nash implementation a complete characterization the authors extend e maskin s results on nash implementation first they establish a condition that is both necessary and sufficient for nash implementability if there are three or more agents the case covered by maskin s sufficiency result second and more important they examine the two agent case for which there existed no general sufficiency results the two agent model is the leading case for applications to contracting and bargaining for this case too they establish a condition that is both necessary and sufficient the authors use their theorems to derive simpler sufficiency conditions that are applicable in a wide variety of economic environments copyright 1990 by the econometric society

the economic theory of agrarian institutions introduction alternative approaches to the theory of institutions in economic development pranab bardhan rational peasants efficient institutions and a theory of rural organization methodological remarks for development economics joseph e stiglitz part 1 land and labour theories of sharecropping nirvikar singh a comparison of principal agent and bargaining solutions the case of tenancy contracts clive bell contracts with eviction in infinitely repeated principal agent relationships bhaskar dutta et al production relations in semi arid african agriculture hans binswanger et al part 2 credit and interlinked transactions rural credit markets the structure of interest rates exploitation and efficiency kaushik basu credit and agrarian class structure mukesh eswaran and ashok kotwal credit rationing tenancy productivity and the dynamics of inequality avishay braverman and joseph e stiglitz on choice among creditors and bonded labour contracts t n srinivasan some aspects of linked product and credit market contracts among risk neutral agents clive bell and t n srinivasan a note on interlinked rural economic arrangements pranab bardhan interlinkages and the pattern of competition debraj ray and kunal sengupta part 3 marketing and insurance agricultural institutions for insurance and stabilization david m newbery peasants risk aversion and the choice of marketing intermediaries and contracts a bargaining theory of equilibrium marketing contracts pinhas zusman part 4 co operatives technology and the state agricultural producer co operatives louis putterman institutional analysis of credit co operatives avishay braverman and j luis guasch agrarian structure technological innovations and the state alain de janvry et al

balanced bayesian mechanisms in the transferable utility case a number of authors have identified conditions on beliefs that guarantee the existence of bayesian incentive compatible mechanisms with balanced transfers we present a new easy to interpret condition and we show that it is strictly more general than all the other conditions found in the literature we also study conditions guaranteeing the bayesian implementability of all social decision rules with balanced budget mechanisms

budget balancing incentive mechanisms abstract a p xepapadeas j environ econom management20 113 26 1991 developed a pollution abatement incentive mechanism that both reduces the information requirements of a regulator and is budget balancing drawing only on the social gains from pollution abatement to encourage firm compliance this paper demonstrates that contrary to xepapadeas the budget balancing system of random penalties cannot be used to induce compliance with the regulator s objectives if firms are risk neutral however the mechanism can be successfully applied if firms are sufficiently risk averse e rasmusen rand j econom 18 428 435 1987

on the informational superiority of quantities over prices in the presence of an externality in this study we investigate the convexity of the profit function of a regulated firm with respect to the random shocks in the marginal costs and the demand intercept and its implications regarding information disclosure when these shocks are revealed to the firm at a future stage we illustrate that information disclosure is attained when the firm is regulated through the use of a quantity rather than a price instrument to do so we argue that increased convexity obtained under complete information is a sufficient condition as a policy implication we suggest a new argument which favors the use of quantities over prices these implications are more pronounced once we allow for multiple firms

menus of price quantity contracts for inducing the truth in environmental regulation abstract many authors have proposed mechanisms to induce regulated polluting firms to truthfully reveal their private information this paper proposes an alternative scheme in which the regulator offers each firm a menu of linear price quantity contracts faced with this menu each firm s dominant strategy is to truthfully report its private information and self select the contract that is ex post efficient the proposed menu schedule that is more elastic than the firm s residual marginal damage function engenders a positive quantity effect thereby counterbalancing the firm s incentive to misreport prompted by the linearity of price due to its built in price quantity structure the scheme performs as designed regardless of the elasticities of marginal damage and demand functions

contract duration and relationship specific investments empirical evidence from coal markets this paper examines the importance of specific relationship investments in determining the duration of coal contracts negotiated between coal suppliers and electric utilities data for 277 coal contracts are used to perform the analysis the results provide strong support for the view that buyers and sellers make longer commitments to the terms of future trade at the contract execution stage and rely less on repeated bargaining when relationship specific investments are more important

a simple auction mechanism for the optimal allocation of the commons efficient regulation of the commons requires information about the regulated firms that is rarely available to regulators e g cost of pollution abatement this paper proposes a simple mechanism that implements the first best for any number of firms a uniform price sealed bid auction of an endogenous number of transferable licenses with a fraction of the auction revenues given back to firms paybacks which rapidly decrease with the number of firms are such that truth telling is a dominant strategy regardless of whether firms behave non cooperatively or collusively the mechanism also provides firms with incentives to invest in socially optimal r d jel d44 d62 d82 q28 regulatory authorities generally find that part of the information they need for implementing an efficient regulation is in the hands of those who are to be regulated regulating externalities such as access to common resources e g clean air water streams fisheries etc is a good example environmental regulators for example know little about firms pollution abatement costs so without communicating with firms they would be unable to establish the efficient level of pollution a number of mechanisms have been proposed for inducing firms to reveal their private information but for different reasons

transaction costs strategic interaction and farm restructuring this article offers a transaction cost explanation for the different paths of organizational adjustment in the case of the former state and collective farms in czech republic after 1989 the focus is the strategic interaction among the stakeholders in the agricultural organization undergoing restructuring in the presence of a neutral institutional environment the number of players involved in the intraorganizational process their ability to make collective decisions and their perceived payoffs in alternative farming structures determine the restructuring outcome these factors influence the choice between maintaining the inherited deployment of assets and the creation of a deeply restructured organization empirical results based on a farm level data set support this basic idea

vacancies in supply chain networks we use the supply chain matching framework to study the effects of firm exit we show that the exit of an initial supplier or end consumer has monotonic effects on the welfare of initial suppliers and end consumers but may simultaneously have positive and negative effects on intermediaries furthermore we demonstrate that there are no clear comparative statics for the effects of intermediary exit on the welfare of other firms most surprisingly intermediary exit may diminish the welfare of other firms at the same level of the supply chain

full implementation and belief restrictions we introduce a framework to study the problem of full implementation under general restrictions on agents beliefs which we call implementation first we provide a characterization of the properties of the mechanisms that achieve implementation these conditions relate the possibility of achieving full implementation to the strength of the strategic externalities induced by the mechanism we then study how to achieve full implementation via the design of simple transfer schemes in these context the general conditions for implementation suggest a simple design principle in which belief restrictions are used to weaken the strategic externalities induced by the baseline transfers of the belief free benchmark importantly our results require minimal information on agents beliefs which regard simple moments of the distribution of types these moment conditions arise naturally in applications and in practical problems of mechanism design

a solution to the problem of externalities when agents are well informed the author describes a class of simple two stage mechanisms that implement efficient allocations as subgame perfect equilibria for economic environments involving externalities these mechanisms known as compensation mechanisms solve a wide variety of externalities problems including implementation of lindahl allocations regulation of monopoly and efficient solutions to the prisoner s dilemma copyright 1994 by american economic association

the externalities problem of transboundary and persistent pollution abstract this paper deals with implementing the efficient allocation of transboundary and persistent pollution in particular we adapt varian s compensation mechanism varian a solution to the problem of externalities when agents are well informed amer econ rev 85 1994 1278 1293 to cover situations in which pollutants extend to neighboring regions and their effects persist over time the main contribution of this paper is the design of a mechanism that implements in subgame perfect equilibrium the efficient pollution levels in this context

global land investments in the bio economy evidence and policy implications for countries dependent on agriculture the recent wave of investor interest in farmland could in principle help set in motion a virtuous cycle of economic growth and poverty reduction a large literature documenting failure of such investments documents the risks involved to appreciate associated opportunities and challenges we review past experience quantify country level potential for area expansion versus intensification and identify determinants of countries attractiveness for investors in the initial stages of the land rush the fact that weak land governance seems to increase rather than reduce land demand justifies an emphasis on improving institutions transparency and accountability while at the same time providing concrete suggestions for policy and research

incentives in corporations evidence from the american whaling industry in the 1830s when whaling was a prosperous american industry a number of whaling corporations were chartered all of them were short lived this paper analyzes the failure of corporations in the american whaling industry and argues that the corporate form was unable to create the incentives requisite for success in whaling most nineteenth century whaling ventures were owned by a small number of local investors and were configured to provide powerful incentives for their managers the effect of the corporate form on productivity is analyzed using a newly collected panel data set of 874 whaling voyages many whaling corporations were managed by individuals who had previously or would subsequently manage ventures with the usual ownership structure using an individual fixed effects framework i identify a strong negative effect of the corporate form on productivity

genetic information in agricultural productivity and product development two prominent features of recent changes in agriculture have been the advent of precision breeding techniques and an increase in the level of information netputs in production this article identifies ways in which these features may complement in expanding the variety of processed products level of productivity and rate of change in productivity using a martingale concept of information we identify conditions under which information increases the incentives to invest and engage in product differentiation activities a theory on how genetic uniformity can enhance the rate of learning through process experimentation and so the rate of technical change is developed

verifiable and non verifiable anonymous mechanisms for regulating a polluting monopolist abstract optimal regulation of a polluting natural monopolist must correct for both external damages and market power to achieve a social optimum existing non bayesian regulatory methods require knowledge of the demand function while bayesian schemes require knowledge of the underlying cost distribution we introduce mechanisms adapted to use less information our p rice based s ubsidy ps mechanisms give the firm a transfer that matches or approximates the incremental surplus generated each period the regulator need not observe the abatement activity or know the demand cost or damage functions of the firm all of the mechanisms induce the firm to price at marginal social cost either immediately or asymptotically

implementing the efficient allocation of a persistent pollutant in the presence of threshold effects abstract the regulation of a persistent pollutant through a sequence of compensation mechanisms varian h 1994 a solution to the problem of externalities when agents are well informed american economic review 85 1278 1293 involves the unexpected conclusion that it may be optimal to establish lower taxes in response to an increase in the magnitude of a possible catastrophe

implementing optimal taxes using tradable share permits abstract this paper presents a simple system for efficient regulation under asymmetric information each firm s income is controlled by a tax that depends on the firm s own output and on a parameter construed as a share permit these shares of total expected output lower a firm s tax burden and are acquired in a competitive market by employing this scheme the planner only requires knowledge of marginal damage to induce the first best outcome relative to a traditional cap and trade approach the system increases expected social welfare

correlated information and mechanism design in models of asymmetric information possession of private information leads to rents for the possessors this induces mechanism designers to distort away from efficiency the authors show that this is an artifact of the presumption that information is independently distributed rent extraction in a large class of mechanism design games is analyzed and a necessary and sufficient condition for arbitrarily small rents to private information is provided additionally the two person bargaining game is shown to have an efficient solution under first order stochastic dominance and a hazard rate condition similar conditions allow full rent extraction in milgrom weber auctions

the nature of the farm abstract using a model based on a trade off between moral hazard incentives and gains from specialization this paper explains why farming has generally not converted from small family based firms into large factory style corporate firms nature is both seasonal and random and the interplay of these qualities generates moral hazard limits the gains from specialization and causes timing problems between stages of production by identifying conditions in which these forces vary we derive testable predictions about the choice of organization and the extent of farm integration to test these predictions we study the historical development of several agricultural industries and analyze data from a sample of over 1 000 farms in british columbia and louisiana in general seasonality and randomness so limit the benefits of specialization that family farms are optimal but when farmers are successful in mitigating the effects of seasonality and random shocks to output farm organizations gravitate toward fa

contractual arrangements between farmer cooperatives and buyers in china the agrofood market in china is dominated by spot market exchanges of small farmers and various small traders with only minor penetration of the modern supply chain at the farmgate the emerging farmer professional cooperatives fpcs are expected to facilitate vertical coordination the overall goal of this study is to investigate the contractual arrangements between the fpcs and the buyers based on a national representative survey of 157 fpcs in china this study shows that 32 of fpcs introduced written contracts in the primary marketing channel contracts are more likely to be adopted in the livestock sector and are positively related to the scale of production while branding promotes contracts between fpcs and buyers public certification of quality and food safety often substitutes for contracts furthermore the membership heterogeneity of fpcs affects an fpc s decision to use contractual arrangements with the buyer

environmental policy under imperfect information incentives and moral hazard abstract when net emissions of individual polluters cannot be efficiently monitored then emissions charges controls on emissions levels or subsidies for emissions reduction are not effective as environmental policy instruments this paper proposes instruments that can be applied in such limited information situations these instruments take the form of contracts between a pollution control agency and individual polluters the contracts include a combination of fines and subsidies that induces dischargers to follow optimal environmental policies in the absence of individual monitoring

subgame perfect implementation this paper examines the use of stage mechanisms in implementation problems and provides a partial characterization of the set of subgam e perfect implementable choice rules it is shown that in many economic environments virtually an y choice rule can be implemented to illustrate the power of this approach the paper discusses a number of models in which it is possible to implement the first best although it wouldn t have been possible to do so without using stage mechanisms the diversity of these models suggests that subgame perfect implementation may find wide application copyright 1988 by the econometric society

migration and farm technical efficiency evidence from kosovo this article investigates the effect of migration on farm technical efficiency drawing on a large and representative sample of agricultural households in kosovo a two stage estimation procedure is applied a frontier technique to estimate the effect of migration on farm efficiency followed by a propensity score based matching approach to robustly estimate the sample average effect on efficiency for different levels of migration intensity migration is found to have an efficiency decreasing effect which is amplified for better educated workers the observed negative effect of migration on efficiency is evident even at low levels of migration intensity

dynamic regulation design without payments the importance of timing abstract we consider a two period model of optimal regulation of a firm subject to marginal compliance cost shocks the regulator faces an asymmetric information problem the firm knows current compliance costs but the regulator does not both the regulator and the firm are uncertain about future costs in our basic framework the regulator may not offer payments to the firm we show that the regulator can vary the strength of regulation over time to induce the firm to reveal its costs and increase welfare in the optimal mechanism the regulator offers stronger weaker regulation in the first period and weaker stronger regulation in the second period if the firm reports low high compliance costs in the first period low cost firms expect compliance costs to rise in the future and thus prefer weaker regulation in the second period high cost firms expect costs to fall in the future and thus prefer regulation which becomes stricter over time thus the regulator offers the low high cost firms slightly weaker stronger regulation in the second period in exchange for much stronger weaker regulation in the first period thereby timing the regulation if the regulator can make payments then the optimal mechanism to some degree times the regulation as long as a positive marginal cost of funds exists if the marginal cost of funds is high enough then under the optimal mechanism the regulator will not use payments and use our timing mechanism exclusively

market power and transferable property rights the appeal of using markets as a means of allocating scarce resources stems in large part from the assumption that a market will approximate the competitive ideal when competition is not a foregone conclusion the question naturally arises as to how a firm might manipulate the market to its own advantage this paper analyzes the issue of market power in the context of markets for transferable property rights first a model is developed that explains how a single firm with market power might exercise its influence this is followed by an examination of the model in the context of a particular policy problem the control of particulate sulfates in the los angeles region

matching with contracts we develop a model of matching with contracts which incorporates as special cases the college admissions problem the kelso crawford labor market matching model and ascending package auctions we introduce a new law of aggregate demand for the case of discrete heterogeneous workers and show that when workers are substitutes this law is satisfied by profit maximizing firms when workers are substitutes and the law is satisfied truthful reporting is a dominant strategy for workers in a worker offering auction matching algorithm we also parameterize a large class of preferences satisfying the two conditions

measuring and explaining scale efficiency with the parametric approach the case of greek tobacco growers estimates of technical and scale inefficiencies of tobacco farms in greece during the period 1991 1995 are obtained by using the parametric approach the degree of technical efficiency was found to be lower than the degree of scale efficiency and thus a greater portion of overall inefficiency is due to producing below the production frontier than to producing at an inefficient scale in addition the vast majority of farms in the sample exhibited suboptimal scale implying that output should be expanded to reach the optimal scale empirical results are provided to determine the impact of various socioeconomic demographic and geoclimatic indicators on technical and scale efficiency

success and failure of reform insights from the transition of agriculture this paper analyzes the linkages between the reform strategies in transition countries and economic performance the authors focus on agriculture because of the sharpness of the policy changes fundamental differences among countries and relative simplicity of agricultural relationships the authors document post reform performance in the transition countries of asia and europe the authors show how a pricing reform and subsidy reductions b land rights reform and policies that affect farm restructuring and c the presence institutions that facilitate exchange either markets or market substitutes affect output and productivity the paper ends with general lessons on reforms and transition

environmental policy under imperfect information comment abstract in a recent article in this journal xepapadeas presented a budget balancing mechanism to implement a policy leading to optimal emissions when only aggregate emissions are observable however as this comment shows the proposed mechanism leads to multiple nash equilibria and is not even incentive compatible

implementing the efficient allocation of pollution we provide simple mechanisms to implement the efficient allocation of pollution first assuming complete information across firms and then allowing for incomplete information both mechanisms operate by inducing firms to monitor one another using firms reports to determine pollution allotments and transfers the complete information mechanism determines a firm s transfer according to a linear pollution price set by other firms both mechanisms can be modified to be budget balanced in and out of equilibrium the complete information mechanism implements the efficient allocation even when firms are allowed to use mixed strategies under a single crossing condition the same holds for the incomplete information mechanism this abstract was borrowed from another version of this item

nash implementation of a proportional solution to international pollution control problems abstract for a very general class of pollution control models involving strictly quasi concave utility functions over consumption and environmental quality and strictly convex emission abatement cost functions a proportional cost sharing mechanism is presented inspired by the ratio equilibrium introduced by 7 it is shown that the proportional solution yields a cost efficient allocation of abatement efforts and that the resulting utility imputation always lies in the stand alone core of the cost sharing game in order to decentralize the proportional cost sharing equilibrium a financial compensation mechanism implementing the proportional solution in complete information nash equilibrium is presented

a complete implementation of the efficient allocation of pollution abstract this paper presents a simple twofold mechanism that attains a complete implementation of the efficient allocation of pollution the first component is adopted from duggan and roberts duggan j roberts j 2002 implementing the efficient allocation of pollution american economic review 92 1070 1078 the second new component takes care of the moral hazard problem

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

using markets to allocate pollution permits and other scarce resource rights under limited information abstract we consider the design of government policy to ration such scarce resources as water or pollution permits in the presence of limited information when government policy is formulated some informed agents e g established public utilities know how highly they value the resource other uninformed agents e g potential independent power producers only learn their valuations at some later date the government allows uninformed agents to trade the resource rights they receive on a competitive market informed agents may or may not have the same privilege the optimal initial distribution of resource rights differs significantly according to whether informed agents can trade the rights they receive

explaining state bans on corporate farming state laws banning corporate farming present a puzzle for a rent seeking explanation of political outcomes since family farmer proponents may receive no direct benefit from these bans an explanation developed here is that these farmers benefit indirectly forestalling corporate entry preserves the farm political coalition structured around those cooperatives patronized by family farmers and so indirectly preserves federal subsidies and supply restrictions that the incidence of state bans is positively related to the importance of federal farm programs the importance of cooperatives and the homogeneity of farmers within a state is consistent with this indirect rent seeking explanation

full extraction of the surplus in bayesian and dominant strategy auctions we consider auctions for a single indivisible object in the case where the bidders have information about each other which is not available to the seller we show that the seller can use this information to his own benefit and we completely characterize the environ ments in which a well chosen auction gives him the same expected payoff as that obtainable were he able to sell the object with full information about each bidder s willingness to pay we provide this characterization for auctions in which the bidders have dominant strate gies and for those where the relevant equilibrium concept is bayesian nash in both set ups the existence of these auctions hinges on the possibility of constructing lotteries with the correct properties we consider the situation in which an agent the seller possesses one indivisible unit of a good to which he attaches no value but the good has value to a number of potential buyers and its transfer to one of them would increase social welfare in particular the transfer to the buyer with the highest valuation maximizes social welfare in this paper we completely characterize environments in which the seller can design an auction that will enable him to capture for himself the full increase in social welfare induced by the transfer of the good to the bidder with the highest willingness to pay if the seller had full information about the reservation prices of potential buyers his optimal selling strategy would be very simple he would announce a price equal or very close to the highest reservation value the optimal strategy for the bidder with the highest evaluation would be to accept the offer note that we are treating a situation in which the seller can commit himself to a price as a result of the exchange the utility of the seller increases by the full amount of the increase in social welfare and he has been able to fully extract the surplus in many circumstances however a seller has only imperfect knowledge of the buyers willingnesses to pay in this case he must find some mechanism or auction which will enable him to maximize his benefit from the sale of the object the auction literature starts with this observation and shows how the seller can by an astute choice of auction extract the largest possible fraction of the surplus in general the literature has shown that this proportion is strictly less than one in some circumstances the bidders will have information about each other which is not available to the seller for instance in auctions for petroleum drilling rights bidders know the results of geological tests which they have

regulation via the polluter pays principle we consider the problem of regulating an economy with environmental pollution we examine the distributional impact of the polluter pays pp principle which requires that any agent compensates all other agents for the damages caused by his or her pollution emissions with constant marginal damages we show that regulation via the pp principle leads to the unique welfare distribution that induces non negative individual welfare change and renders each agent responsible for his or her pollution impact we extend both the pp principle and this result to increasing marginal damages due to pollution we also compare the pp principle with the vickrey clark groves scheme

food insecurity income inequality and the changing comparative advantage in world agriculture i would like to argue in this article that in the process of economic development in land poor countries in asia agriculture faces three distinctly different problems food insecurity sectoral income inequality and the declining food self sufficiency associated with the declining comparative advantage in agriculture at the high income stage massive imports of food grains to asia if they occur will aggravate the world food shortage which will have significant implications for the poverty incidence in the world i argue that in order to avoid such a tragedy asia should expand farm size to reduce labor cost by adopting large scale mechanization sub saharan africa should realize a green revolution in grain production and latin america should further expand its grain production capacity

geographical indications and the competitive provision of quality in agricultural markets the economics of geographical indications gis is assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture it is assumed that certification costs are needed for gis to serve as collective credible quality certification devices and production of high quality product is endogenously determined we find that gis can support a competitive provision of quality and lead to clear welfare gains although they fall short of delivering the constrained first best the main beneficiaries are consumers producers may also accrue some benefit if production of the high quality products draws on scarce factors that they own copyright 2008 oxford university press

entry and structures of interest groups in assignment games abstract this paper presents several comparative statics results concerning the entry problem in assignment games the results compare sets of equilibria and hence do not require the usual assumption of a unique equilibrium by the device of a competing group generator the set of players is decomposed into three interest groups for which three forms of entry effects are identified for the group with the strongest entry effect it is found that generically 1 the benefit functions form a complete ordering and 2 the turnover effect dominates the unemployment effect the implications of these results to bargaining immigrations and matching problems are discussed

insecure land rights and share tenancy evidence from madagascar most studies of tenurial insecurity focus on its effects on investment this paper studies the hitherto unexplored relationship between tenurial insecurity and land tenancy contracts based on distinct features of formal law and customary rights in madagascar this paper augments the canonical model of sharecropping by making the strength of the landlord s property right increasing in the amount of risk she bears within the contract using data on landlords subjective perceptions in rural madagascar empirical tests support the hypothesis that insecure property rights drive contract choice but offer little support in favor of the canonical risk sharing hypothesis

the division of labor coordination costs and knowledge this paper considers specialization and the division of labor a more extensive division of labor raises productivity because returns to the time spent on tasks are usually greater to workers who concentrate on a narrower range of skills the traditional discussion of the division of labor emphasizes the limitations to specialization imposed by the extent of the market we claim that the degree of specialization is more often determined by other considerations especially emphasized are various costs of coordinating specialized workers who perform complementary tasks and the amount of general knowledge available