profits and politics coordinating technology adoption in agriculture abstract this paper examines the political economy of government led coordination of economic activity in a simple two sector model in which individuals choice of agricultural technology affects industrialization we demonstrate the existence of multiple equilibria the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization relative to the traditional technology use of the mechanized technology increases output but leaves some population groups worse off we show that the distributional implications of choosing the mechanized technology restrict the possibility of pareto improving coordination by an elected policy maker even when we allow for income redistribution

green revolution land reform and household income distribution in the philippines income of agricultural households consists of returns to labor capital and land from farming supplemented mainly by labor earnings from nonfarm sources agricultural technology affects farmers income through its effect on factor demands and factor prices which in turn induce changes in the allocation of farmers own resources to different uses income from farming is also affected by village institutions such as land tenure which governs the distribution of income between landlords and tenants as well as resource allocations

induced innovations and farm mechanization cal change in agriculture then they come mainly from the public agent of farm technology the agricultural research system the research system should be held responsible for the social consequences of farm mechanization and it should be budgeted and directed accordingly on the other hand if mechanization and exit from farming are caused mostly by external price and wage changes the responsibility of the research system is limited principally to technology improvement in this note we discuss the newly emerging tradition of induced innovation and its relation to the alternative explanations of machine labor substitution in agriculture we first clarify the conceptual basis of the induced innovation hypothesis and the related innovation possibility function second we call into question the validity of some of the empirical applications we argue that an incomplete conceptualization of the induced innovation idea has led to invalid empirical tests and to inappropriate implications on the causes of american farm mechanization

growth and distribution a test of the induced innovation hypothesis for the korean economy this study investigates technical change biases and their effects on distribute shars in korea we are particularly concerned with whether technical change biases have been induced by changes in relative factor prices accompanied by rapid economic growth in korea our test results show that technical change in korea has been biased in the direction in the direction for saving labour and using capital thus rendering support to the induced innovation hypothesis these findings are roughly in parallel with empirical studies on the induced innovation hypothesis for the us and japanese economies the similar pattern in technical change biases between korea and the two advanced economies is noteworthy in light of their basic differences in factor endowments another salient feature of our empirical analysis is that the price corrected labour share in korea has continually shrunk in the process of rapid economic growth which has been partly precipitated by factor price disorting policies

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

technology adoption and agricultural price policy market interventions such as price supports or fertilizer subsidies can lead to gains from speeding up adoption of new technologies but the policies distort resource allocation a framework is developed for optimizing policies in light of the adoption allocation trade off based on adoption coefficients and production parameters from third world agriculture levels and duration of policies are estimated sensitivity analyses are performed gains are small at best and may be zero or negative in view of farmer costs of adjustment and deadweight losses from taxes profit technology adoption if new technologies are desirable why not use price supports or input subsidies to encourage faster technology adoption while frequently raised in policy deliberations this question has received little serious analysis particularly neglected has been the conflict or trade off between a gains in output as producers switch from old to new technologies and b the losses from resource use distortions brought about by price policies when output prices are raised or prices of inputs such as fertilizer are lowered the

supply and demand functions for multiproduct u s cash grain farms biases caused by research and other policies this study presents new estimates of supply and demand elasticities for u s multiproduct cash grain farms and estimates of input and output bias effects caused by public and private crop research extension and farmers schooling the study also shows that the social rate of return to public crop research is large about 62 percent

labor productivity measurement in japanese agriculture 1956 1990 abstract this paper investigates the factors responsible for a drastic decline in the growth rate of labor productivity of the agricultural sector for the 1956 1990 period this investigation is carried out by a newly devised procedure which decomposes the growth rate of labor productivity into 1 the total substitution effect which consists of the effects due to factor price changes and biased technological change and 2 the tfp effect composed of the effects due to scale economies and technological progress based on empirical estimation of the translog cost function it was found that the total substitution effect contributed to the growth of labor productivity much more than the tfp effect did for the period under question

secrecy and safety we provide a model showing that the use of confidential settlement as a strategy for a firm facing tort litigation leads to lower average safety of products sold than would occur if the firm were committed to openness a rational risk neutral consumer s response in a market wherein a firm engages in confidential settlements may be to reduce demand a firm committed to openness incurs higher liability and r d costs though product demand is not diminished we identify conditions such that if the cost of credible auditing to verify openness is low enough a firm prefers to eschew confidentiality

global population growth technology and malthusian constraints a quantitative growth theoretic perspective we structurally estimate a two sector schumpeterian growth model with endogenous population and finite land reserves to study the long run evolution of global population technological progress and the demand for food the estimated model closely replicates trajectories for world population gdp sectoral productivity growth and crop land area from 1960 to 2010 projections from 2010 onwards show a slowdown of technological progress and because it is a key determinant of fertility costs significant population growth by 2100 global population reaches 12 4 billion and agricultural production doubles but the land constraint does not bind because of capital investment and technological progress

uniqueness of equilibrium in sealed high bid auctions abstract for the case of two buyers we show that equilibrium in the sealed high bid auction is unique when i buyers reservations prices are drawn independently from distributions with finite support and positive mass at the lower endpoint ii buyers have private values and iii buyers preferences are log supermodular for more than two buyers we obtain the same result under the additional assumptions that iv buyers with the same reservation price have the same preferences v buyers are risk neutral or risk averse with non increasing absolute risk aversion and vi the supports of the different buyers distributions of reservation prices have the same upper endpoint

research and extension expenditures and productivity in japanese agriculture 1960 1990 abstract this paper investigates the cause for the decline in the growth of productivity in japanese agriculture since the late 1960s for this objective it investigates the effects of research and extension r e activities on the extent and the direction of the bias of technological change in japanese agriculture for the period 1960 1990 based on the translog cost function framework empirical results show that the cost reducing effects of r e measured in terms of the absolute value of the cost r e elasticity increased slightly from 0 194 in 1960 to 0 205 in 1965 and then decreased consistently to 0 110 in 1990 this finding is broadly consistent with the finding of the decline or slowdown in agricultural productivity since the late 1960s the bias due to r e was found to be toward labor intermediate inputs and other inputs saving on the one hand and machinery and land using on the other labor saving and machinery using biases are consistent with the hicksian induced innovation hypothesis

voluntary quality disclosure and market interaction marketers disclose quality information directly to potential consumers using a variety of communication channels this study investigates how competition may influence duopoly firms incentive to voluntarily reveal quality information we show that firms in competitive markets reveal less information than a monopoly firm in addition sequential disclosure leads to asymmetric equilibrium disclosure behavior the disclosure leader reveals unambiguously less information than in the simultaneous disclosure case whereas the follower ex ante reveals less more private information than that released by the leader or by the firms in the simultaneous case when the disclosure cost is sufficiently low high we also examine the equilibrium firm profits and social welfare we demonstrate that there may be a u shaped relationship between equilibrium monopoly profits or social welfare under both monopoly and duopoly and the disclosure cost moreover in comparison to the simultaneous disclosure case sequential disclosure can lead to increasingly softened competition improving both firm profitability and social welfare

uniqueness of the equilibrium in first price auctions abstract if the value cumulative distribution functions are strictly log concave at the highest lower extremity of their supports a simple geometric argument establishes the uniqueness of the equilibrium of the first price auction in the asymmetric independent private values model

equilibrium in sealed high bid auctions there is a voluminous theoretical literature on sealed high bid auctions auctions in which bids are sealed and the high bidder pays his bid see for example vickrey 1961 myerson 1981 riley and samuelson 1981 milgrom and weber 1982 matthews 1983 maskin and riley 1984 holt 1980 cox smith and walker 1988 a critical property on which this literature relies is the existence of equilibrium in which buyers bidding strategies are monotonic in their types this enables the analyst to perform comparative statics as the distribution of types changes and to compare the welfare properties of the high bid auction with those of other auction institutions one case in which the existence of monotonic equilibrium is readily established is that in which buyers types are distributed smoothly independently and symmetrically in this case there exists a symmetric equilibrium one in which all bidders share the same bidding behaviour as a function of their valuations and this bid function is the solution to a first order differential equation

litigation liability and incentives for care abstract in this paper potential injurers are subject to a negligence standard and differ in cost of taking care in the event of accident the injurer s degree of care is private information in litigation that follows award of damages for pain and suffering will lead to a general increase in care and hence reduce the likehood of accident a tighter negligence standard will lead some potential injurers to take more care and others to take less adoption of a rule under which the loser at trial must pay the litigation costs of the winner will reduce the pressure for punitive damages

welfare impacts of alternative public policies for agricultural pollution control in an open economy a general equilibrium framework a general equilibrium approach is used to evaluate the welfare impacts of alternative policies for reducing agricultural pollution in an open economy with preexisting distortions caused by income taxes and agricultural subsidies the policies examined here include the removal of distortionary agricultural subsidies we find that even though these distortions are small compared to others in the economy removing them and imposing nitrogen reduction subsidies and or output taxes can enhance welfare and reduce nitrogen pollution thereby leading to a substantial double dividend the relative efficiency of the alternative policies examined here depends on the level of the nitrogen reduction target copyright 2008 oxford university press

specification of production functions for analyzing technical change and factor inputs in agricultural development abstract this paper focuses on some vital issues involed in specifying the number of variables to be included in agriculture s production function and on the functional form that the agricultural production function should assume in the context of a computable general equilibrium model when land and intermediate inputs seeds and fertilizers as well as capital and labor are included modeling the agricultural sector can best be done in a more disaggregated format than simple cobb douglas or ces specifications after examining the transcendental logarithmic production function the paper proposes to adopt nested ces specifications on the basis of empirically observed elasticities of substitution

modelling technical change in italian agriculture a latent variable approach this paper presents an alternative approach to the measurement of technical change it is based on the latent variable level of technology that enters explicitly the input demand system and on a hypothesis about the innovation generating process by adding measurement error equations the behavioral system can be viewed as a multiple indicators multiple causes mimic model the parameter estimates are obtained with a maximum likelihood estimator which involves the implicit covariance matrix the analysis refers to italian agriculture and the results provide some evidence on the nature and level of technical change during the years 1961 1991

quality disclosure formats in a distribution channel firms normally disclose quality information to consumers using two alternative formats either directly to consumers or indirectly through downstream retailers this study investigates optimal disclosure strategies formats in a channel setting with bilateral monopolies it shows that retail disclosure leads to more equilibrium information revelation this is because the manufacturer can through wholesale price cuts partially absorb the retailer s effective disclosure cost and thus increase the retailer s incentive for disclosure the conditions under which a particular disclosure format arises as the manufacturer s optimal choice are also examined even though direct disclosure is the ex post dominated option the manufacturer may benefit from committing ex ante to the direct disclosure format when the cost of disclosure is sufficiently high

qualitative analysis of bayes nash equilibrium in weak asymmetric auctions abstract we propose a simple qualitative methodology for improving the understanding of the nature of equilibrium strategies in asymmetric first price sealed bid auctions when departures from symmetry are weak we exemplify this methodology through the exposition of three examples already studied in literature maskin and riley 2000a fibich and gavious 2003 bajari 2001

price and advertising signals of product quality we present a signaling model based on ideas of phillip nelson in which both the introductory price and the level of directly uninformative advertising or other dissipative marketing expenditures are choice variables and may be used as signals for the initially unobservable quality of a newly introduced experience good repeat purchases play a crucial role in our model a second focus of the paper is on illustrating an approach to refining the set of equilibria in signalling games with multiple potential signals

demand signalling under unobservable effort in franchising linear and nonlinear price contracts we study the signalling strategy of a principal who is privately informed about its high demand potential to an uninformed risk neutral agent we analyze the model in the context of a contract between a franchisor and a franchisee we examine the distortions of a two part pricing scheme necessary to credibly inform the franchisee agent we also study whether the inability of the franchisor principal to observe the agent s effort moderates or exaggerates the distortions from the first best two part pricing scheme a surprising outcome is that even though the principal incurs greater signalling cost the magnitude of distortion in the two part scheme is smaller when service is unobservable than when it is not thus a signalling strategy employing the fixed and variable fees is harder to detect under moral hazard empirical studies failing to control for moral hazard may incorrectly conclude that signalling strategy does not occur we later consider a three part scheme to verify whether or not the schem

agricultural production technologies with systematic and stochastic technical change a production system modeling tool is developed that implements recent work on autoregressive and endogenous stochastic production technologies associated with generalized fechner thurstone gft optimizing functions a gft class production system is used to evaluate the empirical support for technology specifications inherent in the neoclassical theoretic structure of an agricultural production region little likelihood support is found for zero serial correlation elimination of systematic technology changers from the production system strict neoclassical production technologies hicks neutral technical change or zero homogenous factor demand functions

testing the induced innovation hypothesis an error correction model of south african agriculture abstract this paper applies cointegration techniques to a model of induced innovation based on the two stage constant elasticity of substitution ces production function this approach results in direct tests of the inducement hypothesis which are applied to data for south african commercial agriculture for the period 1947 1991 south african data is used because the policy changes have been substantial enough that the factor and price ratios have turning points rather than being monotonic the time series properties of the variables are checked cointegration is established and an error correction model ecm constructed allowing factor substitution to be separated from technological change finally the ecm formulation is subjected to causality tests which show that both the factor price ratios and r d and extension expenditures are granger prior to the factor saving biases of technological change thus each stage of the analysis corroborates the inducement hypothesis however straightforward price inducement is only part of the explanation of changes in factor ratios policy induced innovation in response to tax concessions and subsidised credit is also present

product warranties and double moral hazard this article explores a model of warranties in which moral hazard problems play a key role the goal is to understand the important characteristics of warranties including their provision of incomplete insurance and the relationship between product quality and coverage we analyze a model in which buyers and sellers take actions that affect a product s performance since these actions are not cooperatively determined an incentives problem arises we characterize the optimal warranty contract and undertake comparative statics to determine the predicted correlation of warranty coverage and product quality

global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture we study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level we use a two sector schumpeterian model of growth in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population agriculture demands land as an input itself treated as a scarce form of capital in our model both population and sectoral technological progress are endogenously determined and key technological parameters of the model are structurally estimated using 1960 2010 data on world gdp population cropland and technological progress introducing random shocks to the evolution of total factor productivity in agriculture we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages and that it significantly affects both optimal consumption and population trajectories

a translog cost function analysis of u s agriculture 1939 77 over the past four decades major changes have occurred in u s agriculture a new era in agricultural production in the united states began in 1939 world war ii gave a boost to agriculture still bogged in the depression productivity increases over the period 1939 77 have been quite impressive measured crudely by the ratio of the indices of output and input the productivity index 1967 100 increased from 59 in 1939 to 119 in 1977 to study this phenomenon a multi input translog cost function incorporating hicks neutral technical change hntc was specified annual timeseries data for the united states was used to estimate the model neoclassical duality theory provides an approach for computing the pairwise elasticities of substitution between inputs for each year as well as the annual own and cross price elasticities of demand for inputs

warranties as signals under consumer moral hazard this article examines the use of prices and warranties as signals of product quality to consumers who choose how to maintain their purchases the seller s incentives are strongly affected by the interaction of quality and maintenance in determining product reliability two different assumptions about this interaction are made a separating equilibrium in which high quality is signalled with a low warranty and low price is shown to be possible in both cases

biased technological change and factor demand in postwar japanese agriculture 1958 84 abstract the objective of this study is to gain a better understanding of factor substitutions in postwar japanese agriculture by shedding special light on biased technological change such biased technological change is first measured then associated with the movements of factor prices and then tested for the hicksian induced innovation hypothesis in addition a decomposition analysis is carried out in order to quantitatively examine the importance of the biased effects for determining changes in factor cost shares and factor proportions during the 1958 84 period a slightly modified stevenson greene model of the translog cost function is employed this model has at least two important advantages over ordinary translog cost functions first it incorporates time into the model such that all coefficients of the ordinary translog cost function may change over time this is more realistic than the ordinary translog cost function which assumes that all coefficients are constant over the period of estimation another attractive feature is that it enables us to test the induced innovation hypothesis directly the model is applied to the 1958 84 period by making use of farm level data the results show that technological change was biased towards saving labor and other inputs and using machinery intermediate inputs and land this biased technological change is found to be in principle consistent with the induced innovation hypothesis furthermore it is shown through decomposition analyses that the biased technological change had significant impacts on changes in factor cost shares and factor proportions during these years the empirical results of this study imply that technological change in japanese agriculture has in general proceeded in a manner consistent with factor endowments conditions since the late 1950s an implication of this study for agriculture in less developed countries is that agricultural policies seeking development through technological progress should be carried out so as to take advantage of peculiar factor endowments conditions in the individual countries

induced bias of technical change in agriculture the united states and japan 1880 1980 because of extreme differences in factor endowments and price ratios among factors between the united states and japan both countries have experienced sharply different patterns of factor use and productivity growth in agriculture for the past 100 years of modern economic growth in this study the method of testing the hicksian hypothesis of induced innovation was developed using the two level ces production function the model was applied to the historical data of u s and japanese agricultural development for 1880 1980 the results were consistent with the hypothesis that different patterns of technical change in the two countries were induced by differences in the levels and the movements in relative factor prices

voluntary product safety certification this paper describes the incentives for firms to seek voluntary product safety certifications we consider a firm that makes the decision of whether or not to seek certification prior to selling the product we show that even when the firm and the consumers have the same beliefs about the product s safety there are incentives for the firm to seek safety certification the main analysis investigates the role of consumer moral hazard and shows that it can lead to greater incentives for voluntary certification when inherent product safety and effort are substitutes but smaller incentives when they are complements the analysis of consumer moral hazard provides a nuanced perspective on the so called risk compensation or the peltzman effect phenomenon which postulates higher levels of accidents for safer products in our paper products that are successfully certified can end up with a higher incidence of accidents we also uncover an interesting nonmonotonic relationship between effectiveness of consumer

first price auctions in the asymmetric n bidder case i consider the first price auction when the bidders valuations may be differently distributed i show that every bayesian equilibrium is an essentially pure equilibrium formed by bid functions whose inverses are solutions of a system of differential equations with boundary conditions i then prove the existence of an equilibrium i prove its uniqueness when the valuation distributions have a mass point at the lower extremity of the support i give sufficient conditions for uniqueness when every valuation distribution is one of two atomless distributions i establish inequalities between equilibrium strategies when relations of stochastic dominance exist between valuation distributions

induced innovation in u s agriculture time series direct econometric and nonparametric tests the hypothesis of induced innovation is tested for u s agriculture using a high quality state level panel data set and three disparate testing techniques time series direct econometric and nonparametric we find little support for the hypothesis that conclusion is robust across testing techniques however as with all empirical tests of this hypothesis conducted to date ours focus only on the demand side of the hypothesis the hypothesis could have been rejected simply because the marginal cost of developing and implementing input saving technologies for the relatively expensive inputs is greater than for the relatively cheap inputs copyright 2009 oxford university press

warranties as a signal of quality in this paper we demonstrate through an example that in oligopolistic markets it is only in special cases that warranties can serve as signals of quality warranties are perfect signals only in cases in which the intrinsic attributes of products are neither too clustered nor too widely spaced otherwise multiple separating equilibria arise and the informational content of warranties is limited

is small beautiful farm size productivity and poverty in asian agriculture the debate on the relationship between farm size and productivity has gone through a complete circle in the 1960s it was perceived that small farms were efficient because they can fully use their resources particularly family labor and they can monitor their production activities closely but in the 1970s and 1980s as many asian countries rapidly moved towards industrialization and urbanization small farms were considered a major obstacle in this process