how should commodities be taxed market structure product heterogeneity and the optimal structure of commodity taxes abstract this paper is concerned with the form in which commodity taxes are best imposed and particularly with the appropriate balance between specific and ad valorem components this neglected issue is of policy importance in relation to the harmonization of tax structures within the eec and of theoretical interest as a point of contact between optimal tax theory and models of non price competition the roles of the two taxes as purely corrective devices under a variety of market forms are established and discussed the analysis suggests that heavily taxed commodities should normally be subject to high specific rather than high ad valorem taxes

indirect taxation and undesirable competition abstract this paper studies undesirable competition in an asymmetric oligopoly under ad valorem taxation we show that when the cost advantage of efficient firms is large both the entry of and the cost reduction in efficient firms raise social welfare but unexpectedly hurt consumers moreover we find that unit taxation yields higher consumer surplus in equilibrium and it could also be welfare superior to ad valorem taxation under certain conditions

the effects of taxation price control and government contracts in oligopoly and monopolistic competition abstract many government contracts with or policies towards oligopolistic sectors essentially involve private firms selling a given proportion or quantity of output to the government at a fixed price p r with the remainder being sold on the open market often this is combined with consumer rationing examples include cement and sugar in india and health housing and defence in many countries the paper investigates the effects of these schemes including sales and excise taxation on prices output and household welfare under oligopoly and monopolistic competition less government control reduced may raise prices and tax shifting can be above or below 100 percent

are emotions to blame the impact of non analytical information processing on decision making and implications for fostering sustainability policy advice based on a rationalist perspective to foster sustainable behaviour has approached its limits and gaps in the established models are becoming more and more obvious to better understand how unsustainable choices are made and to foster sustainable decision making alternatives to the rationalist models of human decision making need to be investigated such alternative models have already demonstrated their usefulness in other fields than ecological economics the paper begins with a presentation of conventional models of human behaviour as well as their advances and limitations in ecological and behavioural economics in most of these models the dominance of analytical thinking still prevails i identify this as problematic given the evidence for the influence of emotion and intuition in decision making to offer a perspective on human behaviour that acknowledges this influence dual process models are presented established applications of these models are then used to propose four basic types of explanations for unsustainable behaviour based on these explanations preliminary ideas to promote sustainable decision making are developed these ideas are considerably different from policy implications of the established economic model

the transmission of sustainable harvesting norms when agents are conditionally cooperative experimental and observational studies have highlighted the importance of agents being conditionally cooperative when facing a social dilemma we formalize this mechanism in a theoretical model that portrays a small community having joint access to a common pool resource the diffusion of norms of cooperation takes place via interpersonal relations while individual agents face the temptation of higher profits by overexploiting the resource agents remain conditionally cooperative unless other individuals are misbehaving already we can observe a bubble of conditional cooperators slowly building up followed by a sudden burst which means that a transition from a cooperative social norm to non cooperation occurs interestingly in some parameter regions alternative stable states and limit cycles arise the latter implies that the same community goes through such a transition repeatedly over long time spans history thus repeats itself in the form of the creation and erosion of social capital

from rational actor to efficient complexity manager exorcising the ghost of homo economicus with a unified synthesis of cognition research it is now commonplace to note that economics canonical model of humans as rational self interested utility maximizers homo economicus is both descriptively misleading and often insufficiently predictive however certain outdated assumptions tied to homo economicus persist often influencing discourse and research design even in sustainability oriented fields we argue this ghost of homo economicus endures because the diversity of findings that confound the canonical model has surfaced across multiple behavioral and cognitive sciences each with its own terminology and focus area as such a unified accessible synthesis of this new information has yet to emerge in this paper we review recent insights from across the behavioral and cognitive sciences and propose an efficient complexity manager ecm model homo efficens as the best synthesizing option the crux of this model is that our species works within biological limits to efficiently filter massive environmental complexity this is achieved largely through analogical or case based reasoning we explain this synthesized model using a series of accessible metaphors finally we speculate on how this model may enrich future sustainable development research insofar as it points to fruitful units of analysis can stimulate methodological innovation and provide a more explicit theoretical foundation for the field

profit raising entry common wisdom suggests that entry reduces profits of incumbent firms on the contrary we demonstrate that if the incumbents differ in marginal costs and the entrants behave like stackelberg followers then entry may benefit the cost efficient incumbents while hurting the cost inefficient ones and the total outputs of all incumbents may be higher under entry

the provision of information in a bertrand oligopoly a two stage model of a homogeneous good oligopoly is constructed that is composed of a first stage determining costless information provision to consumers and then a second stage of price setting a perfect equilibrium is found that is characterized by les s than full information and by positive expected profits an alternati ve interpretation of the model is of firms deciding the proportion of contracts to tender for and then the prices at which the tenders wil l be made copyright 1993 by blackwell publishing ltd

the comparison between ad valorem and specific taxation under imperfect competition abstract this paper compares ad valorem and specific taxation in two models of oligopoly with and without free entry predominantly ad valorem taxation implies a relatively low consumer price high tax revenue and when entry is precluded low profits ad valorem taxation dominates specific taxation from the welfare perspective the set of circumstances under which with free entry specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare improving and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation

behaviour in commons dilemmas homo economicus and homo psychologicus in an ecological economic model in mainstream economy behaviour is often formalised following the rational actor approach however in real life the behaviour of people is typified by multidimensional optimisation to realise this people engage in cognitive processes such as social comparison imitation and repetitive behaviour habits so as to efficiently use their limited cognitive resources a multi agent simulation program is being developed to study how such micro level processes affect macro level outcomes sixteen agents are placed in a micro world consisting of a lake and a gold mine each agent s task is to satisfy its personal needs by fishing and or mining whereby they find themselves in a commons dilemma facing the risk of resource depletion homo economicus and homo psychologicus are formalised to study the effects of different cognitive processes on the agents behaviour results show that for the h psychologicus the transition from a fishing to a mining society is more complete than for the h economicus moreover introducing diversity in agents abilities causes the h economicus on the average to decrease its time spent working whereas for the h psychologicus we observe an increase in the time spent working these results confirm that macro level indicators of sustainability such as pollution and fish harvest are strongly and predictably affected by behavioural processes at the micro level it is concluded that the incorporation of a micro level perspective on human behaviour within integrated models of the environment yields a better understanding and eventual management of the processes involved in environmental degradation 2000 elsevier science b v all rights reserved

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

concepts of efficiency in ecological economics sisyphus and the decision maker abstract efficiency forms the bedrock of policy planning and business approaches to sustainable development but what do ecological economists mean by efficiency in the resource use context efficiency has a wide range of potential interpretations from the ratio of work output energy inputs to pareto efficiency despite the potential richness of the efficiency concept in practice efficiency is often narrowly conceived within disciplinary boundaries this appears to be the case even in ecological economics which purports to be transdisciplinary and pluralistic such narrow disciplinary perspectives essentially waste the richness of the efficiency concept this wasting could mean ecological economists and decision makers are destined to sisyphean toil in the pursuit of sustainable development this paper explores the efficiency concept and its interpretation it then reviews ecological economic literature to find that there is much room for improvement in the way ecological economists apply efficiency finally the paper presents a framework within which a truly ecological economic approach to efficiency can emerge armed with this framework policy makers and planners should be better prepared to make decisions leading to sustainable development

signalling and entry deterrence a multidimensional analysis i consider whether a privately informed incumbent can use limit pricing and upward distortions in advertising to deter profitable entry profitable entry is not deterred when the incumbent is privately informed only about its cost type profitable entry may be deterred however if the incumbent is privately informed about its cost type and its patience level an equilibrium foundation is thus provided for the traditional hypothesis that limit pricing and aggressive advertising by an incumbent may deter profitable entry at a methodological level the article contributes by characterizing the refined equilibria of a signalling model with multiple dimensions of private information and multiple signals

tax incidence under imperfect competition comment abstract delipalla and o donnell 2001 contains a formula for the incidence of specific and ad valorem taxes in a conjectural variation oligopoly model with potentially asymmetric firms the formula is incorrect we derive the correct formula and provide a discussion of the error and its implications for empirical studies of pass through

oligopolistic competition and economic welfare a general equilibrium analysis of entry regulation and tax subsidy schemes abstract two contributions to the general equilibrium analysis of an oligopolistic economy with free entry are intended first we generalize the excess entry theorem to the effect that a marginal decrease in the number of oligopolistic firms from the free entry equilibrium level improves economic welfare second we explore the pareto improving tax subsidy schemes in an oligopolistic economy several self financing and pareto improving tax subsidy schemes will be identified in contrast with the preceding analysis by atkinson and stiglitz which focused on the long run incidence of corporate taxation we analyse the short run as well as long run welfare implications of various policies under generalized conditions

towards sustainable consumption economic modelling of mobility and heating for austria abstract the paper focuses on economic modelling and empirical analysis of sustainable structures in private consumption and strives to extend conventional economic consumption models the model analysis of sustainable consumption in the areas heating and transport for austria attempts to depart from traditional measurement of consumption in national accounts and economic consumption models the focus of the analysis is laid on consumer services derived from a combination of stocks e g building stock transport systems and flows mainly energy this approach intends to illustrate that a concentration on flows in consumption models lacks important aspects of sustainable consumption the economic analysis of sustainable consumption patterns aims to highlight the effects related to the substitution of flows by stocks in the consumption areas transport and heating e g improvements in thermal quality of buildings more energy efficient transport systems relevant too in this respect is the role that can be played by technological innovation improvements in energy efficiency of stocks the potential for specific incentives to promote new technologies two essential factors are crucial in the context of sustainable consumption the demand shifts concerning the consumer services desired and the composition of the stock flow mix necessary for the service provision

the existence of equilibrium in discontinuous economic games i theory the article presents information about the existence of equilibrium in discontinuous economic games in this paper and its sequel presents study the existence of nash equilibrium in games where agents payoff functions are discontinuous the enquiry is motivated by a number of recent studies that have uncovered serious existence problems in seemingly innocuous economic games in the sequel to this paper authors have explained the utility function in the economic games referred to earlier are neither continuous nor quasi concave however they demonstrate that the payoff functions in mildly modified versions of these constructs exhibit two weaker forms of continuity which together with the requirement of quasi concavity suffice for the existence of an equilibrium from this one may conclude that at least in the modified versions of these models discontinuities in the payoff functions are not the real source of the problem rather it is the failure of the payoff functions to the quasi concave which is responsible for the non existence of equilibrium these observations bear on the existence of nash equilibrium in pure strategies

climate change costs more than we think because people adapt less than we assume abstract human behaviour is commonly optimised in economic models of adaptation to climate change these models assume that people work to maximise profit subject to financial and technological limitations in effect these models simulate adaptive potential in reality adaptation falls short of this potential this shortfall is conceptualised as the adaptation deficit and it has been causing increasing concern this study demonstrates the impacts of the ways by which people s real world adaptive behaviours depart from those assumed under pure optimisation these departures known as adaptation constraints are formalised as numerical preference functions based on an empirical case study in new zealand and they are used to constrain an agent based model of climate change adaptation we show that these empirically specified adaptation constraints reduce profits relative to an optimised specification by roughly one third this demonstrates that unconstrained economic models are likely to significantly underestimate the costs of adaptation to climate change the benefits of reducing greenhouse gas emissions and the residual loss and damage that climate change will cause

sustainable food consumption among young adults in belgium theory of planned behaviour and the role of confidence and values abstract this study investigates determinants of sustainable food consumer behaviour in belgium to gain a better insight in sustainable consumption a study was conducted in which attitudes and behaviour as well as the role of individual characteristics like confidence and values related to sustainable products are analyzed the focus of the analysis is on exploring the influence of determinants as hypothesised by the theory of planned behaviour tpb attitudes perceived behavioural control social norms on sustainable consumption intention in general and specifically depending on consumer s perceived confidence and personal values the empirical research builds on a survey with a sample of 456 young adults using a questionnaire and showing an advertisement for hypothetical sustainable dairy products stepwise multiple regression models showed that 50 of the variance in intention to consume sustainable dairy was explained by the combination of personal attitudes perceived social influences perceived consumer effectiveness and perceived availability in addition different levels of confidence and value orientation yield different strengths of the determinants the findings yield public policy and marketing recommendations for stimulating sustainable food consumption among young adults

a characterization for the negative welfare effects of cost reduction in cournot oligopoly abstract this paper characterizes the welfare effects of cost reductions in a cournot model with linear costs under linear demand a small reduction in a firm s marginal cost reduces welfare if and only if its market share is less than 1 2n 2 or equivalently its marginal cost exceeds a critical level determined by the market a large cost reduction by the firm increases welfare if and only if its magnitude is at least twice the difference between the current marginal cost and its critical value the paper also extends the results to non linear demand but the characterizations become less tractable

welfare effects of entry into markets with switching costs in many markets consumers have costs of switching between products that are functionally identical this note shows that entry of efficient low cost competitors into these markets may be socially detrimental in a linear model entry reduces social welfare as conventionally defined in more than half of the relevant parameter space in a more general model there is always a range of values of switching costs for which entry reduces welfare even if the entrant s production costs are lower than the incumbent s copyright 1988 by blackwell publishing ltd

simulating the diffusion of organic farming practices in two new eu member states abstract agriculture continues to be a major contributor to water pollution climate change and loss of biodiversity although policies to encourage farmers to work to higher sustainability standards in food and energy crop production have increased throughout the european union in new member states accession to the european union mostly brought a substantially increased public support to foster the diffusion of certified organic farming however the take up of organic farming is varied for reasons that are not yet well understood in this paper we analyse the diffusion of organic farming through farm populations this involves an understanding of farmer behaviour and how it can change over time we present a generic agent based model that builds on the theory of planned behaviour as framework for understanding and modelling farmers decision making processes the model is applied to high diffusion regions in two new eu member states latvia and estonia the values for the model s parameters are informed by survey data the model reproduces the interdependence of social influence and economic factors social influence alone is shown to make little difference to the model dynamics organic farmers remain organic and conventional farmers remain conventional introducing a change to the environment e g a subsidy results in an increase in the proportion of adopters thus economic factors appear to be more influential than social factors however only when allowing for both the subsidy and social influence do we reveal the whole picture and the combined adoption rate is higher than the sum of the proportion of adopters resulting from just social influence without a subsidy and from just a subsidy without social influence we also compare the effect of the subsidy with the effect of influence from organic farm advisors to develop policy recommendations

a framework for mapping and comparing behavioural theories in models of social ecological systems formal models are commonly used in natural resource management nrm to study human environment interactions and inform policy making in the majority of applications human behaviour is represented by the rational actor model despite growing empirical evidence of its shortcomings in nrm contexts while the importance of accounting for the complexity of human behaviour is increasingly recognized its integration into formal models remains a major challenge the challenges are multiple i there exist many theories scattered across the social sciences ii most theories cover only a certain aspect of decision making iii they vary in their degree of formalization iv causal mechanisms are often not specified we provide a framework mohub modelling human behavior to facilitate a broader inclusion of theories on human decision making in formal nrm models it serves as a tool and common language to describe compare and communicate alternative theories in doing so we not only enhance understanding of commonalities and differences between theories but take a first step towards tackling the challenges mentioned above this approach may enable modellers to find and formalize relevant theories and be more explicit and inclusive about theories of human decision making in the analysis of social ecological systems

informative advertising and entry deterrence a bertrand model abstract this paper shows that strategic entry deterrence via informative advertising is impossible in a game of sequential advertising followed by simultaneous price setting in a homogenous product market it contrasts schmalensee s journal of political economy 91 1983 636 653 result that when the strategic variables at the post advertising stage are quantities not prices optimal entry deterrence is possible and involves underinvestment in advertising

commodity taxation and imperfect competition a note on the effects of entry abstract this paper looks at the effects of allowing the number of firms to vary in seade s model of oligopoly and taxation we show that the normative and positive consequences of a specific commodity tax are affected by entry in significant ways

pharmaceutical patents incentives for research and development or marketing we analyze how a patent holding pharmaceutical firm may strategically use advertising of existing drugs to affect research and development r d investments in new differentiated drugs and thereby affect the probability distribution of future market structures in the industry within a fairly general model framework we derive exact conditions for advertising and r d being substitute strategies for the incumbent firm and show that it may overinvest in advertising to reduce the incentive for an entrant to invest in r d thereby reducing the probability of a new product on the market in a more specific setting of informative advertising we show that such overinvestment incentives are always present and that more generous patent protection implies that a larger share of the patent rent is spent on marketing relative to r d

unit versus ad valorem taxes monopoly in general equilibrium abstract we show that if a monopoly sector is imbedded in a general equilibrium framework and profits are taxed at one hundred percent then unit specific taxation and ad valorem taxation are equivalent on the set of pareto optima

helping minor firms reduces welfare the effect on national welfare of uneven technical progress and eli mination of a firm is analyzed under the existence of a cournot oligopolistic sector an increase in the share of an inefficient firm owing to its innovations results in a shift of production from more efficient firms to the inefficient firm causing a less efficie nt allocation of production it may decrease welfare even though the innovation itself is beneficial conversely policies keeping ineffic ient firms from innovations or eliminating them may increase welfare though they make the market structure more oligopolistic copyright 1988 by royal economic society

strategic wholesale pricing in a supply chain with a potential entrant this paper develops an adverse selection model for a two stage supply chain with one supplier one retailer and a potential outside entrant supplier who makes a partially substitutable product the work is different from most research on entry deterrence that only considers a single stage model our main interest is to investigate how the incumbent supplier can strategically maximize her profit by a wholesale pricing policy when facing the potential entrant we focus on a model where the entrant supplier will sell her product through the same incumbent retailer we derive the optimal decisions for each player and study the comparative statics of the equilibrium to investigate how the supply chain structure may affect the deterrence strategy of the incumbent supplier we also consider three alternative models with different channel structures when both suppliers sell their products directly when the entrant has another independent retailer and when the entrant sells her product directly through the comparison we find that the existence of the common downstream retailer often enhances the deterring motivation of the incumbent supplier

feed in tariffs for solar microgeneration policy evaluation and capacity projections using a realistic agent based model abstract since 2010 over 700 000 small scale solar photovoltaic pv systems have been installed by households in great britain and registered under the feed in tariff fit scheme this paper introduces a new agent based model which simulates this adoption by considering decision making of individual households based on household income social network total capital cost of the pv system and the payback period of the investment where the final factor takes into account the economic effect of fits after calibration using approximate bayesian computation the model successfully simulates observed cumulative and average capacity installed over the period 2010 2016 using historically accurate fits setting different tariffs allows investigation of alternative policy scenarios model results show that using simple cost control measures more installation by october 2016 could have been achieved at lower subsidy cost the total cost of supporting capacity installed during the period 2010 2016 totalling 2 4 gw is predicted to be 14 billion and costs to consumers significantly exceed predictions the model is further used to project capacity installed up to 2022 for several pv cost electricity price and fit policy scenarios showing that current tariffs are too low to significantly impact adoption and falling pv costs are the most important driver of installation

multi agent simulations to explore rules for rural credit in a highland farming community of northern thailand thanks to recent advances in the field of distributed artificial intelligence agentbased models abm can now be used to run simulations of social phenomena based on their computerized representations and to apply experimental methods in social sciences axelrod 1997 gilbert and troitzsch 1999 jager 2000 in the field of renewable resource management and environmental sciences several abm simulation platforms offer the possibility to explore interactions between social and ecological dynamics costanza and ruth 1998 bousquet et al 1998 lansing 2002 in these complex systems the social and economic dynamics can be viewed as a set of interactions among heterogeneous agents generating aggregate phenomena that are different from the behaviour of groups of average individuals considered in classical economic thinking rouchier and bousquet 1998 such a view was adopted in the research presented here

not only the tragedy of the commons misperceptions of bioeconomics an exploratory search for explanations of mismanagement of renewable resources other than the theory of the commons was performed by an experiment eighty three subjects mostly recruited from the fisheries sector in norway were asked to manage the same simulated virgin fish stock one subject at a time exclusive property rights were granted to rule out the commons problem despite perfect property rights subjects consistently overinvested leading to an average overcapacity of 60 the resource was reduced by an average of 15 below its optimal level overcapacity and tough quotas resemble the situation in norwegian and other fisheries during the past few decades the likely explanation of the observed behaviour is misperception of feedback a phenomenon that occurs in many experimental studies of dynamically complex systems such misperceptions add a new and important dimension to the problem of renewable resource management beyond the commons problem

indirect taxation and cournot equilibrium we analyse a cournot model of oligopoly in an industry which is subject to indirect taxation we consider value added as well as excise taxes we allow for various types of demand and cost conditions as well as cost differences across firms as the tax is raised two types of outcomes can prevail on the one hand the net price can increase which is shown to lead to an increase in market share of high cost firms on the other hand the net price can fall in which case efficiency is rewarded in that low cost firms gain market share this latter outcome which accords with intuition will obtain in most instances it is more likely to occur i with vat rather than with an excise tax ii with concave rather than convex demand and iii with decreasing rather than increasing marginal cost finally we show that an increase in vat can lead to higher profits for low cost firms provided cost differences across firms are large enough