substitution possibility between unpriced pulp and wastepaper in the u s paper and paperboard industry a greater use of recycled wastepaper would preserve virgin forests as well as reducing the amount of wastepaper going to landfills these environmental goals depend critically on the elasticity of substitution between pulp and wastepaper in producing paper and paperboard since most of the pulp consumed by u s paper mills and paperboard mills is transferred internally from vertically integrated pulp mills the price data on pulp is not available this paper constructs an econometric model which enables us to estimate the substitution possibility between unpriced pulp and wastepaper in the u s paper and paperboard industry empirical results show that the elasticity of substitution between unpriced pulp and wastepaper is positive but not statistically significant

partial static equilibrium model of newsprint recycling estimation of the demand for old newspapers as an input to us newsprint production reveals that demand is highly price inelastic in both the short and long run this implies that separation and collection programmes which lower prices in secondary markets will not effectively stimulate recycled newsprint production the results also indicate that policies to raise the price of woodpulp will have little impact a slightly more effectivbe recycling policy may be tax preferences aimed at encouraging investment in newsprint capacity the major finding is that growth in output creates an opportunity for greater old newspaper use thus the most effective recycling policy will be one that promotes us newsprint production

dynamic nonpoint source pollution control policy ambient transfers and uncertainty when a regulator cannot observe or infer individual emissions corrective policy must rely on ambient pollution data assuming this kind of environment we study a class of dierential games of pollution control with prot functions that are polynomial in the global pollution stock given an open loop emissions strategy satisfying mild regularity conditions an ambient transfer scheme is exhibited that induces it in markov perfect equilibrium mpe proposed transfers are a polynomial function of the dierence between actual and desired pollution levels moreover they are designed so that in mpe no tax or subsidy is ever levied their applicability under stochastic pollution dynamics is studied for a symmetric game of polluting oligopolists with linear demand we discuss a quadratic scheme that induces agents to adopt markovian emissions strategies that are stationary and linearly decreasing in total pollution total expected ambient transfers are non positive and their magnitude is linearly increasing in physical volatility the size of the economy and the absolute value of the slope of the inverse demand function however if the regulator is interested in inducing a constant emissions strategy then in expectation transfers vanish the total expected ambient transfer is compared to its point source equivalent

inflation and social consensus in the seventies it is widely believed that the two oil price shocks of the i 970s played a major role in the increase in inflation in industrial countries while this hypothesis is consistent with the timing of changes in inflation at the global level it seems to break down when applied to individual countries cross sectionally for example over the period i973 9 switzerland had an average inflation rate of 4 7 while in neighbouring italy inflation averaged i5 6 over the same period furthermore inflation in the pre opec period i97i 2 was actually higher in switzerland than in italy it seems that a supply shock explanation of inflation in the seventies also requires an explanation of why different countries responded so differently to a similar set of shocks at the world level the purpose of this paper is to offer such an explanation and to test the hypothesis with a cross sectional equation accounting for differences in average inflation rates over the period i973 9 in eighteen oecd countries this time period includes the year of the first opec shock i 973 and the following six years up to the time of the second opec shock the hypothesis to be tested is set in the framework of a model similar to that of brunner et al i 980 the key features of the brunner model are that the adjustment of real wage expectations is subject to lags and that labour supply is positively related to the difference between the perceived real wage and the expected or target real wage given these two assumptions a negative supply shock gives rise to a period of stagflation whose intensity will be greater the slower is the speed of adjustment of real wage expectations the model of this paper extends the brunner model in three ways first across countries the speed of adjustment of real wage expectations or targets is assumed to depend positively on the degree of social consensus as proxied negatively by an indicator of average long run strike activity second the model allows for the possibility of inflation inertia or systematically incorrect inflation expectations as well as a sluggish adjustment of real wage expectations third the model incorporates the hypothesis that money supply growth will vary across countries according to variations in inflationary pressures as perceived by governments the first section of the paper provides a discussion of the rationale for the key proposition regarding strikes and social consensus as well as a brief discussion of the role of wage bargaining institutions section ii develops a theoretical model which yields a reduced form cross sectional equation relating the average i 973 9

the effect of asymmetric entry costs on bertrand competition abstract by permitting firms to have different entry costs i generalize two previously studied models of two stage entry and pricing amongst bertrand competitors i find that the existing results depend critically on the symmetry assumption for example if firms entry decisions are observed before price setting occurs then total welfare can increase following the introduction of a potential entrant in contrast to the unambiguous welfare reduction found in the symmetric setting if firms entry decisions are unobserved before price setting occurs then the expected price typically decreases or remains unchanged following the introduction of a potential entrant in contrast to the unambiguous price increase found in the symmetric setting in both price setting environments competition increases following the introduction of potential entrants with sufficiently low entry costs a finding that is obscured by focusing on the symmetric models

a note on bertrand competition with asymmetric fixed costs abstract we consider a model of bertrand competition with fixed costs of entry or production we show that contrary to most of the existing literature that focuses on symmetric firms and hence symmetric equilibria if we allow these fixed costs to be different for each firm competition may prevent higher cost firms from entering this market even if the differences in cost are small specifically all firms except for the two with the lowest fixed cost find entry blockaded and the two firms with the lowest fixed costs compete ignoring the threat of potential entry

industrialisation catching up and economic growth a comparative study across the world s capitalist economies various hypotheses are examined seeking to explain inter country convergence at the upper end but divergence at the lower end of the world income rankings a model of disequilibrium growth with sector specific technological progress and spillover is developed and then estimated on two samples of capitalist economies 1960 85 it is found that the degree of disequilibrium between agriculture and industry is greatest in the least developed economies but their rate of labor transfer has been slow technological spillover has stimulated productivity growth in less developed agricultural sectors but not in the industrial sectors of the least developed economies copyright 1991 by royal economic society

global warming and energy demand list of tables list of figures list of contributors preface 1 global warming and energy elasticities terry barker paul ekins and nick johnstonepart 1 estimating long term energy elasticities 2 alternative approaches to estimating long run energy demand elasticities an application to asian developing countries ron smith and m hashem pesaran 3 a survey of international energy elasticities neil manning and jago atkinson 4 long run demand elasticities for gasoline thomas sterner and mikael franzen 5 responses of energy demand in uk manufacturing to the energy price increases of 1973 and 1979 80 alan ingham 6 elasticities for oecd aggregate final energy demand lakis vouyoukas 7 modelling uk energy demand derek hodgson and keith millerpart ii energy the economy and greenhouse gas abatement 8 endogenous technological progress in fossil fuel demand laurence boone stephen hall david kemball cook and clare smith 9 uk energy price elasticities and their implications for long term co2 abatement terry barker 10 price elasticity and market structure overcoming obstacles to ensure energy efficiency tim jackson 11 rethinking the use of energy elasticities stefan p schleicher 12 revisiting the costs of co2 abatement paul ekins 13 asymmetrical price elasticities of energy demand michael grubb14 conclusions terry barker paul ekins and nick johnstone bibliography index

optimizing environmental product life cycles in this paper we propose a methodology based on materials accounting and operational research techniques to assess different industry configurations according to their life cycle environmental impacts rather than evaluating a specific technology our methodology searches for the feasible configuration with the minimum impact this approach allows us to address some basic policy relevant questions regarding technology choice investment priorities industrial structures and international trade patterns

the contractors game we develop a symmetric information auction model of multiproject contracting with costly bidding and increasing marginal performance costs when there are many potential contractors or only one job there is a zero expected profit symmetric equilibrium in mixed strategies the winning bid at this equilibrium tends to rise perversely with the number of contractors when there are only two potential bidders and either two or three jobs multiple bids of a contractor at equilibrium are negatively correlated with each other the resulting equilibrium outcome tends to divide the market between the contractors in a manner that suggests anticompetitive behavior despite the absence of any collusion

complementing empirical evidence on global recycling and trade of waste paper this comment provides a critical analysis of van beukering and bouman s world development 29 2001 1717 article on global paper recycling and trade we first question their notion that developin

materials product chains theory and an application to zinc and pvc gutters a framework is presented for the analysis of economic and environmental impacts of policies applied to materials product mp chains this is based on materials flows product flows costs prices and optimal management of an mp chain the main differences compared with other studies focusing on materials flows is that here the link between products or services and materials is explicitly dealt with the framework is developed on the basis of materials balance conditions production functions allowing for substitution and recycling of both materials and products after presenting theoretical mp chain models and analytical results an application to the problem of choosing between zinc and pvc gutters is discussed here optimal mp chain management decisions are presented for various policy and strategy scenarios

optimal non linear pricing with regulatory preference over customer type abstract in this paper we characterize the pareto optimal set of non linear pricing schedules when non negative weights are assigned to each customer type our analysis first compares general non linear tariff schedules and sets of self selecting two part tariffs when there are two customer types and the cost function is linear we then derive optimal sets of two part tariffs for arbitrary numbers of customer types and general cost functions we also consider the sustainability of non linear pricing schedules under the threat of entry of rival firms

conditionally predictive supply elasticity estimates secondary materials obtained from municipal residuals abstract new capital intensive waste processing plants have been developed that can recover secondary materials and energy from the municipal solid waste stream resulting in lower disposal costs than traditional methods the potential supply of secondary glass ferrous metals aluminum and energy is estimated using an engineering cost model of secondary materials and energy supply under alternative prices for energy and materials econometric estimates of the own and cross price elasticities of supply for the materials and energy are then estimated from the data set significant cross price effects are shown

dynamic price competition in auto insurance brokerage we analyze brazilian data on auto insurance and document that a about 20 of policies are sold without brokerage commission b over 40 are sold at the highest fee allowed and c the remaining contracts are associated with a spread out distribution of fees static models cannot rationalize these findings we develop a dynamic model of price competition with search and switching costs that reproduces them we use the equilibrium structure to estimate the model parameters and infer the brokers expected earnings the frequency that insurees switch brokers and the counterfactual effects of a price ceiling policy

modeling the supply of wastepaper abstract utilizing a price expectations model of wastepaper supplies edwards j environ econ manag 6 332 334 1979 claims to be able to explain certain anomalies in earlier empirical work while reaffirming the view that wastepaper supply is generally price inelastic this paper presents evidence to show that the price expectations model does not offer an adequate explanation of the state of affairs in the u k wastepaper market the low price elasticity of supply findings are however confirmed

empirical evidence on recycling and trade of paper and lead in developed and developing countries empirical evidence on recycling at a global scale is scant often data on recycling are provided on national levels only the few obtainable cross country studies on recycling are mostly focussed on one particular material or region therefore it is difficult to draw general conclusions on recycling in developed and developing countries an aggregated overview of trade and recycling in both regions was presented in chapter 1 it was recognised that trade in secondary materials from developed to developing countries has increased significantly in the last three decades this typical trade pattern is a strong indication for specialisation in the recycling sector of both regions

exhaustible resources and secondary materials a macroeconomic analysis abstract in this paper we have developed an endogenous growth model to deal with exhaustible resources and secondary materials together under the assumptions that these two inputs are or are not technologically perfect substitutes of each other in order to compare the results obtained under both hypotheses we highlight the implication of these two assumptions on the rate of growth of total output and upon the flow of exhaustible resources extracted there are also some other interesting findings related to the spill over on welfare of the waste recycling process and the dynamics of shadow prices of both inputs considered finally some implications on hotelling s rule also emerge in our analytical framework

a bertrand model of pricing and entry abstract we analyze an oligopolistic pricing and entry model in which there is a sunk cost of entry and in which firms outputs are homogeneous firms pure strategies consist of a binary entry decision and conditional on entry a uniform or non linear price schedule there does not exist a pure strategy nash equilibrium in this model so we analyze the symmetric mixed strategy equilibrium the main result is that if there exists a positive sunk cost of entry then an increase in the number of potential competitors puts more probability weight on higher prices this result is counter to the usual intuition that underlies current antitrust policy

an econometric analysis of global waste paper recovery and utilization the main purpose of this paper is to provide aneconometric analysis of the most importantdeterminants of inter country differences inwaste paper recovery and utilization rates byemploying pooled t

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

a comparison of public policies for lead recycling policies that encourage recycling may be used to reduce environmental costs from waste disposal because direct restrictions on disposal are difficult to enforce four recycling policies have been advanced i taxes on the use of virgin materials ii deposit refund programs iii subsidies to recycled material production and iv recycled content standards in this article i analyze the structure of these policies and their cost effectiveness in achieving reductions in disposal i then examine the policies in the empirical context of the recycling of lead from automobile batteries in order to calculate the effects of recycling programs i estimate the elasticities for primary and secondary lead supply and demand my results suggest that price based policy mechanisms can be successful in increasing lead recovery and that the difference in efficiency between the four approaches is similar

does international harmonization of environmental policy instruments make economic sense harmonization of the instruments used in environmental policy has beenconsidered necessary to guarantee fair competition in internationalmarkets we examine the economic costs of harmonizing paper recyclingstandards in countries where the urgency of the waste disposal problemsdiffer using data of seven european countries we estimate thetechnologically feasible input combinations of pulp and waste paper forpaper production short term effects of two environmental policy measures minimum content requirement and utilization rate target are analyzed bytranslating the two administrative instruments into taxes and subsidies weshow that the shadow costs of the harmonization vary considerably betweencountries the difference in the domestic availability of waste may explainthe variation and a modification of the policy measures to incorporate thisaspect is suggested

is the income elasticity of environmental improvements less than one we estimated the income elasticity of environmental improvements for a number of european data sets the value of this parameter is consistently found to be less than one with few exceptions our findings are compared with state of the art contingent valuation studies from other countries we also compared our findings with those reported in the literature on charitable donations and corporate donations these studies show a similar pattern donations decrease as a percentage of income as income increases

the interruption of productivity growth in the united states cessation or near cessation of productivity growth in the united states started in i974 and has continued until now the change from the previous steady advance was abrupt and its timing unmistakable although retardation earlier in the postwar period can be identified it was small readily explained and not particularly worrisome this paper will therefore focus on comparisons of changes from i973 to i98i with changes from i948 to i973

the response of mining investment to a decline in economic growth the case of copper in the 1970s abstract this paper analyses how an industry like mining where investments take long to complete adjusts to a permanent decline in demand growth optimal control theory is the method used it is shown that an extended period of excess capacity and low prices will follow after a slowdown in growth this is because profit maximizing firms will continue to complete projects to which large investment funds have already been committed even when they anticipate the price fall numerical solutions of the control problem obtained by using parameters relevant to the copper industry are compared with actual performance of this industry in the late 1970s

potential competition in the deregulated airlines using a new and unique data set this paper applies a systems approach to the study of potential competition prices and entry relations in airline city pair markets consistent with limit pricing models future entry is directly influenced by current prices current prices thus appear to provide an important signal to potential entrants about the probability of profitable entry while results indicate the existence of barriers to entry these barriers appear to have no independent effects on price beyond there effect on actual competition through increases in concentration copyright 1990 by mit press

a household level environmental kuznets curve abstract richer households may create more vehicle emissions because they own more vehicles and drive more poorer households may pollute more because they use high polluting vintages and maintain them less well this paper uses 1993 california vehicle microdata to show that there is a kuznets u shaped hydrocarbon emissions relation

personalized pricing and advertising an asymmetric equilibrium analysis we study personalized price competition with costly advertising among n quality cost differentiated firms strategies involve mixing over both prices and whether to advertise in equilibrium only the top two firms advertise earning bertrand like profits welfare losses initially rise then fall with the ad cost with losses due to excessive advertising and sales by the wrong firm when firms are symmetric the symmetric equilibrium yields perverse comparative statics and is unstable our key results apply when demand is elastic when ad costs are heterogeneous and with noise in consumer tastes

the demand for scrap and primary metal ores after a decline in secular growth old scrap and primary metal ores are substitute raw materials in metal production the paper explores the changing composition in their use following a permanent deceleration in economic growth the cases of copper and iron steel are employed to track the usage of scrap after a secular slow down in the rate of growth of finished metal demand such as occurred in the mid 1970s the conclusions suggest that the expanding role of scrap will result in stagnant demand for primary metal ores in the 1980s and 1990s la demande deferraille et de minerai de metaux primnaires apres une chute dans la croissance economique seculaire la ferraille et le minerai de m6taux primaires sont des matieres premieres qui sont des substituts dans la production du m6tal ce m6moire examine le changement dans la composition de l usage de l un et de l autre apres une decel6ration permanente dans la croissance 6conomique on examine en d6tail les cas du cuivre et du fer acier pour calibrer l usage de la ferraille apres la sorte de d6clin dans la croissance de la demande de m6tal fini qu on a v6cu dans le milieu des annees 1970 l auteur conclut que le role plus grand de la ferraille va vouloir dire une stagnation de la demande de minerais de metaux primaires dans les annees 1980 et 1990 carl van duyne 1946 1983 my professional colleague and personal friend carl van duyne died at the end of february 1983 as work on the present paper was drawing to a close though physically he is not longer with us his spiritual presence will remain through his valuable contributions in various fields to the academic work of the institute

informative price advertising in a sequential search model the purpose of this paper is to study the role and implications of price advertising when shopping trips are costly to consumers to do so we introduce advertising into an optimal sequential search model information about prices is both gathered by consumers and disseminated by firms consumers search sequentially and stores advertise with various intensity when it is in their interest to do so our model has a unique equilibrium exhibiting priee dispersion the model generates predictions about the shape of the price distribution and firms advertising behavior we explore the effects of entry and find that when initial advertising costs at zero level of effort are precisely zero entry drives the equilibrium to the perfectly competitive outcome however when initial marginal advertising costs are positive entry drives prices higher and while the informed consumers almost surely locate competitive prices welfare does not necessarily increase finally we compare the effectiveness of the two informational channels when advertising costs shrink prices become competitive however when search costs shrink prices remain bounded above marginal production costs

a dynamic model of bertrand competition with entry abstract this paper analyzes a simple repeated game of simultaneous entry and pricing we report a surprising property of the symmetric equilibrium solution if the number of potential competitors is increased above two the market breaks down with higher probability and the competitive outcome becomes less likely more potential competition lowers welfare another bertrand paradox the model can also be applied to auctions to explore whether a revenue maximizing auctioneer should restrict the number of bidders if bidder participation is costly

monopoly rents in contestable markets random choices of prices and product characteristics can be used by a contestable monopolist to deter entry and fully extract the monopoly rent we develop this idea in a model of bertrand price competition in equilibrium one firm enters the market and makes choices that are unpredictable to its competitors this prevents price undercuts and keeps other firms out of the market the entrant firm collects the monopoly rent despite the existence of potential competitors this result raises an alert for regulatory practices based on the conventional wisdom that contestability is associated with low prices and profits

municipal waste kuznets curves evidence on socio economic drivers and policy effectiveness from the eu waste generation and waste disposal are becoming increasingly prominent in the environmental arena from a policy perspective and in the context of delinking analysis in general waste generation is still increasing proportionally with income and economic and environmental costs associated to landfilling are also increasing this paper provides a comprehensive analysis of waste generation incineration and landfill dynamics based on panel data for the eu25 to assess the effects of different drivers economic structural policy and the eventual differences between western and eastern eu countries we show that for waste generation there is still no waste kuznets curve wkc trend although elasticity to income drivers appears lower than in the past landfill and other policy effects do not seem to provide backward incentives for waste prevention and in terms of landfill and incineration as expected they are respectively decreasing and increasing with policy acting as a strong driver eastern countries appear to be performing generally quite well thus benefiting from eu membership and related policies in terms of environmental performance we can conclude that although absolute delinking is far from being achieved for waste generation there are some first positive signs of an increasing relative delinking for waste generation and robust landfill diversion and varying evidence of a significant role of the eu waste policies implemented in the late 1990s and early 2000s our evidence suggests that if while landfill diversion is currently associated to a delinking partly explained by eu policies waste prevention must be the next objective of waste regulation efforts

hubs and high fares dominance and market power in the u s airline industry this article estimates the importance of route and airport dominance in determining the degree of market power exercised by an airline the results indicate that an airline s share of passengers on a route and at the endpoint airports significantly influences its ability to mark up price above cost the high markups of a dominant airline however do not create much of an umbrella effect from which carriers with smaller operations in the same markets can benefit the article suggests a number of possible explanations for this asymmetry

the stock market and the productivity slowdown international evidence extending baily s model of the productivity slowdown to the manufacturing sectors of five other countries we find that a decline in the growth of capital services reflected in declines in the stock market can explain much of the 1973 1978 decline in productivity abroad as well as in the united states we also show however that the stock market declines often preceded the declines in productivity growth and the model is less successful when the sample period is extended through 1981

adjustment with growth abstract this paper describes and examines simple versions of the analytical approaches employed by the international monetary fund and the world bank in designing adjustment programs that support their lending activities in the case of the bank this means essentially a variant of the two gap growth model and for the fund a model derived from the monetary approach to the balance of payments an attempt is also made to merge the fund and bank approaches within a consistent framework to demonstrate their complementarity

segmentation advertising and prices this paper explores the implications of market segmentation on firm competitiveness in contrast to earlier work here market segmentation is minimal in the sense that it is based on consumer attributes that are completely unrelated to tastes we show that when the market is comprised by two consumer segments and when there is sufficient variation in the per consumer costs firms need to incur to access the different consumer populations then firms obtain positive profits in symmetric equilibrium otherwise the equilibrium is characterized by zero profits as a result a minimal form of market segmentation combined with advertising cost asymmetries across consumer segments give firms an opportunity to generate positive rents in an otherwise bertrand like environment