the political economy of customs and culture informal solutions to the commons problem chapter 1 faciliting cross disciplinary understanding of the commons chapter 2 property rights regimes and natural resources a conceptual analysis chapter 3 the tragicomedy of the commons chapter 4 contracting into the commons chapter 5 capturing the commons legal and illegal strategies chapter 6 the political economy of changing property rights dismantling a kenyan commons chapter 7 analyzing institutional successes and failure a millennium of common mountain pastures in iceland chapter 8 covenants with and without a sword self enforcement is possible chapter 9 economic principle in the emergence of humankind

branching and competition in the european banking industry in this study branching costs and competitiveness of european banks are measured by fitting a monopolistic competition model to a representative sample drawn from nine eec banking industries in the period from 1990 to 1996 in the theoretical model banks decide strategically the size of their branching network anticipating the degree of competition faced on interest rates from the structural equations of the model an econometric test is derived in order to measure branching costs and degree of competition in banking services the empirical analysis captures their changing over time together with the impact of various european directives aiming at deregulating the banking industry furthermore the study shows persistence of segmentation acoss eec banking industries

the influence of private contractual failure on regulation the case of oil field unitization an analysis of the interdependence between regulation and private contractual failure reveals that the feasible range of regulation is restricted by the same forces that block private agreement the focus of the study is oil field unitization regulation in oklahoma texas and wyoming federal lands from 1948 through 1975 despite large potential gains from unitization private negotiations fail because of lease heterogeneities and information problems regarding lease value estimates in response the federal and state governments have adopted strikingly different policies to encourage unitization with different results only the federal government s regulations are effective because they surmount information problems texas has the least successful regulation the paper argues that the policy differences are due to the political influence of small firms that benefit from nonunitized production 25 references 2 tables

location and competition in retail banking abstract we investigate the impact of banking deregulation during the 1990s on consumer welfare we estimate a spatial model of consumer demand for retail bank deposits that explicitly accounts for consumer disutility from distance traveled this is important given the substantial changes in banks branch networks observed in the data our model indicates that cross price elasticities between banks whose branches are close to consumers close banks are larger than those between far banks and more than double the cross price elasticity of close banks with respect to far banks we distinguish between thrifts and other banks and find that within thrift competitive effects are stronger than within bank effects or those between thrifts and banks we use our estimates to predict the effect of changes in market structure on consumer welfare following the branching deregulation of the riegle neal act of 1994 our results indicate that the median household gained around 60 per year from the changes approximately two thirds of the gains come from within market changes in market structure the gains were greater in markets with high initial numbers of banks than elsewhere

contractual responses to the common pool prorationing of crude oil production this paper examines bargaining among firms to mitigate rent dissipation following the major oil discoveries of 1926 35 because of high bargaining costs firms chose prorationing instead of consolidation and unitization and success varied the analysis also shows that prorationing took the form it did because concession such as per well quotas were required to draw in small operations and the quotas led to predictable responses regarding rent dissipation prorationing despite its costs controlled total field production and costs conserved natural reservoir energies and lengthened field life when private agreements failed the parties successfully appealed for state enforcement since similar heterogeneities influnce regulations elsewhere in the economy detailed analysis of bargaining among firms is essential for insight into the emergence of various institutional forms 33 references 3 tables

income distribution and the contractionary effect of protection a theoretical analysis abstract in terms of a simple model we show that the removal of a tariff from a competing foreign brand is likely to expand the size of the domestic industry when income disparities exist a tariff increases the profits of the local monopolist but is capable of cutting down the size of the local industry after providing the general theoretical condition we construct an example from a class of examples where such an outcome holds in equilibrium

non price strategic behavior the case of bank branches abstract we perform an empirical study of banks branching decisions as a strategic non price variable in an oligopolistic setting using panel data of banks from norway we find clear evidence that banks act strategically in their branching decisions taking into consideration the future response from rival banks the analysis is applied to a unique data set which covers the entire banking sector during both pre and post banking crisis periods where very different types of conduct are found in each of these periods both for banks and borrowers moreover we find that a bank specific branch network does not confer externality on other banks as a result branch network affects only market shares but not market size

multimarket competition in banking with an example from the portuguese market abstract banks typically have more than one branch and their activities usually span over several markets this multilocational nature of banks generates equilibrium price dispersion the paper proposes a spatial competition model to explain price differences across banks in the deposits market the model allows to separate two different sources of observed market power collusion in the industry and product differentiation induced by location in local markets an application to portuguese commercial banking is reported as an illustration

property rights to multi attribute fishery resources abstract the united nations code of conduct for responsible fisheries urges governments to manage multiple yield bycatch and habitat attributes of fishery resources the information and enforcement costs of multi attribute management are high however as a result relatively few attributes generally stock biomass age structure and growth are specified in yield targets exposing others e g localized abundance sex to excessive use in the public domain spillovers caused by fishing gear e g gear conflicts bycatch habitat damage generally are regulated with catch limits and area closures that artificially divide or exclude activities which interact due to attribute jointness total fishery income is compromised because tradeoffs are not evaluated at the margin alternative arrangements that bundle fishery resource attributes are suggested bundled property rights could evolve from a comprehensive assignment of usufruct rights which reduce the transaction costs of gathering information on unspecified attributes and of contracting for spillovers markets for harvest rights could resolve the simpler gear conflict and bycatch problems other interactions e g predation habitat requirements would require corporate or collective property rights and governance arrangements that make harvesters and other interested parties the residual claimants of their harvest decisions subject to government restrictions that protect public goods

portfolio management of wild fish stocks abstract managing fish stocks in terms of a portfolio of economic assets is likely to significantly increase benefits for society relative to single species approaches a portfolio framework systematically combines fish stocks that are joined by ecology e g predation competition and unspecialized fishing technologies e g mixed species trawls into a portfolio which balances expected aggregate returns against the risks associated with stock attribute and other uncertainties to be productive however this framework must be combined with property rights institutions that clearly state management objectives create long run time horizons among harvesters internalize spillovers caused by ecological and technological jointness and reduce uncertainty through research and adaptive management although the cost of reducing scientific uncertainty about ecological interactions may limit the portfolio approach to intensive management of relatively few species its scope can be broadened to integrate tradeoffs among more types of marine resources such as nature preserves and oil and gas deposits

dynamic branching and interest rate competition of commercial banks evidence from hungary abstract i supplement previous models of bank competition by incorporating the endogenous branching choices of commercial banks i apply a dynamic structural model of banks branching and interest rate choices to a unique bank level dataset on hungarian commercial banks during 2004 2007 i find that banks charge a premium in interest rates for relative branch network dominance and banks with relatively smaller networks are less likely to close branches i present significant and robust estimates of branch setup costs and scrap values and discuss the potential use of branching restrictions as regulatory tools to alter lending rates and consumer surplus

quality discrimination among income constrained consumers abstract this paper provides a complete characterization of equilibrium menus offered by a monopolist to the income constrained consumers in a vertically differentiated market even when all consumers have the same marginal willingness to pay the monopolist can profitably discriminate between them provided they have different binding budget constraints

asymmetric information and the structure of the banking industry abstract we analyze the effects of informational asymmetries on the market structure of the banking industry in a multi period model of spatial competition in the process of lending incumbent banks gather proprietary information about their clients acquiring an advantage over potential entrants we show that these informational asymmetries are important determinants of the industry structure and of banks strategic behavior contrary to traditional models of horizontal differentiation the steady state equilibrium is characterized by a finite number of banks even in the absence of exogenous fixed costs in addition less concentrated industry structures may be associated with higher interest rates

demand fluctuations in the ready mix concrete industry i investigate the role of demand shocks in the ready mix concrete industry using census data on more than 15 000 plants i estimate a model of investment and entry in oligopolistic markets these estimates are used to simulate the effect of eliminating short term local demand changes a policy of smoothing the volatility of demand has a market expansion effect the model predicts a 39 increase in the number of plants in the industry since bigger markets have both more plants and larger plants a demand smoothing fiscal policy would increase the share of large plants by 20 finally the policy of smoothing demand reduces entry and exit by 25 but has no effect on the rate at which firms change their size

imperfect competition in bank retail markets deposit and loan rate dynamics and incomplete pass through this paper examines determinants of pass through from the market interest rate to bank retail deposit and loan rates a dynamic adjustment cost model with imperfect competition implies that these rates depend on own lagged values and on lagged current and expected future values of the security rate greater competition in retail markets reduces the impact of lagged and expected rates on current retail rates while raising the effect of the current security rate yielding greater pass through these results have important implications for both the specifications used in empirical work and biases introduced into estimates of pass through effects

partial enclosure of the commons abstract we examine the efficiency distributional and environmental consequences of assigning spatial property rights to part of a spatially connected natural resource while the remainder is competed for by an open access fringe we refer to this as partial enclosure of the commons we obtain sharp analytical results regarding partial enclosure of the commons including 1 while second best it typically improves welfare relative to no property rights 2 all resource users can be made better off 3 positive rents arise in the open access area and 4 the resource maintains higher stocks under spatial heterogeneity we also characterize spatial regions that are ideal candidates for partial enclosure typically society should seek to enclose those patches with high environmental productivity and high self retention but whether high economic productivity promotes or relegates a patch may depend on one s objective

fishery management under multiple uncertainty abstract among others who point to environmental variability and managerial uncertainty as causes of fishery collapse roughgarden and smith proc natl acad sci 93 1996 5078 argue that three sources of uncertainty are important for fisheries management variability in fish dynamics inaccurate stock size estimates and inaccurate implementation of harvest quotas we develop a bioeconomic model with these three sources of uncertainty and solve for optimal escapement based on measurements of fish stock in a discrete time model among other results we find 1 when uncertainties are high we generally reject the constant escapement rule advocated in much of the existing literature 2 inaccurate stock estimation affects policy in a fundamentally different way than the other sources of uncertainty and 3 the optimal policy leads to significantly higher commercial profits and lower extinction risk than the optimal constant escapement policy by 42 and 56 respectively

branch banking and the geography of bank pricing we show that bank branching tends to mitigate localized market power by broadening the geographic scope of competition among banks even though branch banking allows banks to differentiate themselves through their choices of branch locations banking services at peripheral locations will be priced more competitively when those locales are served by branch networks we develop a theoretical model in support of this view and offer empirical evidence

a comment on a model of vertical product differentiation in a duopoly model with vertical differentiation if the firms do not cover the market the lower quality firm chooses a quality level exactly 4 7 of that of the higher quality firm and chooses a price that is 2 7 of the price of the higher quality firm copyright 1992 by blackwell publishing ltd

the structure of a contract and the theory of a non exclusive resource the process of arriving at a useful concept of analysis is not only slow and painful but also may go astray and attain nothing useful someone begins with one example or observation followed by a theory which is intuitively plausible a theoretical term associated with a vague concept is coined examples of a seemingly different type emerge which call for another theory the process goes on as examples and theories continue to accumulate the different categories under the same heading of analysis serve only to confuse and each associated theory becomes ad hoc such has been the fate of the concept of externality a more useful approach i think is via contractual conditions the example chosen for illustration is marine fisheries where the fishing right is taken

property rights regimes and natural resources a conceptual analysis the term common property resource is an example of a term repeatedly used to refer to property owned by a government or by no one it is also used for property owned by a community of resource users such usage leads to confusion in scientific study and policy analysis in this paper we develop a conceptual schema for arraying property rights regimes that distinguishes among diverse bundles of rights ranging from authorized user to claimant to proprietor and to owner we apply this conceptual schema to analyze findings from a variety of empirical settings including the maine lobster industry

spatial competition in the banking system localization cross subsidies and the regulation of deposit rates abstract the paper analyses a spatial competition model of the banking sector banks offer two kind of services deposits and credit and can either borrow or lend on the money market we investigate the consequences of the regulation of rates paid on deposits the main conclusions are as follows regulation first increases network size beyond social optimum in the long run it results in lower equilibrium credit rates because of increased competition secondly regulation generates tied sales contracts by which banks propose bundles of credit and deposit services tied sales in turn motivate the introduction of cross subsidies between the two activities the rent levied upon regulated deposits financing lower rates in the credit market finally it is shown that in a regulated environment the effectiveness of monetary policy is reduced in the sense that fluctuations of money market rates are less than fully transmitted in credit rates

common property and collective action in economic development abstract a fundamental issue in many ldcs is the degree to which natural resource mismanagement is caused by common property arrangements this view has led to widespread attempts to privatize forests rangelands and water resources many of these efforts have failed to stop overuse and have contributed to inequality in resource distribution this paper seriously questions this approach and describes a number of reasons why common property may continue to be both efficient and equitable complementing and combining with private rights in a way consistent with the resource endowments of village economies a theoretical approach is outlined showing that the tragedy of the commons is an unsatisfactory model of common property an alternative model is presented together with a call for research into institutional alternatives in resource management

unraveling the multiple margins of rent generation from individual transferable quotas individual transferable quotas itqs induce changes along both the extensive margin via consolidation of quota among fewer vessels and the intensive margin as harvesters adjust their behavior to itq incentives we use itq introduction in the bering sea crab fishery to decompose the sources of rent generation across both margins we embed an empirically calibrated structural model of the harvesting process into a sector level model allowing us to experimentally unravel the itq treatment we show that the magnitude and source of rent generation under itqs critically depends on the manner and degree of rent dissipation before itqs are implemented

the dynamic efficiency costs of common pool resource exploitation we conduct the first empirical investigation of common pool resource users dynamic and strategic behavior at the micro level using real world data fishermen s strategies in a fully dynamic game account for latent resource dynamics and other players actions revealing the profit structure of the fishery we compare the fishermen s actual and socially optimal exploitation paths under a time specific vessel allocation policy and find a sizable dynamic externality individual fishermen respond to other users by exerting effort above the optimal level early in the season congestion is costly instantaneously but is beneficial in the long run because it partially offsets dynamic inefficiencies jel d24 q21 q22

contracting problems and regulation the case of the fishery the inefficiencies of common property fisheries are of continuing concern to economists the early work by scott gordon 1954 and anthony scott 1955 outlined the problem and later studies by james crutchfield and giulio pontecorvo 1969 and frederick bell 1972 provided empirical estimates of the losses that result those studies were followed by the dynamic models of colin clark 1976 and james quirk and vernon smith 1970 of optimal harvest rates and the use of corrective taxes or quotas to achieve them but in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria most fisheries retain common property aspects with overcapitalization and excessive labor input why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper we examine a number of fisheries but focus on the texas shrimp industry which is one of the nation s most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere it is considered overcapitalized and catch per unit of effort is falling 2 examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses the regulatory environment in texas is complicated by conflict within the fishery between inshore and offshore fishermen the latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the gulf the inshore fishery is highlighted by another issue the recent resettlement of some 30 45 000 vietnamese refugees including many fishermen along the texas coast marine advisory service paul starr their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights bay shrimpers have lobbied the texas legislature for broad limits on new entrants yet ironically the sale of additional boats by individual shrimpers to the vietnamese has facilitated entry of the refugees into the fishery regulations in the texas shrimp and other fisheries are incomplete leaving many options for rent dissipation uncontrolled because of high contracting costs among fishermen and political factors that mold government actions contracting costs are high among heterogeneous fishermen who vary principally with regard to fishing skill 3 montana state university and texas a m university respectively we benefitted from comments by terry anderson raymond c battalio gardner brown oscar burt micha gisser wade griffin john r moroney anthony d scott peter temin and participants in workshops at texas a m university and the university of washington research assistance was provided by scott barnhart and phil mizzi funding was provided by sea grant texas a m university throughout this paper we use the terms common property and open access interchangeably here the terms describe a situation where no property rights group or individual exist s for the resource 2catch per unit of effort in the inshore texas gulf and federal gulf waters is presented for 1963 77 by w l griffin c g tydlacka and w e grant they show catch per unit of effort generally falling in inshore and offshore waters while catch per unit of effort fluctuates from year to year it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 the common property nature of the fishery is reflected in the following statistics since 1975 the number of vessels has grown by 23 percent nelson swartz for fish houses the record of entry is similar between 1970 a d 1977 the number of firms grew from 259 to 287 though during that period many left the industry as others entered the number of fish houses was calculated from license data supplied by the texas parks and wildlife department the record of entry by fish houses suggests that monopsony as discussed by colin clark and gordon munro is absent in the fishery 3there may be minor differences in labor leisure choices and capital but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill government regulations in the texas bays restrict capital and our empirical evidence shows boats to be relatively homogeneous

reputation and uncertainty toward an explanation of quality problems in competitive ldc markets abstract this paper attempts to explain the puzzle of low and variable product qualities in seemingly competitive ldc markets it shows that the cost of overcoming quality moral hazard through seller reputation rises with the rate of interest the rate of seller turnover the amplitude of idiosyncratic cost fluctuations and the relative scarcity of exogenous entry costs since markets with a multiplicity of small producers are more likely to have these characteristics they are more susceptible to suffering from quality problems the model developed here in particular highlights the role of cost variations in impeding the function of reputation in markets with moral hazard and adverse selection the derived conditions for the persistence of quality problems contribute to the explanation of quality differences between similar markets in developed and less developed countries