political freedom and the response to economic incentives labor migration in africa 1972 1987 abstract policy reforms in developing countries often address in isolation either an economic or a political problem this study examines the interaction between political institutions and responses of labor migration to economic incentives migration data from thirty two african countries were used to quantify the statistical relationships between political institutions and labor migration out of agriculture regression results indicate that the presence of political freedoms and civil liberties increases the responsiveness of labor migration to economic incentives

should a carbon tax be differentiated across sectors abstract if some but not all countries are cooperating to reduce co2 emissions one could make the following argument a high carbon tax for carbon intensive tradeable sectors in the cooperating countries will reduce the production of goods from these sectors and therefore co2 emissions in the cooperating countries however this will to a large extent be counteracted by increased production of such goods in the countries that have no climate policy and since it is only total co2 emissions from all countries that are relevant for the climate there is no point in a policy that simply relocates co2 emissions from the cooperating countries to the countries that have no climate policy according to this line of reasoning carbon intensive tradeable sectors should thus face a lower carbon tax than other sectors of the economy this paper shows that a carbon tax should not be differentiated across sectors in the economy provided one can use import and export tariffs on all traded goods it is also shown that such a differentiation of carbon taxes is optimal for the cooperating countries if they are prevented from using tariffs on the traded goods however informational or political factors constraining the use of tariffs are likely also to constrain the possibility of differentiating carbon taxes between sectors

closing coal economic and moral incentives climate policy requires that much of the world s reserves of fossil fuels remain unburned this paper makes the case for implementing this directly through policy to close the global coal industry coal is singled out because of its high emissions intensity low rents per unit value local environmental costs and sheer scale direct supply policy the sequenced closure of coal mines may lead to less policy leakage across countries and time than other policies based on demand or price management it also has the advantage of involving relatively few players and leading to clear cut and observable outcomes appropriately sequenced closure of the world coal industry could we suggest create the moral force needed to mobilize collective international action

supply versus demand side policies in the presence of carbon leakage and the green paradox we consider a climate coalition that seeks to reduce global emissions in the presence of carbon leakage and resource exhaustibility we show that a credible announcement of future unilateral supply side policies delays foreign emissions and we derive the optimal combination of consumer taxes and producer taxes when we consider leakages from free riders both within periods and across periods the tax shares generally differ over time a decline in the present value of the social cost of carbon over time supports a time path where the consumers tax share of the total carbon tax also declines over time we illustrate our findings with a numerical model

trade in fossil fuel deposits for preservation and strategic action abstract in the world economy with interdependent markets for fossil fuel deposits and extracted fossil fuel some coalition of countries may fight climate change by purchasing and preserving fossil fuel deposits which would be exploited otherwise assuming that deposits are traded on a market with a uniform price we find that the outcome is efficient if the coalition is a price taker in both markets but inefficient if it acts strategically in the deposit market but not in the fuel market or acts strategically in both markets the latter result demonstrates that harstad s 2012 theorem 1 efficiency despite strategic action result is not robust with respect to changes in the concepts of the deposit market and market or bargaining power in a simplified parametric version of the game a strategically acting coalition buys fewer deposits consumes more fuel and puts up with higher climate damage than in first best

pollution claim settlements under private information abstract the classical problem of resolving a nuisance dispute between a pollution generating firm and nearby residents is modelled here as a mechanism design problem we assume that the designer of the mechanism is the firm that it is uncertain about the actual losses suffered by residents and that the initial assignment of property rights is one where each resident is entitled to prevail we derive a profitmaximizing scheme under the individual rationality and incentive compatibility constraints and examine its properties it is shown that the outcomes it yields are sometimes inefficient moreover when many residents are affected by pollution and the degree of uncertainty with respect to the losses they suffer is large these inefficiencies become rampant

bottom up world climate policies preserving fossil fuel deposits vs capping fuel consumption the policy of purchasing fossil fuel deposits for preservation is an alternative to the demand side climate policies that predominate in practice and in professional studies this paper analyzes the deposit purchase approach and compares it to the standard demand side policy in a model with international trade and non cooperative governments that account for the effects of their policies on equilibrium prices we investigate how the two regimes differ with respect to their equilibrium allocations and in particular with respect to the countries mitigation effort and welfare if countries are symmetric mitigation is stronger in the demand side than in the supply side regime and the transition from the latter to the former is welfare enhancing for all countries if countries have different endowments of deposits in a two country economy the country with higher extraction costs does not purchase deposits for preservation and the country with lower extraction costs is better off with the supply side than with the demand side policy finally we consider the case of combined policies and find surprisingly that no equilibrium in pure strategies exists when heterogeneous countries apply both policy instruments politiques climatiques mondiales ascendantes preservation des gisements de combustibles fossiles par opposition a la limitation de la consommation de carburant la politique d achat de gisements de combustibles fossiles aux fins de preservation represente une alternative aux politiques climatiques axees sur la demande predominant a la fois dans la pratique mais aussi dans les etudes professionnelles cet article analyse l approche fondee sur l achat de gisements et la compare a la politique standard axee sur la demande dans un modele de commerce international et de gouvernements non cooperatifs prenant en compte les effets de leurs politiques sur les prix d equilibre nous avons recherche en quoi les deux regimes differaient relativement a leur repartition de l equilibre et notamment relativement a l effort d attenuation et a la protection sociale si les pays sont symetriques l attenuation est plus prononcee dans un systeme axe sur la demande comparativement a un systeme axe sur l offre et la transition du second au premier systeme permet d ameliorer la protection sociale pour tous les pays dans une economie a deux pays differemment dotes en matiere de gisements le pays ayant les couts d extraction les plus eleves n achete pas de gisements a des fins de preservation tandis que le pays ayant les couts d extraction les moins eleves se retrouve en meilleure posture dans une politique axee sur l offre plutot que sur la demande pour terminer nous examinons le cas des politiques combinees et etonnamment nous constatons qu il n existe aucun equilibre en matiere de strategies pures lorsque des pays heterogenes appliquent les deux moyens d action

incomplete international cooperation to reduce co2 emissions alternative policies abstract as a first step toward a global treaty to control co2 emissions individual countries contemplate unilateral reductions in their fuel use such actions if significant would reduce world market fuel prices thereby stimulating fuel use elsewhere and causing problems for exporting countries possibly jeopardizing this policy initiative among the policy alternatives for mitigating the price effects of reduced demand reduced fuel consumption combined with buying or leasing fuel deposits to achieve a reduced supply is discussed in particular this policy which at first seems prohibitively costly is shown to dominate the original policy approach under a fairly wide set of circumstances

competition in regional environmental policies when plant locations are endogenous abstract a two region model is presented in which an imperfectly competitive firm produces a good with increasing returns at the plant level production of the good causes local pollution the firm decides whether to maintain plants in both regions serve both regions from a single plant or shut down if the disutility of pollution is high enough the two regions will compete by increasing their environmental taxes standards until the polluting firm is driven from the market alternatively if the disutility from pollution is not as great the regions will usually compete by undercutting each other s pollution tax rates

carbon pricing carbon sequestration and social discounting abstract this paper studies the optimal taxation of carbon emissions in a dynastic economy when the welfare function places direct pareto weights on unborn generations the social discount rate is lower than the discount rate of the current generation i show that this welfare criterion has important consequences for the structure of the optimal regulatory system in particular i show that i the optimal carbon tax does not in general equal the social cost of carbon ii a subsidy on oil reserves is sometimes optimal and iii carbon trading programs should limit the award of carbon offset allowances

markets for ownership the prevailing economic theory of the firm based on a property rights perspective has demonstrated that ownership by dispensable outside parties is an inefficient outcome relative to ownership by productive agents in order to better understand observed patterns of ownership this paper considers the outcome of ma rkets for ownership that operate prior to production taking place the main result is that outside parties will often become the equilibrium asset owners this is precisely because but for ownership such parties would not earn rents in contrast productive agents earn rents even when they do not own assets given that their contribution is complementary with other productive agents their willingness to pay for ownership is less than that of an outside party this result is robust to the introduction of moderate levels of inefficiency arising from outside ownership and to a consideration of opportunities for re sale before production begins the main conclusion drawn is that the nature of the operation of markets for ownership stands alongside incentive effects as important predictors of firm boundaries journal of economic literature classification numbers d23 l22

effects of agricultural market policy on crop production in china this paper investigates the effects of chinese market policy on crop production in the reform process after a brief review of the policy changes due to the reform the theoretical significance of chinese market policies for crop production is demonstrated diagrammatically it is shown that under the current market system the production of main crops is significantly influenced by both market and quota prices while relatively high quota reduces the influence of market prices on production relative price changes between competing crops will lead to shifting farmers cultivation preferences if inputs are constant empirical analysis based on cross section data for the period 1985 1997 from the province of zhejiang confirms these hypotheses the effects of policy variables however prove to be crop specific if the potential of crop production in china is to be better used an even more market oriented agricultural policy is required

carbon leakage grandfathering as an incentive device to avert firm relocation emission allowances are sometimes distributed for free in an early phase of a cap and trade scheme to reduce adverse effects on the profitability of firms this paper investigates whether grandfathering can also be used to avert the relocation of firms to countries with lower carbon prices we show that under certain conditions relocation can be averted in the long run even if the grandfathering scheme is phased out over time and immediate relocation is profitable in its absence this requires that the permit price triggers sufficient investments into low carbon technologies or abatement capital that create a lock in effect which makes relocation unprofitable

dynamic agricultural supply response under economic transformation a case study of henan china during the dramatic economic transformation in the last few decades food demand in china has expanded due to rapid urbanization dietary change and steady population growth at the same time a decline in available land for agriculture has made grain selfsufficiency a major goal of chinese agriculture policy a considerable challenge the governmenthasimplementedcomprehensivepolicies to encourage domestic agricultural production including eliminating agricultural taxes and providing direct subsidies to farmers it remains unclear whether these policies are effective in stimulating food production there isanurgentneedforknowledgeonagricultural supply response to changes in prices policies and rural infrastructure in china which can guide policy formulation in the process of economic transformation if agriculture is highly responsive policy induced changes in farmers behavior can be effective in increasing production and ensuring long term food security in the country

all or nothing climate policy when assets can become stranded abstract this paper develops a new perspective on stranded assets in climate policy using a partial equilibrium model of the energy sector political economy related aspects are considered in the government s objective function lobbying power of firms or fiscal considerations by the government lead to time inconsistency the government will deviate from a previously announced carbon tax which creates stranded assets under rational expectations we show that a time consistent policy outcome exists with either a zero carbon tax or a prohibitive carbon tax that leads to zero fossil investments an all or nothing policy although stranded assets are crucial to such a bipolar outcome they disappear again under time consistent policy which of the two outcomes all or nothing prevails depends on the lobbying power of owners of fixed factors land and fossil resources but not on fiscal revenue considerations or on the lobbying power of renewable or fossil energy firms

the supply of non renewable resources there exists no formal treatment of non renewable resource nrr supply systematically deriving quantity as function of price we establish instantaneous restricted fixed reserves and unrestricted nrr supply functions the supply of a nrr at any date and location not only depends on the local contemporary price of the resource but also on prices at all other dates and locations besides the usual law of supply which characterizes the own price effect cross price effects have their own law they can be decomposed into a substitution effect and a stock compensation effect we show that the substitution effect always dominates a price increase at some point in space and time causes nrr supply to decrease at all other points this new but orthodox supply setting extends to nrrs the partial equilibrium analysis of demand and supply policies thereby it provides a generalization of many results about policy induced changes on nrr markets the properties of restricted and unrestricted supply functions are characterized for hotelling homogeneous as well as ricardian non homogeneous reserves for a single deposit as well as for several deposits that endogenously come into production or cease to be active

supply side climate policy on the role of exploration and asymmetric information in the world economy with interdependent markets for fossil fuel deposits and extracted fossil fuel a coalition of countries may fight climate change by purchasing fossil fuel deposits for preservation harstad j polit econ 120 77 115 2012 has shown that the coalition s supply side climate policy implements the first best the present paper focuses on the role exploration and asymmetric information with respect to climate damage plays for the efficiency of unilateral supply side climate policy under the assumption of non strategic exploration and truthful reporting of climate damage the deposit policy turns out to be efficient if exploration is used strategically or the coalition misreports its climate damage however the deposit policy becomes inefficient

trading between agents for a better match this paper studies externalities that arise when agents can trade outcomes ex post i show that when agents can trade outcomes ex post principals are incentivized to contract with agents ex ante to reduce ex post transfers to outside agents with whom the principals do not directly contract this causes principals to offer agents piece rates that are inefficiently low and lower than the piece rates they would offer if trading was not allowed although trading reduces an agent s effort and could increase the agent s outside option of rejecting a principal s ex ante contract principals ultimately gain from allowing ex post trading because such trading results in outcomes that better match their tastes

efficient climate policy in the presence of free riders abstract if all countries participate in a climate agreement policies affecting the supply of fossil fuels have identical economic consequences as policies affecting the demand of fossil fuels this is no longer true when there is limited participation in an international agreement in the paper it is assumed that a group of countries commit themselves to cooperating while the remaining countries act independently and in pure self interest the paper compares supply and demand policies in this context and demonstrates that policies which affect only demand or only supply of carbon generally are inferior to policies affecting both demand and supply of carbon the optimal mix of supply and demand policies is derived in the paper with particular emphasis on carbon taxes an important result is that if the marginal environmental costs of total emissions are sufficiently high in the cooperating countries then both production and consumption of carbon should be taxed at a positive rate if on the other hand the marginal environmental costs of total emissions are sufficiently low it may be optimal to subsidize production or consumption in this case production should be subsidized if the cooperating countries are net importers of carbon while consumption should be subsidized if the cooperating countries are net exporters of carbon another important conclusion of the paper is that the cooperating countries should try to induce the non cooperating countries through appropriate transfers to tax consumption and production of carbon at the same rate as in the cooperating countries

the limits of monopolization through acquisition we address the question of whether competitive acquisition of firms by their rivals can result in complete or partial monopolization of a homogeneous product industry this question is modeled in terms of two distinct three stage noncoopera tive games analysis of subgame perfect pure strategy nash equilibria of these games discloses that under simplifying assumptions monopolization of an industry through acquisition is limited to industries with relatively few firms partial monopolization is either limited in scope or can be completely eliminated by prohibiting any owner from acquiring over 50 percent of the firms in the industry

can carbon tax eat opec s rents abstract we consider the optimal emission tax for a stock pollutant when the pollutant flow is also regulated by a resource exporting cartel we consolidate clarify and generalize a set of previous results to obtain clear isolation of the pigouvian and trade policy components of the tax because of the trade policy component the tax can shift more rents from the cartel than the pollution causes damage related costs this leads to the possibility that the pollution problem accompanied by the coordination of taxation can bring about net benefits at the expense of the cartel

twenty first century the century of coal co2 prices to curb coal demand the paper investigates how a carbon price could halt the comeback of coal which started in the early 2000s since the year 2000 coal has provided roughly 40 per cent of global primary energy growth the success of coal in the primary energy mix is due to the fact that it is abundant cheap and most often a domestic resource however global coal reserves if burnt would surpass the remaining carbon budget for a 2 c target by a factor of two the paper shows that a carbon price of 25 100 usd per tonne of co2 would be needed to phase out coal in the power sector depending on the technology and the world region even when assuming significant technological progress

buy coal a case for supply side environmental policy free riding is at the core of environmental problems if a climate coalition reduces its emissions world prices change and nonparticipants typically emit more they may also extract the dirtiest type of fossil fuel and invest too little in green technology the coalition s second best policy distorts trade and is not time consistent however suppose that the countries can trade the rights to exploit fossil fuel deposits as soon as the market clears the above mentioned problems vanish and the first best is implemented in short the coalition s best policy is to simply buy foreign deposits and conserve them

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

plan and market in china s agricultural commerce this article examines interactions between markets and state commercial planning in the context of china s agricultural sector it begins with a discussion of recent trends in agricultural planning and commerce in china and then presents a theoretical model that analyzes the way that a mixed commercial system of the sort observed in china functions the theoretical analysis suggests that a mixed system is sustainable and can have desirable efficiency and distributional effects markets however limit the range of sustainable plans and in the presence of markets state planning may no longer directly influence production and consumption behavior

migration and the urban to rural earnings difference a sample selection approach in particular i conjecture that in many parts of rural africa a self selection mechanism may occur that sorts migratory and nonmigratory workers in a manner consistent with the notion that those workers who are most likely to benefit from migration do so and workers least likely to benefit from migration do not in other words individuals sort themselves into migratory and nonmigratory workers given their characteristics for instance rural workers with relatively more human capital skills are most likely to migrate because the discrepancy is larger between earnings from rural unskilled jobs that underutilize their skills and earnings from skilled jobs in urban areas that more fully realize their potential given their characteristics therefore participation in the migratory labor stream is strongly assumed to be influenced by the workers anticipated earnings as a migrant versus his or her anticipated earnings from working in the rural area as a nonmigrant it is thus conceivable that the urban to rural earnings difference would be positive for workers with relatively greater skills and that their incidence of migration may be higher this study tests this hypothesis excerpt

opec unconventional oil and climate change on the importance of the order of extraction we show that opec s market power contributes to climate change by enabling producers of relatively expensive and dirty oil to start producing before opec reserves are depleted we examine the importance of this extraction sequence effect by calibrating and simulating a cartel fringe model of the global oil market while welfare net of climate damage under the cartel fringe equilibrium can be significantly lower than under a first best outcome almost the entire welfare loss is due to the sequence effect of opec s market power in our benchmark calibration the cost of the sequence effect amounts to 15 trillion us which corresponds to 97 percent of the welfare loss moreover we find that an increase in non opec oil reserves decreases global welfare in a counterfactual world without non opec oil global welfare would be 13 trillion us higher 10 trillion us of which is due to lower climate damages

self enforcing environmental agreements and trade in fossil energy deposits abstract the literature on self enforcing environmental agreements sieas focuses on de mand side emission reduction policies to our knowledge harstad 2012 is the only study on sieas in which countries purchase fossil energy deposits to prevent their exploitation he finds that for any coalition size there exists a small subset of parameters different for each size such that the coalition of that size is stable however the comparison of harstad s results with the prevailing demand side siea analyses is hampered by major differences in the structure of the respective game models this paper develops a game model with a deposit market and deposit purchases for preservation that is in line with some demand side siea literature it turns out that either no coalition is stable or the grand coalition is the only stable coalition we compare the outcome of our model not only with harstad s model but also with eichner and pethig s 2015 model of the formation of sieas in which climate policy takes the form of demand side emissions taxes

grain policy in chinese villages yield response to pricing procurement and loan policies this paper assesses the effects of pricing procurement and loan policies on china s grain economy a dynamic control model of the village leader is specified parameters of structural and control equations are estimated using time series cross section data simulation results show that pricing and procurement policies are not effective in raising yields because of conflicting objectives of local officials loan policies can increase yields the paper concludes that rural policies often have contradictory effects that can arise for a number of reasons an important reason is the fact that local officials in a reforming economy have greater decision making discretion than higher level officials and execute policies to meet their own objectives

contracting with externalities the paper studies inefficiencies arising in contracting between one principal and n agents when the utility of each agent depends on all agents trades with the principal when the principal commits to a set of publicly observable bilateral contract offers the arising inefficiency is due entirely to the externalities imposed on non signers in contrast when the principal s offers are privately observed the distortion is due to the externalities given agents equilibrium trades comparison of the two externalities determines the relative efficiency of the two contracting regimes in both cases we show that when n is large each agent can be treated as non pivotal provided that appropriate continuity assumptions are satisfied we also study the case in which the principal can condition each agent s trade on other agents messages we characterize the set of such mechanisms in which each agent s participation is voluntary when the principal can commit to any such mechanism she implements the first best outcome while threatening each deviator with the harshest possible punishment however in the presence of noise that goes to zero slower than n goes to infinity in the limit we obtain a generally inefficient outcome in which each agent feels non pivotal

why higher takeover premia protect minority shareholders posttakeover moral hazard by the acquirer and free riding by the target shareholders lead the former to acquire as few sharcs as necessary to gain control as moral hazard is most severe under such low ownership concentration inefficiencies arise in successful takeovers moreover share supply is shown to be upward sloping rules promoting ownership concentration limit both agency costs and the occurrence of takeovers furthermore higher takeover premia induced by competition translate into higher ownership concen tration and are thus beneficial finally one share one vote and simple majority are generally not optimal and socially optimal rules need not emerge through private contracting

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

a market equilibrium analysis of the impact of risk on the u s rice industry an economic model of supply demand for u s rice suggests that increases in risk result in decreased acreage and increased marketing margins in a market equilibrium context the empirical results also suggest rice production and rice prices are more responsive to changes in risk faced by marketing firms than changes in risk faced by producing firms

the significance of access to land as a determinant of kenya s interregional migration abstract hous and rempel 1980 obtain a positive sign that is not significant different from zero for wages expected in a region of origin given kenya s rural economic structure formal sector wages misrepresent income opportunities this study applies a polytomous logistic model to aggregate published census data from kenya to test whether measures of access to land provide a better representation of income opportunities and lead to results consistent with underlying migration theory i find that as an origin province s quality of agricultural land rises the likehood of migration declines accompanying these results is a brief historical description of kenya s land tenure system

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

can the terms of trade externality outweigh free riding the role of vertical linkages abstract this paper analyzes the impact of vertical linkages on the international effects of environmental policy with vertical linkages stricter environmental policy at home indirectly reduces pollution in the rest of the world this spillback effect can reinforce the free rider problem that arises under strategic interaction when pollution is transboundary a race to the bottom ensues despite the fact that vertical linkages make it easier for national regulators to export the costs of environmental policy via the terms of trade we also find that while trade liberalization can be good for the environment vertical linkages tend to increase global pollution

climate change policy market structure and carbon leakage abstract the 1997 kyoto protocol on climate change obliges the industrialized countries to initiate the international effort of abating anthropogenic greenhouse gas ghg emissions if such an initiative is to be taken the associated competitive effects may lead to significant relocation of developed countries energy intensive production this paper examines this issue i adopt an oligopolistic structure combined with increasing returns to scale production technologies to represent the strategic interaction among the firms producing energy intensive products this representation is then embedded within a multi regional computable general equilibrium model which in turn is used for quantifying these relocational effects the results suggest that significant relocation of energy intensive industries away from the oecd may occur depending on the type of market structure with leakage rates as high as 130 in which case ghg control policies in the industrialized countries actually lead to higher global emissions

climate contracts a game of emissions investments negotiations and renegotiations the paper presents a dynamic game where players can contribute to a public bad invest in technologies and write incomplete contracts despite the n 1 stocks in the model the analysis is tractable and the symmetric markov perfect equilibrium unique the framework helps to analyze emissions investments and international environmental agreements if only the emission levels are contractible then investments are suboptimally small if the contract is short term or close to its expiration date to encourage investments the optimal contract is more ambitious if it is short term and it is tougher to satisfy close to its expiration date and for countries with small investment costs if renegotiation is possible such an incomplete contract implements the rst best the results have important lessons for how to design a climate treaty

trade and carbon taxes we study various scenarios for taxing emissions of carbon dioxide c02 the question is how carbon tax policies will perform given interna tional trade if countries adopt different tax rates we investigate this question quantitatively using cim earth a newly developed open source computable general equilibrium cge model since climate change is a function of global c02 emissions an efficient strategy for control ling emissions would be to impose the same price wherever they occur such an approach presents a free riding problem however because nations have an incentive not to comply while gaining the ben efits of reduced emissions elsewhere moreover because of distributive concerns and claims about

regulation and contract design the impact of relationship specific investment a primary explanation for variation in contract structure is the extent to which contracting parties make investments specific to their transaction investment decisions are typically endogenous in contract choice however frustrating attempts at causal verification i analyze the impact of a major environmental regulation the clean air act amendment of 1990 on coal procurement strategies of u s utilities i exploit a key feature of the amendment s design to define a difference in difference model that is arguably less susceptible to endogeneity concerns i find wide support for the theoretical prediction reduced specificity leads to shorter length fixed price contracts

the effect of environmental policies on risk reductions in energy generation abstract we demonstrate that environmental policies can decrease the risks in energy generation for private investors when several renewable technologies are simultaneously triggered this is because diverse renewable technologies can hedge the intermittent generation of other forms of renewable power our study is distinct from previous literature which has not examined environmental policies through a risk reduction analysis or has only considered a few technologies such as wind and solar when analyzing risk reduction benefits this paper is important as environmental policies can be justified not only due to environmental benefits but also economically from a risk reduction perspective by using basic diversification gains

a distributional argument for supply side climate policies this paper presents a distributional argument for the use of supply side climate policies whereby carbon emissions are controlled through i depletion quotas or ii permanent confiscation of a fraction of the in situ carbon stocks the modeling considers intertemporal competitive equilibria in the cobb douglas version of the dasgupta heal solow stiglitz model of capital accumulation and costless resource extraction it is shown how policies i and ii preserve the functional distribution of income between capital owners and resource owners compared to the case where no climate policy is needed while suggested demand side policies do not such observations are of interest as avoiding functional redistribution may facilitate climate change negotiations the paper discusses policy implications of the analysis outside the simplified setting of the stylized model

buy coal and act strategically on the fuel market abstract a coalition of given size fights climate change by a policy of purchasing fossil fuel deposits and it seeks to manipulate the fuel price in its favor assuming that non signatories are price takers in the fuel market harstad 2012 designs a policy of trading deposits that attains efficiency despite the coalition s option to act strategically in the fuel market the deposit transactions constituting that policy include the trade of deposits which the non signatories would have exploited and the coalition will exploit the present paper shows that in a proper subset of economies a simpler policy is also efficient that consists of deposit purchases for preservation only in these economies the coalition is unable to raise its welfare above the level in the benchmark case of fuel price taking in the economies where the efficient policy requires deposit transactions for exploitation the coalition is better off and the non signatories are worse off than in case of price taking

negative externalities may cause delay in negotiation we study the strategic equilibria of a negotiation game where potential buyers are affected by identity dependent negative externalities the unique equilibrium of long finitely repeated generic games can either display delay where a transaction can take place only in several stages before the deadline or in spite of the random element in the game a well defined buyer exists that obtains the object with probability close to one

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

environmental policy when market structure and plant locations are endogenous abstract a two region two firm model is developed in which firms choose the number and the regional locations of their plants both firms pollute and market structure is endogenous to environmental policy there are increasing returns at the plant level imperfect competition between the home and the foreign firm and transport costs between the two markets at critical levels of environmental policy variables small policy changes cause large discrete jumps in a region s pollution and welfare as a firm closes or opens a plant or shifts production to from a foreign branch plant the implications for optimal environmental policy differ significantly from those suggested by traditional pigouvian marginal analysis

asymmetric information bargaining problems with many agents a yes or no decision must be made about some issue all agents must agree the coase theorem asserts that the efficient outcome will always result suppose the value positive or negative that an individual attaches to an affirmative decision is privately known to that individual it is proved under very mild conditions that with independent types as the number of agents increases the probability of an affirmative efficient decision goes to zero an example in which it is common knowledge that an affirmative decision is efficient and yet the probability of such a decision goes to zero is given

endogenous games and mechanisms side payments among players we characterize the outcomes of games when players may make binding offers of strategy contingent side payments before the game is played this does not always lead to efficient outcomes despite complete information and costless contracting the characterizations are illustrated in a series of examples including voluntary contribution public good games cournot and bertrand oligopoly principal agent problems and commons games among others

participation and duration of environmental agreements we analyze participation in international environmental agreements in a dynamic game in which countries pollute and invest in green technologies if complete contracts are feasible participants eliminate the holdup problem associated with their investments however most countries prefer to free ride rather than participate if investments are noncontractible countries face a holdup problem every time they negotiate but the free rider problem can be mitigated and significant participation is feasible participation becomes attractive because only large coalitions commit to long term agreements that circumvent the holdup problem under well specified conditions even the first best outcome is possible when the contract is incomplete

unilateral climate policy harmful or even disastrous this paper deals with possible foreign reactions to unilateral carbon demand reducing policies it differentiates between demand side and supply side reactions as well as between intra and inter temporal shifts in greenhouse gas emissions in our model we integrate a stock dependent marginal physical cost of extracting fossil fuels into eichner and pethig s int econ rev 52 3 767 805 2011 general equilibrium carbon leakage model the results are as follows under similar but somewhat tighter conditions than those derived by eichner and pethig int econ rev 52 3 767 805 2011 a weak green paradox arises furthermore a strong green paradox can arise in our model under supplementary constraints that means a green policy measure might not only lead to a harmful acceleration of fossil fuel extraction but to an increase in the cumulative climate damages at the same time in some of these cases there is even a cumulative extraction expansion which we consider disastrous

ronald coase and methodology ronald coase wrote two great theoretical articles that earned him the nobel prize the nature of the firm in 1937 and the problem of social cost in 1960 he also wrote many articles dealing with the methodology of economics often in the setting of a discussion of a particular economist such as adam smith or alfred marshall the methodological articles will be my particular focus here

the coase theorem is tautological incoherent or wrong the coase theorem is commonly understood to mean that costless bargaining ensures efficiency in the economy for any assignment of property rights the standard demonstration of the theorem suggests that costless bargaining ensures efficiency without an assignment of property rights 1998 elsevier science s a all rights reserved

does voluntary participation undermine the coase theorem abstract the coase theorem states that costless enforcement of voluntary agreements yields efficient outcomes we argue that previous treatments fail to recognize the full meaning of voluntary it requires a two stage game a non cooperative participation decision followed by coaseian bargaining only among those who choose to participate we illustrate this in a simple public goods model and find outcomes ranging from extremely inefficient to fully efficient however the efficient equilibrium is not robust to even very small transaction costs thus we cast doubt on coaseian claims of universal efficiency finally we outline a kind of coercion that restores efficiency