emerging biofuels outlook of effects on u s grain oilseed and livestock markets projections of u s ethanol production and its impacts on planted acreage crop prices livestock production and prices trade and retail food costs are presented under the assumption that current tax credits and trade policies are maintained the projections were made using a multi product multi country deterministic partial equilibrium model the impacts of higher oil prices a drought combined with an ethanol mandate and removal of land from the conservation reserve program crp relative to baseline projections are also presented the results indicate that expanded u s ethanol production will cause long run crop prices to increase in response to higher feed costs livestock farmgate prices will increase enough to cover the feed cost increases retail meat egg and dairy prices will also increase if oil prices are permanently 10 per barrel higher than assumed in the baseline projections u s ethanol will expand significantly the magnitude of the expansion will depend on the future makeup of the u s automobile fleet if sufficient demand for e 85 from flex fuel vehicles is available corn based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices the direct effect of higher feed costs is that u s food prices would increase by a minimum of 1 1 over baseline levels results of a model of a 1988 type drought combined with a large mandate for continued ethanol production show sharply higher crop prices a drop in livestock production and higher food prices corn exports would drop significantly and feed costs would rise wheat feed use would rise sharply taking additional land out of the crp would lower crop prices in the short run but because long run corn prices are determined by ethanol prices and not by corn acreage the long run impacts on commodity prices and food prices of a smaller crp are modest cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the corn belt under any of the scenarios this is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of corn based ethanol so long as producers can choose between soybeans for biodiesel switchgrass for ethanol and corn for ethanol they will choose to grow corn cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial sized ethanol facility

truth telling and nash equilibria in minimum cost spanning tree models abstract in this paper we consider the minimum cost spanning tree model we assume that a central planner aims at implementing a minimum cost spanning tree not knowing the true link costs the central planner sets up a game where agents announce link costs a tree is chosen and costs are allocated according to the rules of the game we characterize ways of allocating costs such that true announcements constitute nash equilibria both in case of full and incomplete information in particular we find that the shapley rule based on the irreducible cost matrix is consistent with truthful announcements while a series of other well known rules such as the bird rule serial equal split and the proportional rule are not

food versus fuel an updated and expanded evidence abstract this paper replicates the study of zhang et al 2010 food versus fuel what do prices tell us energy policy 38 pp 445 451 we confirm the findings of the original paper that there was only a weak relationship between ethanol and food commodities in the period between march 1989 and july 2008 in addition we extend that study and examine the cointegration relationship between biofuels and related commodities for a considerably enlarged dataset 3 vs 1 market 26 vs 8 commodities analysis up till 2017 vs 2008 weekly vs monthly data frequency focusing on the biofuel markets of brazil the eu and the usa in the three separate periods before during and after the food crisis of 2007 and 2008 we show that studying the time variation of the relationships plays an essential role in their proper understanding our results help to clarify the wide extensive discussion about the role of biofuels prices in food shortages manifested particularly during the food crises in agreement with the original study we confirm that price series data do not support strong statements about biofuels uniformly serving as main leading source of high food prices and consequently the food shortages

uncertainty effects on production mix and on hedging decisions the case of brazilian ethanol and sugar abstract the use of food crops to produce biofuels has been subject of interest in literature the relationship between food and fuel prices can remarkably affect production strategies these prices are subject to high uncertainty and producers must adopt hedging and storage strategies in order to avoid financial losses this study investigates the effect of uncertainty on production storage and hedging of ethanol and sugar in brazilian mills a robust optimization model to define production storage and hedging strategies is proposed uncertainty sets on returns are constructed based on a state space model kalman filter the presented model was applied to brazilian ethanol and sugar markets in different economic scenarios the study analyses efficient frontiers and optimal strategies and the results indicate that even adopting good price forecast models the optimal strategies can be deeply affected by uncertainty

a causal model of linkages among environmental dimensions macro organizational characteristics and performance an integrative model of relationships among environmental dimensions diversification strategy firm size structural divisionalization and economic performance was developed and tested using environmental and organizational data from 110 large manufacturing firms the results suggested that among those organizations 1 higher levels of environmental instability were associated with lower levels of divisionalization and diversification 2 strategy followed structure and 3 size did not mediate the strategy structure relationship furthermore both environmental instability and diversification were positively related to market determined performance and instability was negatively related to operating performance the results provided support for portions of each of three models the external control strategic management and inertial models

bargaining foundations of shapley value1 a transferable utility economy in which each agent holds a resource which can be used in combination with the resources of other agents to generate value according to the characteristic function v is studied using a dynamic model of bargaining the main theorem establishes that the payoffs associated with efficient equilibria converge to the agents shapley values as the time between periods of the dynamic game goes to zero in addition it is demonstrated that an efficient equilibrium exists and is unique when an additivity condition is satisfied to demonstrate the sensitivity of the solution to the institutional detail we modify the model to allow for partnerships and show that the shapley value is no longer achieved

bargaining and value we present and analyze a model of noncooperative bargaining among n participants applied to situations describable as games in coalitional form this leads to a unified solution theory for such games that has as special cases the shapley value in the transferable utility tu case the nash bargaining solution in the pure bargaining case and the recently introduced maschler owen consistent value in the general nontransferable utility ntu case moreover we show that any variation in a certain class of our bargaining procedure which generates the shapley value in the tu setup must yield the consistent value in the general ntu setup

reconceptualizing the context design issue for the information systems function the authors develop theory for predicting the distribution of decision making between the corporate and business unit levels of management for a subset of information systems is resources referred to as systems development drawing on literature from the fields of mis strategic management and organization theory they first determine how potentially influential context factors are likely to affect the locus of the lead decision making role from a multiple contingencies perspective then they theorize how conflicting corporate and business unit contingencies are likely to be resolved they present a set of six propositions that predict a centralized decentralized or compromise design solution for a given business unit on the basis of 1 business level strategy 2 whether or not information technology it plays a strategic role for the business unit 3 the degree of line managers it knowledge at the business unit level and 4 the level at which opportunities for it related synergies across business units are being pursued at the corporate level

understanding the reductions in us corn ethanol production costs an experience curve approach the us is currently the world s largest ethanol producer an increasing percentage is used as transportation fuel but debates continue on its costs competitiveness and energy balance in this study technological development of ethanol production and resulting cost reductions are investigated by using the experience curve approach scrutinizing costs of dry grind ethanol production over the timeframe 1980 2005 cost reductions are differentiated between feedstock corn production and industrial ethanol processing corn production costs in the us have declined by 62 over 30 years down to 100 2005 tonne in 2005 while corn production volumes almost doubled since 1975 a progress ratio pr of 0 55 is calculated indicating a 45 cost decline over each doubling in cumulative production higher corn yields and increasing farm sizes are the most important drivers behind this cost decline industrial processing costs of ethanol have declined by 45 since 1983 to below 130 2005 m3 in 2005 excluding costs for corn and capital equivalent to a pr of 0 87 total ethanol production costs including capital and net corn costs have declined approximately 60 from 800 2005 m3 in the early 1980s to 300 2005 m3 in 2005 higher ethanol yields lower energy use and the replacement of beverage alcohol based production technologies have mostly contributed to this substantial cost decline in addition the average size of dry grind ethanol plants increased by 235 since 1990 for the future it is estimated that solely due to technological learning production costs of ethanol may decline 28 44 though this excludes effects of the current rising corn and fossil fuel costs it is also concluded that experience curves are a valuable tool to describe both past and potential future cost reductions in us corn based ethanol production

blending under uncertainty real options analysis of ethanol plants and biofuels mandates abstract the value of a representative ethanol producer that benefits from both low and high gasoline prices in the short run is modeled ethanol producers make a modest competitive profit in the mandate induced region of production a low price of gasoline increases the demand for blend ethanol and consequently increases the profit of ethanol producers on the other hand when gasoline becomes costlier than ethanol the capacity constraints of the biofuels sector bind and ethanol producers gain large quasi monopoly margins this is an interesting example of a market where two commodities are complement up to a point and then substitute after that we postulate the value of an ethanol producer as a strangle option consisting of two real options the option to substitute gasoline at times of expensive crude oil and the option to expand supply of blend at times of cheap gasoline using a dynamic model we show that the higher volatilities of crude oil and ethanol costs increase biofuels firms value we also find non monotonic relationships between the value of an ethanol plant and several underlying variables including gasoline price level we estimate the value provided by a 10 blend mandate to be around 150 000 000 for a representative ethanol unit our results offer a novel view of oil and feedstock price risks in contrast to the common belief that considers those risks as a negative factor for the biofuels sector

forming coalitions and the shapley ntu value a simple protocol for coalition formation is presented first an order of the players is randomly chosen then a coalition grows by sequentially incorporating new members in this order the protocol is studied in the context of non transferable utility ntu games in characteristic function form if weighted utility transfers are feasible when everybody cooperates then the expected subgame perfect equilibrium payoff allocation anticipated before any implemented game is the shapley ntu value

nash equilibrium and welfare optimality if is a set of social alternatives a social choice rule scr assigns a subset of a to each potential profile of individuals preferences over a where the subset is interpreted as the set of welfare optima a game form or mechanism implements the social choice rule if for any potential profile of preferences 1 any welfare optimum can arise as a nash equilibrium of the game form implying in particular that a nash equilibrium exists and 2 all nash equilibria are welfare optimal the main result of this paper establishes that any scr that satisfies two properties monotonicity and no veto power can be implemented by a game form if there are three or more individuals the proof is constructive

the dynamics of alignment insights from a punctuated equilibrium model several prior articles have emphasized the importance of alignment between business and information system is strategies and between business and is structures seeking to advance our understanding of alignment we examine the dynamics of changes in alignment through strategy structure interactions in the business and is domains more specifically we address the following question in what ways does alignment evolve over time changes in the strategic is management profile which includes business strategy is strategy business structure and is structure over time are examined using a punctuated equilibrium model involving long periods of relative stability or evolutionary change interrupted by short periods of quick and extensive or revolutionary change case studies of changes in business and is strategies and structure over long time periods in three organizations suggest that the punctuated equilibrium model provides a valuable perspective for viewing these dynamics the cases suggest that a pattern of alignment may continue over a long period because either the level of alignment is high or the managers do not recognize the low alignment as a problem revolutions involving changes in most or all dimensions of the strategic is management profile interrupt the evolutionary changes however organizations hesitate to make such revolutionary changes in strategic is management profiles complete revolutions apparently require a combination of strong triggers finally post revolution adjustments to one dimension of the strategic is management profile seem to follow revolutionary changes

bidding for the surplus a non cooperative approach to the shapley value abstract we propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero monotonic environments with transferable utility the mechanism consists of a bidding stage followed by a proposal stage we show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the shapley value payoffs we extend our results to implement the weighted shapley values finally we generalize our mechanism to handle arbitrary transferable utility environments the modified mechanism generates an efficient coalition structure and implements the shapley values of the super additive cover of the environment journal of economic literature classification numbers c71 c72

choosing wisely a multibidding approach reaching decisions about the location of noxious facilities such as dump sites environmentally hazardous plants nuclear power generators and the like is a highly contentious issue for instance in february 2000 the u s senate decided that nationwide nuclear waste would be shipped to the yucca mountain site in nevada conditional to it being approved as a high level nuclear waste repository despite the attractive compensation package the state of nevada voiced vehement opposition president clinton vetoed the bill and in may 2000 the senate failed to overturn it as such the major problem facing the u s nuclear industry on where to site a high level radioactive waste repository remains virtually unresolved neither are decisions about the location of desirable events easily solvable every two years the international olympic committee selects hosts for the summer and winter games a procedure that is constantly under review and revision in order to bring about the best possible outcome until about a year ago the decision was made by a vote based on bids and plans submitted by candidate cities however the recent controversy surrounding the choice of salt lake city to host the 2002 winter games culminated in the design of a new procedure for choosing the host of the 2006 winter games this procedure called for the selection of two finalist cities in this case turin and sion immediately after which the host was selected by secret ballot in this case turin another similar issue is currently the subject of heated debate in spain the spanish government both on the national and local level has recently been discussing various possible projects for transferring water from rivers in the north of spain to the arid southern regions the parties involved have conflicting interests with regard to several aspects of the projects proposed particularly the water rich regions are hesitant to give up parts of their water resources the parties involved have still not agreed upon the choice of a transport mode or the size of the transfer payments that would compensate the localities that are relinquishing part of the water supply these and several other cases belong to a class of problems in which a group of agents has to choose one out of several projects a project is efficient if it maximizes the aggregate welfare of the group members reaching an efficient outcome is trivial when the designer has all the relevant information however it is often the case that the parties concerned possess much more information than the designer hence the designer faces a nontrivial problem if she wishes to optimally choose one of the projects moreover from a normative point of view even if the designer has all the information it is easier to justify the use of a fixed procedure to reach a decision than to modify the procedure for various cases in light of information disclosed or already available to the designer several well known methods are available for the problem of choosing one out of a set of alternatives one class of methods consists of various voting schemes such as majority voting or the borda rule the outcomes generated by these methods need not be efficient due to strategic behavior on the part of the agents another class of methods consists of vickreyclarke groves mechanisms for this class truthtelling is a dominant strategy that always results in the choice of an efficient alternative however these mechanisms are not budgetbalanced and the payments collected from the perez castrillo department of economics code universitat autonoma de barcelona 08193 bellatera barcelona spain wettstein department of economics bengurion university of the negev monaster center for economic research beer sheva 84105 israel we thank herve moulin for his helpful suggestions suresh mutuswami who encouraged us to check for strong nash equilibria and francis bloch mark gradstein moshe justman jordi masso and two anonymous referees for their useful comments perez castrillo gratefully acknowledges financial support from bec2000 0172 and 2000sgr 00054

biofuel related price transmission literature a review abstract in this article an extensive review of the rapidly growing biofuel related time series literature is carried out the data used the modeling techniques and the main findings of this literature are discussed providing a review of this flourishing research area is relevant as a guidepost for future research this literature concludes that energy prices drive long run agricultural price levels and that instability in energy markets is transferred to food markets

bioenergy and global land use change this is the first article that econometrically estimates the global land use change impact of bioenergy applying time series analytical mechanisms to fuel biofuel and agricultural commodity prices and production we estimate the long run relationship between energy prices bioenergy production and the global land use change our results suggest that rising energy prices and bioenergy production significantly contribute to the global land use change both through the direct and indirect land use change impact globally the total agricultural area yearly increases by 35 578 1 thousand ha due to increasing oil price and by 12 125 1 thousand ha due to increasing biofuel production which corresponds to 0 73 and 0 25 of the total worldwide agricultural area respectively soya land use change and wheat land use change have the highest elasticities with respect to both oil price and biofuel production in contrast nonbiomass crops grassland and rice have negative land use change elasticities region spe

the impact of ethanol production on us and regional gasoline markets an update to may 2009 we update the findings of the impact of ethanol production on u s and regional gasoline markets as reported previously in du and hayes 2009 and 2011 by extending the data to december 2011 the results indicate that over the period of january 2000 to december 2011 the growth in ethanol production reduced wholesale gasoline prices by 0 29 per gallon on average across all regions the midwest region experienced the biggest negative impact of 0 45 gallon while the regions of east coast west coast and gulf coast experienced negative impacts of similar magnitudes around 0 20 gallon based on the data of 2011 only the marginal impacts on gasoline prices are found to be substantially higher given the increasing ethanol production and higher crude oil prices the average effect across all regions increases to 1 09 gallon and the regional impact ranges from 0 73 gallon in the gulf coast to 1 69 gallon in the midwest

the impact of ethanol production on us and regional gasoline markets abstract this study quantifies the impact of increasing ethanol production on wholesale retail gasoline prices employing pooled regional time series data from january 1995 to march 2008 we find that the growth in ethanol production kept wholesale gasoline prices 0 14 gallon lower than would otherwise have been the case the negative impact of ethanol on retail gasoline prices is found to vary considerably across regions the midwest region has the biggest impact at 0 28 gallon while the rocky mountain region had the smallest impact at 0 07 gallon the results also indicate that the ethanol induced reduction in gasoline prices comes at the expense of refiners profits we find a net welfare loss of 0 5 billion from the ethanol support policies in multiple markets

realizing fair outcomes in minimum cost spanning tree problems through non cooperative mechanisms abstract in the context of minimum cost spanning tree problems we present a bargaining mechanism for connecting all agents to the source and dividing the cost among them the basic idea is very simple we ask each agent the part of the cost he is willing to pay for an arc to be constructed we prove that there exists a unique payoff allocation associated with the subgame perfect nash equilibria of this bargaining mechanism moreover this payoff allocation coincides with the rule defined in bergantinos and vidal puga bergantinos g vidal puga j j 2007a a fair rule in minimum cost spanning tree problems journal of economic theory 137 326 352

the impact of diesel price on upstream and downstream food prices evidence from sao paulo abstract the literature on the transmission of oil price shocks to prices along the food supply chain has widely ignored how shocks upstream differ from downstream ones this article examines this issue by modelling upstream and downstream diesel price shocks along the nutritional high value food supply chain in sao paulo using a vector error correction approach and monthly data from july 2001 to december 2013 we estimate short run and long run dynamics in producer and retail prices of meat eggs dairy and fats oil due to changes in the average monthly price of diesel the results of the granger causality analysis show that the price of diesel cannot be used to predict the behaviour of producer prices in all the markets under study and the price of diesel predicts retail price only in the egg market this result is in line with the nature of price controls in brazil as of january 2002 the prices charged by distributors and retailers have been liberalized although wholesale prices of the derivatives including that of diesel continue to be set by the state oil company with the objective of controlling inflationary pressures the results of the response of food prices to diesel price shocks show a positive response of both upstream and downstream prices of egg and dairy products both upstream and downstream while the opposite direction occurs in the fat and meat markets albeit the initial positive shock of the producer price of meat the findings of the study show the important role of public policy in determining the nature of price transmission along the food supply chain

cost monotonicity consistency and minimum cost spanning tree games abstract we propose a new cost allocation rule for minimum cost spanning tree games the new rule is a core selection and also satisfies cost monotonicity we also give characterisation theorems for the new rule as well as the much studied bird allocation we show that the principal difference between these two rules is in terms of their consistency properties

the effect of ethanol policies on the vertical price transmission in corn and food markets this paper analyzes the impact of ethanol policies on price transmission along the food supply chain we consider the us corn sector and its vertical links with food and ethanol energy markets we find that ethanol is a source of imperfect price transmission in the food supply chain ethanol however alters price transmission only under a binding blender s tax credit and only from food to corn not vice versa our results indicate that ethanol weakens the response of corn and food prices in terms of their level changes to shocks occurring in agricultural corn and food markets the results are robust to different assumptions on the model parameters although market power has previously been identified as a source of imperfect price transmission in the food supply chain our findings show that in the presence of ethanol the imperfect price transmission may occur even if markets are perfectly competitive this warrants careful evaluation of markets before any policy intervention

biofuels and food security the biofuel market created the linkage between energy and agricultural market prices biofuel policies and energy prices set the floor price of feedstock prices and the energy prices and the upper limit of the biofuel blend ratio can decide the ceiling of feedstock prices on the other hand biofuels can also transmit price volatility from energy to agricultural markets despite not always being the cause of price volatility of feedstock and related agricultural commodity prices brazilian bioethanol can play a crucial role in stabilizing the sugar market one of the most crucial problems for increasing biofuel production is the competition with food and food related demand and agricultural resources the definition of competition between biofuels and food can be divided into two dimensions the competition with food and food related demand and the competition with the agricultural resources the feedstock of the second generation biofuels can compete with food and food related demand and agricultural resources the development of second generation biofuels may not solve the problems associated with the competition between biofuels and food however the competition between biofuels and food doesn t always have a negative impact on food security the competition and food security impact on different dimensions biofuels can contribute to agricultural and rural development and can have a positive impact on a national and sub national level but they can also have a negative impact on household levels in the same country international action is required to monitor whether biofuels can have a negative impact on food security and nutrition security at national sub national and household levels biofuels should be compatible with and must not threaten food security the fao in collaboration with other international organizations will have the responsibility of monitoring the impact of biofuels on food security and proposing policy recommendations to individual countries based on the results of the monitoring

food versus fuel what do prices tell us abstract sorting out the impacts of biofuels on global agricultural commodity prices is impossible without turning to data and distinguishing between the short run versus the long run impacts using time series prices on fuels and agricultural commodities the aim is to investigate the long run cointegration of these prices simultaneously with their multivariate short run interactions results indicate no direct long run price relations between fuel and agricultural commodity prices and limited if any direct short run relationships in terms of short run price movements sugar prices are influencing all the other agricultural commodity prices except rice with sugar the number one world input for ethanol results indicate increased ethanol production is potentially influencing short run agricultural commodity prices overall results support the effect of agricultural commodity prices as market signals which restore commodity markets to their equilibria after a demand or supply event shock

how is volatility in commodity markets linked to oil price shocks abstract this study investigates the effects of oil price shocks on volatility of agricultural and metal commodities we decompose an oil price shock to its underlying components including macroeconomics and oil specific shocks the applied method is the structural vector autoregressive svar model and the time span is from april 1983 to may 2014 the investigation is divided into two subsamples before and after may 2006 for agriculture taking into account the 2006 2008 food crisis and change in u s ethanol production policy and before and after january 2008 for metals considering the recent global financial crisis we find that based on impulse response functions the response of volatility of each commodity to an oil price shock differs significantly depending on the underlying cause of the shock for the both periods moreover according to variance decomposition the explanatory power of oil shocks becomes stronger after the crisis the different responses of commodities are described in detail by investigating market characteristics in each period

bidding for surplus in network allocation problems in this paper we study non cooperative foundations of network allocation rules we focus on three allocation rules the myerson value the position value and the component wise egalitarian solution for any of these three rules we provide a characterization based on component efficiency and some balanced contribution property additionally we present three mechanisms whose equilibrium payoffs are well defined and coincide with the three rules under consideration if the underlying value function is monotonic non monotonic value functions are shown to deal with allocation rules applied to monotonic covers the mechanisms are inspired by the implementation of the shapley value by perez castrillo and wettstein bidding for the surplus a non cooperative approach to the shapley value j econ theory 100 2 2001 274 294

the integration of energy and agricultural markets this article addresses the evolving links between energy and agricultural markets prior to 2005 there was little correlation between energy and agricultural commodity prices in 2006 2008 with the ethanol boom in the united states there emerged a strong link between crude oil gasoline and corn prices there was little link between ethanol and corn however in late 2008 and 2009 the markets changed as ethanol production came under severe economic pressure and 2 billion out of 12 billion gallons of capacity shut down during this period ethanol became priced more on corn as the breakeven corn price helped drive the ethanol market this article explores the drivers in these markets as well as other major issues facing the corn ethanol industry in the united states such as the blend wall the article concludes with a review of prospects of a future cellulosic biofuels industry

rational bargaining in games with coalitional externalities this paper provides a flexible strategic framework to analyze bargaining and values in environments with coalitional externalities within this framework we propose a new value that extends the shapley value to partition function form games the so called rational belief shapley rbs value we investigate the strategic foundation of the rbs value by constructing an implementation mechanism this mechanism extends existing models of multilateral bargaining by allowing players a higher degree of freedom to form coalitions the same framework of bidding and renegotiation allows for natural variations of the rbs mechanism in this way alternative shapley like values are obtained and a unified platform to analyze and compare these solutions is provided

an implementation of the owen value abstract we present an implementation of the owen value owen 1977 essays in mathematical economics and game theory pp 76 88 inspired by the bidding mechanism introduced by perez castrillo and wettstein 2001 j econ theory 100 274 294 the idea is the following first players of each coalition play the bidding mechanism trying to obtain the resources of the coalition later players who obtained the resources play the bidding mechanism in order to share the surplus

how market efficiency and the theory of storage link corn and ethanol markets this article uses the theories of market efficiency and supply of storage to develop a conceptual link between the corn and ethanol markets and explores statistical evidence for the link we propose that a long run no profit condition is established in distant futures markets for ethanol corn and natural gas and then use the theory of storage to define an inter temporal equilibrium among these prices the relationship shows that under certain conditions future price expectations will influence nearby futures prices and that a short term relationship between input and output prices will exist we demonstrate validity of the theory using a structural price model and then by means of time series techniques

how policies affect international biofuel price linkages abstract we estimate the role of biofuel policies in determining which country is the price leader in world biofuel markets using a cointegration analysis and a vector error correction vec model weekly prices are analyzed for the eu us and brazilian ethanol and biodiesel markets in the 2002 2010 and 2005 2010 time periods respectively the us blender s tax credit and brazil s consumer tax exemption are found to play a role in determining the ethanol prices in other countries for biodiesel our results demonstrate that eu policies the consumer tax exemption and blending target tend to determine the world biodiesel price

when do the usda forecasters make mistakes this study analysed forecasts for all us corn soya bean and wheat categories published within the world agricultural supply and demand estimates wasde reports over the 1987 88 through 2009 10 marketing years in an attempt to identify patterns and better understand when the usda forecasters make mistakes two general sources of errors were investigated behavioural and macroeconomic factors the first objective was to examine how these factors affect the size of the forecast error and the second concentrated on the direction of the error due to these effects our findings suggest that the largest increase in the size of usda forecast errors was associated with structural changes in commodity markets that took place in the mid 2000s corn soya bean and wheat forecast errors also grew during the periods of economic growth and with changes in exchange rates while inflation and changes in oil price had a much smaller impact with respect to behavioural sources we identified patterns consistent with leni

axiomatization of the shapley value on minimum cost spanning tree games abstract this paper axiomatizes the shapley value on minimum cost spanning tree games by using axioms which are different from those used in network games journal of economic literature classification numbers c71 a14

exogenous impacts on the links between energy and agricultural commodity markets abstract the main purpose of this paper is to identify the effects of exogenous factors which have been somewhat controversial on the price links between the energy and agricultural commodity markets our study differs from other studies by employing multivariate normal mixture models to capture the structural properties of the price dependencies in the underlying states this paper investigates price dependencies from both quantitative and structural perspectives by analyzing the overall dependencies and structural heterogeneity in the empirical results we conclude that the global financial crisis is the most influential shock on the price links between energy and agricultural commodities because price links are vulnerable to financial shocks our results also suggest introducing state based analysis to risk management and portfolio diversification across the energy and agriculture markets during times of turmoil

the welfare economics of a biofuel tax credit and the interaction effects with price contingent farm subsidies a framework is developed to analyze the effects of a biofuel consumer tax exemption and the interaction effects with a price contingent farm subsidy ethanol prices rise above the gasoline price by the amount of the tax credit corn farmers gain directly while gasoline consumers only gain from any reduction in world oil prices due to the extra ethanol production domestic oil producers lose historically the intercept of the ethanol supply curve is above the gasoline price hence part of the tax credit is redundant and represents rectangular deadweight costs that dwarf triangular deadweight cost measures of traditional farm subsidies copyright 2007 oxford university press

a strategic model of social and economic networks we study the stability and efficiency of social and economic networks when self interested individuals can form or sever links first for two stylized models we characterize the stable and efficient networks there does not always exist a stable network that is efficient next we show that this tension persists generally to assure that there exists a stable network that is efficient one is forced to allocate resources to nodes that are not responsible for any of the production we characterize one such allocation rule the equal split rule and another rule that arises naturally from bargaining of the players

subscription mechanisms for network formation we analyze a model of network formation where the costs of forming links are publicly known but an individual s benefits are not known to the social planner the objective is to design a mechanism which not only ensures that an efficient network always forms in equilibrium but also ensures that the resulting net payoffs to the agents are equitable we propose two mechanisms towards this end in the first agents announce sequentially the set of players with whom they wish to form links and a cost contribution we show that all subgame perfect equilibria of this game result in the formation of an efficient network but the resulting net payoffs are asymmetric the second mechanism corrects this asymmetry through a two stage variant of the first mechanism we also discuss an extension of the basic model to cover the case of directed graphs and give conditions under which the proposed mechanisms are immune to deviations by coalitions

do oil price increases cause higher food prices us retail food price increases in recent years may seem large in nominal terms but after adjusting for inflation have been quite modest even after the change in us biofuel policies in 2006 in contrast increases in the real prices of corn soybeans wheat and rice received by us farmers have been more substantial and can be linked in part to increases in the real price of oil that link however appears largely driven by common macroeconomic determinants of the prices of oil and of agricultural commodities rather than the pass through from higher oil prices we show that there is no evidence that corn ethanol mandates have created a tight link between oil and agricultural markets moreover increases in agricultural commodity prices have contributed little to us retail food price increases because of the small cost share of agricultural products in food prices in short there is no evidence that oil price shocks have been associated with more than a negligible increase in us retail food prices in recent years nor is there evidence for the prevailing wisdom that oil price driven increases in the cost of food processing packaging transportation and distribution have been responsible for higher retail food prices similar results hold for other industrialized countries there is reason however to expect food commodity prices to be more tightly linked to retail food prices in developing countries christiane baumeister and lutz kilian

efficient bidding with externalities we implement a family of efficient proposals to share benefits generated in environments with externalities these proposals extend the shapley value to games with externalities and are parametrized through the method by which the externalities are averaged we construct two slightly different mechanisms one for environments with negative externalities and the other for positive externalities we show that the subgame perfect equilibrium outcomes of these mechanisms coincide with the sharing proposals

policy shocks and market based regulations evidence from the renewable fuel standard the renewable fuel standard mandates large increases in u s biofuel consumption and is implemented using tradable compliance credits known as rins in early 2013 rin prices soared causing the regulator to propose reducing future mandates we estimate empirically the effect of three policy shocks that reduced the expected mandates in 2013 we find that the largest of these shocks decreased the value of the fuel industry s 2013 compliance obligation by 7 billion we then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel we argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the rfs and discuss alternative policy designs to address the problems that arose in 2013

how does petroleum price and corn yield volatility affect ethanol markets with and without an ethanol use mandate the recent increase in ethanol use in the us strengthens and changes the nature of links between agricultural and energy markets here we explore the interaction of market volatility and the scope for policy to affect this interaction with a focus on how corn yields and petroleum prices affect ethanol prices mandates associated with new us energy legislation may intervene in these links in the medium term future we simulate stochastically a structural model that represents these markets and that includes mandates in order to assess how shocks to corn or oil markets can affect ethanol price and use we estimate that the mandate makes ethanol producer prices more sensitive to corn yields and less sensitive to changes in petroleum prices overall we note a discontinuity in these links that is caused by the mandate ethanol use can exceed the mandate if petroleum prices and corn yields are high enough but the mandate limits downside adjustments in ethanol use to low petroleum prices or corn yields

the effect of biodiesel policies on world biodiesel and oilseed prices a theoretical and empirical model is developed to analyze the effect of a biodiesel mandate a tax exemption tax credit and an exogenous diesel price shock on world soybean and canola markets the jointness in crushing oil and meal from the oilseed reduces the size of the link between biodiesel and oilseed prices a diesel price shock with a mandate results in a smaller change in oilseed prices compared with a tax exemption higher diesel prices increase biodiesel prices under a tax exemption but lower them with a blend mandate when both canola and soybeans are used to produce biodiesel an increase in the diesel price leads to higher canola prices but the effect on soybean prices is ambiguous and depends on relative elasticities of meal demand and canola supply because canola produces more oil than soybeans

minimum cost arborescences in this paper we analyze the cost allocation problem when a group of agents or nodes have to be connected to a source and where the cost matrix describing the cost of connecting each pair of agents is not necessarily symmetric thus extending the well studied problem of minimum cost spanning tree games where the costs are assumed to be symmetric the focus is on rules which satisfy axioms representing incentive and fairness properties we show that while some results are similar there are also signifcant differences between the frameworks corresponding to symmetric and asymmetric cost matrices