long term innovation trends and of backstop technologies is used we show that if we do take care of the inertia constraints in the decision process both policies namely the no regret and the innovation process exploitation becomes crucial in terms of minimization of the learning time

unilateral climate policy with production based and consumption based carbon emission taxes this paper characterizes a sub global climate coalition s unilateral policy of reaching a given climate damage reduction goal at minimum costs following eichner and pethig j environ econ manag 2013 we set up a two country two period model in which one of the countries represents a climate coalition that implements a binding ceiling on the world s first period emissions the other country is the rest of the world and refrains from taking action the coalition can make use of production based carbon emission taxes in both periods as in eichner and pethig j environ econ manag 2013 but here we consider consumption based carbon emission taxes as an additional instrument the central question is whether and how the coalition employs the consumption based taxes along with the production based taxes in its unilateral cost effective ceiling policy all cost effective policies identified analytically and numerically consist of a mix of both types of taxes implying that there is a tax mix which is less expensive for the coalition than stand alone consumption based or stand alone production based taxes with full cooperation both taxes are perfect substitutes in our model but in case of unilateral action they are imperfect substitutes because coalition s total welfare loss from two different but moderate distortions is smaller than that from a single but severe distortion

brown backstops versus the green paradox abstract anticipated climate policies are ineffective when fossil fuel owners respond by shifting supply intertemporally the green paradox this mechanism relies crucially on the exhaustibility of fossil fuels we analyze the effect of anticipated climate policies on emissions in a simple model with two fossil fuels one scarce and dirty e g oil the other abundant and dirtier e g coal we derive conditions for a green orthodox anticipated climate policies may reduce current emissions the model can also be used to analyze spatial carbon leakage calibrations suggest that intertemporal carbon leakage from 0 to 8 is a relatively minor concern

between a rock and a hard place a trade theory analysis of leakage under production and consumption based policies without a comprehensive global climate agreement carbon leakage remains a contentious issue consumption based pricing of emissions which could in practice be implemented with a full border tax adjustment bta has been forwarded as an option to increase the effectiveness of unilateral climate policy this paper questions the economic rationale behind this approach using a theoretical 2 times 2 trade model in which leakage occurs through terms of trade effects we show analytically first that consumption based pricing of emissions does not necessarily result in less leakage than production based policies second the sign of the optimal unilateral carbon tariff depends on the carbon intensity differential between the foreign country s exporting and non exporting sectors and not on the differential between home s and foreign s exporting sectors as implied by the full bta approach third based on empirical data for the year 2004 our model implies that full bta applied by the european union on e g imports from and exports to china would by shifting china s production from the export sector with a relatively low carbon intensity towards the more carbon intensive non export sector actually increase leakage

urban economic theory land use and city size this book examines the economic reasons why people choose to live where they live and develops through analysis of the bid rent function a unified theory of urban land use and city size the first part of the book explicates the basic theory of urban land use and optimal city size residential location behavior of households is examined in a microeconomic framework and equilibrium and optimal patterns of residential land use are discussed the corresponding equilibrium and optimal city sizes are studied in a variety of contexts part two extends the classical theories of von thunen and alonso with the addition of externality factors such as local public goods crowding and congestion and racial prejudice the rigorous mathematical approach and theoretical treatment of the material make urban economic theory of interest to researchers in urban economics location theory urban geography and urban planning

substitution between biofuels and fossil fuels is there a green paradox we show that i subsidies for renewable energy policies with the intention of encouraging substitution away from fossil fuels may accentuate climate change damages by hastening fossil fuel extraction and that ii the opposite result holds under some specified conditions we focus on the case of subsidies for renewable resources produced under increasing marginal costs and assume that both the renewable resources and the fossil fuels are currently in use such subsidies have a direct effect and an indirect effect working in opposite directions the direct effect is the reduction in demand for fossil fuels at any given price the indirect effect is the reduction in the current equilibrium price for fossil fuels which tends to increase the amount of fossil fuels demanded whether the sum of the two effects will actually result in an earlier or later date of exhaustion of the stock of fossil fuels depends on the curvature of the demand curve for energy and of the supply curve for the renewable substitute

a distributional argument for supply side climate policies this paper presents a distributional argument for the use of supply side climate policies whereby carbon emissions are controlled through i depletion quotas or ii permanent confiscation of a fraction of the in situ carbon stocks the modeling considers intertemporal competitive equilibria in the cobb douglas version of the dasgupta heal solow stiglitz model of capital accumulation and costless resource extraction it is shown how policies i and ii preserve the functional distribution of income between capital owners and resource owners compared to the case where no climate policy is needed while suggested demand side policies do not such observations are of interest as avoiding functional redistribution may facilitate climate change negotiations the paper discusses policy implications of the analysis outside the simplified setting of the stylized model

the choice of organizational form the case of franchising abstract we examine companies that franchise some units and centrally operate own others the agency problems confronting these two organizational forms are analyzed testable hypotheses are developed the empirical results support the notion that owning versus franchising reflects a trade off among agency related problems the cost of monitoring store managers appears to be especially important in the own franchise decision the level of repeat business and initial investment requirements per unit also appear to be important

buy coal and act strategically on the fuel market abstract a coalition of given size fights climate change by a policy of purchasing fossil fuel deposits and it seeks to manipulate the fuel price in its favor assuming that non signatories are price takers in the fuel market harstad 2012 designs a policy of trading deposits that attains efficiency despite the coalition s option to act strategically in the fuel market the deposit transactions constituting that policy include the trade of deposits which the non signatories would have exploited and the coalition will exploit the present paper shows that in a proper subset of economies a simpler policy is also efficient that consists of deposit purchases for preservation only in these economies the coalition is unable to raise its welfare above the level in the benchmark case of fuel price taking in the economies where the efficient policy requires deposit transactions for exploitation the coalition is better off and the non signatories are worse off than in case of price taking

an empirical analysis of a firm s decision to franchise abstract hypotheses from monitoring and search cost explanations for the existence of franchising are discussed and tested the evidence offers strong support for the search theory somewhat weaker support for the monitoring shirking theory and no support for the monitoring cheating hypothesis

brand retrieval consideration set composition consumer choice and the pioneering advantage recent research on the pioneering advantage has shown that consumers often prefer pioneering brands to follower brands recent research on consumer choice suggests that information about brands is filtered through a series of sequential cognitive processes this study attempts to integrate these two separate lines of research by investigating the effects of pioneering on each stage of the multistage decision process a within subjects longitudinal experiment was conducted to simulate brand order of entry into a new market we also developed a sequential logit model to isolate the direct impact of pioneering on each stage of the decision process while controlling for indirect effects of pioneering on previous stages the results revealed that the pioneering brand vs followers is more likely to be retrieved considered and selected moreover the results revealed that consumers are more likely to bypass consideration set formation when the choice decision is simple vs complex theoretical and practical implications of the results are discussed

location and history as determinants of urban residential density abstract dynamic models of urban residential location have been widely used in recent years to explain spatial patterns of urban development and residential density however there has been little empirical evidence of their superiority in accounting for observed density patterns compared with long run equilibrium location models or pure historical models that ignore the influence of location as a determinant of density the test developed and applied in this paper demonstrates the superior explanatory power of dynamic models and yields plausible estimates of changes over time in equilibrium densities

intra industry trade in intermediate products pollution and internationally increasing returns this paper examines the relationship between intra industry trade in intermediate products pollution and increasing returns we develop a two country model in which production occurs in two stages final and intermediate good production intermediate goods are produced under monopolistic competition and final good production exhibits increasing returns with respect to the number of varieties of intermediates pollution occurs in the production of the final good when polluting intermediates are used we analyze the effects of international trade in intermediate products on pollution output and welfare under an endogenous tax scenario and with two types of pollution functions the results show that because of increasing returns international trade either leads to lower total pollution in each country or lower pollution per unit of output in at least one country in addition intra industry trade causes countries to import the environmental quality of their trading partners

joint implementation strategic reactions and possible remedies this paper investigates the promising proposal of joint implementation ji to mitigate greenhouse gas emissions this was ultimately the only concrete outcome of the conference on climate change in berlin albeit restricted to a pilot phase the basic idea given the public s awareness of global warming sounds economically plausible the industrialized countries the only ones required to stabilize and lower carbon emissions can search for cheaper reductions of greenhouse gas emissions in developing countries and economies in transition however this proposal leads to strategic reactions by developing countries reinforced by the fact that this cheating coincides with the interest of the industrialized country in short this proposal will lead to cheating given asymmetric information and will thus produce largely faked reductions in emissions on the constructive side an efficient mechanism retaining the spirit of ji is derived which deters strategic reactions this differs from a usual principal agent problem through an additional hierarchical layer a global authority e g the conference of parties on climate change an industrialized country and a developing country the unavoidable loss that is even associated with an optimal scheme due to strategic behavioural reality the first best optimum is unattainable except at the top leads of course to much less glamorous predictions in emission reductions moreover the implicit subsidization scheme focuses and favours on already efficient partners

environmental taxes and international spillovers the case of a small open economy abstract in the existence of trade interaction a sub global climate change policy can generate externality which can cause competitiveness issues for the producers in compliant regimes however among compliant regions a small economy also receives a significant spillins effect when a large economy takes some regulatory actions that affect particularly the world prices of traded commodities this externality can have notable impacts on the efficiency and pollution abatement opportunities of the small compliant regime with a trivial converse effect in some cases these impacts on the efficiency and emissions abatement can be in opposite directions we capture these findings by incorporating two protection polices i e border tax adjustment and free emissions allocations to emission intensive and trade exposed industries in a multi region analytical and numerical general equilibrium modeling framework these results convey that the large economies hold leading strategic positions towards a cooperative global climate change movement because of their policies influences on the small economies

sustainable pioneering advantage profit implications of market entry order there is strong theoretical and empirical evidence supporting the idea that first to market leads to an enduring market share advantage in sharp contrast to these findings we find that at the business unit level being first to market leads on average to a long termprofit disadvantage this result holds for a sample of consumer goods as well as a sample of industrial goods and leads to questions about the validity of first mover advantage in and of itself as a strategy to achieve superior performance we replicate the typical demand side pioneering advantage but find an evengreater average cost disadvantage which is the source of the pioneering profit disadvantage in an extended analysis we show that first to market leads to aninitial profit advantage which depending on the sample or profit measure lasts for about 12 to 14 years before turning into a disadvantage moreover we show that pioneers differentially benefit from a lack of consumer learning a strong market position and patent protection these three moderating factors together can actually help pioneers achieve a sustainable profit advantage over later entrants finally we find strong support for the theoretical argument that the entry order decision should be treated as endogenous in empirical estimation

robust policies to mitigate carbon leakage abstract unilateral climate policy induces carbon leakage through the relocation of emission intensive and trade exposed industries to regions without emission regulation previous studies suggest that emission pricing combined with border carbon adjustment is a second best instrument and more cost effective than output based rebating we show that the combination of output based rebating and a consumption tax for emission intensive and trade exposed goods can be equivalent with border carbon adjustment moreover it is welfare improving for a region that implements emission pricing along with output based rebating to introduce such a consumption tax the welfare gain is particularly large if output based rebating is already implemented for a sector that is not much exposed to leakage e g due to uncertainty about exposure or due to lobbying activities thus supplementing output based rebating with a consumption tax constitutes robust policies to mitigate carbon leakage

practice prize paper marketing mix recommendations to manage value growth at p g asia pacific procter gamble p g asia pacific is interested in managing value growth only after fully understanding the true effects of the marketing mix variables can p g managers make strategic decisions answering questions such as the following 1 are the p g brands in the detergent market inelastic or elastic with respect to price how has the price elasticity changed over time can p g increase the price of its brands to gain value growth 2 what are the price distribution and sizing combinations needed to achieve the desirable value growth 3 how can p g gain market share from its competitors without cannibalizing its own brands p g asia pacific approached us to develop a value growth framework to answer these questions to generate the answers for the above questions we develop a three step weighted random coefficient estimator that captures the heterogeneity across cross sections different stock keeping units and states and the endogeneity of distribution based on the parameter estimates we provide strategic recommendations to p g for a field test to validate our suggestions we developed a simulator for p g managers so that they can generate appropriate marketing mix strategies for achieving the desired value growth as a result p g gained over 39 million in value growth over a one year period by implementing the recommendations from our modeling approach

first mover advantage through distribution a decomposition approach whereas the extant literature on entry order effects establishes that first entrants often earn higher market shares market share advantage the literature on distribution suggests that increased distribution has a positive effect on sales can distribution help us better understand entry order effects on market shares this paper examines how the first entrant in a geographical market achieves a market share advantage through distribution for this purpose i propose a simple method of decomposing sales into physical distribution and sales performance the data come from a manually collected panel on six major japanese convenience store chains from 47 geographical markets between 1991 and 2007 using an instrumental variable approach to address the potential endogeneity of entry order i find first entrants have a positive market share advantage over later entrants specifically the physical distribution measured by the number of outlets in a market drives most of the advantage meanwhile the pos