the pricing of durable exhaustible resources partial or total durability characterizes a large class of exhaustible resources hotelling s r percent rule will apply to a durable resource produced in a competitive market but will not apply if the resource is produced in a monopolistic market however the r percent rule does not mean that price is steadily rising it is shown that in general the competitive market price will fall initially as the stock in circulation increases and later will rise as the stock decreases and eventually depreciates toward zero after production ceases accounting for durability may thus help explain the u shaped long term price profiles observed for many resources 11 references 3 figures

dividend taxes corporate investment and q abstract taxes on corporate distributions have traditionally been regarded as a double tax on corporate income this view implies that while the total effective tax rate on corporate source income affects real economic decisions the distribution of this tax burden between the shareholders and the corporation is irrelevant recent research has suggested an alternative to this traditional view one explanation of why firms in the united states pay dividends in spite of the heavy tax liabilities associated with this form of distribution is that the stock market capitalizes the tax payments associated with corporate distributions this capitalization leaves investors indifferent at the margin between a corporation s decision to pay out dividends or to retain earnings this alternative view holds that while changes in the dividend tax rate will affect shareholder wealth they will have no impact on corporate investment decisions this paper develops econometric tests which distinguish between these two views of dividend taxation by extending tobin s q theory of investment to incorporate taxes at both the corporate and personal levels the implications of each view for corporate investment decisions can be derived the competing views may be tested by comparing the performance of investment equations estimated under each theory s predictions british time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial postwar variation in effective tax rates on corporate distributions the econometric results suggest that dividend taxes have important effects on investment decisions

long term competition in a dynamic game the cold fish war this article presents a model of credible voluntary collective agreements in a dynamic game these agreements are implicit in collections of history dependent threat strategies i consider the strategies in a game of resource exploitation credibility is represented by perfect equilibrium voluntarism requires at least that all behavior be supported by the threat of collapse of the agreement which would return the players to the memoryless equilibrium collective rationality requires that the agreement be robust to the possibility of mutually beneficial renegotiation i analyze the set of agreements meeting each of these restrictions

the tragedy of the commons in a violent world earlier research has shown that the tragedy of the commons may be resolved by folk theorems for dynamic games in this article we graft on a standard natural resource exploitation game the possibility to appropriate the resource through violent means because conflict emerges endogenously as resources get depleted the threat supporting the cooperative outcome is no longer subgame perfect and thus credible the unique equilibrium is such that players exploit noncooperatively the resource when it is abundant and they revert to conflict when it becomes scarce the players utility is shown to be lower even if conflict wastes no resources

environmental management in development the evolution of paradigms in the past quarter century environmental management has increasingly become a concern of governments more recently the traditional split between developers and conservationists has begun to break down conceptions of what is economically and technologically practical ecologically necessary and politically feasible are rapidly changing this report discusses the implications of five paradigms of environmental management in development the author notes that the remedial legalistic approach of environmental management is breaking down instead interest in the more economically integrated approach of resource management has recently taken hold several interdependent forces indicate that improving the economic management of pollution and resources may be a necessary but insufficient measure to create the conditions for sustainable development the perception of tradeoffs between development and environmental quality persists in the present debate but its necessity is greatly exaggerated according to this paper finally it is noted that paradigms may be impervious to evidence and institutions and societies too difficult to change whether when and how these issues are resolved may be modern civilization s most significant test

common property resources storage facilities and ownership structures a cournot model of the oil market during the last decade economists have tried hard to convince meadows and his followers that market forces do not tend to exhaust our natural resources too rapidly as compared with the requirements of an intertemporal pareto optimum it is well known now that under well defined property rights and correct price expectations a competitive extraction industry brings about a pareto optimal depletion path and it has been shown that oligopolistic and monopolistic market structures may even produce a bias towards conservation 1 it is still an unresolved issue however which extraction path will result if property rights are imperfectly defined following the pioneering work of gordon 1954 there has been a large body of literature demonstrating that in the extreme case of free entry and myopic profit maximization there are strong reasons for excessive extraction 2 but this literature hardly yields reliable conclusions for the perhaps more realistic case where firms derive their behaviour from intertemporal optimization and where there is a common ownership but limited access to the resource the basic intuition behind the common pool problem is that the individual agent chooses an extraction policy other than the one he would choose under well defined property rights since he is afraid that part of the resource he leaves underground will be extracted and sold by others 3 despite the simplicity of this intuition there does not seem to be any publication that analyses it within an intertemporal equilibrium model with rational and far sighted agents this is the motivation for the present approach the approach studies the common pool problem in the context of an oligopolistic world market for oil it posits a given number of identical firms extracting oil from holdings between some of which there is mutual seepage the firms sell the extracted oil in the same market or they store it in privately owned seepage proof tanks each firm derives its behaviour from intertemporal optimization under perfect foresight of the time paths of the model variables but cournotesque conjectures about the reactions of its competitors except for the assumption of storage facilities this specification is closely related to models previously studied by khalatbari 1977 and kemp and long 1980 essay 10 4 the two models are very similar but they yield strikingly different conclusions while kemp and long find that the extraction path chosen by the firms is pareto optimal i e that the price of the resource rises at a rate given by the market rate of interest khalatbari contends that there is over extraction kemp and long convincingly demonstrate that khalatbari s model suffers from an inconsistency in the way the individual firm expects its rivals to respond to its own actions and they argue that this inconsistency is the reason for the divergence in results thus the casual reader gets the

comparing systems approaches to innovation and technological change for sustainable and competitive economies an explorative study into conceptual commonalities differences and complementarities this paper makes a distinction between three theoretical frameworks that have been highly influential in the discourse on innovation competitiveness and sustainability sectoral systems of innovation ssi technological innovation systems tis and socio technical systems st systems these frameworks share a common systems approach to innovation but are often positioned as different bodies of literature that correspond to different epistemic communities this paper is explorative and conceptual in nature it presents a systematic comparative review of ssi tis and st systems based on the following analytical dimensions 1 system boundaries 2 actors and networks 3 institutions 4 knowledge 5 dynamics and 6 policy approach in the concluding section commonalities and differences of the three approaches are presented and suggestions for complimentarily are made c 2010 elsevier ltd all rights reserved

barriers and drivers in the adoption of advanced wastewater treatment technologies a comparative analysis of italian utilities abstract the adoption of new environmentally friendly technologies is becoming a key issue in both public debate and policy arenas the paper focuses on innovation adoption by wastewater utilities and investigates why stringent environmental regulations are not sufficient to foster it the adoption of advanced wastewater treatment technologies is made complex by the sunk nature of highly specific infrastructures and the consequent exposure of utilities to political and institutional influences in addition it requires the involvement of various actors utilities suppliers contractors and is influenced by various stakeholders communities business users citizens associations that generally have no aligned objectives with reference to the aforementioned theoretical background our paper develops and analyzes a conceptual framework that unfolds over two dimensions a the role played by firm specific characteristics i e technological and organizational capabilities and managerial professionalism b the influence of community level factors i e citizens voice and pressure exerted by local stakeholders we investigate these issues through multiple descriptive case studies based on semi structured interviews with the ceos and top managers of 11 wastewater utilities operating in a region in north italy the results suggest that firm specific resources could spur wastewater utilities into adopting innovation despite an adverse institutional environment at the same time on the community level side the analysis shows that residents and local businesses are able to mobilize resources and exert pressure to either drive or hinder the adoption of water innovations

bargaining strategic reserves and international trade in exhaustible resources this paper proposes a framework for the analysis of optimal strategic reserve policy when ability to withstand embargoes influences terms of trade in an exhaustible resource like oil the mode embodies two stylized facts competitive forces are not always strong enough to eliminate other influences on the negotiated price of oil and long term contracts for oil delivery cannot be enforced across national boundaries some modeling issues that arise in this context are discussed and a model of optimal strategic reserve policies is proposed and solved in a leading special case

a private property rights regime to replenish a groundwater aquifer groundwater management is often reactive and in some cases the groundwater stock groundwater table of an aquifer may fall below its optimal steady state level before any thought is given to management this paper examines a private property rights regime to restore a groundwater resource to its optimal steady state results from a stochastic dynamic programming model of madera county california show that the private property rights regime recovers about 95 percent of the potential gain from groundwater management

industry self regulation without sanctions the chemical industry s responsible care program industry self regulation the voluntary association of firms to control their collective action has been proposed as a complement to government regulation proponents argue that the establishment of

a comprehensive review of the evolving and cumulative nature of eco innovation in the chemical industry different bodies of literature have attempted to explain what factors and events drive industries throughout processes of environmental change the latter is a gradual historical process of evolution from lower to higher degrees of development based on concepts derived from evolutionary economics greening technological progress and resource based view of the firm this article informs the sustainability transitions literature by providing an account of the evolution in the chemical industry s striving for the design use and production of environmentally sound chemical processes and products based upon eco innovation a conceptual model was elaborated depicting five stages of environmental change in the chemical industry in the period 1901 2030 the authors empirically tested this model by conducting a longitudinal computer aided content analysis of 255 documents addressing different environmental and innovation aspects in this industry in the same period of time the results of this article advance our modern understanding of the different stages of evolution of the chemical industry in terms of environmental change consistent with the conceptual model hitherto presented the findings of this article highlight a number cumulative of factors that enabled the evolution of the chemical industry throughout time supporting eco innovation highlighting the intertwined nature of regulation innovation and technological change it is plausible that the future development of this industry might be shaped by the policy driven paradigms of sustainability and resource efficiency 2015 the authors

governing a groundwater commons a strategic and laboratory analysis of western water law we examine strategic behavior in groundwater depletion within the setting of state governance of groundwater resources in the american west solving a dynamic common pool resource model for its optimal solution and its subgame perfect equilibrium provides benchmarks for behavior observed in laboratory experiments three forms of legal rules common pool depletion with a rule of capture to establish ownership absolute ownership doctrine entry restrictions prior appropriation doctrine and stock quotas correlative rights doctrinekre examined in terms of their impact on individual strategic behavior in laboratory experiments

the pricing of durable exhaustible resources comment in its simplest form hotelling s 1931 r percent rule states that in a competitive market with no extraction costs the price of an exhaustible resource will grow at the rate of interest for instance if price grows at a rate slower than the rate of interest it is in the interest of each firm to sell its entire stock immediately the hypothesized price path is obviously not an equilibrium even if there are extraction costs and firms are not identical it remains true that price net of marginal cost rises at the rate of interest the proposition generalizes to monopolized resources along the equilibrium path of extraction net marginal revenue grows at the rate of interest in a recent article in this journal levhari and pindyck 1981 henceforth l p show the r percent rule extends to durable exhaustible resources in a competitive market but they conclude that it does not hold in a monopoly market this is a surprising result following the hotelling logic should it not be possible for the monopolist to rearrange production from low net marginal revenue dates to high net marginal revenue dates and raise its present value the primary purpose of this comment is to show that hotelling s rule does in fact hold this is shown in section ii our result is compared with that of l p in section iii the conflict is shown to arise from a disagreement over the relevant marginal revenue in continuous time increasing the flow of production of a durable good at a particular point in time has no effect on the sales price at that or any other point in time hence the rate of change in the flow of revenue at that particular point in time is the sales price this is the definition of marginal revenue l p use however durables are different from nondurables in that a perturbation in the production trajectory over some length of time will affect the entire sales price trajectory in choosing its

monopoly production of durable exhaustible resources we examine monopoly production of a durable exhaustible resource previous authors have implicitly assumed that the monopolist is able to make binding commitments about future decisions we consider the more plausible case in which the monopolist lacks this ability and must choose from dynamically consistent plans two models are considered a discrete time model in which there is a strictly finite initial stock of the resource and a continuous time model in which costs are an increasing function of cumulative production we find that as a general result monopoly leads to overconservation the monopolist who cannot precommit produces the efficient quantity ultimately but does so too slowly by contrast the monopolist who can precommit produces less than the efficient stock even in the limit we also find that increased importance of exhaustibility hastens the extraction of the resource copyright 1990 by the london school of economics and political science

cartel stability in an exhaustible resource model a simple oligopolistic common pool exhaustible resource game is considered by analysing punishment strategies including optimal punishments it is possible to determine which cartel agreements are implementable in a non cooperative play of the game joint profit maximizing allocations are sustainable for sufficiently low discounting but in general it is shown that no folk theorem exists for this model in particular for sufficiently high elasticities of demand it is shown that optimal punishments are not sufficiently severe to enforce most stationary symmetric extraction paths thus confirming the hypothesis that sufficient market power is needed for a cartel to be stable a simple common property exhaustible resource model in a discrete time infinite horizon framework will be considered by looking at punishments levelled against firms that deviate from an implicitly agreed extraction path it is possible to examine the extent to which different allocations can be supported as non cooperative equilibria we shall pay particular attention to the question of whether punishments can be severe enough to sustain implicit agreements that maximize joint profits and to the idea pindyck 1979 that cartel stability depends crucially upon market power this non cooperative approach to the question of cartel stability has been used by porter 1983 in a repeated oligopoly model with imperfect information see also green and porter 1984 while we assume perfect observability here the model is compli cated by the existence of a state variable in the form of the resource stock moreover we shall apply the idea of optimal punishments in this dynamic model abreu et al 1986 1990 have looked at general properties of the equilibrium set in the green porter model what we find is that by considering a more general strategy space than that conventionally studied cooperative extraction rates are sustainable in equilibrium for low enough discount rates in contrast to the over extraction results often obtained moreover in this model the predictions concerning the range of possible sustainable equilibria as the discount rate approaches zero are sharp while the cooperative solution belongs to the set of equilibria for low discount rates constant symmetric extraction paths below the maximum possible rate fail to be sustainable in the limit if the elasticity of demand is sufficiently high thus for low discount rates only extraction rates close to the cooperative rate are sustainable together with disagreement equilibria which involve very high extraction rates these results are in sharp contrast to those obtained from repeated games where in the limit the range of equilibria is very large the difference is explained by the existence of a state variable in the form of a declining stock of the resource these results are also in contrast to what can happen in our model when the demand elasticity is lower all constant symmetric extraction paths may be sustainable for low enough

cradle to cradle design creating healthy emissions a strategy for eco effective product and system design eco effectiveness and cradle to cradle design present an alternative design and production concept to the strategies of zero emission and ecoefficiency where eco efficiency and zero emission seek to reduce the unintended negative consequences of processes of production and consumption eco effectiveness is a positive agenda for the conception and production of goods and services that incorporate social economic and environmental benefit enabling triple top line growth eco effectiveness moves beyond zero emission approaches by focusing on the development of products and industrial systems that maintain or enhance the quality and productivity of materials through subsequent life cycles the concept of eco effectiveness also addresses the major shortcomings of eco efficiency approaches their inability to address the necessity for fundamental redesign of material flows their inherent antagonism towards long term economic growth and innovation and their insufficiency in addressing toxicity issues a central component of the eco effectiveness concept cradle to cradle design provides a practical design framework for creating products and industrial systems in a positive relationship with ecological health and abundance and long term economic growth against this background the transition to eco effective industrial systems is a five step process beginning with an elimination of undesirable substances and ultimately calling for a reinvention of products by reconsidering how they may optimally fulfill the need or needs for which they are actually intended while simultaneously being supportive of ecological and social systems this process necessitates the creation of an eco effective system of nutrient management to coordinate the material flows amongst actors in the product system the concept of intelligent materials pooling illustrates how such a system might take shape in reality 2006 published by elsevier ltd

perfect equilibrium timing of a backstop technology limit pricing induced by trigger zones this paper considers strategic use of r d in the context of an exhaustible resource market where the consuming countries control r d and a cartel controls the resource it is shown that r d investments to develop a backstop technology can be used as a credible threat to induce a low price profile for the resource the price path associated with the unique perfect equilibrium exhibits limit pricing the backstop is eventually introduced but in a period before this event the cartel keeps the price sufficiently low to make delayed investment the preferred alternative for the consuming nations

expert inquiry on innovation options for cleaner production in the chemical industry abstract the prospects of further progress in cleaner production in the chemical industry are explored by means of an expert inquiry which looks at the ecological and economic potentials of different technological and business innovation options as well as barriers to their development the outcome of the inquiry is analysed with a view to identify prospective priority areas for innovation support policies the analysis shows that innovation leading to alternative synthetic pathways and a shift to selling services instead of products have especially high potentials for both strong positive ecological effects and to be important factors for competitiveness the utilisation of these potentials depends however on whether different types of innovation barriers can be overcome suggestions are made as to how to develop policy measures to facilitate this

a theory of oil igopoly cournot equilibrium in exhaustible resource markets with fixed supplies the emergence of an effective and powerful cartel in the international petroleum market has stimulated considerable effort among economists to develop models of pricing and supply behavior for this industry 2 this modeling task poses two basic difficulties first as in the standard oligopoly problem one must characterize the behavior of several sellers in a market aware of each other and of their effect on market price second there is here the added difficulty of treating the explicitly intertemporal nature of suppliers decision wherein a limited stock must be optimally allocated over time this paper studies the implications of the simplest non trivial postulates about these two aspects of the problem it is assumed that suppliers are non cooperative cournot nash players each of whom is imagined to select an optimal supply strategy taking as given the strategies of the others moreover it is hypothesized that the feasible strategies are limited to open loop paths chosen at the initial date to maximize the present value of profits in light of the paths of supply which the others have chosen 3 these basic postulates together with a few technical assumptions concerning the structure of resource demand permit one to demonstrate the existence of at least one non cooperative equilibrium concerning thisequilibrium we show that 1 the average and marginal return on resource stocks is inversely related to the size of a player s initial endowment 2 aggregate production decreases over time until all stocks are exhausted while firms with smaller stocks exhaust their supplies no later than firms with larger stocks do 3 the present value of price net of extraction cost declines over time 4 industry production maximizes a weighted average of intertemporal consumer s surplus and producers profits

permanent versus interim regulations a game theoretic analysis abstract when a regulator anticipates learning about the benefits or costs of regulations over time questions can be raised about the appropriate regulatory policy this paper compares permanent and interim regulations in a setting with initially uncertain pollution damages a fixed capital input and costly enforcement the analysis shows that neither policy is first best conditions under which one policy dominates the other are identified with the help of a simulation the results indicate that permanent regulations may be preferable to interim regulations even when there is substantial uncertainty about damages

common pool equities an arbitrage based non cooperative solution to the common pool resource problem abstract it is proposed that a new type of property right termed a common pool equity can solve the common pool resource problem this equity may be presented to any firm that extracts from the resource for a share in profits it is shown that a profit arbitrage condition ensures that the market and socially efficient solutions correspond whenever market power is absent the cost externalities are fully internalized

equilibria in a stochastic resource management game under imperfect information abstract the paper considers equilibrium solutions in a stochastic resource management game the countries choose frequently between cooperative and noncooperative retaliation modes of play the choices between cooperative and noncooperative subgames are based on imperfect estimates of the fishing efforts fleet sizes of the co harvesting country during the previous period if either of the countries concludes that the fishing activity of the co harvesting country has been too intensive during the previous period i e the estimated fishing effort exceeds a trigger value then either a noncooperative retaliation period follows or cooperation is continued after a noncooperative period the countries begin to cooperate once again it is shown that equilibria in which cooperative and noncooperative periods alternate can occur in dynamic games different types of equilibria for the game exist the countries may be able to sustain efficient cooperation all the time they may oscillate between cooperation and noncooperation or they may fail to cooperate at all conditions under which an equilibrium coincides with a pareto optimal solution are studied

inefficiency of credible strategies in oligopolistic resource markets with uncertainty abstract the implications of different information patterns for firms in oligopolistic resource markets are considered the traditional open loop nash equilibrium with static information sets is one of many possible nash equilibria and is not suitable for stochastic environments when shocks to resource growth are serially uncorrelated there are no gains from conditioning the harvest on past stock levels and the feedback or credible nash equilibrium is the appropriate nash equilibrium concept this credible equilibrium assumes that firms have knowledge of current stocks of reserves which typically leads to more rapid extraction of the resource and possibly extinction since the open loop nash equilibrium is efficient when demand is iso elastic and extraction costs are zero it is clear that an increase in information can be detrimental to firms in the industry

groundwater use under incomplete information abstract this paper introduces a game theoretic model of groundwater extraction in a two cell aquifer under incomplete information a novel assumption is that individual users have incomplete knowledge of the speed of lateral flows in the aquifer although a user is aware that his neighbor s water use has some influence on his future water stock he is uncertain about the degree of this impact we find that the lack of information may either increase or decrease the rate of water use and welfare in a two period framework the relevant characteristic is the ratio of the periodic marginal benefits of water use depending on whether this ratio is convex or concave the average speed with which the aquifer is depleted decreases or increases when users learn more about the local hydrologic properties of groundwater in principle welfare may decrease even in cases when the groundwater allocation is closer to the efficient groundwater allocation

general wisdom concerning the factors affecting the adoption of cleaner technologies a survey 1990 2007 abstract cleaner technologies ct have recently received much attention in diverse media and policy agendas this comes out of the clear role they play in environmental protection and sustainability and the large potential to contribute to economic growth and competitiveness the realization of both potentials depends on the level diffusion and exploitation achieved today very low this article presents a selective survey of papers that today represent the general wisdom concerning the factors affecting adoption as a primary condition to diffusion and exploitation of ct the paper helps to clarify the challenges facing diffusion modelers and policy makers when dealing with policy design assessing the levels of diffusion achieved as well as the factors affecting diffusion of a particular technology the paper ends outlining further research need in the field

the dynamics of technological innovation the case of the pharmaceutical industry abstract this paper examines the mechanisms and dynamics of the process of innovation in companies and sectors of the chemical industry it is based on analysis of science and technology output indicators namely patents and innovations evaluated in terms of originality and in the case of innovations in terms of market success as well radical innovation ri is identified as the kingpin for the evolution of technologies in both the micro and macro economic context not only because it provides a model for imitation but also because it turns out to be more profitable for the innovating companies than incremental innovation at the micro economic level this paper examines the significance of diverse driving forces which lead a company to the launching of projects aiming at ri measures the length of commitment to such projects and describes the dynamic effects generated by the introduction of a successful ri and how they affect the company s subsequent r d and market orientation at the macro economic level this paper identifies the stages of youth growth maturity and decline of the subsectors of the chemical industry examines the distribution of ri and market successful innovations over the development of a sector describes the influence of market demand and capital investment on technological advance and compares the development of national chemical industries the paper concludes with an account of the dynamics of technological innovation in the chemical industry over the period 1930 1985 which is based on the empirical findings of the previous sections

on the oligopolistic extraction of non renewable common pool resources in recent literature the extraction of common pool resources ha s been discussed under the aspect of whether or not they can be used efficiently when a finite number of agents has access to the resource the objective of this paper is the derivation of a necessary equilibrium condition in a simple model this condition has severe consequences for existence propositions in papers of m c kemp and n v long 1980 j mcmillan and h w sinn 1984 and j f reinganum and n l stokey 1985 copyright 1986 by the review of economic studies limited

efficiency inducing tax for a common property oligopoly the author characterizes the markov perfect tax that induces a common property oligopoly to extract efficiently a nonrenewable resource for linear and isoelastic demand he provides closed form expressions of the unique specific tax industry profits may be higher or lower in the oligopoly with the tax relative to the competitive equilibrium with property rights for linear or isoelastic demand there exists no feasible open loop tax that induces efficient extraction in this case the policymaker gains no advantage from being able to make binding commitments copyright 1992 by royal economic society

the effects of well management and the nature of the aquifer on groundwater resources we compare groundwater use under collective well management in china where village leaders allocate water among households and under private well management where farmers either pump from their own wells or buy water from wells owned by other farmers villages are divided into connected or isolated groups depending on whether there are lateral groundwater flows between aquifers underlying a village and neighboring ones in rural china households under collective well management use less water even under collective management households located in connected villages use more water indicating that the connectedness of the aquifers may undermine leaders incentives to conserve water

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

competitive versus efficient extraction of a common property resource the groundwater case abstract in this paper socially optimal and private extraction of a common property aquifer are compared open loop equilibrium and feedback equilibrium in linear strategies have been computed to characterize private extraction the use of these two equilibrium concepts allows us to distinguish between cost and strategic externalities as long as the open loop solution captures only the cost externality and the feedback solution captures both the results show that strategic behaviour increases the overexploitation of the aquifer compared to the open loop solution however if the groundwater storage capacity is large the difference between the socially optimal and private extraction the latter characterized by a feedback equilibrium is negligible

redefining innovation eco innovation research and the contribution from ecological economics while innovation processes toward sustainable development eco innovations have received increasing attention during the past years theoretical and methodological approaches to analyze these processes are poorly developed against this background the term eco innovation is introduced in this paper addressing explicitly three kinds of changes towards sustainable development technological social and institutional innovation secondly the potential contribution of neoclassical and co evolutionary approaches from environmental and innovation economics to eco innovation research is discussed three peculiarities of eco innovation are identified the double externality problem the regulatory push pull effect and the increasing importance of social and institutional innovation while the first two are widely ignored in innovation economics the third is at the least not elaborated appropriately the consideration of these peculiarities may help to overcome market failure by establishing a specific eco innovation policy and to avoid a technology bias through a broader understanding of innovation finally perspectives for a specific contribution of ecological economics to eco innovation research are drawn it is argued that methodological pluralism as established in ecological economics would be very beneficial for eco innovation research a theoretical framework integrating elements from both neoclassical and evolutionary approaches should be pursued in order to consider the complexity of factors influencing innovation decisions as well as the specific role of regulatory instruments and the experience gathered in ecological economics integrating ecological social and economic aspects of sustainable development is highly useful for opening up innovation research to social and institutional changes 2000 elsevier science b v all rights reserved

financial capacity and output fluctuations in an economy with multi period financial relationships this paper motivates a financial propagation mechanism in the context of an intertemporal production economy with asymmetric information and with borrowers and lenders who enter multi period financial relationships a key feature is that aggregate output and borrowers financial capacity the maximum overhang of past debt they may feasibly carry are determined jointly much in the spirit of gurley and shaw 1955 expectations of future economic conditions govern financial capacity which in turn may constrain current production especially in bad times a small but persistent shift in aggregate conditions may have a large impact on financial capacity making the framework capable of motivating large endogenous fluctuations in financial constraints understanding how small disturbances can induce large output fluctuations is an on going quest in macroeconomics this paper develops a simple framework in which shifts in aggregate economic fundamentals are amplified through their impact on financial conditions a distinguishing feature is that output and borrowers financial capacity the maximum overhang of past debt they may feasibly carry are determined jointly much in the spirit of gurley and shaw 1955 expectations of future economic conditions govern financial capacity and financial capacity may constrain current production especially in bad times a number of recent papers have resurrected the view that financial factors may play a part in propagating business fluctuations the underlying theories exploit the idea that with asymmetric information between borrowers and lenders agency costs may drive the price of uncollateralized external funds above the price of internal funds in this kind of setting a borrower s financial position is a key determinant of the terms of credit she faces in the aggregate swings in borrower balance sheets over the cycle amplify fluctuations in investment and output essentially by inducing counter cyclical movements in the required premium for external finance this simple mechanism is broadly consistent with informal descriptions of how financial and real variables interacted in the great depression bernanke 1983 and in the postwar business cycles eckstein and sinai 1986 in addition numerous recent panel data studies beginning with fazzari hubbard and peterson 1988 support the notion of a financial investment accelerator mechanism

consistent tariffs with dynamic supply response abstract this paper models a large importer of a competitively produced good for which there are nonlinear adjustment costs in production if producers have rational expectations and the importer is unable to make a credible commitment regarding future tariffs market power may be disadvantageous this is more likely to occur when the difference between short and long run elasticities of supply are large this result depends on the particular subgame perfect equilibrium that is chosen if producers were capable of strategic behavior other equilibria which rely on trigger strategies would be reasonable and market power could no longer be disadvantageous

appropriation of common access natural resources through exploration the relevance of the open loop concept in this paper the open loop equilibrium is rehabilitated as a sensible concept for analyzing common property situations in a model of natur al resource exploration in which the sole motivation to explore prior to extraction arises from a strategic incentive to preempt competito rs a consistency rule to the exploration game is applied under which the commonality of reserves is preserved even if strategies are open loop under this rule the so often claimed efficiency of the common property open loop equilibrium is lost copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

from end of pipe technology towards pollution preventive approach the evolution of corporate environmentalism in korea abstract this paper is concerned with the evolution of korean corporate environmentalism because korea has experienced dramatic economy growth and faced diverse environmental issues in recent decades it is a good place to think how the dominant environmental response of companies evolves using content analysis of industry journals as well as surveys and in depth interviews we found that korean companies have progressed through different eras of corporate environmentalism the ignorance era the compliance era and the strategic compliance era they have been changing their environmental responsive mode from an end of pipe approach to a preventive one since the early 1990s enforced regulations local community pressure and new knowledge and information for environmental management are the main forces of the environmental postures of korean companies during the 1990s in addition we confirmed that a pollution preventive approach results in a better environmental performance than an end of pipe approach although sustainable development is far off for korean companies they have quickly begun to turn their attention to pollution prevention and further environmental management as they face a new competitive environment

dynamic demand and noncompetitive intertemporal output adjustments abstract this paper integrates dynamics on the demand and on the supply side which are characteristic for many goods in particular fuels due to costly adjustments furthermore firms often pursue a quantity strategy and decide on output adjustments additional capacities etc instead of fixing prices e g opec moved from posting prices to adjusting output in 1986 this paper provides a corresponding framework surprisingly ignored in the literature and derives intertemporal market equilibria cooperative and noncooperative in open loop and in markov strategies the equilibrium in markov strategies is different mostly opposite to the much discussed sticky price models the qualitative properties are non trivial and some of them are even surprising e g increased demand sluggishness can raise supply

factor demands effective discount rates and liquidity constraints in the retail trade firm eunkyung kwon this is a firm level empirical study of the impact of credit market frictions on firm factor demands it extends previous work in two ways it studies the impact of liquidity constraints on both fixed investment and employment and examines data on retail firms using the euler equation approach it finds strong evidence for the impact of financial constraints on factor demands estimated relationships in turn induce striking countercyclical movements in effective discount rates of firms with limited access to credit the article concludes that the results found in previous work regarding excess sensitivities of investment to liquidity are indeed due to liquidity constraints jel e32 e44 e22 i introduction financing and investment decisions are not in general independent of one another when a firm has limited access to credit markets a number of empirical studies have provided evidence in support of this hypothesis 1 using the euler equation approach and firm level data these studies provide evidence for the role of imperfect financial markets in firms economic decisions they have two common features one is that they study the impact of liquidity constraints on only a single input typically investment the other is that they focus exclusively on the manufacturing sector this article extends the earlier work in two important ways first it examines the impact of liquidity constraints on multiple input choices in particular physical investment and employment second it incorporates data from nonmanufacturing sectors specifically retail trade studying the impact of liquidity constraints on multiple inputs is important for several reasons first it provides an additional testable restriction on the data by holding the impact of financial constraints constant over factor demands it is possible to identify the effects of financial constraints more strictly the idea is that if borrowing constraints truly affect firm factor demands then the impact of such constraints on a firm s discount rate should be the same across different input choices since previous studies considered investment only we cannot exclude the possibility that other factors e g fixed costs of adjustment capital irreversibility in capital etc may be responsible for data not conforming to the model s prediction hence finding the neoclassical model with the perfect capital market to have been misspecified second the analysis in this article considers a general model that allows for the possibility that demands for capital and labor are dynamically interrelated and so jointly determined as opposed to the previous model where optimal investment was determined solely by future investment and prices this generalization is important because the misspecification of the standard euler equation might be due to an assumption of no interactions between input demands rather than to capital market imperfections adding employment to the euler equation for investment is insightful regarding tests for the presence of financial constraints for several other reasons first it is quite straightforward to derive and analyze the euler equation for labor relative to other inputs such as inventories second firm employment decisions are more likely to be closely connected to a firm s physical investment decisions third it is commonly thought that firm labor decisions are rarely affected by liquidity constraints thus examining liquidity jointly on investment and employment is of particular interest for examining the empirical relevance of financial constraints 2 retail trade is an important cyclical sector that has received relatively little attention in the literature it is of particular interest to this study because one can make the case on a priori grounds that firms with imperfect access to credit have a substantial influence within this sector for example as described in a following section in retail trade firms that either do not issue publicly traded equity or do not have a rating to issue publicly traded bonds account for nearly 80 of economic activities in the retail sector

oligopoly extraction of a common property natural resource the importance of the period of commitment in dynamic games the theory of noncooperative dynamic games has provided an extremely powerful framework for studying many of the classic questions in industrial organization for example questions about resource extraction advertising research and development investment in new capacity and barriers to entry where interactions over time among few firms are involved however an important methodological issue arises when economic competition over time is modeled as a dynamic game the issue is the appropriate formulation of the players strategy spaces

the transition to the sustainable enterprise abstract the sustainable enterprise is entering a new phase private enterprise engages in a shift from environmentally friendly production methods towards true sustainable entrepreneurship dealing both with quality and volume aspects of natural capital corporate governance changes at two levels first the internal governance of the firm alters as new environmental preservation demands come forward secondly the external governance of the firm changes as new initiatives need to be employed to ensure adequate and sustainable social technological and infrastructural conditions for production it is argued that the preservation of non reproducible key stocks of energy biodiversity and space requires new and special attention in the strategic management of the sustainable enterprise also it is shown that evolving ethical values of intergenerational equity demand a timely transition to new business practices finally a program for governments and enterprises to enhance progress towards the next stage of sustainable entrepreneurship is presented

unilateral production restrictions in a dynamic duopoly abstract this paper examines a dynamic game of exploitation of a productive asset by a duopoly a closed loop nash equilibrium of the game is constructed and used to analyze the effects of a unilateral production restriction surprisingly such unilateral action may result in a decrease of the long run asset s stock we also exhibit production restrictions that can result simultaneously in an increase of the asset s stock and the long run profits of the firm that is being imposed the production restriction moreover a unilateral decrease of the production of one firm can induce its rival to also decrease its production

brand loyalty and market equilibrium two concepts of brand loyalty are defined inertial brand loyalty resulting from time lags in awareness and cost based brand loyalty resulting from intertemporal utility effects their market level implications are formally derived in a continuous time model it is found that inertial brand loyalty leads to equilibria with price dispersion while cost based brand loyalty also may allow single price equilibria in all cases as brand loyalty vanishes so does the difference between the average trading price and the price which obtains with no brand loyalty consistent with empirical results the theory predicts that the relationship between market share and performance is positive in cross sectional studies but flat in time series studies the theory is also consistent with the view that market share is an asset in itself after developing the theory several strategic implications are drawn in the end some questions for further theoretical and empirical research are raised