analyzing nutritional impacts of policies an empirical study for malawi summary widespread malnutrition in developing countries calls for appropriate strategies presupposing good knowledge about nutritional impacts of policies little previous work has been carried out in this direction especially with respect to micronutrients we use representative household data from malawi and develop a demand systems approach to estimate income and price elasticities of food demand and nutrient consumption these estimates are applied for policy simulations given multiple nutritional deficiencies income related policies are better suited than price policies to improve nutrition while consumer price subsidies for maize improve calorie and mineral consumption they can worsen vitamin consumption in urban areas

ants rationality and recruitment this paper offers an explanation of behavior that puzzled entomologists and economists ants faced with two identical food sources were observed to concentrate more on one of these but after a period they would turn their attention to the other the same phenomenon has been observed in humans choosing between restaurants after discussing the nature of foraging and recruitment behavior in ants a simple model of stochastic recruitment is suggested this explains the herding and epidemics described in the literature on financial markets as corresponding to the equilibrium distribution of a stochastic process rather than to switching between multiple equilibria

the role of knowledge codification in the emergence of consensus under uncertainty empirical analysis and policy implications the aim of the article is to empirically analyse the main factors which allow the emergence of consensus moreover we raise the question of the nature of the codified process involved which seems to be too reducing to promote knowledge flows within the community and therefore to contribute to learning processes and better choices about the future our analysis relies on a prospective investigation based on a delphi type study carried out by beta in 1994

nonparametric and parametric analysis of calorie consumption in tanzania abstract the empirical literature on the demand for calories in developing countries suggests mixed results regarding the role of income and other socioeconomic characteristics on calorie demand this study employs both nonparametric and parametric methods to examine the impact of household expenditure and other socioeconomic variables on household demand for calories in tanzania using recent survey data the parametric methods include estimation strategies that ensure consistent estimates in the presence of behavioral endogeneity and measurement error under each estimation strategy we employ we find a strongly significant and positive relationship between household expenditure and calorie demand lending support to conventional wisdom that income growth can alleviate inadequate calorie intake the results also show a negative and significant relationship between food prices and calorie demand suggesting that effectively targeted food subsidies for very poor households may play a role in improving their calorie intake

strategic information disclosure the case of multi attribute products with heterogeneous consumers we examine the incentives for firms to voluntarily disclose otherwise private information about quality attributes of differentiated products in particular we focus on the case of differentiated products with multiple attributes and consumers that are heterogeneous in their preferences over these attributes we show that there exist certain configurations of consumer preferences under which a firm producing a high quality product even with zero costs of disclosure may choose not to reveal the quality of its product this failure of firms to voluntarily disclose the quality of their products will arise when providing consumers with more information results in more elastic demands for these products which in turn triggers more intensive price competition and leads to lower prices and profits for all firms as a result the equilibrium in which disclosure is voluntary may diverge from that in which disclosure is mandatory

the impact of maize price shocks on household food security panel evidence from tanzania abstract using three waves 2008 09 2010 11 2012 13 of the tanzanian national panel survey this study investigates the impact of maize price shocks on household food security between 2008 09 and 2012 13 calorie intake stagnated for urban households yet sharply deteriorated for rural households the latter was driven by a significant decline in the consumption of the major staple maize which showed strongest price hikes among all major food items fixed effects regressions indicate a clear negative relationship between maize prices and average household energy intake almost all population groups were found to be negatively affected by maize price shocks with rural landless households being the most vulnerable group in particular a 50 percent rise in maize prices decreases caloric intake for rural urban households on average by 4 4 5 4 percent and for rural landless households by 12 6 percent results further indicate that subsistence agriculture can act as an effective strategy to insure against food price volatility

income elasticities for food calories and nutrients across africa a meta analysis abstract this paper aims to provide a better understanding of the relationship between income and the demand for different types of food nutrients and calories in africa by conducting a meta analysis of income elasticity estimates we build a meta sample consisting of 1523 food income elasticities 369 nutrient income elasticities and 123 calorie income elasticities extracted from 66 primary studies covering 48 african countries the sample displays a large heterogeneity in income elasticity estimates which our meta analysis aims to explain by looking into attributes of the primary studies and characteristics of the countries considered there are significant differences in the size of the income elasticities across food and nutrient groups foods that make up basic diets tend to have lower income elasticities while elasticities are considerably higher for less basic and more aspirational foods the role of methodological attributes of the primary studies in explaining heterogeneity is found to be small overall our results confirm that although income growth in africa will increase food consumption and lead to more nutritionally diverse diets it is also associated with excessive intakes of fats and sugars raising concerns about over in addition to undernutrition this suggests that income based policies can still play a role in the fight against hunger but that targeted programs are needed to promote nutritionally valuable and healthy diets

bubbles and volatility of stock prices effect of mimetic contagion the author discusses the effect of the mimetic contagion on the dynamics of stock prices each investor bids and or asks prices such that adjusts to his present value calculated from his incomplete information set and to the average price of others buyers and sellers mimetic contagion an original stochastic treatment based on the equation of motion of the probability density function is used to calculate the equations of the mean and variance of the market price as soon as the agents are mimetic and or have correlated present values then the moments of the market price are driven away from the fundamental ones copyright 1991 by royal economic society

on the simple economics of advertising marketing and product design we propose a framework for analyzing transformations of demand such transformations frequently stem from changes in the dispersion of consumers valuations which lead to rotations of the demand curve in many settings profits are a u shaped function of dispersion high dispersion is complemented by niche production and low dispersion is complemented by mass market supply we investigate numerous applications including product design advertising marketing and sales advice and the construction of quality differentiated product lines we also suggest a new taxonomy of advertising distinguishing between hype which shifts demand and real information which rotates demand

the wisdom of the minority we consider a simple variant of the canonical model of social learning and show that in many situations it is optimal for an agent to abandon her own information and follow the minority rather than the majority this possibility depends on two economically meaningful requirements agents are differentially informed and observe only the number of agents having chosen each option such as consumers observing only market shares we show that minority wisdom arises when information is sufficiently heterogeneous and the well informed are not overly abundant yet the conditions necessary are not overly restrictive in fact it is possible for the minority to be wise even when the minority consists of a lone dissenter and a majority of citizens are well informed

self reinforcing mechanisms and interactive behaviour we consider the possibility of switching between two options when there are benefits from compatibility and imprecise information about the other agents choices we find that lock in to one of multiple equilibria is just a temporary occurrence the system lingers at prevalence of one option with intermittent transitions to prevalence of the other

brand names and price discrimination this paper explains the fact that firms market both labeled and unlabeled products as a practice of price discrimination that emerges as a non cooperative equilibrium outcome the authors consider a market for a differentiated product where the possibility to price discriminate by the selective use of labels is due to the fact that buyers differ in the intensity of their preferences and that before they buy they are unable to distinguish among the different brands without the aid of identifying labels copyright 1987 by blackwell publishing ltd

alternative models of individual behaviour and implications for environmental policy abstract most insights of environmental economics are in line with the standard neoclassical economic model of rational behaviour formulated in terms of maximization of utility in general or of profits in particular the standard theory of environmental policy is a case in point however the maximization hypothesis and its methodological foundation have been criticized on many grounds related to a lack of either logical or empirical content moreover over the years a great many alternative models of behaviour have been proposed both criticism and alternatives are surveyed here attention is devoted to relevant insights from the philosophy of science the notion of methodological individualism and other criticism the alternative behavioural models include bounded rationality and satisficing lexicographic preferences habitual behaviour incommensurability and multicriteria evaluation and various models of behaviour under uncertainty major implications of the criticism and alternative models of individual behaviour for environmental policy theory are outlined

why is equity order flow so persistent abstract order flow in equity markets is remarkably persistent in the sense that order signs to buy or sell are positively autocorrelated out to time lags of tens of thousands of orders corresponding to many days two possible explanations are herding corresponding to positive correlation in the behavior of different investors or order splitting corresponding to positive autocorrelation in the behavior of single investors we investigate this using order flow data from the london stock exchange for which we have membership identifiers by formulating models for herding and order splitting as well as models for brokerage choice we are able to overcome the distortion introduced by brokerage on timescales of less than a few hours the persistence of order flow is overwhelmingly due to splitting rather than herding we also study the properties of brokerage order flow and show that it is remarkably consistent both cross sectionally and longitudinally

gendered impacts of the 2007 2008 food price crisis evidence using panel data from rural ethiopia abstract this paper provides empirical evidence on the gendered impact of the 2007 2008 food price crisis using panel data on 1400 households from rural ethiopia that were initially surveyed before the onset of the crisis in 1994 1995 1997 and 2004 and after food prices spiked in 2009 it investigates whether female headed households are more likely to report experiencing a food price shock and whether female headed households experiencing a shock are more or less likely to adopt certain coping strategies controlling for individual household and community characteristics our findings suggest that female headed households are more vulnerable to food price changes and are more likely to have experienced a food price shock in 2007 2008 because female headed households are also resource poor and have a larger food gap compared with male headed households they cope by cutting back on the number of meals they provide their households during good months and eating less preferred foods in general a combination of short term measures to protect diet diversity and micronutrient consumption of vulnerable groups and longer term measures to promote investment in sustainable agriculture such as strengthening women s property rights may increase the ability of poor and vulnerable households to cope better with food price increases

evolution coordination and banking panics abstract i study equilibrium selection by an evolutionary process in an environment with multiple equilibria one of which involves a banking panic the analysis is built on a repeated version of the diamond dybvig 1983 model the optimal equilibrium is uniquely selected if it is also risk dominant when there are multiple banks the probability of observing a panic increases as the size of the banks decreases local interaction generates contagion effects that allow a bank run to spread first among banks in the same geographic location and then throughout the population

dynamic pricing of new experience goods we develop a dynamic model of experience goods pricing with independent private valuations we show that the optimal paths of sales and prices can be described in terms of a simple dichotomy in a mass market prices are declining over time in a niche market the optimal prices are initially low followed by higher prices that extract surplus from the buyers with a high willingness to pay we consider extensions of the model to integrate elements of social rather than private learning and turnover among buyers

cash crop production food price volatility and rural market integration in the third world large farmers in the third world often devote to cash crops a larger share of their land than do small farmers this paper suggests a possible explanation even in the presence of food markets third world farmers food security is best assured by food self sufficiency a model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern simulations further indicate that food market integration reduces the need for food self sufficiency policy implications are drawn regarding domestic trade liberalization and agricultural technology

price competition for an informed buyer abstract this paper investigates price competition with private information on the demand side two sellers each offer a different variety of a good to a buyer endowed with a private binary signal on their relative quality the model provides an informational foundation to differentiation in hotelling s price competition game equilibrium comparative statics is performed with respect to the prior belief and the precision of the private information competition is fierce when the prior strongly favors one seller and private signals are relatively uninformative sellers equilibrium profits may fall with the revelation of public information and are nonmonotonic in the prior belief journal of economic literature classification numbers c72 d43 d82 l15

equilibrium with product differentiation tive consumer formulations is used to examine the properties of single and multiple price equilibria conditions under which decreases in the intensity of consumer preferences reduce price are given it is shown that with certain types of demand curves entry can eliminate price cost markups even given product differentiation if competition is localized it is demonstrated that entry does not affect the markup finally the effect of spurious product differentiation on price is examined

higher fuel and food prices impacts and responses for mozambique rising world prices for fuel and food represent a negative terms of trade shock for mozambique the impacts of these price rises are analyzed using various approaches detailed price data show that the world price increases are being transmitted to domestic prices short run net benefit ratio analysis indicates that urban households and households in the southern region are more vulnerable to food price increases rural households particularly in the north and center often benefit from being in a net seller position longer term analysis using a computable general equilibrium cge model of mozambique indicates that the fuel price shock dominates rising food prices from both macroeconomic and poverty perspectives again negative impacts are larger in urban areas the importance of agricultural production response in general and export response in particular is highlighted policy analysis reveals difficult trade offs between short run mitigation and long run growth improved agricultural productivity has powerful positive impacts but remains difficult to achieve and may not address the immediate impacts of higher prices

what the seller won t tell you persuasion and disclosure in markets imagine that you are considering an investment in a new public offering of a firm s shares the firm s officers make a presentation that includes an audited financial statement an earnings forecast reviewed by its prestigious investment bankers and an impressive demonstration of its new technology or suppose that you are buying a new furnace to replace an old one that is not working well the salesman displays a chart showing that the projected total life cycle cost of one particular model including capital costs and fuel usage over the projected lifetime of the furnace is lower than that of some competing models you have considered this paper reviews the theoretical arguments about how sellers disclose information in an attempt to encourage buyers and the potential role for regulation in encouraging efficient disclosure of information how well does a system of private reporting work when should we expect all the relevant information to be reported if testing and reporting by the seller are costly will too little testing and reporting be done or too much when some information is withheld what sort of information is withheld how do rational buyers respond to such withholding how are prices and welfare affected what role is there for laws and regulations to improve the functioning of markets we address these questions by studying the theory of persuasion games games in which one or more sellers provide verifiable information to buyers to influence the actions they take

the value of public information in monopoly the logic of the linkage principle of milgrom and weber 1982 extends to price discrimination a non linear pricing monopolist who sells to a single buyer always prefers to commit to publicly reveal information a liated to the valuation of the buyer

word of mouth communication and social learning this paper studies the way that word of mouth communication aggregates the information of individual agents we find that the structure of the communication process determines whether all agents end up making identical choices with less communication making this conformity more likely despite the players naive decision rules and the stochastic decision environment word of mouth communication may lead all players to adopt the action that is on average superior these socially efficient outcomes tend to occur when each agent samples only a few others i introduction economic agents must often make decisions without knowing the costs and benefits of the possible choices given the frequency with which such situations arise it is understandable that agents often choose not to perform studies or experiments but instead rely on whatever information they have obtained via casual word of mouth communication reliance on this sort of easily obtained information appears to be common in circumstances ranging from consumers choosing restaurants or auto mechanics to business managers evaluating alternative organizational structures this paper studies two related environments in arguing that individuals reliance on word of mouth communication has interesting implications for their aggregate behavior first motivated by the diffusion of new technologies we consider a choice between two competing products with unequal qualities or payoffs and show that the structure of communication is important in determining whether the population as a whole is likely to learn to use the superior product second we consider a choice between two products or practices that are equally good and ask whether consumers are likely to herd onto a single choice or whether diversity will obtain even in the long run we explore the implications of word of mouth communication in a simple nonstrategic environment there is a large population of identical players each of whom repeatedly chooses between two possible actions each player s payoff is determined by his own

estimating the short run poverty impacts of the 2010 11 surge in food prices global food prices have increased substantially since mid 2010 as have prices in many developing countries in this study we assess the poverty impact of the price changes between june and december 2010 in twenty eight low and middle income countries this is done by gathering detailed information on individual households food production and consumption levels for thirty eight agricultural and food commodities to assess the impacts on household welfare this study estimates that this sudden food price surge increased the number of poor people globally but with considerably different impacts in different countries the heterogeneity of these impacts is partly related to the wide variation in the transmission of global prices to local prices and partly to differences in households patterns of production and consumption on balance the adverse welfare impact on net buyers outweighs the benefits to net sellers resulting in an increase in the number of poor and in the depth of poverty we estimate that the average poverty change was 1 1 percentage points in low income countries and 0 7 percentage points in middle income countries with a net increase of 44 million people falling below the 1 25 per day extreme poverty line

agricultural growth poverty and nutrition in tanzania abstract rapid economic growth does not appear to have significantly improved poverty and nutrition outcomes in tanzania we link recent production trends to household incomes using a regionalized recursive dynamic computable general equilibrium and microsimulation model results indicate some inconsistency between recent growth and poverty measurements in tanzania we also find that the structure of economic growth may have constrained the rate of poverty reduction agricultural growth has been driven by larger scale farmers who are less likely to be poor and has been concentrated among crops grown in specific regions of the country slow expansion of food crops and livestock also explain the weak relationship between agricultural growth and nutrition outcomes we find that accelerating agricultural growth particularly in maize strengthens the growth poverty relationship and enhances households caloric availability while also contributing significantly to growth itself

energy price shocks household location patterns and housing crises theory and implications abstract the u s housing collapse in 2007 is widely blamed for inducing a financial crisis that spread to the real economy and caused a severe and prolonged downturn this paper develops a model to investigate the role of gasoline price shocks in triggering the housing market collapse and identifies a new channel through which energy price shocks affect the financial market and the macro economy results suggest that unanticipated gasoline price shocks increase the cost of work commutes lower the value of homes away from the city center and increase foreclosure rates as homeowners either cannot afford mortgage payments amid elevated gas expenditures or seek to abandon underwater homes the model predicts that gasoline price shocks disproportionately affect suburban households that face greater exposure due to longer commutes and lower incomes empirical evidence from the 2007 08 housing collapse is presented to corroborate this theory

cash crop choice and income dynamics in rural areas evidence for post crisis indonesia in this article we investigate the factors affecting levels and growth of incomes in rural indonesia following the crisis of 1997 1998 in particular we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics framing the article in the context of an optimal labor allocation model relying on unique household panel data from central sulawesi and using advanced panel econometric methods we find that local innovations related to the adoption and intensification of new cash crop varieties more specifically the shift from coffee to cocoa production can explain a substantial part of the observed post crisis developments causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14 higher income levels during the post crisis period compared to the planting of other crops most notably coffee also our results demonstrate the importance of engagement in nonfarm activities for household income growth comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of indonesia

social learning and dynamic pricing of durable goods we analyze the impacts of social learning sl on the dynamic pricing and consumer adoption of durable goods in a two period monopoly consumers can make either early uninformed purchases or late but potentially informed purchases as a result of social learning several results are derived first we identify the market conditions under which ex ante homogeneous consumers may choose to purchase at different times second equilibrium adoption may demonstrate inertia where all adopt late or frenzy where all adopt early in particular adoption inertia appears when sl intensity is reasonably high but may vanish when sl intensity exceeds a certain threshold third firm profits and social welfare first weakly decrease in sl intensity and may then jump up by a lump sum amount at the threshold sl intensity level mentioned above last we show that the firm potentially benefits from informative advertising or investing to cultivate more social learning

does twitter chatter matter online reviews and box office revenues with a rapid rise of text based social media and online word of mouth wom activity millions of people express their thoughts and opinions on a variety of topics considering that nowadays wom is

supplying information to facilitate price discrimination the authors examine the incentive of a seller to allow potential buyers to acquire private information about their tastes for the seller s product improved private information for buyers enables the seller to segment the market and charge higher prices to high value buyers however improved information can also provide rents to buyers in a variety of settings this tradeoff is optimally resolved at one of two extremes either buyers are supplied with the best available knowledge of their tastes or no information is supplied by the seller copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

welfare impact of higher maize prices when allowing for heterogeneous price increases in this paper we explore the short term welfare impact of higher maize prices on different regions and socioeconomic groups in kenya we find that approximately 80 of the population would be negatively affected by higher maize prices and that poor households would lose a larger proportion of their welfare than wealthy households more specifically rural landless households would lose the most whereas households with landholdings of five acres or more would gain we simulate a 25 increase in maize prices and find that rural poverty would increase by approximately 1 percentage point and urban poverty by 0 5 percentage points moreover the impact differs among regions poverty would increase by 3 percentage points in the rural parts of coast province whereas it would be almost unchanged in the rural parts of western province furthermore we relax the standard assumption that consumer and producer prices change in the same proportions and allow for heterogeneity in marketing margins among districts we demonstrate that relaxing this assumption substantially affects the results and that the results from previous research were thus likely biased

quality disclosure and competition we analyze costly quality disclosure with horizontally differentiated products under duopoly and a cartel and characterize the effect of competition on disclosure and welfare we show that expected disclosure is higher under a cartel than under duopoly and the welfare comparison depends on the level of disclosure cost when the disclosure cost is low welfare is higher under a cartel than duopoly but when the disclosure cost is high welfare is higher under duopoly in either market structure disclosure is excessive in terms of total surplus but insufficient in terms of consumer surplus

sustainable development and girardian economics what is sustainable development why is it an issue ideally what needs to be done and practically what can be done are answered in this chapter by relying on the framework of girardian economics developed by french economist andre orlean and based on rene girard s model of mimetic rivalry under conditions of high uncertainty

the market for evaluations recent developments in computer networks have driven the cost of distributing information virtually to zero creating extraordinary opportunities for sharing product evaluations the authors present pricing and subsidy mechanisms that operate through a computerized market and induce the efficient provision of evaluations the mechanisms overcome three major challenges first evaluations which are public goods are likely to be underprovided second an inefficient ordering of evaluators may arise and third the optimal quantity of evaluations depends on what is learned from the initial evaluations

the value of private information in monopoly we investigate a basic question about a monopoly with incomplete information when does the seller have an incentive to allow potential buyers to acquire more private information about their tastes for the seller s product under plausible conditions such as log concave density of willingness to pay and convex marginal cost the seller prefers that the paying customers be well informed as a group but be left in the dark regarding their individual tastes

the economics of rumours this paper studies a class of information transmission processes which we call rumours the distinctive features of these processes are that the information transmission takes place in such a way that the recipient does not quite know whether or not to believe the information and that the probability that someone receives the information depends on how many people already have it specifically we study an example in which there is an investment project with returns only known to a few people these people have a cost of undertaking the project and this cost is private information the only information the other agents receive is that someone else has invested they are not told whether that person actually knew the returns or whether he too was just acting on the basis of his observation of others they use their optimal bayesian decision rule to decide whether to invest we show that for a wide class of alternative specifications this decision rule has the property that a positive fraction of those who observe the rumour will not invest in this sense a rumour cannot mislead everybody counter intuitive comparative statics results are obtained for example more information and higher productivity may reduce welfare while changing the speed with which the rumour spreads has no welfare effect

getting rid of trans fats in the us diet policies incentives and progress artificial trans fats in foods increase chronic disease risk in the us population federal nutrition label regulation enacted in 2003 requires mandatory disclosure of trans fat content on packaged foods this action created incentives for the food industry to reduce trans fats both in response to consumer demand and through competition to maintain product reputation subsequent public actions include a ban on trans fat use in new york city restaurants and lawsuits against food companies which created further incentives to remove trans fats especially in the food service industry industry has reformulated packaged foods and found substitutes for restaurant fry oils and trans fats are disappearing from the us food supply market response extends throughout the supply chain and has spurred research to alter oilseed crop characteristics the widespread and relatively rapid industry response likely has improved the quality of us diets and demonstrates the potential for policy actions to spur such improvements

competition and confidentiality signaling quality in a duopoly when there is universal private information abstract we model non cooperative signaling by two firms that compete over a continuum of consumers assuming each consumer has private information about the intensity of her preferences for the firms respective products and each firm has private information about its own product s quality we characterize a symmetric separating equilibrium in which each firm s price reveals its respective product quality we show that the equilibrium prices the difference between those prices the associated outputs and profits are all increasing functions of the ex ante probability of high safety if horizontal product differentiation is sufficiently great then equilibrium prices and profits are higher under incomplete information about quality than if quality were commonly known thus while signaling imposes a distortionary loss on a monopolist using price to signal quality duopolists may benefit from the distortion as it can reduce competition finally average quality is lower since signaling quality redistributes demand towards low quality firms

sell probabilistic goods a behavioral explanation for opaque selling probabilistic or opaque selling whereby a seller hides the exact identity of a product until after the buyer makes a payment has been used in practice and received considerable attention in the literature under what conditions and why is probabilistic selling attractive to firms the extant literature has offered the following explanations to price discriminate heterogeneous consumers to reduce supply demand mismatches and to soften price competition in this paper we provide a new explanation to exploit consumer bounded rationality in the sense of anecdotal reasoning we build a simple model where the firm is a monopoly consumers are homogeneous and there is no demand uncertainty or capacity constraint this model allows us to isolate the impact of consumer bounded rationality on the adoption of opaque selling we find that although it is never optimal to use opaque selling when consumers have rational expectations it can be optimal when consumers are boundedly rational we show that opaque selling may soften price competition and increase the industry profits as a result of consumer bounded rationality our findings underscore the importance of consumer bounded rationality and show that opaque selling might be even more attractive than previously thought

business as usual market crashes and wisdom after the fact the authors present a three stage model of market dynamics in the first stage routine behavior tends to keep information of common interest trapped in private hands in the second stage private information reaches a threshold that triggers some agents to alter their behavior these actions release information to the market the final stage involves the market s response to this news as other participants react to the initial departure from routine behavior the authors present an application to industry investment they also outline applications to the international debt crisis to bank runs and to political upheavals copyright 1994 by american economic association

survey evidence on diffusion of interest and information among investors abstract questionnaire surveys of institutional and individual investors were undertaken to learn about patterns of communications it was found that direct interpersonal communications are very important in investor decisions questions elicited what fraction of investors were unsystematic and allowed themselves to be influenced by word of mouth communications or other salient stimuli randomly sampled investors were studied as well as investors in stocks whose price had recently increased dramatically contagion or epidemic models of financial markets are proposed in which interest in individual stocks is spread by word of mouth the survey evidence is interpreted as supporting such models

implementing cool comparative welfare effects of different labeling schemes country of origin labeling cool is being implemented in different forms and degrees in the united states and other countries across the world the first implementation of mandatory country of origin labeling mcool in the united states was for seafood in 2005 this is an example of partial mcool because it exempts the foodservice sector and excludes processed seafood from labeling using a conceptual framework we analyze the welfare impacts of partial mcool when compared to no voluntary and total mandatory cool taking into account imperfect competition in the downstream markets information asymmetry and diversion of low quality product to the unlabeled market the model is general enough to apply to any incomplete regulation for which the perceived low quality product is required to be labeled such as the labeling of genetically modified food in the european union our results show that when consumers have a strong enough preference for domestic relative to imported product regulators can overestimate the gain in consumer welfare from partial mandatory labeling if they ignore the diversion of lower quality imports to the unlabeled sector we show that if the preference for domestic product is large enough total mcool benefits the home market the most overall including domestic consumers and producers but not the imperfectly competitive downstream agents however if total mcool is too costly to implement partial mcool is the second best solution but only if consumers falsely believe the unlabeled product to be of higher quality than it truly is our results suggest more research is needed to determine the extent to which consumers value the information provided by mcool and to enable regulators to consider the welfare impact of diversion in evaluating incomplete mandatory labeling regulations

rising food prices and undernourishment a cross country inquiry households welfare in developing countries has been hit by dramatic food prices increases which occurred between 2005 and 2008 in this paper we adopt a partial equilibrium approach to analyze the short time effects of a staple food price increase on nutritional attainments as a measure of welfare the analysis consists of first approximating complete food demand systems and then performing household level micro simulations instead of focusing on a single country profile we provide a more complete snapshot by comparing the evidence through a cross country assessment made possible by the use of nationally representative household surveys comparability is assured by the adoption of the same methodological choices in the treatment of the micro data we find that food price spikes not only reduce the mean consumption of dietary energy but also worsen the distribution of food calories further deteriorating the nutritional status of populations we also discovered that access to agricultural land plays a significant role in ensuring adequate nutritional attainments in rural areas and surprisingly even in urban areas

analyzing nutritional impacts of price and income related shocks in malawi simulating household entitlements to food the 2007 2008 food price crisis and the following global economic recession has temporarily increased the number of people to suffer from hunger while the impacts can be measured with precision only ex post for policy makers it is critical to get a sense of likely impacts ex ante in order to plan approaches to mitigate these impacts in this paper we adopt a very simple micro based simulation approach to analyze how changes in prices of specific food groups such as maize prices or prices for staple foods as well as how negative short term household level income shocks affect the entitlements to calorie consumption of individuals and how these changes affect overall food poverty we illustrate our approach using household survey data from malawi we find that food poverty is of serious concern with large within country variations we find that price shocks for staple foods have a considerable impact on food security with particularly strong effects on poor net food buyers in rural and urban areas this paper demonstrates that it is possible to estimate food security impacts of price and income shocks ex ante in a relatively straightforward fashion that can be done relatively quickly and that is suitable for cross country assessments of the likely impacts of shocks on food security and the design of appropriate response measures

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

a model of labeling with horizontal differentiation and cost variability we study optimal disclosure of variety by a multiproduct firm with random costs the prices for labeled varieties are increasing functions of the cost differential and do not reveal which variety is cheaper to produce nondisclosure is most common under moderate uncertainty about costs and not too much idiosyncrasy in valuations and quality asymmetry mandatory disclosure decreases expected welfare when cost variability is large and quality asymmetry is small the cheaper variety tends to be oversupplied undersupplied when disclosure is voluntary mandatory competition among multiproduct firms that source inputs in the same upstream market may not lead to more disclosure

geographical indications and the competitive provision of quality in agricultural markets the economics of geographical indications gis is assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture it is assumed that certification costs are needed for gis to serve as collective credible quality certification devices and production of high quality product is endogenously determined we find that gis can support a competitive provision of quality and lead to clear welfare gains although they fall short of delivering the constrained first best the main beneficiaries are consumers producers may also accrue some benefit if production of the high quality products draws on scarce factors that they own copyright 2008 oxford university press

comparative advertising disclosing horizontal match information improved consumer information about horizontal aspects of products of similar quality leads to better consumer matching but also to higher prices so consumer surplus can go up or down while profits rise with enough quality asymmetry though the higher quality and hence larger firm s price falls with more information so both effects benefit consumers this occurs when comparative advertising is used against a large firm by a small one comparative advertising as it imparts more information therefore helps consumers although it also improves the profitability of the small firm overall welfare goes down because of the large loss to the attacked firm

food product composition consumer health and public policy introduction and overview of special section as efforts to improve diets in high income countries intensify attention has turned to how policies may influence diet composition the case studies in this special issue contribute to our understanding of how two main types of policies have influenced food product composition and dietary outcomes 1 policies affecting food manufacturers input costs and 2 information policy affecting competition research on the first type of policy is relatively new but suggests that us commodity policies would not be good policy instruments to influence diets except through the long run impacts of agricultural research research on the impacts of information policy continues to demonstrate that it can spur food industry competition to introduce healthier products but may not result in healthier diets international comparisons show where the us experience may have relevance for other high income countries

collective marketing arrangements for geographically differentiated agricultural products welfare impacts and policy implications this paper examines the incentive of atomistic agricultural producers within a specific geographical region to differentiate and collectively market products we develop a model that allows us to analyze the market and welfare effects of the main types of real world producer organizations using it to derive economic insights regarding the circumstances under which these organizations will evolve and describing implications of the results obtained in the context of an ongoing debate between the european union and united states as the anticipated fixed costs of development and marketing increase and the anticipated size of the market falls it becomes essential to increase the ability of the producer organization to control supply in order to ensure the coverage of fixed costs whenever a collective organization allows a market with a new product to exist that otherwise would not have existed there is an increase in societal welfare counterintuitively stronger property right protection for producer organizations may be welfare enhancing even after a differentiated product has been developed the reason for this somewhat paradoxical result is that legislation aimed at curtailing the market power of producer organizations may induce large technological distortions

relying on the information of interested parties we investigate the conventional wisdom that competition among interested parties attempting to influence a decisionmaker by providing verifiable information elicits all relevant information we find that if the decisionmaker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties competition may be unnecessary to achieve this result if the decisionmaker is unsophisticated or not well informed competition is not generally sufficient if the interested parties interests are sufficiently opposed however or if the decisionmaker is seeking to advance the parties welfare then competition can reduce or even eliminate the decisionmaker s need for prior knowledge about the relevant variables and for strategic sophistication in other settings only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow effective decisionmaking