distributed energy infrastructure paradigm community microgrids in a new institutional economics context abstract this paper provides a theoretical framework based on new institutional economics nie concepts to guide the development of community microgrids given limited application thus far of such energy systems this paper also draws on empirical studies and experiences from the planning and development of other public community infrastructure and utility services in the development of this framework it links an efficient ownership and governance structure with transactional characteristics such as asset idiosyncrasy frequency and uncertainty defined in section 3 1 the key role of the customers and the microgrid service provider and more specifically their bilateral monopoly relationship and its effects on the choice of institutional structure is highlighted the paper examines the optimum conditions for public private or hybrid financial ownership and for unified or network governance through long term contracting this allows ex ante investment uncertainty and ex post appropriation risks to be efficiently managed the analysis suggests that long term contract completeness future demand for electricity and level of uncertainty are the determining factors in the selection of institutional structure this has significant real world implications for the communities seeking to achieve electricity self sufficiency and environmental benefits through community microgrids service providers and other private or public actors

transfers in a polarized country bridging the gap between efficiency and stability we consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession the country is efficient if its break up into smaller countries leads to aggregate utility loss we show that in an efficient country whose citizens preferences exhibit a high degree of polarization a threat of secession cannot be eliminated without interregional transfers we also demonstrate that if majority voting is used to determine the redistribution schemes within the country then a high degree of polarization yields the full compensation scheme as the unique political equilibrium

the new institutional economics and the theory of behaviour under uncertainty the new institutional economics nie is diverse in terms of the theory of behaviour under uncertainty some views are close to neoclassical economics but others are similar to those held by heterodox economists distinctions between procedural and substantive uncertainty weak and strong uncertainty and ambiguity and fundamental uncertainty help to identify different approaches to uncertainty in nie regarding the influence of institutions on economics behaviour not all nie focuses on institutions as constraints and takes individuals as given the dominant views of rationality in nie are standard neoclassical maximization and bounded rationality but alternative notions have also been defended

the new institutional economics this outstanding book presents new original contributions from some of the world s leading economists including ronald coase douglass c north masahiko aoki oliver e williamson and harold demsetz it demonstrates the extent and depth of the new institutional economics research programme which is having a worldwide impact on the economics profession

asymmetric equilibria in spatial competition under weakly concave scoring rules abstract the hotelling downs model of spatial competition is used to investigate the strategic position taking behavior of firms or political parties under scoring rules previous studies of non convergent nash equilibria equilibria in which divergent positions are chosen found that they often do not exist and when they do they are fairly symmetric in particular this is true for convex scoring rules cahan and slinko 2017 here we investigate non convergent equilibria for the broad class of weakly concave scoring rules surprisingly we find that only asymmetric equilibria can exist and we present several examples

towards an economics of well being there is growing concern that presently dominant frameworks in economics no longer provide a way of adequately addressing and analysing the problems of today s globalising and rapidly changing world this article makes a number of fundamental proposals about how we might reframe economics to move it towards a clearer focus on human well being it develops arguments for a change in the basic ontological proposition and for the need to see the economy as an instituted process of resource allocation from this viewpoint economics is then the study of resource allocation decisions and processes and the forces that guide these from a human perspective it is about understanding who gets what under what conditions and why the paper argues that a pluralist approach to understanding the economy is necessary for political analytical and technical reasons drawing on a range of contributions to heterodox economics the paper argues that if we are to understand current crises and challenges then our understanding of resource allocation in society must have a broader scope than is present in mainstream economics it proposes a rethinking of economic agency and provides a critique of rational behaviour that is founded in shifting the emphasis from a narrow conception of welfare to well being acknowledging human well being as a multidimensional concept the relationship between the well being of the person and the collective is reconsidered and the methodological implications for the issue of aggregation are discussed the article seeks to serve as a point of departure for formulating new research questions exploring the relationships between human well being and economic development and analysing economic behaviour and interactions in such a way as to bring us closer to peoples realities on the ground

three problems of social organisation institutional law and economics meets habermasian law and democracy this paper attempts to identify certain implications of habermasian ethics for the economic analysis of law it does so by demonstrating a complementarity between the habermas of between facts and norms and the veblen ayres commons tradition s of economic analysis three unresolved problems of social organisation raised by the institutionalists are addressed the legitimacy of the status quo ante buchanan schmid the legitimacy of society s transaction structure klevorick and the problem of social order hobbes platteau discourse ethics demonstrates how these problems may be resolved the model of human agency adopted in institutional law and economics permits an easier fit with discourse ethics than would be possible with the neoclassical traditions

spatial equilibrium with entry this paper examines spatial equilibrium in political competition when established parties choose their platforms competitively while rationally anticipating entry of a vote maximizing third party the resulting equilibrium is substantially different from the hotelling median equilibrium established parties are spatially separated and third parties will generally lose the election this provides one theoretical explanation for the stability of two party systems namely that non cooperative behavior between established parties can effectively prevent third parties from winning

the government financial system and large private enterprises in the economic development of south korea abstract the paper investigates the main characteristics of the government business relationship in south korea in the past three decades to find out how it may have contributed to south korea s economic development it proposes that the government and large private enterprises in south korea should be viewed as constituting an internal organization namely a quasi internal organization as such extensive intervention by the government with south korea s financial system can be viewed as an internal capital market and consequently it could have led to a more efficient allocation of credit than possible in a free market financial system it also argues that the quasi internal organization has made it possible for the government to efficiently implement its developmental policies it is however pointed out that for the quasi internal organization to be successful in accelerating the pace of economic development the country must have a political leadership committed to the goal of economic development and must adopt an outward oriented development policy

multivariate tests of the zero beta capm abstract a cross sectional regression test csrt of the capm is developed and its connection to the hotelling t2 test of multivariate statistical analysis is explored algebraic relations between the csrt the likehood ratio test and the langrange multiplier test are derived and a useful small sample bound on the distribution function of the csrt is obtained an application of the csrt suggests that the crsp equally weighted index is inefficient but that the inefficiency is not explained by a firm size effect from february to december

economics of transaction costs saving forestry following the arguments concerning the problems of traditional forest economics in putz 2000 this article shows that transaction cost economics can overcome some of the shortcomings of the main stream forest economics the public forestry subsistence forestry non industrial private forestry china s share holding forestry and their revolutions are analyzed by the relative transaction costs of labor capital land and forest products potential implications of transaction cost economics in forest policy including regulated access to commons sustainable forestry criteria ecological certificates and land tenure decentralization have also been discussed 2001 elsevier science b v all rights reserved

the contained rivalry requirement and a triple feature program for business ethics this paper proposes a description of the moral obligations of economic agents it will show that a threefold division should be adopted to distinguish moral obligations applying to their interactions in the market obligations applying to their interactions inside business firms and obligations applying to their interactions with agents outside the market competition might be permissible in the first case since markets are special patterns of social interactions called adversarial schemes they produce their benefits when agents try to satisfy exclusive preferences at the expense of others however moral obligations inside the firm and moral obligations outside the market are of a different nature this argument will be developed in the two first parts of this paper in the third part it will outline the relevant strengths of that account in relation with two popular views of economic agents moral obligations the shareholder primacy view and the stakeholder theory

coase s choice of methodology this paper examines the nature of ronald h coase s realism by considering the relationship between theories and facts in his methodology i focus especially on coase s criticisms of friedman s 1953 essay as set out in a lecture published in 1982 it is shown that in developing his argument coase applies his institutional economics to address the question of how economists operating within a regulated market for ideas choose their theories he calls for realism in methodology and carries out an empirical study of economists choices he explores how the profession is regulated and highlights how discourse impacts on the functioning of science a key question addressed within this paper is how can coase maintain a sociological and rhetorical view of science without falling into relativism i identify the different motives for theory choice that coase considers and show that his answer is both institutional and epistemic this helps to clarify the status of the empirical basis in coase s methodology and sheds new light on the nature of his realism i conclude by carrying out a reflexive analysis of coase s text as a text that attempts to justify the methodology on which it is itself based

keeping up with the joneses and optimal diversification abstract peer effects have been shown to affect behavior and can generally lead to investments choices that are mean variance inefficient this paper analyzes optimal diversification with peer effects we show that if individuals have keeping up with the joneses preferences and they take their peer group reference as the market portfolio markowitz s mean variance efficiency analysis and the capm equilibrium are intact this holds for any keeping up preferences as well as heterogeneous combinations of such preferences these results also extend to the merton levy segmented market model

aggregation and social choice a mean voter theorem a celebrated result of black 1948a demonstrates the existence of a simple majority winner when preferences are single peaked the social choice follows the preferences of the median voter the median voter s most preferred outcome beats any alternative however this conclusion does not extend to elections in which candidates differ in more than one dimension this paper provides a multi dimensional analog of the median voter result we provide conditions under which the mean voter s most preferred outcome is unbeatable according to a 64 majority rule the conditions supporting this result represent a significant generalization of caplin and nalebuff 1988 the proof of our mean voter result uses a mathematical aggregation theorem due to prekopa 1971 1973 and borell 1975 this theorem has broad applications in economics an application to the distribution of income is described at the end of this paper results on imperfect competition are presented in the companion paper caplin and nalebuff 1991

on multivariate tests of the capm abstract this paper evaluates the power of multivariate tests of the capital asset pricing model the results indicate that when employing an unspecified alternative hypothesis the ability of the tests to distinguish between the capm and other pricing models is poor an upper bound is derived for the distance the alternative distribution of the test statistic can be from the null distribution when the deviations from the capm are due to missing factors this upper bound explains the low power of the tests

coase on the nature of economics recent writings on coase s methodology largely focus on method at the risk of underappreciating his substantive view of economics that economics has as its subject matter the working of the real world economic system is coase s main methodological message and is also the key to understanding coase s other methodological concerns coase s methodological position is illustrated in this paper by comparing him with other economists in terms of their differing research programmes informed by their methodological stances along the way this paper outlines the new institutional economics a research programme inspired by coase s methodology copyright 2003 oxford university press

the hotelling downs model with runoff voting we consider the hotelling downs model with n 2 oce seeking candidates and runo voting we show that nash equilibria in pure strategies always exist and that there are typically multiple equilibria both convergent all candidates are located at the median and divergent candidates locate at distinct positions though only divergent equilibria are robust to free entry moreover two policy equilibria exist under any distribution of voters ideal policies while equilibria with more than two policies exist generically but under restrictive conditions that we characterize

technological learning and renewable energy costs implications for us renewable energy policy abstract this paper analyzes the relationship between current renewable energy technology costs and cumulative production research development and demonstration expenditures and other institutional influences combining the theoretical framework of learning by doing and developments in learning by searching with the fields of organizational learning and institutional economics offers a complete methodological framework to examine the underlying capital cost trajectory when developing electricity cost estimates used in energy policy planning models sensitivities of the learning rates for global wind and solar photovoltaic technologies to changes in the model parameters are tested the implications of the results indicate that institutional policy instruments play an important role for these technologies to achieve cost reductions and further market adoption

the new institutional economics and its applicability to development abstract the several remarkable developments in the social sciences which have come to be known as the new institutional economics nie have not yet been fully exploited for analyzing the determinants and effects of institutional change in the context of development this paper identifies two important components of the nie and illustrates both a potential complementarities between them and b their applicability to various problems and policies in the long term development of developing countries

small sample tests of portfolio efficiency abstract this paper presents an eigenvalue test of the efficiency of a portfolio when there is no riskless asset complementing the test of gibbons ross and shanken 1989 besides optimal upper and lower bounds an easily implented numerical method is provided for computing the exact p value our approach makes it possible to draw statistical inferences on the efficiency of a given portfolio both in the context of the zero beta capm and with respect to other linear pricing models as an application using monthly data for every consecutive five year period from 1926 to 1986 we reject the efficiency of the crsp value weighted index for most periods

electoral competition with third party entry in the lab abstract electoral competition between two vote share maximizing candidates in the context of the unidimensional spatial model leads to platform convergence both candidates end up proposing the ideal policy of the median voter downs 1957 palfrey 1984 famously argued that if third candidate entry is expected after the two main candidates choose their platforms the unique equilibrium is such that the two main candidates locate substantially far from each other by conducting a laboratory experiment we put this popular idea to test for the first time we allow entry to take place with four different probabilities and find that indeed the degree of polarization of the two main candidates platforms increases as third candidate entry becomes more likely to occur providing strong evidence in support of palfrey 1984 s formal results and underlying intuition

sustainability economics as a contested concept sustainability economics as a concept is interpreted differently in different publications some authors look for a modification of mainstream neoclassical economics while the present author regard

tax harmonization and tax competition in the european union lessons from switzerland abstract this paper presents empirical evidence on individual income tax competition in switzerland tax competition has some influence on the spread of people with high income over the cantons and it is partly capitalised in dwelling rents however it neither leads to a collapse of public good supply nor makes redistribution by the fiscal authorities impossible thus if tax competition works well in switzerland there is no reason why it should have disastrous effects in a future european union

theoretical comparisons of electoral systems abstract elements of an economic theory of political institutions are introduced a variety of electoral systems are reviewed cox s threshold is shown to measure incentives for diversity and specialization of candidates positions when the number of serious candidates is given duverger s law and its generalizations are discussed to predict the number of serious candidates duverger s law is interpreted as a statement about electoral barriers to entry and this idea is linked to the question of the effectiveness of democratic competition as a deterrent to political corruption the impact of post electoral bargaining on party structure in presidential and parliamentary systems is discussed

the convention on biological diversity a conventionalist approach the erosion of biological diversity pertains to the category of problems that are brought to the fore in debated universes there are scientific controversies about their definition import and possible solutions and they involve opposing economic interests and political strategies a convention commonly shared values set of definitions rules and norms implying a compromise among various actors and groups is needed to define and enforce policies the convention on biological diversity can be seen as an attempt to define such a middle ground the rights and policy orientations it promotes are however challenged by overlapping norms and rules enacted in other arenas such as the wto the purpose of this paper is to take up a conventionalist stance on the complex international regime that governs biodiversity management and conservation policies

the likelihood ratio test statistic of mean variance efficiency without a riskless asset abstract the question whether a given porfolio is mean variance efficient is a basic problem of investment analysis mean variance efficiency is also the basis of the capital asset pricing model this paper presents the explicit form of the likelihood ratio test of the hypothesis that a given portfolio or a particular market index is ex ante mean variance efficient in the case where there is no riskless asset geometric relations are illustrated to provide intuition about the constrained maximum likelihood estimators and the test statistic and two simple economic interpretations of the test are given

would letting people vote for multiple candidates yield policy moderation abstract we investigate whether letting people vote for multiple candidates would yield policy moderation we do so in a setting that takes three key features of elections into account namely strategic voting endogenous candidacy and policy motivation on the part of the candidates we consider two classes of voting rules one class consists of the voting rules where each voter casts several equally weighed votes for the different candidates the other class consists of the voting rules where each voter rank orders the candidates we identify conditions under which these voting rules yield policy moderation we also show that these voting rules may yield policy extremism instead of policy moderation if one or several of the conditions is not satisfied finally we find that amongst these voting rules the extent of policy moderation is maximal under the borda count if we consider only equilibria where all candidates are serious contenders however this result does not carry over to spoiler equilibria where approval voting can yield more moderate policy outcomes than the borda count

the new economics of organization over the last ten years or so an important new approach to the study of organizations has emerged within economics it is perhaps best characterized by three elements a contractual perspective on organizational relationships a theoretical focus on hierarchical control and formal analysis via principal agent models this paper provides political scientists with an overview of the new economics of organization and explores its implications for the study of public bureaucracy so far positive political theory has not contributed much to our understanding of public bureaucracy in part this is due to the unsympathetic treatment that rational modeling and most other modes of quantitative analysis have long received from students of public administration the other side of the coin however is that positive theorists have not made much of an effort to develop theories of bureaucracy their concerns have centered around two basic mechanisms of social choice voting and markets and they have devoted little systematic attention to a third mechanism that is clearly important for understanding how societies and other aggregates make collective decisions this third and relatively unexplored mechanism is hierarchy movement toward a positive theory of hierarchies would fill a serious gap in the social choice literature while at the same time making a theoretical contribution that strikes to the essence of public bureaucracy indeed of all organizations in fact significant steps toward a positive theory of hierarchies have very recently been taken but by economists not political scientists in small numbers of course economists made contributions to the study of public bureaucracy some time ago with the pioneering works of downs 1967 tullock 1965 and niskanen 1971 but this new wave of theoretical work is different it is already a large complex body of literature that is the focus of innovation and excitement among a growing number of economists and it reflects an unusual degree of theoretical coherence and cumulative effort work in this tradition tends to receive orientation from a distinctive economic approach to the analysis of organizations an approach perhaps best characterized by three elements a contractual perspective on organizational relationships a focus on hierarchical control and formal analysis via principal agent models this approach has emerged from recent attempts to move beyond the neoclassical theory of the firm which assumes away all organizational considerations to a theory of economic organizations that can explain why firms corporations and other enterprises behave as they do propo

the search for a development economics abstract in this paper i first note some of the pieces of evidence that suggest that development has gone reasonably well since the early 1950s then i discuss why this evidence is not fully convincing and examine the content and sources of development failures the main reason why development is so often accompanied by disappointment and tensions is that it is largely an effort to replicate the west rather than an effort to set in motion an indigenous process of change within the traditional sectors themselves the efforts to replace the values and institutions and relationships of the traditional society by imported ones create tensions and uncertainty that can offset the increase in welfare that larger amounts of goods and services could produce if the present less developed countries do not seek to imitate present gnp rich countries what approach is available to them a country must find its own way and to do this it must search it must learn it must choose and it must do all these things in a world with gnp rich countries readily available for imitation the content of these three notions search learning choice is examined in some detail in the last part of the article

veblen s evolutionary programme a promise unfulfilled this article examines in detail the way in which veblen attempted to give theoretical expression to the programme for an evolutionary economics that he outlined in methodological terms in his 1898 essay why is economics not an evolutionary science veblen s conception of darwinian methodological principles led him to attempt to develop a theory of institutional evolution that was purely causal in nature this theory was never satisfactorily developed by veblen at base his theory was one of new technology changing economic conditions and new economic conditions leading to new ways of thinking and to new institutions through a non intentional process of habituation those who attempted to follow veblen such as hoxie and mitchell found difficulties with the key aspects of this theory and both men came to abandon it institutionalism in the interwar period is devoid of attempts to develop veblen s theory and veblen s programme remained a promise unfulfilled

spot pricing of electricity arguments and prospects abstract the paper in this issue extend the early literature on spot pricing but differences of opinion still remain between proponents and critics mathematical models designed to prove that spot pricing is socially optimal are unpersuasive regrettably there are no further empirical estimates of the consequences costs and benefits of spot pricing but previous studies suggest that it would be profitable and economic for a significant subset of large industrial users current moves to deregulate and privatize electricity industries are likely to stimulate rather than hinder the adoption of spot pricing

institutions in theories of land markets illustrated by the dutch market for agricultural land theories of land markets should be intellectually sound and should be able to explain and predict market outcomes such as price and volume of transactions changes in these and locations of different land uses theories based on neo classical economics which largely ignore the role of institutions are not intellectually sound because it is known that markets cannot work without institutions nor do these theories predict outcomes satisfactorily moreover they assume market mechanisms and do not investigate them critically this paper explores how institutions may be taken into account in theories of land markets and whether that leads to better theories both of market outcomes and of market processes new institutional economics provides the tools to investigate how the interactions between market actors are influenced by institutions and the old institutional economics emphasises how institutions influence the motivations and preferences of those actors the conclusion is that there cannot be a general theory of land markets only theories with a limited applicability and scope such theories can be used to explain the effects of small changes and to predict the effects of marginal changes in institutions in that latter use these theories can be used for designing land policy how institutions can be incorporated into theory is illustrated by analysing the dutch market for agricultural land this shows how institutions affect the outcomes in that market and the consequences for the transformation of land from agriculture to urban use

potential performance and tests of portfolio efficiency abstract the potential performance of an asset set may be obtained by choosing the portfolio proportions to maximize the sharpe 1966 performance measure if a portfolio has a sharpe measure equivalent to the potential performance of the underlying set of assets then it is efficient multivariate statistical procedures for comparing potential performance and testing portfolio efficiency are developed and then evaluated using simulations two likelihood ratio statistics are then used to compare stock and bond indices against sets of 20 and 40 portfolios the procedures are also compared to the gibbons 1982 methodology for testing financial models

the nature of long run technological change innovation evolution and technological systems abstract the aim of this paper is to define the concept of technological system as a useful tool for analysing the technological performance of an economy in order to deal with system openness and related concepts the main methodological issues are presented paying particular attention to the evolutionary methodological foundations of the process of technological change then the main building blocks of a technological system and its dynamics are analyzed in order to highlight the relevant features of this approach an empirical comparison between german and italian technological systems is then performed

territories development and specific resources what analytical framework most theoretical forms of regional development are based on the assumption that territory plays an active role in regional dynamics such a point of view risks generalizing regional development forms as a general model of development the point of view exposed here is that rather than considering territorial forms of production as a starting point it is possible to put the focus on the phenomena underlying regional development thus considering it as a result rather than a starting point most approaches use the distinction between generic and specific resources as a foundation of regional differentiation the approach here focuses on the process of specification of resources their dimensions and their repercussions for paths of regional development

factor pricing in a finite economy abstract prior theoretical derivations of the arbitrage pricing theory apt bound an aggregate measure of the deviation of mean asset returns from that predicted by a linear pricing equation it is conceivable given this bound that some assets might be badly mispriced by the model in this paper a more intuitive derivation of the factor pricing equation is presented which describes the deviation on an asset by asset basis the deviation is shown to be small for assets in a realistic finite economy and is arbitrarily close to zero for those assets with arbitrarily small size relative to aggregate wealth it follows that the linear pricing equation provides a good approximation for the mean returns of all traded assets

multivariate proxies and asset pricing relations abstract a framework is developed in which inferences can be made about the validity of an equilibrium asset pricing relation even though the central aggregate in this relation is unobservable a multivariate proxy for the true market portfolio consisting of an equal weighted stock index and a long term government bond index is employed in an investigation of the sharpe lintner capm the empirical evidence suggests that we can reject the joint hypothesis that a capm is valid and b multiple correlation between the true market portfolio and proxy assets exceeds 0 7 connections to the equilibrium factor pricing literature are also explored

electoral rules strategic entry and polarization abstract how does electoral rule disproportionality affect the structure of the party system i e the number and the policy platforms of the competing parties by studying a model where both party entry and platform choice are endogenous we are able to provide a unified theory an increasing electoral rule disproportionality exhibits a a first order negative effect on platform polarization b a second order negative effect on the number of parties as polarization decreases centrist parties are squeezed between other contenders and prefer not to enter and c an additional third order negative effect on polarization via the reduction of the number of parties we then conduct a laboratory experiment and strongly confirm the theoretical predictions of the model

on the difficulty of evolutionary analysis thorstein veblen s 100 year old question why is economics not an evolu tionary science remains relevant evolutionary analysis even for those social scientists who trace their intellectual heritage to evolutionary thought has been difficult for three reasons effective incorporation of time requires a respectful and detailed treatment of the past dominant social science paradigms have made it difficult to account for novelty and concern with policy and current issues of social debate creates a tendency towards taxonomy the twentieth century history of economic anthropology and institutional economics illustrates that a failure to overcome these difficulties leaves veblen s vision unfulfilled the reasonable reaction to veblen s famous question why is economics not an evolutionary science is to ask a further question why is it still not an evolutionary science and then to continue with the questions why are the other social sciences not evolutionary sciences why especially have the american institutionalists who claim veblen as a founding father and who have an organisation called the association for evolutionary economics found evolutionary analyses difficult in this paper i propose to address these questions by examining aspects of the history of one discipline anthropology and one subdiscipline institutional economics that emerged from the evolutionary vision of the late nineteenth century 1 veblen s anthropological roots were

ecological economics in relation to democracy ideology and politics two recent studies and policy documents are discussed in the present article one is a un report prepared by experienced politicians as input into the 2012 rio de janeiro conference the other a st

values ideology and politics in ecological economics abstract ecological economics is built on a value commitment to study environmental issues and to contribute constructively to a more sustainable development path however many ecological economists still hesitate it appears to depart too much from other scholars by openly addressing issues of values and ideology in this essay the role of the scholar s orientation with respect to values and ideology is addressed it is observed that not only scholars but also actors in society are guided by their ideological orientation this leads to the idea that some of the weaknesses of economic man and profit maximising firm assumptions can be mitigated by introducing a political economic person and a political economic organisation

debt and communications technology diffusion retrospective evidence this study has evaluated the relationship between debt in the capital structure of firms and the dynamics of broadband and digital technology adoption in the united states based on a large dataset on local exchange carriers in the united states over a contemporary historical fourteen year period from 1988 to 2001 using treatment effects modeling the impact of debt in impacting the levels of firms broadband deployment has been found to be negative and significant the primary source of debt in the sector has been in the form of arm s length corporate bonds and the assumptions of the monitoring hypothesis associated with such debt that lenders in the face of information and collective actions problems might not be able to control managers and hence invest less in highly technology intensive situations are supported by the data additionally the data set has been split into separate sets for two periods one between 1988 and 1995 for the period before the telecommunications act of 1996 came into force and the other set between 1996 and 2001 and the results have stayed consistent a test of the coefficients between the two periods has shown that the negative impact of leverage on broadband deployment has become stronger after the introduction of competition in the sector and this has suggested that the change in the institutional logics between the two periods has been of material impact in influencing lenders perceptions

institutional arrangements in the emerging biodiesel industry case studies from minas gerais brazil connecting small family farmers to the emerging biodiesel industry requires careful design of the institutional arrangements between the producers of oil crops and the processing companies according to institutional economics theory the design of effective and efficient arrangements depends on production and transaction characteristics the institutional environment and the organizational environment supporting the transaction between producers and the industry this paper presents a comparative study on two cases in the feedstock for biodiesel industry in the state of minas gerais brazil the two case studies represent the production and transaction system of soybeans glycine max l merrill and castor beans ricinus communis l important elements of effective and efficient institutional arrangements are farmer collective action availability of technical and financial support and farmer experience with particular crops

stability in electoral competition a case for multiple votes abstract it is well known that the hotelling downs model generically fails to admit an equilibrium when voting takes place under the plurality rule osborne 1993 this paper studies the hotelling downs model considering that each voter is allowed to vote for up to k candidates and demonstrates that an equilibrium exists for a non degenerate class of distributions of voters ideal policies which includes all log concave distributions if and only if k 2 that is the plurality rule k 1 is shown to be the unique k vote rule which generically precludes stability in electoral competition regarding the features of k vote rules equilibria first we show that there is no convergent equilibrium and then we fully characterize all divergent equilibria we study comprehensively the simplest kind of divergent equilibria two location ones and we argue that apart from existing for quite a general class of distributions when k 2 they have further attractive properties among others they are robust to free entry and to candidates being uncertain about voters preferences

the theory of the firm as governance structure from choice to contract the propositions that organization matters and that it is susceptible to analysis were long greeted by skepticism by economists one reason why this message took a long time to register is that it is much easier to say that organization matters than it is to show how and why the prevalence of the science of choice approach to economics has also been an obstacle as developed herein the lessons of organization theory for economics are both different and more consequential when examined through the lens of contract this paper examines economic organization from a science of contract perspective with special emphasis on the theory of the firm

on correlations and inferences about mean variance efficiency a framework is presented for investigating the mean variance efficiency of an unobservable portfolio based on its correlation with a proxy portfolio a sensitivity analysis derives the highest correlation between the proxy and a portfolio that reverses the inference of a test of sharpe lintner tangency for example the maximum correlation between the value weighted nyse amex portfolio and a portfolio inferred tangent ranges from 0 76 to 0 48 we also test whether the correlation between the proxy and the tangent portfolio exceeds a given level this hypothesis is often rejected for the nyse amex proxy at a correlation of 0 7

an explicit bound on individual assets deviations from apt pricing in a finite economy abstract ross s arbitrage pricing theory apt is a tractible and reasonable alternative to the mean variance model nonetheless understanding of the theory has been obscured by the complexity of the sequence economy models used for motivation by contrast we give a simple and direct derivation of the apt in a finite economy using an explicit bound on the deviations from apt prices across assets a coarse calculation shows that theoretical deviations from apt pricing are negligible in our economy

a critique of the stochastic discount factor methodology in this paper we point out that the widely used stochastic discount factor sdf methodology ignores a fully specified model for asset returns as a result it suffers from two potential problems when asset returns follow a linear factor model the first problem is that the risk premium estimate from the sdf methodology is unreliable the second problem is that the specification test under the sdf methodology has very low power in detecting misspecified models traditional methodologies typically incorporate a fully specified model for asset returns and they can perform substantially better than the sdf methodology asset pricing theories such as those of sharpe 1964 lintner 1965 black 1972 merton 1973 ross 1976 and breeden 1979 show that the expected return on a financial asset is a linear function of its covariances or betas with some systematic risk factors this implication has been tested extensively in the finance literature by the so called traditional methodologies in the traditional methodologies a data generating process is first proposed for the returns and then the restrictions imposed by an asset pricing model are tested as parametric constraints on the return generating process the approach taken by the traditional methodologies has a potential problem which is that when the proposed return generating process is misspecified the test results could be misleading therefore in applying the traditional methodologies researchers typically have to justify that the proposed data generating process provides a good description of the returns for example when the proposed return generating process is a factor model one would like the model to have high r 2 in explaining the returns on the test assets especially when the test assets are well diversified portfolios as many of the earlier theories are special cases of the stochastic discount factor sdf model recent empirical asset pricing studies have been focused on testing the pricing restrictions in terms of the sdf model rather

the developmental state government and singapore s economic development since 1960 abstract government interventionism is widely acknowledged to characterize less developed countries but consensus is lacking as to whether it promotes economic development and if so how the present article analyzes the nature of government involvement in the singapore model of economic development and emergence of a developmental state closely associated with this model it compares singapore s experience with south korea s and taiwan s where government also contributed to development success and with other asian countries where government failed to play a strong developmental role

mixed equilibria in runoff elections abstract we demonstrate that the hotelling downs model with runoff voting always admits symmetric mixed strategy equilibria for any even or odd number of office motivated candidates provided they are at least four in specific a we show that the game does not admit any symmetric atomless equilibrium b we fully characterize a class of symmetric atomic mixed equilibria which exist for any distribution of the voters ideal policies and c we argue that these equilibria are more robust than pure strategy equilibria to introduction of uncertainty about the voters preferences

can analytic narrative inform policy change the political economy of the indian electricity irrigation nexus abstractagricultural electricity subsidisation has led to high electricity demand groundwater depletion and public financial burdens the policy persists although paralleled by fundamental changes in electricity governance how can lock in and policy trajectories be explained theories of institutional public choice and regulation are reviewed two game models are built to analyse narratives based on interviews and secondary historical data the findings reveal path dependencies inherent in the existing action situations resolving the current equilibrium requires changes outside the political or regulatory process such as the electricity distribution level where coordination failure impedes infrastructure improvements contributing to resistance among the agricultural electorate

institutional economics and the minimum wage broadening the theoretical and policy debate debate among labor economists on the pros and cons of a minimum wage law has come to focus on whether labor markets are competitive or monopsonistic using principles and concepts of institutional economics the author argues that this perspective on minimum wages is too narrow in particular he uses institutional theory to develop four theoretical rationales for minimum wage legislation setting a floor on wages to offset imperfect competition and inequality of bargaining power promote macroeconomic stabilization and full employment contribute to long term efficiency and growth and incorporate labor market externalities and social costs of labor one revisionist implication is that a minimum wage under plausible conditions may increase economic efficiency even in a purely competitive labor market

market culture and authority a comparative analysis of management and organization in the far east three frameworks purport to explain industrial arrangements and practices a market approach that emphasizes economic characteristics a cultural approach that sees organization as the expression of patterned values and an authority approach that explains organization as a historically developed structure of domination the efficacy of each approach is tested in explaining the organizational structures of three rapidly growing east asian economies japan south korea and taiwan the paper argues through comparative analysis that organizational growth is best explained by market and cultural factors but that authority patterns and legitimation strategies best explain organizational structure

two conceptions of economics and maximisation fil crespo ricardo fernando consejo nacional de investigaciones cientificas y tecnicas argentina universidad austral instituto de altos estudios argentina

government support for economic agendas in developing countries a behavioral model abstract a behavioral model of the roles played by the key actors in the political system of a developing country is developed and experimented with to understand circular cause and effect relationships shaping government commitment to economic development agendas the model shows that an authoritarian government whether compassionate or otherwise will be unable to provide continued support for an economic agenda since its need to increase control will eventually take priority over the need to increase public welfare

regulatory intervention on the dynamic european gas market neoclassical economics or transaction cost economics shifts at the international gas market indicate that the transaction cost perspective provides better underpinnings for european gas regulation than the current neoclassical perspective three implications are that policymakers should 1 allow alternative coordination measures to complement market exchange 2 recognize that less than perfect competition outcomes may be optimal and 3 be more reticent in prescribing interventionist measures finally the analysis provides the foundations for the empirical research required to complement this paper s theoretical approach