cooperation against theft a test of incentives for water management in tunisia water theft carried out by manipulating water meters constrains volumetric pricing in semi arid regions cooperative management can reduce theft and improve incentives for efficient water use by inducing peer monitoring using a theoretical model we show that theft is more likely when prices are high punishments are weak and cooperatives are large we also show how cooperative membership and punishment levels are determined endogenously by constraints on monitoring we test the model on data from tunisia for the years 2001 2003 relying on instruments that proxy for unobservable monitoring costs the results confirm that well designed incentives can reduce theft and that constraints on monitoring costs affect institutional design

the regulation of non point source pollution and risk preferences an experimental approach many environmental problems notably arising from agriculture can be classified as non point source pollution problems in this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems collective fining random fining and a tax subsidy scheme we find that the fining schemes induce under abatement a feature being enforced with experience we further elicit the participants risk attitude and show that the performance of collective fining is not affected by the subjects risk preferences under a system based on random fining the performance of the mechanism worsens in the presence of risk seeking subjects however coordination on over abatement under the tax subsidy can be alleviated if subjects are risk averse c 2011 elsevier b v all rights reserved

moral hazard in risk averse teams holmstrom 1982 has shown that a non budget balancing contract induces a team of risk neutral agents to choose the first best effort levels this is not generally true when agents are risk averse furthermore a massacre contract which punishes all but one agent when the outcome is low can attain the first best over a wider range of parameters than any other budget balancing contract

policy for the adoption of new environmental monitoring technologies to manage stock externalities abstract with the development of modern information technologies relying on nanotechnologies and remote sensing a number of systems can be envisaged that allow for monitoring of the negative externalities generated by producers consumers or travelers road pricing schemes or individual emission meters for automobiles are two examples we analyze a dynamic model of stock pollution when the regulator has incomplete information on emissions generated by heterogeneous agents our contribution is to explicitly study a decentralized policy for adoption of monitoring equipment over time we determine the second best tax rates the pattern of monitoring technology adoption and identify conditions for the voluntary diffusion of monitoring technologies over time simulations show the welfare gains compared to alternative policies

psychological factors and stock option exercise we investigate stock option exercise decisions by over 50 000 employees at seven corporations controlling for economic factors psychological factors influence exercise consistent with psychological models of beliefs employees exercise in response to stock price trends exercise is positively related to stock returns during the preceding month and negatively related to returns over longer horizons consistent with psychological models of values that include reference points employee exercise activity roughly doubles when the stock price exceeds the maximum price attained during the previous year

addressing social dilemmas with mascots information and graphics acknolwedgements this research was supported by funding from the national science foundation for the north east water resources network newrnet grant iia 1330406 and from the center for behavioral and experimental agri environmental research cbear which is supported by the u s department of agriculture economic research service we are grateful for comments received during the 2015 northeastern agricultural and resource economics association annual meeting and the 2015 behavioral and experimental economists of the mid atlantic conference authors listed in alphabetical order

nonpoint pollution control inducing first best outcomes through the use of threats abstract this paper develops an economic model to analyze the use of a policy that combines a voluntary approach to controlling nonpoint source pollution with a background threat of an ambient tax if the voluntary approach is unsuccessful in meeting a pre specified environmental goal we show that such a policy can be designed to induce cost minimizing abatement without actually imposing the tax because the threat of imposition of the tax is sufficient to induce voluntary compliance thus the combined policy approach can not only be more effective in protecting environmental quality than a pure voluntary approach but can also be less costly than a pure ambient tax approach however whether the cost minimizing choices are a unique equilibrium or not depends on the design of the tax policy and whether or not it can be applied retroactively all results still hold if the background threat takes the form of a reducing in government subsidies

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

experimental evidence on dynamic pollution tax policies abstract this paper uses laboratory experiments to provide primary empirical evidence on dynamic pollution tax policies in particular we investigate a setting where a regulator with incomplete information uses a pollution tax mechanism with a simple endogenous tax rate adjustment rule to cost effectively meet a pollution standard this mechanism provides the opportunity for firms to strategically abate in order to reduce future tax rates the experiments vary important policy design features such as the type of tax ambient or emissions the initial tax rate and the tax rate adjustment speed we find that in equilibrium the pollution standard is met on average for each of these settings the observed long run tax rates vary considerably across policy designs which can be explained with a theory that allows for a mix of strategic and myopic firms along with the recognition that the incentives generated by the policy design can influence whether an agent plays myopically or strategically

market based systems for reducing chemical use in agriculture in the united states this study uses a computable general equilibrium cge model of the u s economy to estimate the economic effects of agricultural fertilizer and pesticide input reductions on individual farm sectors and on the economy as a whole the costs of reducing agricultural chemicals using a market based approach and a command and control approach are compared the real cost to society of restrictng fertilizer and pesticide use by 20 percent across all uses is estimated to be 2 3 billion a market based approach that would provide incentives to reduce chemical use in the most cost efficient manner would be about 10 percent less costly

voluntary threat approaches to reduce ambient water pollution this article considers the regulation of nonpoint source water pollution through the use of a voluntary threat approach which allows a polluter group to meet a standard voluntarily but imposes an ambient tax upon noncompliance in particular we develop an endogenous voluntary threat approach that can be parameterized to induce compliance as a unique subgame perfect nash equilibrium and eliminate zero abatement equilibria experimental evidence on the proposed approach as well as the exogenous approach of segerson and wu 2006 suggests that the severity of the threatened tax and the opportunity for communication are critical in determining policy outcomes

carbon taxation when climate affects productivity optimal carbon taxation is evaluated in a model where climate change affects productivity with a numerical us economy model with preexisting taxes the optimal carbon tax is found to exceed marginal social damage by 53 percent and marginal private damage the sum of households marginal willingness to pay by 73 percent the welfare gain from optimal carbon taxation is estimated at 3 58 billion per year when marginal damages are 40 ton employment also increases setting the carbon tax at the pigouvian rate raises welfare by only 3 17 billion the contrasting results in the tax interaction literature are due to the use of marginal private damage when applied to amenity externalities

performance of the ambient tax does the nature of the damage matter the ambient tax is often considered as an efficient instrument to achieve a first best outcome of ambient pollution when the regulator cannot observe individual emissions or when monitoring costs are prohibitive while this view is supported to a large extent by experimental findings there remains several hurdles that hinder the implementation of the ambient tax in the field one of these hurdles is the nature of the damage experimental findings suggest that the efficiency of the ambient tax is higher under external damage i e if ambient pollution affects non polluters spraggon in j public econ 84 427 456 2002 than under internal damage i e if ambient pollution affects polluters themselves cochard et al in environ resour econ 30 393 422 2005 but this result rests on very different experimental settings therefore we designed a new experiment that allows to compare external and internal damage within a common setting our main finding is that the ambient tax is equally efficient under internal and external damage

efficiency of nonpoint source pollution instruments an experimental study in nonpoint source pollution problems the regulator does not observe each polluter s individual emission which prevents him from using the conventional policy instruments therefore new instruments have been designed to regulate this type of pollution in an experiment we compare the efficiency of some of these instruments an input based tax an ambient tax subsidy an ambient tax and a group fine we assume that polluters themselves are affected by environmental damages a control session without any regulation is also carried out in order to study the status quo situation our experimental data show that the input tax and the ambient tax are very efficient and reliable and the group fine is fairly efficient and reliable these instruments improve social welfare with respect to the status quo on the contrary the ambient tax subsidy decreases social welfare with respect to the status quo and its effect is very unreliable

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

the regulation of environmental innovations abstract we offer mechanisms to regulate environmental r d projects that are intertemporal and indivisible and involve high monitoring cost screening and contracting the r d performer are based solely on the project completion time when the project duration is ex ante uncertain to all parties including the performing firm the mechanism is formulated in terms of a completion time limit the mechanism extends to other intertemporal public projects as well as to principal agent settings with dynamic agent s tasks

a test for parameter homogeneity in co2panel ekc estimations this paper casts doubt on empirical results based on panel estimations of an inverted u relationship between per capita gdp and pollution using a new dataset for oecd countries on carbon dioxide emissions for the period 1960 1997 we find that the crucial assumption of homogeneity across countries is problematic decisively rejected are model specifications that feature even weaker homogeneity assumptions than are commonly used furthermore our results challenge the existence of an overall environmental kuznets curve for carbon dioxide emissions

forecasting volatility using long memory and comovements an application to option valuation under sfas 123r horizon matched historical volatility is commonly used to forecast future volatility for op tion valuation under the statement of financial accounting standards sfas 123r in this paper we empirically investigate the performance of using historical volatility to forecast long term stock return volatility in comparison with a number of alternative forecasting methods in analyzing forecasting errors and their impact on reported income due to option expensing we find that historical volatility is a poor forecast for long term volatility and that shrinkage adjustment toward comparable firm volatility only slightly improves its per formance forecasting performance can be improved substantially by incorporating both long memory and comovements with common market factors we also experiment with a simple mixed horizon realized volatility model and find its long term forecasting perfor mance to be more accurate than historical forecasts but less accurate than long memory forecasts

sustainable farm income in the presence of soil erosion an agricultural hartwick rule soil erosion is a physical and economic problem of natural capital degradation even along an intertemporally efficient trajectory one can have in a loss of soil fertility and a continuous decline of agricultural net revenue moreover soil erosion is a major source of surface water pollution in rural areas erosion control is thus a challenge for sustainable resource management and internalizing external effects to sustain the level of farm income an agricultural hartwick rule is proposed which addresses both on farm and off farm effects of soil erosion first it requires the investment of the soil rents into alternative capital second additional measures are required to comply with an ambient quality target a charge subsidy scheme proves the most adequate from a perspective of cost effectiveness and sustainability if effluent charge revenues are earmarked to subsidize cropland retirement at the watershed scale in combination with the investment of soil rents this enables to maintain the level of farm income constant over time while respecting the ambient quality target altogether this fulfills the requirements of efficiency and sustainability 2003 elsevier science b v all rights reserved

ambient taxes under m dimensional choice sets heterogeneous expectations and risk aversion we consider the design of ambient taxes forrisk neutral and risk averse polluters whenpolluters and the regulatory agency haveasymmetric information about environmentalrelationships and probabilities associatedwith random events unlike prior work we showthat under these conditions optimal ambienttaxes must be firm specific and accompaniedby additional incentives to influencepolluters choices of abatement techniques

the exercise and valuation of executive stock options abstract in theory hedging restrictions faced by managers make executive stock options more difficult to value than ordinary options because they imply that exercise policies of managers depend on their preferences and endowments using data on option exercises from 40 firms this paper shows that a simple extension of the ordinary american option model which introduces random exogenous exercise and forfeiture predicts actual exercise times and payoffs just as well as an elaborate utility maximizing model that explicitly accounts for the nontransferability of options the simpler model could therefore be more useful than the preference based model for valuing executive options in practice

a model of industrial pollution in a stochastic environment abstract standard models of pollution abatement assume that pollution accumulation occurs in a deterministic pattern as a by product of the production process governmental intervention often occurs in the form of taxation or mandatory abatement controls to reduce inefficiency caused by incomplete markets in this paper we assume that the accumulation effect of pollution may be stochastic due for instance to the random absorption capacity of the ecosystem furthermore we assume that the level of pollution may vary with input use as well as output level we proceed to analyze properties of a policy for efficient social management of competitive firms which generate pollution

adverse selection and pigou taxes it id assumed that firms have different technologies and that an environment protection agency knows which technologies exist but not which is used by which firms neither the emissions of individual firms nor their total emissions are observable the output of each individual firm however can be monitored without cost based on this information tax schemes are constructed which induce firms to produce the socially efficient output quantities conditions about cost functions are derived which ensure the existence of tax schemes which yield first best solutions

does stock return predictability affect eso fair value abstract executive stock options esos are modified american options that cannot be valued using standard methods with a few exceptions the literature has discussed the eso fair value by assuming unpredictable stock returns which are not supported by the available empirical evidence in this paper we obtain the fair value of american esos when stock returns are predictable and specifically driven by the trending ornstein uhlenbeck process of lo and wang 1995 we solve the executive s portfolio allocation problem for a simple buy and hold strategy when his wealth can be distributed between a risk free asset and a market portfolio this problem is jointly solved with the executive s optimal exercise policy we find that executives tend to wait longer the higher the predictability independently of the composition of executive s asset menu we have also analyzed the implications under the fas123r proposals for the eso fair value and found that even for low autocorrelations there is a meaningful mispricing when unpredictable returns are erroneously assumed

a damage based tax mechanism for regulation of non point emissions in a recent paper segerson 1988 proposed a novel incentive mechanism for stochastic non point emissions based on ambient pollution concentrations in nature for specification of the mechanism when the damage function is nonlinear the regulator must know polluters cost and emission functions the mechanism also gives incentives to form coalitions among polluters which if they are formed render the mechanism inefficient in this paper we propose a revised mechanism which eliminates the need for knowledge of polluters cost and emission functions and reduces the probability of coalition forming a standards and pricing version of the revised mechanism with both properties mentioned is also developed

the regulation of non point source pollution under imperfect and asymmetric information abstract this paper develops a bayesian framework for discussing the role of information in the design of non point source pollution control mechanisms an ambient concentration tax is examined allowing for spatial transport among multiple zones imposition of the tax requires costly measurement of concentrations in selected zones and the selection of zones for measurement must be undertaken without perfect information regarding several parameters of the problem potentially crucial information issues discussed include a the impact of asymmetric priors regarding fate and transport b the cost of measuring ambient concentration and c the optimal acquisition of information regarding fate and transport

nonpoint source pollution taxes and excessive tax burden if a regulator is unable to measure firms individual emissions an ambient tax can be used to achieve the socially desired level of pollution with this tax each firm pays a unit tax on aggregate emissions in order for the tax to be effective firms must recognize that their decisions affect aggregate emissions when firms behave strategically with respect to the tax setting regulator under plausible circumstances their tax burden is lower under an ambient tax relative to the tax which charges firms on the basis of individual emissions firms may prefer the case where the regulator is unable to observe individual firm emissions even if this asymmetric information causes the regulator to tax each firm on the basis of aggregate emissions

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

group decision making theory and behavior under performance based water quality payments abstract two theoretical models explaining group allocation decisions under watershed level performance based payments are explored i reward and penalize individual contributors and ii reduce the problem with cost sharing and cooperative abatement under model i an optimal amount of pollution from individual contributors can be achieved with proper payment incentive and group allocation formula model ii represents a cost effective solution to pollution reduction where the group optimizes its return from group payments but does not necessarily achieve an optimal level of pollution field experiment observations support farmer behavior closer to model ii

some economic determinants of time series properties of earnings abstract the earnings time series literature in accounting focuses on the statistical characteristics of the processes which generate corporate earnings in order to further our understanding of earnings behavior this study investigates the question whether inter firm differences in these statistical characteristics autocorrelations and variances of earnings changes can be explained by economic factors various relationships between economic factors and earnings behavior are derived from the economic literature and examined empirically in this study findings indicate that autocorrelations and variability of annual earnings and earnings over equity changes are systematically associated with the following factors the type of product the height of industry barriers to entry a surrogate for degree of competition the degree of capital intensity operating leverage and the firm size

when can carbon abatement policies increase welfare the fundamental role of distorted factor markets abstract this paper employs analytical and numerical models to assess the welfare effects of a revenue neutral carbon tax and nonauctioned carbon emissions permits taking into account preexisting tax distortions in factor markets the presence of preexisting taxes significantly raises the general equilibrium costs of both policies this cost increase is much greater under emissions permits since this policy does not generate revenues to reduce distortionary taxes under our central estimates emissions permits cannot increase welfare unless environmental damages exceed about 18 per ton of carbon in contrast an appropriately scaled carbon tax is welfare improving so long as environmental damages are positive

ambient based pollution mechanisms a comparison of homogeneous and heterogeneous groups of emitters abstract over the last two decades ambient based tax mechanisms have been offered as a potential solution to the problem of nonpoint source water pollution previous theoretical analyses suggest that the performance of ambient based tax mechanisms does not depend on firm characteristics such as size whilst policy discussions advocate that such mechanisms are best suited for regulating relatively homogeneous firms using controlled laboratory experiments we provide empirical evidence that the distribution of firm sizes does have a significant impact on observed group decision making and further that heterogeneity has the potential to generate both some relatively desirable outcomes as well as some outcomes that are not attractive these results suggest that richer theoretical models that capture important strategic interactions and social preferences are needed to better describe laboratory behavior and by extension behavior in potential policy settings

forecasting currency volatility a comparison of implied volatilities and ar fi ma models we compare forecasts of the realized volatility of the pound mark and yen exchange rates against the dollar calculated from intraday rates over horizons ranging from one day to three months our forecasts are obtained from a short memory arma model a long memory arfima model a garch model and option implied volatilities we find intraday rates provide the most accurate forecasts for the one day and one week forecast horizons while implied volatilities are at least as accurate as the historical forecasts for the one month and three month horizons the superior accuracy of the historical forecasts relative to implied volatilities comes from the use of high frequency returns and not from a long memory specification we find significant incremental information in historical forecasts beyond the implied volatility information for forecast horizons up to one week

regulation of non point emissions a variance based mechanism non point emission problems such as pesticide nitrate and phosphorus pollution of lakes and ground water are often characterised by a small number of polluters convex damage functions and stochastic emissions some regulatory mechanisms proposed in the literature for stochastic non point emissions implement the optimal abatement vector in dominant strategies ensuring that non nash conjectures cannot be rationalized however specification of these mechanisms requires firm level information and differentiated rates when the damage function is convex other mechanisms eliminate the need for firm level information and rate differentiation but only implement optimum in nash strategies where non nash conjectures that cause equilibrium to stray from optimum can be rationalized in this paper we propose a mechanism which eliminates the need for firm level information and rate differentiation while retaining implementation in dominant strategies

ambient taxes when polluters have multiple choices economic research on environmental policy design has largely been concerned with the merits of emissions based economic incentives e g emissions charges emissions reduction subsidies transferable discharge permits ambient based tax subsidy schemes have drawn considerable interest in nonpoint pollution literature as alternatives to emissions based instruments expanding especially on segerson s seminal article this article examines the optimal design and budget balancing properties of ambient tax subsidy schemes under more realistic assumptions about the dimensions of firms choice sets than prior research

employee stock option exercises an empirical analysis this paper describes the exercise behavior of over 50 000 employees who hold longterm options on employer stock at eight corporations employees typically exercise options years before expiration commonly sacrificing half of the black scholes value exercise is strongly associated with recent stock price movements the market to strike ratio proximity to vesting dates time to maturity volatility and the employee s level within the company these findings have implications for compensation planners the fasb as it develops a new accounting standard for options and financial statement users and preparers who apply and interpret the new fasb standard

the persistence of volatility and stock market fluctuations this paper examines the potential influence of changing volatility in stock market prices on the level of stock market prices it demonstrates that volatility is only weakly serially correlated implying that shocks to volatility do not persist these shocks can therefore have only a small impact on stockmarket prices since changes in volatility affect expected required rates of return for relatively short intervals these findings lead us to be skeptical of recent claims that the stock market s poor performance during the 1970 s can be explained by volatility induced increases in risk premia this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

environmental tax interactions when pollution affects health or productivity abstract recent studies indicate that interactions with the tax distorted labor market increase the cost of pollution regulation however these studies make restrictive assumptions regarding preferences and ignore key links between pollution human health and labor productivity together these assumptions imply that pollution does not affect labor supply this paper develops an analytical general equilibrium model that considers several potential benefits from reduced pollution including improved health or productivity it shows that these benefits affect labor supply and thus create a benefit side tax interaction effect that can be of the same magnitude as the familiar cost side interaction when reduced pollution boosts labor productivity the effect substantially magnifies such benefits in contrast when pollution affects consumer health the effect tends to diminish the benefits of reduced pollution the paper considers only environmental regulation but these concepts apply equally to other policies affecting productivity or health such as research subsidies or occupational safety regulations

team approaches in reducing nonpoint source pollution abstract it is technically difficult and costly to monitor nonpoint source pollution consequently most economic instruments directed towards reducing this type of pollution have focused on circumventing the monitoring problem by focusing on readily observable factors such instruments include taxes or tradable permits on inputs or other incentives to induce changes in farming practices one difficulty with such approaches is that the incentives may not be consistent with the primary objectives of the policies to reduce nutrient runoffs this paper seeks to identify under what conditions it would be beneficial to apply more direct incentives for reduced nutrient runoffs monitoring and enforcement are core issues in this connection it is still difficult to monitor individual farm field runoffs hence the incentive problems associated with multiple agents emitting to the same recipient need to be resolved

asymmetric information and uncertainty the usefulness of logbooks as a regulation measure abstract in many fisheries managed by quota systems fishermen are required to keep a logbook containing information about catches no well functioning enforcement system is set up in connection with the logbooks since the purpose is to assist biologists in making stock assessments in this paper we consider a case where three market failures a stock externality problem a stock uncertainty problem and problems with measuring individual catches arise simultaneously it is shown that a stock tax and a tax on voluntary self reported catches may solve these three problems by taxing voluntary self reported catches we make use of logbook information it is shown using an analytic model that it will be in the interest of risk averse fishermen to report part of their catch voluntarily even without an enforcement policy in addition it is shown that the tax structure can secure optimal expected individual catches and empirical simulations show that the tax payment is relatively low thus the tax system may be useful in practical fisheries management

collective versus random fining an experimental study on controlling ambient pollution this paper presents an experimental study oftwo different pollution compliance games collective vis a vis random fining as ameans to regulate non pointpollution using samples from both costa ricancoffee mill managers and costa rican students we find that the two games perform equivalentlybut although they lead to efficient outcomesthrough nash play in the majority of cases theobserved frequency of nash play is lower thantheoretically predicted moreover we rejectthe hypothesis that managers and studentsbehave equally off the equilibrium managerstend to over abate whereas students tend tounder abate this result suggests theimportance of considering subject pooldifferences in the evaluation of environmentalpolicies by means of experiments particularlyif those policies involve certain forms ofmanagement decisions

non point source regulation a self reporting mechanism abstract information feasible regulatory mechanisms that do not require the regulator to acquire firm level information have been proposed long ago for stochastic non point emission problems these mechanisms do not take polluter cooperation and firm entry exit incentives simultaneously into account nor are these issues addressed in an informationally efficient way in this paper we propose an informationally feasible self reporting mechanism that is robust to cooperation among polluters while giving participating firms correct abatement incentives as well as giving entry exit incentives that are correct to a first order approximation

on repeated moral hazard with discounting in this paper we analyze optimal contracts in an infinitely repeated agency model in which both the principal and agent discount the future we show that there is a stationary representation of the optimal contract when the agent s conditional discounted expected utility is used as a state variable this representation reduces the multi period problem to a static variational problem which can be analyzed using standard variational techniques this reduction is used to obtain several properties of the contract

a bayesian approach to modeling stock return volatility for option valuation new measures of stock return volatility are developed to increase the precision of stock option price estimates with bayesian statistical methods volatility estimates for a given stock are developed using prior information on the cross sectional patterns in return volatil ities for groups of stocks sorted on size financial leverage and trading volume call option values computed with the bayesian procedure generally improve prediction accuracy for market prices of call options relative to those computed using implied volatility standard historical volatility or even the actual ex post volatility that occurred during each option s life although the bayesian methods produce biased call price estimators they do reduce the systematic tendency of standard pricing approaches to overprice underprice options on high low volatility stocks little bias improvement is observed with respect to the time to maturity and moneyness of the call options

the sufficiency strategy would rich world frugality lower environmental impact abstract one alleged weapon against unsustainable environmental impact is for the wealthy to consume less this sufficiency strategy is to complement the efficiency strategy of lowering ratios of resource inputs to economic outputs the former would reduce the affluence factor in i pat the latter the technology factor that the latter strategy suffers from a consumption rebound is widely recognized this paper identifies a similar rebound when the affluence factor is autonomously lowered the lower initial demand lowers prices which in turn stimulates new demand by others the strategy moreover addresses only the rich raising questions of its theoretical maximum efficacy its proponents usually conflate frugality with the north south dichotomy and intra generational with inter generational equity moreover there are difficulties with the supporting arguments that frugality is good for one s own sake as well as for the environment and that the rich should lead the way to living more lightly personal behaviour change is furthermore not a substitute for international political efforts finally since all changes in right side factors of the i pat equation change other right side factors such indirect attacks on impact should be abandoned in favor of supply and emissions quotas