the expansion of modern agriculture and global biodiversity decline an integrated assessment the world is banking on a major increase in food production if the dietary needs and food preferences of an increasing and increasingly rich population are to be met this requires the further expansion of modern agriculture but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity ecologists have shown that biodiversity loss results in lower plant productivity while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields and sometimes lower mean yields in this paper we consider the macro economic consequences of the continued expansion of particular forms of intensive modern agriculture with a focus on how the loss of biodiversity affects food production we employ a quantitative structurally estimated model of the global economy which jointly determines economic growth population and food demand agricultural innovations and land conversion we show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion

allocative inefficiency and the capital energy controversy abstract the purpose of the paper is to estimate a system of input demands for greek manufacturing deviating from the standard practice of assuming strict cost minimization the study allows for the presence of price distortions and allocative inefficiency in the decision process this assumption affects parameter estimates and estimated elasticities materially and throws new light on the capital energy controversy in greek manufacturing

are judges leading economic theory sunk costs the threat of entry and the competitive process in this paper we attempt to bring theoretical form to a particular entry argument that has found favor in the courts we suggest that sunk costs may not be a major impediment to entry when a group of customers can commit to an entry enhancing strategy buyers have strong incentives to adopt such strategies because they benefit directly from the resulting lower prices the simplest example involves a large buyer that is able to guarantee an entrant a market for its product long term contracts or even informal purchase commitments backed by customer reputation may also allow the entrant to obtain a guarantee of sufficient business to make the entry profitable once entry is thought likely to occur the existing competitors may be unwilling to attempt a price increase of any magnitude thus the threat of entry can maintain competitive prices even in the presence of sunk costs in section ii we motivate the analysis by discussing the current controversy over the role entry conditions play in an antitrust merger review then we discuss the necessary assumptions for a model of how the threat of entry can deter any price increase in the presence of sunk costs we note that these conditions are different from those commonly used in the economic literature

energy taxes and endogenous technological change abstract this paper studies the effects of a tax on energy use in a growth model where market structure is endogenous and jointly determined with the rate of technological change because this economy does not exhibit the scale effect a positive relation between tfp growth and aggregate r d the tax has no effect on the steady state growth rate it has however important transitional effects that give rise to surprising results specifically under the plausible assumption that energy demand is inelastic there may exist a hump shaped relation between the energy tax and welfare this shape stems from the fact that the reallocation of resources from energy production to manufacturing triggers a temporary acceleration of tfp growth that generates a shaped time profile of consumption if endogenous technological change raises consumption sufficiently fast and by a sufficient amount in the long run and households are sufficiently patient the tax raises welfare despite the fact that in line with standard intuition it lowers consumption in the short run

population concentration urbanization and demographic transition abstract this paper investigates how urbanization and demographic transition interrelate with each other via merits agglomeration economies and demerits congestion diseconomies of population concentration it reveals the mechanism by which agglomeration economies and congestion diseconomies affect the fertility rate furthermore analysis also shows that by assuming declines in infant and child mortality rate the model developed in this paper can replicate the following well known historical patterns i advances in urbanization ii rises in the wage rate iii declines in fertility and iv rises followed by declines in the population growth rate the inverted u shaped demographic transition

long run competition in capacity short run competition in price and the cournot model in this article we investigate the nature of equilibrium in markets in which firms choose the scale of operation before they make pricing decisions we analyze a duopoly model in which firms choose their capacities before engaging in bertrand like price competition we demonstrate that the cournot outcome is unlikely to emerge in such markets and that the equilibrium tends to be more competitive than the cournot model would predict in addition our results indicate a tendency toward asymmetric firm sizes and price dispersion that results from the mixed strategies firms use in equilibrium

does acquisition of a cooperative generate profits for the buyer the dairyworld case this article examines the takeover of a cooperative dairyworld by an investor owned firm saputo that was not previously present in the industry determines if this takeover generates greater returns for the investor owned firms iof and on the basis of this evidence makes some inferences about the behavior and performance of cooperatives and iofs the empirical evidence strongly supports the conclusion that saputo s stock price rose with its takeover announcement this outcome is consistent with a number of explanations including that saputo was unaffected by hubris a factor often suggested as the reason that many firms overbid when they undertake acquisitions dairyworld s poor liquidity and capital shortage problems as well as a limited number of suitors may have weakened its bargaining position in its dealings with saputo the observed increase in saputo s stock price is also consistent with the possibility that by taking over a cooperative saputo was able to decrease competition and thus increase its profits a fruitful area for future research would be a rigorous theoretical and empirical determination of the impact that these various factors have on acquisition profitability such analysis is required before inferences about the behavior and performance of cooperatives and iofs can be fully answered

cooperatives as entrants a potential shortcoming of game theoretic models in industrial organization is their failure to consider consumers as players we introduce a customer coalition a cooperative as a potential entrant and compare the cooperative entry threat with that posed by the usualforprofit entrant we identify four fundamental distinctions between cooperative andfor profit entrants and demonstrate that the strategic interplay between a cooperative and an incumbent firm may differ markedly from that between the incumbent and a for profit entrant the results impart a prospectively powerful role to potential cooperatives in beneficially regulating free market performance

industrialization and consolidation in the u s food sector implications for competition and welfare good sources for information on recent developments in food market structure include barkema drabenstott and welch u s department of agriculture 1996b and rogers my objective is not to add to this literature but rather to consider what we have learned as a profession about the rapid consolidation in food processing and distribution what are its implications for market power economic efficiency and the distribution of economic welfare among producers consumers and marketers

selling at the farmgate or traveling to market using detailed survey data from uganda this article examines whether coffee producers sell to itinerant traders or directly to markets where they can get a higher price but must incur a transport cost we find that selling to the market is more likely when the quantity sold is large and the market is close by wealthy farmers are less likely to sell to the market possibly because the shadow value of their time is higher but if they have a large quantity of coffee for sale they are more likely to sell it to the market they are also more likely to travel to a distant market these findings are consistent with their better ability to pay for public transportation we find no evidence that the decision to sell at the farmgate is driven by a self control motive

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

noncooperative behavior by a cartel as an entry deterring signal recent work has investigated the effect of a potential entrant s uncertainty about postentry profits on the likelihood of his entering the market it has always been assumed that the potential entrant knows the type of postentry solution but lacks information on cost or as to whether the postentry solution will be cooperative or noncooperative we find that entry is more likely the greater is the preentry profit rate in equilibrium the threat of entry then forces the incumbent firms to act more competitively to deter entry

global population growth technology and malthusian constraints a quantitative growth theoretic perspective we structurally estimate a two sector schumpeterian growth model with endogenous population and finite land reserves to study the long run evolution of global population technological progress and the demand for food the estimated model closely replicates trajectories for world population gdp sectoral productivity growth and crop land area from 1960 to 2010 projections from 2010 onwards show a slowdown of technological progress and because it is a key determinant of fertility costs significant population growth by 2100 global population reaches 12 4 billion and agricultural production doubles but the land constraint does not bind because of capital investment and technological progress

process innovation activity in a mixed oligopoly the role of cooperatives this article develops a sequential game theoretic model of heterogeneous producers to examine the market and welfare effects of cooperative involvement in process innovation activity in the agricultural sector the analysis examines an open membership input supplying cooperative co op that maximizes member welfare and finances its innovation activity through retained earnings analytical results show that the presence of the co op can increase the arrival rate of innovations while reducing the price of agricultural inputs cooperative involvement in innovation activity can thus be welfare enhancing and socially desirable with its effectiveness being determined by the degree of producer heterogeneity and the size of innovation costs

the population problem theory and evidence this study is concerned with the relationships among population growth poverty and environmental degradation with particular focus on the situation in developing countries the author rejects the concept of a general theory of fertility behavior in favor of an interpretation of these relationships which might be applicable to certain situations in the poorest parts of the indian subcontinent and sub saharan africa such situations include unacceptable risks of maternal death for poor illiterate women and a condemnation to extreme poverty in conditions of the deterioration of local resources and of the environment the author concludes that population growth rates are too high in certain specific areas and that an appropriate policy reaction to such conditions would be to try to change the options that men and women face so that their reasoned choice would be to lower their fertility

scarcity growth and r d abstract the limits to economic growth due to resource scarcity can be alleviated only by the development of backstop substitutes this paper combines resource based economic growth with r d to reduce the cost of backstop technologies characterizing the entire dynamics of optimal growth and r d processes we find that an economy s growth prospects depend on its type as determined by its production technology and learning ability and by its knowledge capital endowment a wide variety of growth patterns emerges ranging from cases in which an economy that without r d eventually stagnates converges to a steady state is diverted by r d onto a path of sustained growth to cases in which r d is not warranted resource scarcity is shown to encourage r d due to the increased reliance on the backstop technology

hartwick s rule and maximin paths when the exhaustible resource has an amenity value abstract this paper studies the maximin paths of the canonical dasgupta heal solow model when the stock of natural capital is a direct argument of well being besides consumption hartwick s rule then appears as an efficient tool to characterize solutions in a variety of settings we start with the case without technical progress we obtain an explicit solution of the maximin problem in the case where production and utility are cobb douglas when the utility function is ces with a low elasticity of substitution between consumption and natural capital we show that it is optimal to preserve forever a critical level of natural capital determined endogeneously we then study how technical progress affects the optimal maximin paths in the cobb douglas utility case on the long run path of the economy capital production and consumption grow at a common constant rate while the resource stock decreases at a constant rate and is therefore completely depleted in the very long run a higher amenity value of the resource stock leads to faster economic growth but to a lower long run rate of depletion we then develop a complete analysis of the dynamics of the maximin problem when the sole source of well being is consumption and provide a numerical resolution of the model with resource amenity the economy consumes produces and invests less in the short run if the resource has an amenity value than if it does not whereas it is the contrary in the medium and long runs however and without surprise the resource stock remains for ever higher with resource amenity than without

buyers strategies entry barriers and competition in markets where sellers have customer specific investments and buyers can make credible but costly commitments to switch suppliers buyers strategies attenuate the market power of sellers furthermore since current prices and a buyer s decision to switch suppliers are related limit pricing becomes an equilibrium limit prices increase with the time it takes a buyer to switch suppliers and with buyers switching costs but fall with the level of sunk investments thus sunk investments may restrain the sellers ability to exert market power the paper questions then the standard inverse relationship between market performance and sunk investments

adjustment costs and price and quantity adjustment abstract the role of prices and quantities in the adjustment process changes qualitatively when both price and quantity adjustment are costly not only relative adjustment costs but also structural characteristics affect the adjustment process which is asymmetric and implies rationing

strategic entry deterrence in analyzing deterrence of large scale entry two classes of entry barriers may be distinguished an innocent entry barrier is unintentionally erected as a side effect of innocent profit maximization in contrast a strategic entry barrier is purposely erected to reduce the possibility of entry two types of innocent barriers may also be distinguished a postentry absolute advantage has the property that if entry did occur the established firm would be at a profit advantage over the entrant examples are superior technology or product design patents and lower input prices a preentry asymmetry advantage arises from the fundamental preentry asymmetry between established firm and potential entrant before the entrant makes his entry decision the established firm has already committed resources this prior existence gives first move advantages the preentry asymmetry is independent of symmetry or asymmetry in the rules the equilibrium concept of the postentry game that might ensue even if the postentry game will be played according to nash cournot or entrant as leader rules the preentry leadership

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

constant savings rates and quasi arithmetic population growth under exhaustible resource constraints in the dasgupta heal solow stiglitz dhss model of capital accumulation and resource depletion we show the following equivalence if an efficient path has constant gross and net of population growth savings rates then population growth must be quasi arithmetic and the path is a maximin or a classical utilitarian optimum conversely if a path is optimal according to maximin or classical utilitarianism with constant elasticity of marginal utility under quasi arithmetic population growth then the gross and net of population growth savings rates converge asymptotically to constants

malthus in the light of climate change abstract to reconsider the malthusian predictions of natural limits to economic development the paper develops a multi sector growth model with exhaustible resource extraction investments in physical and knowledge capital climate change and endogenous fertility economic growth is driven by endogenous innovations which increase in the availability and productivity of research labour poor substitution of natural resources triggers sectoral change climate change is the result of polluting resource use which is like consumption and investments based on the intertemporal optimization of the households highlighting the importance of bounded resource supply and of rational extraction decisions i show that climate change is independent of population growth in steady state and there is no causal relationship between climate and population during transition to steady state the consumption per capita growth rate rises in the innovation rate and the output elasticities of labour and capital in the different sectors unlike climate policy population policy is not warranted it may be counterproductive because labour is crucial for the research sector

human capital and economic development abstract this paper develops a general equilibrium model of fertility and human capital investment with young adult mortality because young adult mortality is negatively related to average young adult human capital human capital accumulation lowers mortality inducing demographic transition and industrial revolution data confirm that young adult mortality is related negatively to schooling and the rate of return to schooling and positively to fertility the data indicate a negative relationship between tfp growth and schooling accumulation the model fits the data on country populations per capita incomes human capital total fertility rates infant mortality life expectancy and conditional life expectancy

the return of malthus resource constraints in an era of declining population growth abstract will natural resources comprise an important constraint on economic development in the 21st century we use a macroeconomic model mava to demonstrate the precise nature of this problem first we employ the model to demonstrate that resource constraints do not substantially limit future economic growth under parametric conditions prevailing in the period 1960 2010 second we examine the sorts of changed conditions that are unavoidable in the coming century and demonstrate that declining population growth and the increased dependency rates this implies is likely to result in increasingly important resource constraints ironically it is the decline in population growth rates and not the opposite that may occasion the return of malthusian constraints 1

customer coalitions monopoly price discrimination and generic entry deterrence abstract this paper analyzes the interplay between a profit maximizing monopolist and a set of consumers who are able to form coalitions that bargain with the monopolist and or integrate into production we show that the monopolist will deter the formation of these countervailing coalitions through strategic selection of generic limit price offers to each consumer these limit prices are derived as subgame perfect equilibria in two alternative models of customer monopoly interplay in both models price discrimination emerges in environments wherein it has previously been considered unprofitable welfare analysis of the equilibria demonstrates the procompetitive effects of potential customer coalitions and generally provides an efficiency based motivation for a government ban on price discrimination

the canonical classical model of political economy adam smith david ricardo thomas robert malthus and john stuart mill shared in common essentially one dynamic model of equilibrium growth and distribution when the limitation of land and natural resources is added to the model of karl marx he also ends up with this same canonical classical model in its present version the model is stripped down to its minimal essentials for brevity i employ modern mathematical tools but only to characterize in modern terms the relations that were actually common to all these writers the reader should of course be warned that any simple codification of the classical economists discursive writings must be an oversimplification in some of their passages they qualify what they have written elsewhere in some they provide negations and contradictions not a few of the stereotypes about the classical writers are to paraphrase voltaire myths agreedupon by later commentators distortions that both improve and libel the originals the relevant object of study for a modern scholar is the corpus of original texts and the commentaries on them the latter not being genuinely of less interest than the former once we have succeeded in telling them apart to the fascinating question of whether classical political economy does or can be made to offer an alternative paradigm in the sense of thomas kuhn 11 1962 to modern mainstream economics the present investigation provides an instructive answer so to speak within every classical economist there is to be discerned a modern economist trying to be born a ricardo or mill did not so much replace supply and demand by quite different mechanisms but rather sought to be able to say something significant and limiting about their properties quite in the same way that we moderns endeavor to do i describe and analyze here the basic classical model in its essential form

estimated substitution elasticities of a nested ces production function approach for germany this paper demonstrates an econometric estimation of substitution elasticities of a nested constant elasticity of substitution production function ces between capital energy and labour for the west german industry in the last few years ces production functions have become more important in economic modelling especially for applied general equilibrium models where ces production functions are an important building stone in the literature different results of estimated elasticities can be found this paper investigates three different approaches for nested ces production functions and their estimated substitution elasticities capital energy and labour are estimated as substitutes for the west german industry in the long run

global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture we study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level we use a two sector schumpeterian model of growth in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population agriculture demands land as an input itself treated as a scarce form of capital in our model both population and sectoral technological progress are endogenously determined and key technological parameters of the model are structurally estimated using 1960 2010 data on world gdp population cropland and technological progress introducing random shocks to the evolution of total factor productivity in agriculture we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages and that it significantly affects both optimal consumption and population trajectories

financially constrained entry in a game with incomplete information in an earlier paper we presented an entry game with a monopolist and a potential entrant facing financial constraints in which the unique perfect equilibrium involved no entry here we consider a one sided incomplete information variant of the game in which the monopolist allows for the possibility that the entrant is committed to endure a price war to the limit of his capability we find a unique sequentially perfect equilibrium in which entry sometimes occurs when it does predatory price wars may result with the incumbent sometimes driving out the entrant but other times eventually abandoning the fight

the formation of cooperatives a game theoretic approach with implications for cooperative finance decision making and stability this paper departs from the traditional organization oriented approach to cooperative analysis it exploits cooperation s functional similarity to vertical integration to examine individuals incentives to form cooperatives a model of formation of a purchasing cooperative is presented and developed as an n person game with the core as a solution concept core existence is examined for both single and multiple cooperative configurations and cooperative finance methods are examined relative to finding core compatible allocation rules the results provide insight into a cooperative s equilibrium output stability decision making financing methods and choice of open or restricted membership

social criteria for evaluating population change an alternative to the blackorby donaldson criterion abstract an ethical objection is raised against the blackorby donaldson criterion of optimum population maximizing the sum total of utilities in excess of some critical level since it may disprefer a social state with more people and with more worthwhile lives however the criterion may serve as a practicably reasonable compromise between maximizing total and average utility nevertheless an alternative compromise the maximization of number dampened total utility is proposed that is free from the above objection

changing world prices women s wages and the fertility transition sweden 1860 1910 this time series analysis examines during 1860 1910 the impact of changes in local prices of agricultural commodities on wages among men and women in sweden and the impact of changes in wages on fertility decline child mortality urbanization and improved social conditions linear ordinary least squares models are set up to determine whether demand induced increases in womens wages relative to mens are significant factors in explaining swedish total fertility rates data are obtained from 25 counties and the city of stockholm among pooled observations for six time periods during 1860 64 and 1910 14 this period is marked by a total fertility decline of 28 a marital fertility decline of 26 and a child mortality decline of 52 explanatory variables are the relative prices of main agricultural outputs employment outside of agriculture the proportion of urban population and the child mortality rate findings indicate a significant relationship between child mortality and total fertility and specific fertility rates among women aged 20 39 years a doubling of the male real wage rate was significantly associated with earlier marriage higher birth rates among women aged 15 29 years and lower birth rates among women aged 35 49 years the ratio of male wages to female wages was associated with a decline in birth rates at all ages with the exception of teenagers 66 of fertility increase was due to declines in child mortality but this increase was counterbalanced by fertility decline among older women child mortality and urbanization depressed marital fertility male wages increased the proportion married a 10 increase in the male female wage rate was associated with a 25 reduction in the total fertility rate another 25 increase in the male female wage rate was associated with a 50 reduction in child mortality it is concluded that the value of womens time had a key impact on the swedish fertility transition

inequality and growth why differential fertility matters we argue that inequality and growth are linked through differential fertility and the accumulation of human capital we build an overlapping generations model in which dynasties differ in their initial endowment with human capital growth the income distribution and fertility are endogenous due to a quantiy quality tradeoff families with less human capital decide to have more children and invest less in education when initial inequality is high large fertility differentials lower the growth rate of average human capital since poor families who invest little in education make up a large fraction of the population in the next generation a calibrated model shows that this fertility differential effect is quantitatively important we also provide empirical evidence to confirm the links between inequality differential fertility and growth suggested by the model

population growth and natural resource scarcity long run development under seemingly unfavorable conditions in this paper i consider an economy that is constrained by the use of natural resources and driven by knowledge accumulation resources are essential inputs in all sectors i show that population growth and poor input substitution are not detrimental but on the contrary are even necessary to obtain a sustainable consumption level i find a general rule to define the conditions for a constant innovation rate the rule does not apply to capital but to labor growth which is the crucial input in research furthermore the rule relates to the sectoral structure of the economy and to demographic transition the results continue to hold with a backstop technology and are extended for the case of minimum resource constraints

customer ownership and quality provision in public services under asymmetric information the implementation of projects producing external effects is often a source of disagreement and conflict between hosting and nonhosting communities the article focuses on the impact of participatory ownership on conflict resolution and social welfare in the presence of asymmetric information and imperfect quality monitoring we show that in such situations the participatory solution may help solve deadlocks that money transfers to a for profit operator cannot solve the analysis highlights three main factors behind this fact first a customer owned cooperative internalizes at least partially the external effects generated by the project second the alignment of cooperative members preferences with those of the social planner reduces in some cases eliminates the distortions caused by information asymmetries third cooperatives require less costly monitoring than their for profit counterparts we also show that cooperatives productive inefficiency with respect to for profits may emerge endogenously as a consequence of a lower pressure to compete on costs for the market