what drives corporate social performance the role of nation level institutions based on whitley s national business systems nbs institutional framework we theorize about and empirically investigate the impact of nation level institutions on firms corporate social performance csp using a sample of firms from 42 countries spanning seven years we construct an annual composite csp index for each firm based on social and environmental metrics we find that the political system followed by the labor and education system and the cultural system are the most important nbs categories of institutions that impact csp interestingly the financial system appears to have a relatively less significant impact we discuss implications for research practice and policymaking

efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

analysing the interactions between renewable energy promotion and energy efficiency support schemes the impact of different instruments and design elements abstract co2 emissions reduction renewable energy deployment and energy efficiency are three main energy environmental goals particularly in europe their relevance has led to the implementation of support schemes in these realms their coexistence may lead to overlaps synergies and conflicts between them the aim of this paper is to analyse the interactions between energy efficiency measures and renewable energy promotion whereas previous analyses have focused on the interactions between emissions trading schemes ets and energy efficiency measures and ets and renewable energy promotion schemes furthermore the analysis in this paper transcends the certificate debate i e tradable green and white certificates and considers other instruments particularly feed in tariffs for renewable electricity the goal is to identify positive and negative interactions between energy efficiency and renewable electricity promotion and to assess whether the choice of specific instruments and design elements within those instruments affects the results of the interactions

transfer prices and the structure of intra firm trade in this paper the structure of intra firm trade within the context of transfer price manipulation by a multinational firm is endogenized high and low values of host country tax rates give rise to intra firm trade in final goods and intermediate inputs and intermediate values of the tax rate are associated with intra firm trade in either the intermediate inputs or the final goods only higher tariffs and stricter local content restrictions bias intra firm trade towards intermediate good trade and final good trade respectively in the presence of endogenous transfer prices host country sales may increase if the multinational faces stricter trade restrictions and higher host country tax rates jel classification f23 f12 prix de cession interne et structure du commerce itnra firme ce memoire endogeneise la structure du commerce intra firme dans le contexte d un modele qui permet la manipulation du prix de cession interne par une firme plurinationale des taux de taxation hauts et bas par le pays hote entrainent un commerce international intra firme tant dans les biens finaux que dans les intrants intermediaires des taux moyens de taxation sont associes a un commere intra firme soit dans les intrants intermediaires soit dans les biens finaux mais pas dans les deux des droits de douane eleves et des restrictions sur le contenu interieur plus importantes creent des distorsions en faveur du commerce intra firme dans les biens intermediaires et dans les biens finaux respectivement quand il existe des prix de cession interne endogenes les ventes de la firme nationale peuvent s accroitre si la firme plurinationale fait face a des restrictions au commerce plus importantes et a des taux de taxation plus eleves de la part du pays hote

exact and heuristic solutions of the global supply chain problem with transfer pricing we examine the example of a multinational corporation that attempts to maximize its global after tax profits by determining the flow of goods the transfer prices and the transportation cost allocation between each of its subsidiaries vidal and goetschalckx vidal c j goetschalckx m 2001 a global supply chain model with transfer pricing and transportation cost allocation european journal of operational research 129 1 134 158 proposed a bilinear model of this problem and solved it by an alternate heuristic we propose a reformulation of this model reducing the number of bilinear terms and accelerating considerably the exact solution we also present three other solution methods an implementation of variable neighborhood search vns designed for any bilinear model an implementation of vns specifically designed for the problem considered here and an exact method based on a branch and cut algorithm the solution methods are tested on artificial instances these results show that our implementation of vns outperforms the two other heuristics the exact method found the optimal solution of all small instances and of 26 of medium instances

sustainability as a fair bequest an evaluation challenge abstract in contrast to conventional approaches the conceptualisation of sustainability as fair bequest makes it possible to consider a finite time horizon valuation is necessary to determine whether the bequest package that is passed on from one generation to the next is fair acknowledging the merits as well as the limitations of economic price theory this paper differentiates between three classes of valuables the essential the useful and the unique it is argued that a fair bequest package should contain items from each of the classes because the three classes are incommensurable fairness of the bequest cannot be expressed by a single figure like a non declining total value of the package we then discuss which methods are appropriate for describing a bequest package with respect to its fairness

evolution of population resource dynamics models abstract this paper provides a comprehensive analysis of brander and taylor s 1998 model and its descendants from the following perspectives population growth substitutability innovation capital accumulation property rights and institutional designs and modeling approach this survey aims to contribute to a better understanding of population and resource dynamics models in general and facilitate further application of the model framework to relevant circumstances although often treated as exogenous in optimal growth models making population growth an endogenous function allows us to analyze broader effects of economic activities on population the issues of substitutability innovation and capital accumulation are intertwined allowing a model to address the effect of an endogenous technological change on substitutability between natural and man made capital facilitates our analyses of sustainability issues to address internalizing inter generational externalities in resource use incorporating property right changes and institutional designs to this type of model is a useful exercise but careful attention is needed for the consistency between such an arrangement and the mathematical representation of the depicted economy finally although the common criticism regarding convenient mathematical assumptions applies to the existing bt type models the use of computer simulation can relax such assumptions to better represent the intended relationships between the relevant variables

a direct mechanism characterization of sequential bargaining with one sided incomplete information we characterize the sequential equilibria of a class of infinite horizon bargaining games with one sided incomplete information when the seller the uninformed party makes all the offers we prove a folk theorem every incentive compatible individually rational direct bargaining mechanism is implementable by sequential equilibria introducing buyer counteroffers eliminates outcomes which are unfavorable to that party as the proportion of buyer offers increases the set of implementable mechanisms shrinks continuously when the proportion reaches one only the single outcome most favorable to the buyer remains thus depending on the offer structure sequentiality may or may not impose restrictions beyond static incentive compatibility

does the energy efficiency paradox exist technological progress and uncertainty we explain why firms may choose not to undertake investments inenergy saving technologies that appear profitable from a net presentvalue perspective as future technological advances are inherentlyuncertain and investments in new technology are at least partly irreversible it may pay to postpone investments in energy savingand wait for the arrival of improved varieties this insight casts doubton the existence of so called low hanging fruits in energy saving although we do not wish to deny that organisational failures may alsobe important failure to appreciate the underlying stochasticity oftechnological progress may obscure the insight that there is value inwaiting and costs involved in terminating the option to invest theappetite for low hanging fruits will be less when these costs areincorporated in the analysis we demonstrate that the effect of thearrival rate of new technologies on the adoption lag for a rational firmis ambiguous the same holds for the effect of the expected jump inefficiency of new technologies government policies aimed at enhancingthe adoption of new technologies through stimulation of r d maytherefore be counterproductive

carbon emission reduction the impact on the financial and operational performance of international companies abstract over the last few decades companies operate in an environment in which exercising responsibility is a prerequisite for competing owing to the growing social concern for ethical social and environmental issues the question of the impact of emissions trading on firm competitiveness has acquired special relevance in recent years this research analyzes the impact of the variation in carbon dioxide emissions on financial and operational performance by using international data consisting of 89 companies for the period 2006 2009 the findings show a reduction in emissions that generates a positive impact on financial performance in addition certain control variables are considered such as company size sector growth sustainability index and legal system while a panel data methodology is used as the analysis technique overall this research shows that companies promote greater environmental behaviour in order to obtain higher financial performance nonetheless the findings do not show evidence for operational performance this study contributes to the literature on carbon emission reduction and corporate performance moreover it complements previous literature in the sense that results obtained show a reduction in emissions that generates a positive impact on financial performance

the determinants of an environmentally responsive firm an empirical approach abstract our empirical results indicate that a firm s formulation of an environmental plan is positively influenced by customer pressure shareholder pressure government regulatory pressure and neighborhood and community group pressure but negatively influenced by other lobby group pressure sources and a firm s sales to asset ratio firms which view environmental issues as important in the next 5 years are also more likely to have a plan relative to the manufacturing sector firms in the natural resource sector are more likely to formulate environmental plans while firms in the service sector are less likely to have plans our results provide insight into how firms react to environmental issues they also offer policymakers a list of determinants which can be used either as an alternative or complement to environmental regulation

human and nature dynamics handy modeling inequality and use of resources in the collapse or sustainability of societies abstract there are widespread concerns that current trends in resource use are unsustainable but possibilities of overshoot collapse remain controversial collapses have occurred frequently in history often followed by centuries of economic intellectual and population decline many different natural and social phenomena have been invoked to explain specific collapses but a general explanation remains elusive in this paper we build a human population dynamics model by adding accumulated wealth and economic inequality to a predator prey model of humans and nature the model structure and simulated scenarios that offer significant implications are explained four equations describe the evolution of elites commoners nature and wealth the model shows economic stratification or ecological strain can independently lead to collapse in agreement with the historical record the measure carrying capacity is developed and its estimation is shown to be a practical means for early detection of a collapse mechanisms leading to two types of collapses are discussed the new dynamics of this model can also reproduce the irreversible collapses found in history collapse can be avoided and population can reach a steady state at maximum carrying capacity if the rate of depletion of nature is reduced to a sustainable level and if resources are distributed equitably

a model of negotiated transfer pricing abstract a large majority of firms employ negotiated transfer pricing yet this method of decentralization remains largely unexplored this study develops a model of negotiated transfer pricing incorporating private divisional information as this is the setting where decentralization is most compelling the firm designs a compensation system utilizing divisional performance evaluation and negotiated transfer pricing a dynamic bargaining model is employed to capture managerial negotiations the study demonstrates that the firm can design managerial compensation schemes and bargaining infrastructures so that the negotiated transfer pricing structure allows it to reach the upper bound on available profits

evolutionary theories in environmental and resource economics approaches and applications recent advances in evolutionary theory have important implications for environmental economics a short overview is offered of evolutionarythinking in economics subsequently major concepts and approaches inevolutionary biology and evolutionary economics are presented andcompared attention is devoted among others to darwinian selection punctuated equilibrium sorting mechanisms lamarckian evolution coevolution and self organization basic features of evolution such assustained change irreversible change unpredictability qualitativechange and disequilibrium are examined it is argued that there are anumber of fundamental differences as well as similarities betweenbiological and economic evolution next some general implications ofevolutionary thinking for environmental economics are outlined this isfollowed by a more detailed examination of potential uses ofevolutionary theories in specific areas of environmental economics including sustainability and long run development theories technologyand environment ecosystem management and resilience spatial evolutionand environmental processes and design of environmental policy

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

foundations of dynamic monopoly and the coase conjecture subgame perfect equilibria are characterized for a market in which the seller quotes a price each period assume zero costs positive interest rate continuum of buyers and some technical conditions if buyers valuations are positive then equilibrium is unique buyers strategies are stationary and the price sequence is determinant along the equilibrium path but possibly randomized elsewhere otherwise a continuum of stationary equilibria can exist but at most one with analytic strategies coase s conjecture is verified for stationary strategies reducing the period length drives all prices to zero or the least valuation connections to bargaining models are described journal qf economic literature classification

systemic crises in hierarchical ecological economies human beings are both the slaves and the masters of the ecosystems in which they live this paper examines the interrelationship be tween economic decision making hierarchies and ecological hierarchies conditions under which dis continuous changes can occur are presented both for top down and bottom up causes appropriate institutional arrangements for minimizing ecological disruption are analyzed and depend on the nature of the relationship between the economic and eco logical hierarchies in some cases this will involve self managed economic units operating at the ap propriate level of the ecological hierarchy jel q20

negative externalities and welfare improving preference changes when the over consumption of open access resources and congestible public goods generate negative externalities and social welfare losses many individuals and environmental advocacy organizations offer as an alternative nongovernmental solution the adoption of new ecology sustaining preferences this paper shows that exogenously inducing a change in preferences and the adoption of new externality internalizing preferences which increase an individual s marginal rate of substitution between a private good and a good whose consumption imposes external costs on others not only reduces the aggregate output of the negative externality but also produces an economic state that is socially superior to the initial state because it is based on both the initial and new preferences the social superiority welfare criterion makes possible meaningful welfare comparisons of economic states generated by preference changes a computational general equilibrium model is then used to simulate preference changes and to calculate the resulting allocative and welfare effects the computer simulations reveal that important factors in the attainment of a socially superior state include i the particular characteristics of an individual s negative externality reaction function ii the magnitude of the preference change and iii the number of individuals changing preferences

resource use institutions and sustainability a tale of two pacific island cultures this paper examines two pacific island cultures easter island and tikopia and the relationship between natural resource systems human made capital population growth and institutional change easter island followed a preindustrial society pattern of overshoot and collapse however tikopia evolved cultural practices leading to zero population growth and sustainable resource use using a modified lotka volterra predator prey model we find 1 investment in human made capital does not necessarily eliminate the boom and bust cycles of economic activity and population observed in many past societies and 2 institutional adaptation and resource conservation can be critical in achieving population stability

a complex systems approach to the value of ecological resources a theory of value sits at the core of every school of economic thought and directs the allocation of resources to competing uses ecological resources complicate the modem neoclassical approach to determining value due to their complex nature considerable non market values and the difficulty in assigning property rights application of the market model through economic valuation only provides analytical solutions based on virtual markets and neither the demand nor supply side techniques of valuation can adequately consider the complex set of biophysical and ecological relations that lead to the provision of ecosystem goods and services this paper sets out a conceptual framework for a complex systems approach to the value of ecological resources this approach is based on there being both an intrinsic quality of ecological resources and a subjective evaluation by the consumer both elements are necessary for economic value this conceptual framework points the way towards a theory of value that incorporates both elements so has implications for principles by which ecological resources can be allocated c 2005 elsevier b v all rights reserved

redesign of global supply chains with integration of transfer pricing mathematical modeling and managerial insights abstract unlike the supply chain sc design problem which deals with the configuration of a new sc the redesign problem assumes that a sc already exists and focuses on its reconfiguration in order to take profit of the changing logistics financial and fiscal advantages offered by each country first this requires considering specific decisions and cost factors such as those associated with facility closing and capacity relocation these aspects are often ignored by sc design models second to better capitalize on the tax advantages in each country the redesign of sc requires the consideration of taxation rates and mainly transfer pricing indeed companies can use transfer pricing to shift profits to lower tax countries which may impact on the sc redesign decisions e g on the relocation of operations and manufacturing facilities this paper contributes to the literature by 1 developing a large scale optimization model that is specific to the problem of sc redesign while addressing decisions costs and complexity factors that are often ignored by the model based sc design literature 2 integrating transfer pricing in the model by using two methods one of them is the profit split method that is dictated by the oecd transfer pricing guidelines 1995 2010 which could be considered as a novelty in large scale sc optimization models and 3 using the model to derive a series of insights that may be helpful for companies and governments most of these insights are difficult to obtain without the support of models like the one developed here

ecological thresholds a survey abstract the existence of ecological discontinuities and thresholds has been recognised by ecological economics as a key feature to take into account in the study of environment economy interactions this paper reviews some theoretical developments and empirical studies dealing with ecological phenomena involving non linear dynamics the literature about this issue reveals that there is abundant evidence of discontinuities and threshold effects as the consequence of human perturbations on ecological systems however due to the complexities involved the predictive capacity of ecology is limited and large uncertainties still remain

on the intergenerational allocation of natural resources it is known hartwick and others that under standard assumptions a society that invests in reproducible capital the competitive rents on its current extraction of exhaustible resources will enjoy a consumption stream constant in time it is shown here that this result can be interpreted as saying that an appropriately defined stock of capital including the initial endowment of resources is being maintained intact and that consumption can be interpreted as the interest on that patrimony this seems like a useful rule of thumb for policy

indicators of sustainable development some lessons from capital theory abstract interest in sustainable development has prompted a search for suitable indicators that might complement or supplant the traditional measures of economic success although there is no agreement about the precise meaning of sustainable development one idea which is increasingly in good currency is that sustainable development requires that the stock of capital that one generation passes on to the next be maintained or enhanced further this stock of capital is seen by some to comprise two elements manufactured capital and natural capital the extent to which these are believed to be substitutes or complements is one factor which separates the neoclassical school from some of its critics a premise of this paper is that if capital theory is relevant to sustainable development then it should also be helpful in developing indicators however even within the normal confines of economics capital theory is not a homogeneous body of analysis therefore an exploration of capital theory and its relevance to sustainable development can be expected to generate various perspectives on those measures most useful for gauging the sustainability of economic activity it is these linkages between capital theory in various schools of thought and possible indicators of sustainable development that are the subject of this paper

tightening environmental standards the benefit cost or the no cost paradigm ms ff ichael porter and claas van der linde have written a paper that is interesting and to us at least somewhat astonishing it is a defense of environmental regulation indeed an invitation to more stringent regulation that makes essentially no reference to the social benefits of such regulation this approach contrasts starkly with the methods that economists and other policy analysts have traditionally used when assessing environmental or other regulatory programs the traditional approach consists of comparing the beneficial effects of regulation with the costs that must be borne to secure these benefits for environmental regulation the social benefits include the reductions in morbidity or premature mortality that can accompany cleaner air the enhanced recreational opportunities that can result from water quality improvements the increased land values that might attend the cleanup of a hazardous waste site the enhanced vitality of aquatic ecosystems that might follow reductions in agricultural pesticide use or any of the other potentially significant benefits associated with tighter standards from this benefit cost approach emerges the standard tradeoff discussed in virtually every economics textbook porter and van der linde deny the validity of this approach to the analysis of environmental regulation claiming it to be an artifact of what they see as a static mindset in their view economists have failed to appreciate the capacity of

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

critical natural capital revisited ecological resilience and sustainable development abstract the maintenance of critical natural capital is an important objective of sustainable development critical natural capital represents a multidimensional concept as it mirrors the different frameworks of various scientific disciplines and social groups in valuing nature this article revisits the concept of critical natural capital and examines its relation to the concept of ecological resilience i propose that ecological resilience can help a great deal in specifying the ecological criticality of specific renewable parts of the natural capital more specifically i suggest that the degree of ecological resilience is inversely related to the degree of threat ecosystems are prone to the concept of ecological resilience may complement other measures such as integrity or vulnerability in estimating the degree of threat specific ecosystems are exposed to the empirical estimates of ecological resilience add a further criterion in order to build a comprehensive and clear conception of critical natural capital

endogeneity and the dynamics of internal corporate governance abstract we use a well developed dynamic panel generalized method of moments gmm estimator to alleviate endogeneity concerns in two aspects of corporate governance research the effect of board structure on firm performance and the determinants of board structure the estimator incorporates the dynamic nature of internal governance choices to provide valid and powerful instruments that address unobserved heterogeneity and simultaneity we re examine the relation between board structure and performance using the gmm estimator in a panel of 6 000 firms over a period from 1991 to 2003 and find no causal relation between board structure and current firm performance we illustrate why other commonly used estimators that ignore the dynamic relationship between current governance and past firm performance may be biased we discuss where it may be appropriate to consider the dynamic panel gmm estimator in corporate governance research as well as caveats to its use

strategic corporate social responsibility and economic performance this article proposes a novel corporate social responsibility csr index based on a data envelopment analysis dea model acknowledging the argument that companies might favour those csr dimensions that provide strategic competitive advantages we argue that the index can capture companies strategic approach to csr furthermore our findings reveal a neutral relationship between this strategic csr index and economic performance as measured by return on assets roa and tobin s q when controlling for firm unobserved heterogeneity and past economic performance by contrast an equally weighted index of the same csr indicators is found to be negatively related with roa which reinforces our claim that this specific dea based index is a measure of strategic csr

fair transfer price and inventory holding policies in two enterprise supply chains abstract a key issue in supply chain optimisation involving multiple enterprises is the determination of policies that optimise the performance of the supply chain as a whole while ensuring adequate rewards for each participant in this paper we present a mathematical programming formulation for fair optimised profit distribution between echelons in a general multi enterprise supply chain the proposed formulation is based on an approach applying the nash bargaining solution for finding optimal multi partner profit levels subject to given minimum echelon profit requirements the overall problem is first formulated as a mixed integer non linear programming minlp model a spatial and binary variable branch and bound algorithm is then applied to the above problem based on exact and approximate linearisations of the bilinear terms involved in the model while at each node of the search tree a mixed integer linear programming milp problem is solved the solution comprises inter firm transfer prices production and inventory levels flows of products between echelons and sales profiles the applicability of the proposed approach is demonstrated by a number of illustrative examples based on industrial processes

a global supply chain model with transfer pricing and transportation cost allocation abstract we present a model for the optimization of a global supply that maximizes the after tax profits of a multinational corporation and that includes transfer prices and the allocation of transportation costs as explicit decision variables the resulting mathematical formulation is a non convex optimization problem with a linear objective function a set of linear constraints and a set of bilinear constraints we develop a heuristic solution algorithm that applies successive linear programming based on the reformulation and the relaxation of the original problem our computational experiments investigate the impact of using different starting points the algorithm produces feasible solutions with very small gaps between the solutions and their upper bound ub

formation of a strategic manufacturing and distribution network with transfer prices abstract we propose a profit maximization model for the decision support system of a firm that wishes to establish or rationalize a multinational manufacturing and distribution network to produce and deliver finished goods from sources to consumers the model simultaneously evaluates all traditional location factors in a manufacturing and distribution network design problem and sets intra firm transfer prices that take account of tax and exchange rate differentials between countries utilizing the generalized benders decomposition approach we exploit the partition between the product flow and the cash allocation i e the pricing and revenue assignment decisions in the supply chain to find near optimal model solutions our proposed profit maximizing strategic planning model produces intuitive results we offer computational experiments to illustrate the potential valuable guidance the model can provide to a firm s supply chain design strategic planning process

reputation in bargaining and durable goods monopoly this paper analyzes durable goods monopoly in an infinite horizon discrete time game we prove that as the time interval between successive offers approaches zero all seller payoffs between zero and static monopoly profits are supported by subgame perfect equilibria this reverses a well known conjecture of coase alternatively one can interpret the model as a sequential bargaining game with one sided incomplete information in which an uninformed seller makes all the offers our folk theorem for seller payoffs equally applies to the set of sequential equilibria of this bargaining game

the effect of subsistence on collapse and institutional adaptation in population resource societies abstract we extend the brander taylor model of population and resource development in an isolated society by adding a resource subsistence requirement to people s preferences this improves plausibility amplifies population overshoot and collapse and can destabilize the steady state and allows for complete cessation of non harvesting activities in line with archaeological evidence for many societies we then use bifurcation techniques to give a global analysis of four types of institutional adaptation an ad valorem resource tax and quotas on total resource harvest total harvest effort and per capita effort in all cases we find that a higher subsistence requirement makes it harder or often impossible for adaptation to avoid overshoot and collapse

an operational profit sharing and transfer pricing model for network manufacturing companies abstract new age companies are forging partnerships with other firms to market products that have been assembled through manufacturing activities distributed at different locations these locations belong to more than one company and the product passes through these different sites during its manufacturing stages this manufacturing collaboration is known as network manufacturing according to the network philosophy companies form alliances to manufacture a product and share in its operating profits this paper proposes a framework and methodology for profit sharing and transfer pricing between network companies we propose a paradigm that enables maximization of operating profits by the manufacturing network in its larger supply chain suggesting a departure from the model that maximizes profits for the individual company within the sphere of its own supply chain

decentralization and transfer pricing under oligopoly this paper presents a simple model of a partially decentralized multinational firm mnf in competition with a rival firm it is shown that transfer pricing can be used as a rent shifting device by the mnf to compete with the rival this arises because the mnf headquarters uses the transfer price to manage different subsidiaries the specific value of the transfer price chosen by the mnf depends on whether the rival firm produces the intermediate good the final good or both and whether the rival is integrated or not in particular both decentralization and competition with a fully integrated rival result in lower transfer prices

dynamic resource allocation with hidden volatility abstract we study a firm s internal resource allocation using a dynamic principal agent model with endogenous cash flow volatility the principal supplies the agent with resources for productive use but the agent has private control over both project volatility and resource intensity and may misallocate resources to obtain private benefits the optimal contract can yield either overly risky or overly prudent project selection it can be implemented with a constant pricing schedule i e a static decentralized linear mechanism giving the agent control over the resource quantities project risk and agent s equity share the implementation rationalizes the use of hurdle rates above a firm s cost of capital and transfer prices above marginal cost while showing that hurdle rates or transfer prices may not vary with the agent s risk choice

gray market trade with product information service in global supply chains abstract this paper investigates the economic effects of a product information service when potential consumers who are segmented by their taste exist in gray markets specifically we construct an economic model that considers a multinational firm mnf who expands business to a country and chooses whether to provide information service regarding product characteristics if receiving the information consumers in a specific segment whose taste suits the characteristics have positive utility from consuming the product while those in other segments have no utility by contrast consumers in all segments have positive expected utility before consuming the product without information with these settings we demonstrate that there arises the equilibrium that the mnf provides no information service when gray market trade i e parallel trade is allowed in the country leading to lower consumer welfare than when it is prohibited a primary finding in the equilibrium is that such a situation arises especially when potential consumers are less segmented in this situation the regulator in the country should ban the parallel imports so as to enhance consumer welfare the result is counterintuitive and notable because one might intuitively infer that gray market trade is less desirable when customers are more minutely segmented and the product information service is thus more specific and necessary

transfer pricing mechanisms an experimental investigation abstract this study evaluates in a laboratory setting the performance of the ronen and mckinney 1970 and the ronen 1992 transfer pricing schemes both mechanisms possess in theory the property of inducing efficient production and truth telling while decision making autonomy is maintained the ronen mckinney scheme however allows for multiple nash equilibria and if the divisions managers coordinate their messages they are expected to exploit the mechanism at the expense of the overall profitability of the firm the ronen 1992 scheme was designed to prevent this towards this end a penalty factor was incorporated into the original ronen mckinney scheme to make truth telling and optimal production a unique equilibrium the basic results are that under the ronen mckinney scheme and with coordination of messages being allowed subjects collude and earn significantly higher profits than amounts implied by the overall optimal solution without the penalty factor subjects seemed not to converge towards the efficient level of transacting at the end of the experiment it is not clear whether with additional trials such conversion would have occurred the inclusion of the penalty factor however eliminated the collusive behaviour in fact most of the pairs implementing the ronen mechanism reached the efficiency predicted by the theory whether or not coordination of messages was allowed

modeling and design of global logistics systems a review of integrated strategic and tactical models and design algorithms the overall focus of this research is to demonstrate the savings potential generated by the integration of the design of strategic global supply chain networks with the determination of tactical production distribution allocations and transfer prices the logistics systems design problem is defined as follows given a set of potential suppliers potential manufacturing facilities and distribution centers with multiple possible configurations and customers with deterministic demands determine the configuration of the production distribution system and the transfer prices between various subsidiaries of the corporation such that seasonal customer demands and service requirements are met and the after tax profit of the corporation is maximized the after tax profit is the difference between the sales revenue minus the total system cost and taxes the total cost is defined as the sum of supply production transportation inventory and facility costs two models and their associated solution algorithms will be introduced the savings opportunities created by designing the system with a methodology that integrates strategic and tactical decisions rather than in a hierarchical fashion are demonstrated with two case studies the first model focuses on the setting of transfer prices in a global supply chain with the objective of maximizing the after tax profit of an international corporation the constraints mandated by the national taxing authorities create a bilinear programming formulation we will describe a very efficient heuristic iterative solution algorithm which alternates between the optimization of the transfer prices and the material flows performance and bounds for the heuristic algorithms will be discussed the second model focuses on the production and distribution allocation in a single country system when the customers have seasonal demands this model also needs to be solved as a subproblem in the heuristic solution of the global transfer price model the research develops an integrated design methodology based on primal decomposition methods for the mixed integer programming formulation the primal decomposition allows a natural split of the production and transportation decisions and the research identifies the necessary information flows between the subsystems the primal decomposition method also allows a very efficient solution algorithm for this general class of large mixed integer programming models data requirements and solution times will be discussed for a real life case study in the packaging industry 2002 elsevier science b v all rights reserved

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

coupled societies are more robust against collapse a hypothetical look at easter island inspired by the challenges of environmental change and the resource limitations experienced by modern society recent decades have seen an increased interest in understanding the collapse of past societies modelling efforts so far have focused on single isolated societies while multi patch dynamical models representing networks of coupled socio environmental systems have received limited attention we propose a model of societal evolution that describes the dynamics of a population that harvests renewable resources and manufactures products that have positive effects on population growth collapse is driven by a critical transition that occurs when the rate of natural resource extraction passes beyond a certain point for which we present numerical and analytical results applying the model to easter island gives a good fit to the archaeological record subsequently we investigate what effects emerge from the movement of people goods and resources between two societies that share the characteristics of easter island we analyse how diffusive coupling and wealth driven coupling change the population levels and their distribution across the two societies compared to non interacting societies we find that the region of parameter space in which societies can stably survive in the long term is significantly enlarged when coupling occurs in both social and environmental variables

towards an ecological economics of sustainability abstract persistent disagreement both as to the interpretation to be given to sustainability and as to the relation between ecological and economic sustainability has hindered the development of an ecological economics of sustainable resource use this paper identifies the main concepts of sustainability deriving from the two disciplines in order to explore the difference implied by an ecological approach to the problem it is argued that present economic and ecological approaches are largely disjoint and that they address basically different phenomena by combining the efficiency requirements of what is usually thought of as economic sustainability with the stability requirements of an ecological approach it is shown that an intertemporally efficient allocation of resources that satisfies the conditions for constant levels of consumption is not necessary to assure ecological sustainability ecological sustainability requires that the allocation of economic resources should not result in the instability of the economy environment system as a whole

efficient allocation with continuous quantities abstract the inefficiency of allocation mechanisms in the presence of bilateral asymmetric information is reconsidered in an environment with continuous quantities the result of myerson and satterthwaite is proved in this environment under the condition that zero trade is efficient if the highest cost seller or the lowest value buyer appears in addition if this condition fails there may exist mechanisms implementing efficient allocations the problem of hidden endowments is considered where any agent may be either a buyer or seller depending on the realization of the privately observed information in this environment it is often possible to arrange efficient trades ex ante asymmetries rather than interim asymmetries tend to prevent efficient allocations

valuing environmental functions tropical wetlands recent studies have suggested that tropical wetland systems may have a crucial economic role to play in development the following paper provides an overview of these benefits using the general framework of cost benefit analysis as the methodological approach to assessing wetland values an analysis of trade offs between conserving or converting tropical wetlands demonstrates that taking into account the opportunity cost of wetland loss leads to a lower level of conversion than would otherwise be the case finally the paper discusses the extensions and limitations of the production function approach as applied to valuing nonmarketed wetland benefits

sustainable energy systems and company performance does the implementation of sustainable energy systems improve companies financial performance abstract the main aim of this paper is to analyse whether the adoption of sustainable energy systems improves corporate financial performance to this end we obtained data from a sample of 574 multinational companies from 36 countries in the 2008 2013 period on this data we implement a dynamic system panel data method our findings show that the adoption of sustainable energy systems allows firms to improve their short term corporate financial performance while not leading them to reduce their corporate financial performance in the long term specifically our results indicate that an increase in energy efficiency and the use of renewable energy sources do not significantly affect corporate financial performance neither does the integration of energy efficiency systems and renewable energy sources have any significant influence on corporate financial performance while the level of implementation of sustainable energy management systems has a significant effect on short term but not long term corporate financial performance furthermore other control variables such as research and development expenditure and year are also relevant in explaining firms financial performance the adoption of sustainable energy systems helps to improve corporate financial performance in the short term but has no affect in the long term this might be because the monitoring of energy efficiency using key performance indicators allows firms to detect and correct failures in the production process and hence improve short term financial performance however this measure does not generate competitive advantages for firms and therefore has no effect on long term corporate financial performance from a scientific perspective of energy this paper contributes to the literature by providing a detailed explanation of how the adoption of sustainable energy systems proposed by peura 2013 influences corporate financial performance on the basis of new empirical evidence these explanations provide a strong rationale for improving the efficient use of energy and harvesting low hanging fruits in the short term from a managerial perspective policymakers should encourage firms to align sustainable energy systems with their core business strategy by developing green technologies that allow them to acquire rare and valuable capabilities and abilities which generate competitive advantage and therefore allow firms to increase their long term corporate financial performance

entitlements missing markets and environmental uncertainty reply abstract at one level dore and ward seem intent on immunizing received doctrine they say that i did not prove that rights violated nozick s principles of justice and that i did not prove that missing markets were the problem more telling they allege i did not prove that my story was better than the particular story favored by dore and ward that is they argue that there is an alternative approach based on the theory of public economics which is indeed operational 3 they then use the bulk of their comment to explain and defend this alternative model they hope to convince the reader that the model of public economics survives intact in the face of my alternative model to the extent that their model allows one to define the problem away it is not difficult to see why they find it so compelling more seriously dore and ward fail to make a coherent argument about the concept of rights and duties and the logic of a particular rights structure that happens to prevail they seem concerned that my article was tampering with some sacred social construct the status quo rights structure and that my article threatened the received wisdom of both public economics and paretian walrasian bliss indeed theirs seems to be a genuine fear that if economists release their grip on the certitude of received orthodoxy the floodgates will be open to all manner of bumbling regulators seeking to shift rights and wealth positions across generations my article is apparently threatening because it seems to suggest that the received wisdom may at times be misleading

intrafirm trade arm s length transfer pricing rule and coordination failure abstract this paper demonstrates that uniform imposition of the arm s length principle on transfer pricing leads to coordination failure among countries in terms of economic welfare if the countries trade products in the form of intrafirm transactions by multinational firms mnfs to highlight this implication we first show that imposition of the arm s length principle on an mnf induces it to transfer a product among subordinate divisions at marginal cost i e the competitive price which is consistent with the purpose of the principle nonetheless if regulators in each country impose the principle on mnfs all of the following economic welfare measures decrease compared with the situation where the principle is not imposed 1 consumer welfare in each of the trading countries 2 profit of each mnf and thus 3 total world economic welfare this result indicates that it is possible that enforcement of the principle has no positive effect at all in the world because economic welfare of all economic agents deteriorates when the principle is imposed a numerical analysis demonstrates that this possibility arises in a broad range of circumstances even including the situation where a giant economic world power and a small underdeveloped country mutually trade products in these circumstances an agreement among trading countries that no country imposes the arm s length principle may encourage pareto improvement of the world economy

institutional ecological economics abstract new institutional economics and its forerunners have we argue made important contributions to the evolving agenda of ecological economics the conceptualisation of environmental problems as instances of interdependence and the acknowledgement of positive transaction costs are key insights into the nature of environmental problems we also discuss how plurality of behavioural motivations and limited cognitive capacity have important implications for environmental decision making and its analysis we show how evolutionary and collective action theories offer complementary takes on the choice and change of environmental governance institutions and how the concept of social capital can enrich analyses of environmental governance we conclude that an emerging institutional ecological economics has the greatest relative advantage in analysing the design implementation and effectiveness of environmental governance solutions

optimal diversity increasing returns versus recombinant innovation abstract choices regarding diversity play an important role in economics and innovation management but often remain implicit once made explicit the objectives of efficiency and diversity are usually posed as in conflict as efficiency relates positively and diversity negatively to various increasing returns to scale in markets such a perspective however neglects the benefits of diversity in terms of realizing system improvements through recombinant innovation or spillovers the latter implies a contribution of diversity to long term efficiency dominant economic approaches that address diversity such as option value and real options theories regard benefits of diversity as exogenous this paper proposes a simple model of variable endogenous diversity to analyse the optimal balance between increasing returns to scale and recombinant innovation it is discussed under which conditions one of four solutions is optimal complete specialization regardless of which option complete specialization in one specific option symmetric diversity perfect balance and asymmetric diversity the results give rise to a number of policy insights

organizational design and the intensity of rivalry we analyze the effect of managerial compensation schemes and organizational structure on competitive behavior in imperfectly competitive product markets previous research suggests that in cases of strategic substitutability firms tend to choose organizational structures and compensation systems that commit the firm to behaving aggressively in the product market reducing firm and industry profits in contrast we show that while compensation and structure in isolation lead to excessive aggressiveness the combination of these two internal choice variables may reverse the outcome organizational design can be used as a commitment device to reduce competitive rivalry finally we find that in equilibrium firms may choose to be different one firm is decentralized and uses incentives that commit it to being aggressive while the other is centralized and uses incentives that commit it to being soft hence endogenous firm heterogeneity in the form of organizational differentiation allows firms to avoid a mutually detrimental outcome

retracted experiences in renewable energy and energy efficiency in tunisia case study of a developing country tunisia is one of the few developing countries to have developed a proactive policy for the promotion of renewable energy and energy efficiency already in the mid 1980s this policy gained special momentum starting in the mid 2000s in the context of spiraling international oil prices and the development of a steadily growing energy deficit this momentum resulted in the development of ambitious energy efficiency and renewable energy development programs designed to meet energy requirements in a cost effective manner and to reduce the tunisian economy 0s vulnerability to rising fossil fuel prices the three year 2005 2007 and fouryear 2008 2011 programs as well as the tunisian solar plan are strong indicators of tunisia 0 s

joint inventory and cash management for multidivisional supply chains this paper develops a centralized supply chain model that integrates material flows with cash flows the supply chain is owned by a single firm with two divisions the downstream division headquarters facing random customer demand replenishes materials from the upstream division the firm installs a financial services platform that pools the divisions cash into a master account managed by the headquarters in each period cash is received from customers and paid to the outside vendor after materials are delivered the headquarters determines how much cash to retain for inventory replenishment the objective is to determine an optimal joint inventory replenishment and cash retention policy for the entire supply chain we prove that the optimal policy has a surprisingly simple structure both divisions implement a base stock policy for inventory replenishment the headquarters monitors the corporate working capital and implements a two threshold policy for cash retention this result is obtained by exte

anniversary article a perspective on asymmetric information incentives and intrafirm resource allocation the paper asymmetric information incentives and intrafirm resource allocation by harris kriebel and raviv was published in the june 1982 issue ofmanagement science in this article written as part of this journal s 50 year anniversary celebration we highlight the significance of the harris et al paper for research in managerial accounting we first formulate and solve a continuous version of the harris et al model to illustrate the key assumptions and findings of their paper we then review several strands of the resource allocation literature in managerial accounting that have taken their inspiration either directly or indirectly from the work of harris et al

problems in valuing the benefits of biodiversity protection this paper considers two problems in valuing the benefits of biodiversity protection these are firstly that preferences for biodiversity protection may be lexicographic rather than utilitarian the more individuals for whom this is true the less is cost benefit analysis validated as a means of decision making for biodiversity protection since lexicographic preferences are incompatible with the kaldor hicks compensation test secondly people may be poorly informed about the meaning of biodiversity complicating the use of contingent valuation as a means of measuring preservation benefits this paper first discusses the meaning of biodiversity and trends in diversity over time we offer some empirical evidence with regard to lexicographic preferences consider the implications of having poorly informed consumers and then report the results of a contingent valuation study of biodiversity protection with varying levels of information we find that willingness to pay for biodiversity protection increases with the level of information provided

organizing product oriented environmental management from a firm s perspective environmental characteristics of products are increasingly investigated much research focuses on environmental implications of design decisions and on methods to determine and influence products environmental impacts less attention is paid to the organizational consequences of such insights this paper aims to contribute to this discussion by describing and analyzing organizational aspects of product oriented environmental management poem from an individual firm s perspective important motives for firms to engage in poem are addressing stakeholder interests and obtaining a competitive advantage specific capabilities are required to organize poem in the process of building such capabilities managerial decision makers play an important role two case studies from the chemical industry provide interesting viewpoints on the organization of poem creating sufficient flexibility a broad involvement across functions and a managerial ability to identify and build the required capabilities are proposed as important factors in the process of organizing poem

evolutionary policies for sustainable development adaptive flexibility and risk minimising abstract an evolutionary perspective on policies to foster sustainable development is presented it is argued that policies suggested by the traditional economic theory of environmental policy can stimulate unsustainable socio economic structures and patterns in addition they are unable to remove undesired locked in systems and technologies drawing on evolutionary thinking characterised by diversity selection innovation path dependence and bounded rationality an alternative partly complementary theory of environmental policy is suggested specific attention is given to the role of strategies that are aimed at increasing diversity and adaptive flexibility and at reducing risk

determining intra company transfer pricing for multinational corporations abstract although significant attention has been paid to transfer pricing the pricing of intermediate products sold between different divisions within one company the focus has been limited to tax minimization within regulatory boundaries this paper presents a comprehensive model that aims to determine the optimal transfer price for a multinational corporation mnc to maximize the entire organization s profit the model considers the situation in which intermediate products are sold from the mnc s selling divisions to buying divisions the buying divisions further process these intermediate products to produce final products the final products are then sold in both selling divisions and buying divisions across the mnc s global locations in contrast to the existing literature our innovative model incorporates elements such as international transportation costs holding costs taxes tariffs including the introduction of a second tariff and exchange rates this paper also provides managerial insights about the impact of setting transfer prices in different currencies on the variance of each division s profit given exchange rate uncertainty

alternative approaches to economic environmental interactions abstract the key questions raised by recent developments in resource and environmental economics have been what useful economic functions does the environment provide and how are these functions affected by the process of economic environmental interaction this paper distinguishes between two different formal approaches to answering these questions the more conventional approach which is concerned with the optimal allocation of economically valuable exhaustible resources and an alternative analysis that considers the trade off between on the one hand environmental quality and on the other resource depletion and waste generation by the economic process to illustrate and extend the latter approach a model is constructed to show how this trade off might lead to continuously declining environmental quality and a future ecological constraint society must therefore optimally allocate output between consumption and services to improve the environment and choose between increased capital accumulation and environmental degradation although strict application of such a model may be limited it has wider implications for the role of technological change and the value of the environment in any system experiencing deteriorating environmental quality

transfer pricing and decentralized dynamic lot sizing in multistage multiproduct production processes abstract this paper presents the use of a transfer pricing system to coordinate business units in a wagner whitin type model for a decentralized lot sizing problem in a dynamic multistage multiproduct environment the paper includes two major proofs 1 a transfer pricing system enabling optimal decentralized lot sizing is characterized the transfer pricing system can be interpreted as a generalization of the reciprocal method or step down allocation method in cost location accounting and 2 based on a wagner whitin type theorem and the kakutani fixed point theorem it is shown that such a transfer pricing system exists

environmental marketing a source of reputational competitive and financial advantage corporate reputation is an intangible asset that is related to marketing and financial performance the social economic and global environment of the 1990 shas resulted in environmental performance becoming an increasingly important component of a company sreputation this paper explores the relationship between reputation environmental performance and financial performance and looks at the contingencies that impact environmental policy making

efficiency gains within firms under voluntary environmental initiatives this paper focuses on efficiency gains that voluntary environmental initiatives may achieve within the firm current debate concerning the extent and significance of inefficiencies within firms is critically important to the progress of energy and environmental policies several recent lines of inquiry in microeconomics help explain the persistence of inefficiencies within firms in addition two of the most prominent new approaches in the field of business strategy resource based strategy and the capabilities perspective focus on the heterogeneity among firms and the resulting pockets of inefficiency within firms they suggest at least three generic strategies for voluntary environmental initiatives challenging outdated organizational routines creating opportunities for differentiation or complementing firms resource investment trajectories these generic approaches suggest that there is considerable scope for further experimentation with voluntary environmental initiatives

trust law sustainability and responsible action abstract the problem of managing for sustainability is marked by the need to make decisions on behalf of others and by the uncertainties that attend such decisions however the economic literature on sustainability has paid scant attention to how decisions on behalf of others might differ from decisions on behalf of oneself and when risk has been modeled explicitly the expected utility hypothesis has generally been used a generation acts sustainably if the expected value of the next generation s utility is not less than the present s this paper investigates how we think about responsibly acting on another s behalf by looking to the united states law of trusts because in important respects the current generation views its responsibility to the future as a trust relationship trust law illuminates responsible decision making under both risk and uncertainty even under conditions of risk more conservative action than would be suggested by the expected utility hypothesis is warranted because it emphasizes preservation of trust principal and disavows profit maximization trust doctrine indicates that special caution should be exercised in conditions of uncertainty finally resource economic concepts of strong sustainability the precautionary principle and the safe minimum standard of conservation are interpreted according to trust principles

the potential of environmental regulation to change managerial perception environmental management competitiveness and financial performance abstract this research presents an overview of where the gaps in the literature exist in relation to the link between environmental regulation and proactive environmental management and competitiveness and incorporates them in a whole model different papers have highlighted only partial aspects of these relationships specifically this research evaluates the relationship between managerial perception and the different styles of environmental regulations command and control versus voluntary norms the mediator role of environmental management in the link between environmental regulations and competitiveness the effect of competitiveness on financial performance and the two way relationship between proactive environmental management and financial performance finally this paper uses statistical evidence to test and estimate causal relationships through a structural equation modelling of 208 firms affected by ippc law in spain there is a lack of systematic statistical evidence on this topic in the literature which mainly focuses on case studies the results show that when environmental regulation stems from command and control legislation its influence on managerial perception and proactive environmental management is not significant however when environmental regulation stems from voluntary norms its effects are positive moreover investment in proactive environmental management contributes to increasing the competitiveness of the firm cost and differentiation competitive advantage have a positive impact on financial performance finally the link between proactive environmental management and financial performance may follow different paths 1 neither direct nor single because it can depend on competitive advantage and 2 direct because there is a significant two way relationship between these variables proactive environmental management influences financial performance and financial performance influences proactive environmental management

historical roots for ecological economics biophysical versus allocative approaches abstract a number of economists today are aware that the results of their science are more or less at variance with concrete fact and are alive to the necessity of perfecting it they go wrong rather in their choice of means to that end they try obstinately to get from their science alone the materials they know are needed for a closer approximation to fact whereas they should resort to other sciences and go into them thoroughly not just incidentally for their bearing on the given economic problem until economic science is much farther advanced economic principles are less important to the economists than the reciprocal bearings of the results of economics and the results of the other social sciences many economists are paying no attention to such interrelations for mastery of them is a long and fatiguing task requiring an extensive knowledge of facts whereas anyone with a little imagination a pen and a few reams of paper can relieve himself of a chat on principles pareto 1935 para 2022

resilience weather and dynamic adjustments in agroecosystems the case of wheat yield in england the paper presents an investigation of agroecosystem dynamics with an application to wheat yield data in england over the period 1885 2012 the analysis relies on a threshold quantile autoregressive model the model allows for lag effects to vary across quantiles of the distribution as well as with the values taken by the lagged variables the analysis documents the dynamics and persistence of yield adjustments to shocks the estimates indicate the presence of dynamic instability in the lower quantile of the distribution the analysis shows that after controlling for the role of technological trend wheat yield exhibits resilience to adverse weather shocks

from malthus to sustainable energy theoretical orientations to reforming the energy sector abstract the main purpose of this article is to consider macro level theories for understanding the urge for reform as well as the process of societal change both in general terms and more specifically within the energy sector the aim is also to consider the energy sector in a wider context and analyse its recent development as a potential part of this reform the scope and logical framework of this article is the following the state of the global environment is approaching a point where the whole of humankind is in danger the article reviews and discusses humankind s limits of existence and dialectics of the human nature relationship by contrasting malthusian and boserupian theoretical views this creates both practical and scientific needs the long societal process of change is discussed according to the three layer 3l model of societal chance the production of energy has traditionally been one of the core issues concerning the effect humankind has on the environment and with regards to potential change related to it reforming the energy sector is in a key position this article reviews and discusses the way the already established renewal of the energy sector corresponds to the 3l model and the diverse potentials of the anticipated further progress

sustainability constraints versus optimality versus intertemporal concern and axioms versus data sustainable sustained or survivable development are defined here as distinct sustainability constraints on intertemporal distribution in a context which ignores uncertainty environmental and intratemporal concerns such constraints are neither self contradictory nor redundant for they can conflict with maximizing the present value of utility optimality nor inferior since the axioms underlying optimality are ethically arbitrary and refuted by empirical psychological data axiomatic arguments may clarify but cannot resolve debates about intertemporal concerns data suggest that sustainability constraints are not respected and that intertemporal welfare functions containing a preference for sustained improvement may better reflect what bodies politic mean by sustainability

the paretian liberal paradox and ecological economics abstract two of the most basic considerations in collective choice are the pareto principle and some minimal protection of individual rights in his impossibility theorem sen 1970 shows that there is a potential inconsistency between preference sovereignty as expressed by the pareto condition and the protection of minimal rights a liberal or liberty condition the paretian liberal paradox plp and the extensive debate surrounding it prompts serious reconsideration of the traditional welfare economics approach the critique of welfarism made by the plp is of central importance for environmental issues given pervasive externalities missing markets uncertainty and potential irreversibilities making collective choice decisions on these issues may require using explicit non utility information and restricting individual preference sovereignty we explore the implications of the plp for long term environmental policy and the transdisciplinary field of ecological economics as a simple pedagogical device relying on sparse principles the plp stimulates an increased awareness of the potential conflict between preferences and rights recognition of the plp focuses attention on what counts as admissible information in collective choice rules for example consideration of the plp illuminates differences in the informational requirements of alternative sustainability concepts

on delay in bargaining with one sided uncertainty recently attention has been given to a model of two person bargaining in which the parties alternate making offers and there is uncertainty about the valuation of one party the purpose of the analysis has been to identify delay to agreement with a screening process where agents with relatively lower valuations distinguish themselves by waiting longer to settle we point out a fundamental difficulty with this program by demonstrating that the assumptions used in the literature allow for delay only in so far as the time between offers is significant

the conditions for achieving environmentally sustainable development this paper is interested in the narrower interpretation the relationship between environmental quality and sustainable economic activity the latter is interpreted as that level of economic activity which leaves the environmental quality level intact with the policy objective corresponding to this notion being the maximization of net benefits of economic development subject to maintaining the services and quality of natural resources over time 3

competition in multiechelon assembly supply chains in this paper we study competition in multiechelon supply chains with an assembly structure firms in the supply chain are grouped into homogenous sectors nodes that contain identical firms with identical production capabilities that all produce exactly one undifferentiated product that may itself be a kit of components each sector may use several inputs to produce its product and these inputs are supplied by different sectors the production process within any sector is taken to be pure assembly in fixed proportions the number of firms in each sector is known the demand curve for the final product is assumed to be linear as are production costs in all sectors competition is modeled via a coordinated successive cournot model in which firms choose production quantities for their downstream market so as to maximize profits given prices for all inputs and all complementary products production quantities for sectors supplying the same successor are coordinated through pricing mechanisms so that complementary products are produced in the right proportions under these assumptions equilibrium prices for any multiechelon assembly network are characterized by a system of linear equations we derive closed form expressions for equilibrium quantities and prices in any two stage system i e a system with multiple input sectors and a single assembly sector we show that any assembly structure can be converted to an equivalent larger structure in which no more than two components are assembled at any node finally large structures can be solved either by direct solution of the characteristic linear equations or through an iterative reduction compression to smaller structures

limits to substitution and irreversibility in production and consumption a neoclassical interpretation of ecological economics abstract there are many methodological approaches within ecological economics one of the principal modes of analysis is a modified version of the standard neoclassical model this paper examines the parallels which emerge between the ideas of some ecological economists concerning production and the ideas of others concerning consumption when these ideas are interpreted in the neoclassical paradigm it is well known that ecological economics is characterized by arguments concerning limits to substitution between inputs energy natural capital etc vs manufactured capital labor etc in production and the implications these have for sustainability however various authors have also expressed concerns regarding limits to substitution in consumption either between environmental assets and other goods or between basic needs commodities and other goods though the specific reasons for non substitution are different in the production and consumption cases the underlying theme is that individual commodities and other inputs have unique physical or other properties which make them poor substitutes ideas about irreversibility in production and economic development are also prominent in ecological economics likewise many authors have argued for similar irreversibilities in consumption behavior in analogy to the term technological change i coin the term preferential change to describe these phenomena the linking themes in this case are that the economy environment system is evolutionary in character and that external effects intended and unintended consequences of actions or processes imposed on other parties or resources are all pervasive

bargaining and the right to remain silent this paper analyzes a class of alternating offer bargaining games with one sided incomplete information for the case of no gap if sequential equilibria are required to satisfy the additional restrictions of stationarity monotonicity pure strategies and no free screening we establish the silence theorem when the time interval between successive periods is made sufficiently short the informed party never makes any serious offers in the play of alternating offer bargaining games a class of parametric examples suggests that the time interval required to assure silence is not especially brief as a byproduct of the analysis we also prove under the same set of assumptions a uniform version of the coase conjecture when the time interval between successive periods is made sufficiently short the initial serious offer by either party in an alternating offer bargaining game must be less than e times the highest possible buyer valuation for an entire family of distribution functions

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd