adapting contract theory to fit contract farming this article discusses the current state of contract theory and its usefulness for conceptualizing issues related to agricultural contracting i will discuss the limitations of existing theory for applied work and what methodological improvements are needed to enhance the usefulness of the theory to agricultural economists one pervasive problem is that the canonical economic literature on contracts is rather fragmented and the various methodological strands are narrow in their focus as such there is a need for agricultural economists to engage in methodological research to develop applied contracting models that can capture higher order features of real world agricultural contracts while delivering generalizable comparative statics predictions the need for such research is obvious as contracting continues to expand along the entire modern food marketing channel in the latter part of this article i develop a simple model to illustrate how classic methodological approaches can be combined with recent developments in contract and game theory to construct applied theory models that are useful for capturing some important features of agricultural contracts

cleaner energy for sustainable future this special issue of the journal of cleaner production focuses on energy for sustainable future it is designed to mirror the increasing relevance of renewable energy sources and improved efficiency as crucial topics for practitioners in industry for governmental policy makers as well as for civic service providers researchers and educators the purpose of this special issue is to serve as a catalyst for dialogue the global warming related to co2 emissions coupled with steeply rising energy prices and the recent global financial institutional melt down are causing massive societal concerns and give rise to increasing demand for ways to improve societal and individual energy efficiency and for ways to shift increasingly to alternative low or non carbon based energy systems until recently industrial energy efficiency improvements have focused on improvements on efficiency rather than on the integration of renewable sources the aim of this special issue is the identification of policies to support the development and implementation of technologies and management approaches we can employ to make the transition to more sustainable societies the collection of papers in this special issue provide a foundation for students researchers scholars practitioners and policy makers interested in making sustainable development more than a metaphor the papers include focus upon ways for a improving industrial process to achieve improvements in energy efficiency b minimising waste disposals and reducing their impact through better management c reducing co2 emissions by making progress toward lower carbon renewable energy based systems d improving production of biofuels and hydrogen production systems facilitated by employing cleaner production and novel lca tools e improving integration of advanced materials and energy efficient equipment in different industrial sectors current and future developments in national and world economies are closely connected to sustainable efficient and safe usage of raw materials and upon energy based on cleaner production concepts and approaches that are ecologically and economically appropriate for the short and for the long term future of society these challenges have received considerable attention in the media and scientific journals over the last several years the idea of developing a specialised conference focussed upon them was put forward on various occasions focus upon them became reality on the 5th and 6th may 2008 in the historic castle of veszprem hungary the current premises of the hungarian academy of science which hosted the workshop the workshop was a stimulating event and an overwhelming success with nearly 100 contributors from africa north america asia and europe representing 28 countries after a comprehensive selection and thorough reviewing procedure 11 papers were selected for this special issue

status in markets this project tests for the effect of social status in a laboratory experimental market we consider a special box design market in which a vertical overlap in supply and demand ensure that there are multiple equilibrium prices we manipulate the relative social status of our subjects by awarding high status to a subset of the group based on one of two procedures in the first a subject s score on a trivia quiz determines his or her status in another subjects are assigned randomly to a higher status or lower status group in both treatments we find that average prices are higher in markets where higher status sellers face lowerstatus buyers and lower when buyers have higher status than sellers across all sessions the higher status side of the market captures a greater share of the surplus earning significantly more than their lower status counterparts

non monetary incentives and opportunistic behavior evidence from a laboratory public good game this study reports data from a laboratory experiment that investigates the incentive effect of three distinct social communication schemes on free riding behavior we use performance based approval and disapproval ratings and a linear public good game to address the above issues the treatments vary in terms of subjects opportunities to anonymously assign 1 only the approval ratings to other group members 2 only the disapproval ratings to other group members and 3 either the approval or the disapproval ratings to other group members but not both to the same group member after they play a standard linear public good game despite the nash prediction of zero individual contribution in all three treatments the data show that the disapproval points generate significantly higher contribution than the approval points the treatment in which subjects could communicate either the approval or the disapproval points produces the highest level of contribution we discuss the implications that these findings may have for efficient design of organizations jel d03 h41 c72 c92

energy security and renewable electricity trade will desertec make europe vulnerable to the energy weapon abstract solar power imports to europe from the deserts of north africa as foreseen in the desertec concept is one possible way to help decarbonising the european power sector by 2050 however this approach raises questions of threats to european energy security in such an import scenario particularly in the light of increasing import dependency and russia s use of the energy weapon in recent years in this paper we investigate the threat of north african countries using the desertec electricity exports as an energy weapon we develop and use a new model to assess the interdependence the bargaining power symmetry operationalised as costs of a disruption in a future renewable electricity trade between north africa and europe if europe maintains current capacity buffers some demand response capability and does not import much more than what is described in the desertec scenario it is susceptible to extortion and political pressure only if all five exporter countries unite in using the energy weapon europe is not vulnerable to extortion by an export cut from only one country as the european capacity buffers are sufficient to restore the power supply no single exporter country would have sustained bargaining power over europe

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

input demand under yield and revenue insurance previous studies disagree on the effects of insurance on fertilizer application rates the effect of increased fertilizer on the probability of low yields primarily determines whether fertilizer and insurance are substitutes or complements we estimate conditional distributions of corn yields to determine if the technical relationship between yields and fertilizer supports the hypothesis that insurance increases optimal application rates our results indicate no support for this hypothesis at all nitrogen fertilizer rates and reasonable levels of risk aversion nitrogen fertilizer and insurance are substitutes suggesting that those who purchase insurance are likely to decrease nitrogen fertilizer applications

addressing social dilemmas with mascots information and graphics acknolwedgements this research was supported by funding from the national science foundation for the north east water resources network newrnet grant iia 1330406 and from the center for behavioral and experimental agri environmental research cbear which is supported by the u s department of agriculture economic research service we are grateful for comments received during the 2015 northeastern agricultural and resource economics association annual meeting and the 2015 behavioral and experimental economists of the mid atlantic conference authors listed in alphabetical order

the role of warnings in regulation keeping control with less punishment abstract regulatory agencies frequently present violators with warnings not pursuing prosecution if the violation ceases upon receipt of the warning we show how such warnings may help regulators to keep control prosecution is costly for the regulator and insufficient prosecution efforts yield low penalties thus with a limited regulatory budget threats of harsh sanctions are credible only if the number of violators is low this produces multiple nash equilibria if firms may make mistakes the economy can accidentally switch from one equilibrium to another warnings reduce substantially the probability of such accidental switches from the full compliance to the no compliance equilibrium

nonmonetary sanctions and rewards in an experimental coordination game abstract a growing body of experimental research documents that nonmonetary sanctions and rewards may be important instruments for enforcing efficient behavior this study contributes to this literature by reporting results from a laboratory experiment the experiment is designed to test whether nonmonetary sanctions or rewards alone can yield the optimal level of efficiency in a game with pareto ranked equilibria performance based disapproval and approval ratings assigned by group members are used as proxies for nonmonetary sanction and reward respectively although these ratings are costless and payoff neutral results show that expression of disapproval facilitates coordination on the most efficient equilibrium in contrast statement of approval induces subjects to converge towards the most inefficient outcome we conclude that induced approval and disapproval ratings have asymmetric behavioral effects on coordination

development of supersmart grids for a more efficient utilisation of electricity from renewable sources abstract if europe is serious about reaching its target to keep global mean temperature increase below 2 c it must strive for a 100 renewable electricity system by 2050 the supersmart grid approach combines what is often perceived as two exclusive alternatives wide area power generation and decentralised power generation we argue that by combining these in fact complementary measures it is possible to address the crucial issue of renewable generation fluctuating supply in a comprehensive as well as in a technologically and economically viable manner thus the supersmart grid simultaneously can contribute to energy security climate security social security and national security

electricity capacity investment under risk aversion a case study of coal gas and concentrated solar power the policy instrument many economists favor to reduce greenhouse gas emissions and to shift new investment towards low carbon technologies is the tradable allowance system experience with this instrument has been mixed with a crucial design issue being the choice of whether to auction allowances to firms or to grandfather them based on historical emissions in this paper we examine the changing incentives of investment in different technologies when investors are risk averse and are expecting an allowance system with a certain allocation rule but do not know if the policy is going to take place in the near future investors also cannot fully predict future investment costs for the low carbon technology we apply a game theoretic model to examine the combined effects of uncertainty and risk aversion on the actions of potential investors into high and low carbon generating capacity under both allocation rules and uncertain costs we find that uncertainty and risk aversion do have implications towards investment incentives we discuss policy implications of these findings

incomplete information strengthens the effectiveness of social approval we present a theoretical model of a public good game in which the expression of social approval induces pro social behavior using a laboratory experiment with earned heterogeneous endowments we test our model the main hypothesis is that the expression of social approval increases cooperative behavior even if reputation building is impossible we vary the information available and investigate how this affects the expression of social approval and individual contributions the expression of social approval significantly increases contributions however the increase is smaller if additional information is provided suggesting that social approval is more effective if subjects receive a noisy signal about others contributions jel c72 c91 d71 d83

agricultural supply response under contract agricultural producers typically face considerable production and price risk in their operations as a result the role of risk in shaping farm level decisions has been the focus of much research e g moschini and hennessy but why do risk averse producers face such risk in a world of complete markets and perfect information a profit maximizing intermediary would provide full insurance to producers thus some aspect of the production and marketing of agricultural commodities must limit the scope for this type of insurance when considering reasons why growers of fresh produce might face price risk hueth and ligon suggest the possibility of unobserved actions in the provision of quality if quality cannot be measured perfectly and some downstream price contains information about a farmer s investment in quality then conditioning a grower s compensation on this price may help the intermediary to monitor farmer effort a similar argument holds in the case of production risk if unobserved actions influence yield an optimal compensation scheme might expose farmers to considerable production risk in order to provide incentive for high output this suggests that the type of intermediation available to farmers can have important consequences for the risks that farmers face previous analyses of the role of risk in producer decisions make one of two polar assumptions regarding intermediation either there is none e g sandmo leland or producers have access to an exogenously specified source of intermediation that may take the form of a futures market e g holthausen public or private insurance e g ramaswami babcock and hennessy or perhaps a particular government program e g lin chavas and holt although each of these analyses represent important contributions toward an understanding of how producers respond in different risk environments they are each silent on how the institutions themselves

energy management on industrial parks in flanders in the race against climate change aiming for low carbon competitiveness flanders has initiated a carbon neutrality strategy on industrial parks building towards energy efficient buildings and processes acting as a stimulus for the production and consumption of green electricity however premises and internal process optimisation on industrial parks is not considered sufficient to limit greenhouse emissions in flanders structural transition is called for aiming for industrial clustering and energy autonomy based on renewables therefore the concept of industrial symbiosis is analysed to determine how it could improve the energy related carbon management on industrial parks this article explores the literature on industrial symbiosis and eco industrial parks searching for specific energy strategies and is illustrated with case studies energy management on industrial parks can be integrated in the entire development process and park management maximising efficiency is a promising local optimisation issue in which business should be engaged stimulated and facilitated by clustering buildings and processes by energy exchange collective production and joint contracting of energy services local synergies can be intensified yet uncertainty and variability in time of energy consumption can keep developers from tailoring industrial park design and utilities instead flexibility and solidity could be gained and the offer of business space could be diversified supported by a persevering issuing procedure to join similar and matching energy profiles energy management on industrial parks in flanders has only recently started but is expected to gain professionalism however further research is needed on this flexible design and thermal planning

potential capability estimation for real time electricity demand response of sustainable manufacturing systems using markov decision process abstract electricity demand response has been considered as a critical methodology to realize the strategy of sustainable development for manufacturing enterprises by effectively reducing the increasing electricity demand and greenhouse gas emissions most existing studies about the electricity demand response implementation focus on either the supply side management e g policy making price setting or the customer side applications for the end users in residential and commercial building sectors as for the industrial sector only a few papers utilizing the long term scheduling methodology to reduce the electricity consumption during peak periods are available little work has been implemented on the decision making for the real time electricity demand response in industrial manufacturing systems considering system throughput constraint in this paper an analytical model is established to identify the optimal energy control actions and estimate the potential capacity of power demand reduction of typical manufacturing systems during the period of demand response event without compromising system production markov decision process is used to model the complex interaction between the adopted demand control actions and the system state evolutions a numerical case study on a section of an automotive assembly line is used to illustrate the effectiveness of the proposed approach

justifying the first order approach to principal agent problems it is of interest to know when the incentive compatibility conditio n in principal agent problems can be replaced by the condition that the agent s expected utility be stationary in effort the mirrlees rogerson conditions do not work if the principal can observe more than one observable statistic also the mirrlees rogerson assumption that the distribution function of output is convex in the agent s action is unsatisfactory even in the context of the basi c model it is too restrictive the paper presents a suite of conditio ns that are applicable to the multistatistic case and replaces the objectionable convex distribution function assumption copyright 1988 by the econometric society

clean and secure power supply a system dynamics based appraisal abstract across the world the electricity industry is changing with the advent of renewable energy sources such as solar and wind power as these are exposed to intermittency seasonality and global climate variation policy makers concerns are now shifting towards security of supply in fact the industry confronts three conflicting goals security of supply competitive prices to customers and environmental protection in this context and given the multiple uncertainties of technology transformation this paper uses modelling based scenario analysis to investigate different extreme and plausible futures simulation is used to analyse policies aimed at increasing the penetration of renewables and to explore how these energy sources may affect system reliability this paper explores the effect of incorporating renewables in colombia where a large hydroelectric component has led to insufficient electricity being available during droughts and to high electricity price volatility though not intuitive at first glance this paper shows that renewables may contribute to i increased security of supply through complementarity e g it does not rain when the sun shines ii reduced price volatility in the medium term and iii increased industry sustainability

solar power investment in north africa reducing perceived risks abstract climate protection targets for mid century imply a need to scale up european renewable power production to a level that may exceed the available land area within europe s borders one attractive solution from a cost and feasibility perspective is the development of large scale concentrating solar power plants in north africa and the middle east however these developments are seen by many people as risky in terms of both european energy security and in terms of the risks faced by project developers in this paper we focus on the latter of theses issues first we examine the risks that project developers are most concerned about and identify these as being associated not with terrorism and rogue state behavior but rather with corruption and inefficient and unpredictable bureaucracies second we identify a range of policy approaches that can reduce these risks either by mitigating their consequences or by seeking to eliminate their underlying causes third we investigate the financial benefits of taking such steps to reduce or eliminate investment risks we find the potential savings to european electricity consumers to exceed 200 billion

marketing contracts and crop insurance contracts between farmers and intermediaries and crop insurers are important means for farmers to mitigate risks in modern u s agriculture in this paper we investigate the effect of crop insurance enrollment on contract terms and farmers participation in marketing contracts following ligon 2003 we set up a mechanism design framework to demonstrate an intermediary s contract design problem where farmers are assumed to be utility maximizing agents we depict farmers optimal choices of insurance coverage using the specification developed by babcock 2012 our model shows that improved terms of crop insurance lower premiums higher subsidies make contracts less appealing to farmers as mechanisms for mitigating risk therefore intermediaries may revise their contract offers so that they are more attractive however improvements in contract terms are limited by their cost to the intermediaries and will not lead to expanded participation in contracts

simple rule for management of thermal loads with real time prices abstract the integration of renewable energies and therefore the generation of a clean and sustainable energy is a current demand by society the use of real time pricing offers advantages for integrating renewable resources into the electrical grid this is because users enhance the flexibility of their own energy demand thanks to planning loads with accumulation capacity the aim of the present work is to equip users to manage their energy demands with simple planning systems for this a simple rule is proposed to help a greater number of users to gain the capacity to manage their demand the new rule based on a geometric progression of real time pricing of energy and intrinsic characteristics of the load provides valuable information for the user to decide whether or not to accumulate energy in the load this rule provides good results by the simulation of a simple thermal load

no excuses for good behavior volunteering and the social environment abstract we study the effect of the social environment on the quantity and quality of voluntary labor contributions by extending benabou and tirole s 2006 image signaling framework we derive theoretical predictions on time volunteered given 1 the availability of excuses to stop volunteering and 2 the presence of an authority figure we test these predictions in an experiment where laboratory subjects are directly involved in a local nonprofit operation we find that in the absence of excuses to stop volunteering subjects volunteer longer without working less productively this increase is partially driven by subjects reluctance to be the first to stop volunteering the presence of an authority figure has little impact but the presence of peers has a positive and significant impact

economic behavior under uncertainty a joint analysis of risk preferences and technology a method is developed to estimate jointly risk preferences and technology under general conditions the approach is illustrated in an application to the analysis of u s corn soybean acreage decisions over time the results provide useful information on the nature of farmers risk preferences and on the influence of price risk and production risk on acreage allocation and farmers welfare copyright 1996 by mit press

socio economic acceptability for smart grid development a comprehensive review abstract a deep transformation of the electrical grid system at the global level is expected in the near future with new economic relations between energy suppliers and consumers this is the smart grid framework which can integrate the behavior of all connected users who become prosumers to ensure a sustainable energy supply in an efficient economical and safe manner smart grid projects have a significant impact on electricity consumers through shifts in consumer behavior culture and lifestyle the aim of this paper is to explore the degree of investigation of the main socio economic features in terms of private and social costs which are relevant for smart grids development and public acceptance to this aim a literature review of 148 peer reviewed scientific journal articles on smart grids has been conducted developing an original taxonomy for the socio economic features in terms of private direct costs directly associated with the monetary costs paid by consumers and social indirect costs constituted by consumers perception privacy cyber security and regulation the importance of the analysis of social costs arising from externalities is that they may hinder the deployment of specific technologies even if these technologies appear to be useful based on private costs the results reveal that the explored literature mainly deals with private costs although an emerging literature starts to address the social costs that may hamper smart grids deployment the paper reviews new opportunities and challenges for further research bridging the gap between engineering and socio economic research areas including business organizational applications policy and security issues the resulting enrichment of interdisciplinary know how can be the basis for the sustainable development of current and future generations

study on china s low carbon development in an economy energy electricity environment framework abstract emissions mitigation is a major challenge for china s sustainable development we summarize china s successful experiences on energy efficiency in past 30 years as the contributions of energy usage management and integrated resource strategic planning which are essential for low carbon economy in an economy energy electricity environment e4 framework the paper studies the low carbon development of china and gives an outlook of china s economy growth energy electricity demand renewable power generation and energy conservation and emissions mitigation until 2030 a business as usual scenario is projected as baseline for comparison while low carbon energy and electricity development path is studied it is defined as low carbon energy electricity when an economy body manages to realize its potential economic growth fueled by less energy electricity consumption which can be characterized by indexes of energy electricity intensity and emissions per unit of energy consumption electricity generation results show that with eum china could save energy by 4 38 billion ton oil equivalences toes and reduce co2 emission by 16 55 billion tons with irsp china could save energy by 1 5 btoes and reduce co2 emission by 5 7 btons during 2010 2030 to realize the massive potential china has to reshape its economic structure and rely much on technology innovation in the future

rank as an inherent incentive evidence from a field experiment abstract money is the prime incentive considered in economic models however recent evidence indicates that people are also greatly concerned about their social rankings is this solely because rank brings tangible benefits or because in addition people have an inherent preference for high rank this paper deployed a field experiment that provides evidence for an inherent preference in the experiment vietnamese students enrolled in an english course performed significantly better on the official standardized international final test when they were told their rankings on practice tests than when they were not this result held even when this ranking information could not be reliably communicated thus severely attenuating the potential to bring tangible or status benefits

optimizing the production scheduling of a single machine to minimize total energy consumption costs abstract the rising cost of energy is one of the important factors associated with increased production costs at manufacturing facilities which encourages decision makers to tackle this problem in different manners one important step in this trend is to reduce the energy consumption costs of production systems considering variable energy prices during one day this paper proposes a mathematical model to minimize energy consumption costs for single machine production scheduling during production processes by making decisions at machine level to determine the launch times for job processing idle time when the machine must be shut down turning on time and turning off time this model enables the operations manager to implement the least expensive production scheduling during a production shift to obtain near optimal solutions genetic algorithm technology has been utilized furthermore to determine whether the heuristic solution provides the minimum cost and the best possible schedule for minimizing energy costs an analytical solution has also been run to generate the optimal solution next a comparison between the analytical solution and heuristic solutions is presented for larger problems the heuristic solution is preferable the results indicate that significant reductions in energy costs can be achieved by avoiding high energy price periods this minimization process also has a positive environmental effect by reducing energy consumption during peak periods which increases the possibility of reducing co 2 emissions from power generator sites

self confidence and personal motivation the maintenance and enhancement of self esteem has always been identified as a fundamental human impulse philosophers writers educators and of course psychologists have all emphasized the crucial role played by self image in motivation affect and social interactions the aim of this chapter is to bring these concerns into the realm of economic analysis and show that this has important implications for how agents process information and make decisions conversely the tools of economic modelling can help shed light on a number of apparently irrational behaviours documented by psychologists

the potential and economics of bioenergy in finland abstract this article summarises the results from four studies on the potential of bioenergy and one study on the economic feasibility of distributed renewable energy production in ostrobothnia finland the scope of the studies was to explore the degree of energy self sufficiency that could be achieved and the economic implications and benefits the results suggest that a great majority of rural areas have the potential for being self sufficient in their energy production through bioenergy alone but other renewable energy sources res including for example wind and solar power will make an even greater contribution in the future this applies to areas especially outside the largest population centres and most energy intensive industries indeed in peripheral regions the renewable energy potential far exceeds the energy demand and the spatial coverage of energy self sufficiency is huge other european and global studies also show tremendous res potential the economics of small scale power generation units here represented by biogas plants are already feasible despite the technology still being at an early developmental phase diffusion of these technologies depends on a number of factors but single and separate units are emerging all the time the adoption of res based energy management systems will however be a long social process the results give rise to an expectation for more res based energy generation in ostrobothnia and finland and even in europe and globally in a time frame of 20 30 years this development may result in structural changes across the whole energy sector this comprehensive movement can only be understood and supported by multi and cross scientific approaches and it will in future be a challenge for forthcoming research