international coordination of trade and domestic policies the past half century has seen a dramatic multilateral reduction in tariff barriers under general agreement on tariffs and trade gatt negotiations however as tariff barriers have fallen attention has shifted to the use of domestic policies as secondary trade barriers a primary concern is that as countries sign trade agreements that constrain their ability to pursue trade goals through trade policy there will be unilateral incentives for governments to distort their domestic policies as a secondary means of protection 1 increasingly international trade disputes revolve around a country s use of internal regulations as a means of restricting trade the united states has successfully challenged the system of liquor taxes in both japan and korea as discriminating against imported liquor while venezuela and brazil have challenged american standards for reformulated and conventional gasoline as trade protection masquerading as environmentalism gatt contains several articles concerning the international regulation of domestic policies but the question of how to fully incorporate domestic policies within gatt negotiations and other international trade agreements remains contentious indeed at both the ministerial meeting in 1994 at the close of the uruguay round and the recent unsuccessful ministerial conference in seattle many gatt delegates renewed demands for the relationship between trade and various domestic policies e g environmental policy labor standards or competition policy to be examined despite the importance that has recently been placed on international cooperation over domestic policies no theoretical basis exists for considering how to cooperate over both trade and domestic policies within an international agreement previous papers on negotiation over two instruments of protection e g copeland 1989 1990 thomas l hungerford 1991 have assumed asymmetric limitations on cooperation i e they assume that one of the two instruments is either nonobservable or nonnegotiable this paper extends such work by investigating cooperation over two negotiable instruments of protection under symmetric limitations on cooperation and provides insight into the design of international trade agreements that incorporate cooperation over domestic policies i adopt the view that enforcement issues are central to the understanding of international cooperation one of the challenges of international cooperation is the absence of a central authority to enforce the terms of an agreement without access to an external enforcement mechanism international agreements are viable only as long as member countries view continued cooperation to be in their own self interest i e the benefits from cooperating outweigh the potential gains from cheating 2 while the gatt department of economics university of miami p o box 248126 coral gables fl 33124 e mail ederington miami edu i would like to thank bob staiger bob baldwin wolfgang keller phillip mccalman jenny minier seminar participants at the nber conference on trade the environment and natural resources and two anonymous referees for comments on earlier versions of this paper any remaining errors are of course my own for example brian r copeland 1990 examined negotiation over one trade barrier leaving a secondary trade barrier e g nontariff barriers domestic legislation etc to be set noncooperatively he shows that trade liberalization will induce substitution toward the less efficient nonnegotiable instrument of protection due to the unilateral incentives to maintain trade protection facing countries thus within a cooperative framework the two types of barriers serve as imperfect substitutes for each other 2 as stated by kenneth w dam in his review of the gatt institution the best guarantee that a commitment of any kind will be kept particularly in an international setting where courts are of limited importance and even more important marshals and jails are nonexistent is that the parties continue to view adherence to their agreement in their mutual interest thus the gatt system unlike most legal systems is not designed to exclude self help in the form of retaliation rather retaliation subjected to established procedures and kept within prescribed bounds is made the heart of the gatt system dam 1970 pp 80 81

optimal product launch times in a duopoly balancing life cycle revenues with product cost we present a model describing the demand dynamics of two new products competing for a limited target market the demand trajectories of the two products are driven by a market saturation effect and an imitation effect reflecting the product experience of previous adopters in this general setting we provide analytical results for the sales trajectories and life cycle sales of the competing products we use these results to study the impact of launch time on overall life cycle sales we consider the perspective of one of the competing products and model the trade off between the lost revenues resulting from a delayed launch and the lower unit production costs we find that the profit maximizing launch time exhibits a counterintuitive behavior in particular we show that a firm facing a launch time delay from a competing product might benefit from accelerating its own product launch as opposed to using the softened competitive situation to further improve its cost position we identify conditions under w

multimarket contact imperfect monitoring and implicit collusion abstract this paper presents a theoretical foundation to the possibility that multimarket contact enhances firms ability to sustain implicit collusion when firms operate in a single market and cannot perfectly monitor their opponents choices it is impossible to achieve efficiency even if these firms have a long term strategic relationship we show that when firms encounter each other in a number of distinct markets and the extent of this market contact is large efficiency can be approximately sustained by a perfect equilibrium this efficiency with imperfect monitoring holds under almost the same condition on the discount factor as with perfect monitoring journal of economic literature classification numbers c70 c72 c73 d43 l11 l22 l41

considerations on providing the energy needs using exclusively renewable sources energiewende in germany abstract the share of renewables in the primary energy demand of germany has increased from 1 3 in 1990 to 11 7 in 2013 the plans are to increase it further by the year 2050 to 50 or even 100 by carrying out the national energiewende energy change switch programme in this paper we analyze the current energy scenario and recall goals of the energiewende programme we also identify infrastructural and technological bottlenecks which are likely to affect the programme execution by doing so the enormous scale of this national venture becomes apparent and it is clear that its execution will last for several generations and perhaps even for a century or two additionally we introduce an idea of exclusively green energy communities egecs as an energiewende mile stone due to the dimensions of the tasks the energy change switch programme will last for several generations and perhaps even for a century or two realization of this overwhelming national venture has to proceed through milestones and demonstration projects we propose demo projects called green energy communities gecs to examine with what efforts and under what constraints such communities can operate using exclusively renewable forms of energy

assessing the need for critical minerals to shift the german energy system towards a high proportion of renewables abstract the german government has set itself the target of reducing the country s ghg emissions by between 80 and 95 by 2050 compared to 1990 levels alongside energy efficiency renewable energy sources are set to play the main role in this transition however the large scale deployment of renewable energies is expected to cause increased demand for critical mineral resources the aim of this article is therefore to determine whether the transformation of the german energy system by 2050 energiewende may possibly be restricted by a lack of critical minerals focusing primarily on the power sector generating transporting and storing electricity from renewable sources for the relevant technologies we create roadmaps describing a number of conceivable quantitative market developments in germany estimating the current and future specific material demand of the options selected and projecting them along a range of long term energy scenarios allows us to assess potential medium or long term mineral resource restrictions the main conclusion we draw is that the shift towards an energy system based on renewable sources that is currently being pursued is principally compatible with the geological availability and supply of mineral resources in fact we identified certain sub technologies as being critical with regard to potential supply risks owing to dependencies on a small number of supplier countries and competing uses these sub technologies are certain wind power plants requiring neodymium and dysprosium thin film cigs photovoltaic cells using indium and selenium and large scale redox flow batteries using vanadium however non critical alternatives to these technologies do indeed exist the likelihood of supplies being restricted can be decreased further by cooperating even more closely with companies in the supplier countries and their governments and by establishing greater resource efficiency and recyclability as key elements of technology development

forecasting the impact of renewable energies in competition with non renewable sources abstract the diffusion dynamics of traditional and clean energy systems in the energy mix are studied in a competition modeling where their interacting life cycles are jointly described competition has only been considered recently since diffusion competition models are not easy to be implemented data are represented by yearly consumptions in mtoe of traditional sources coal oil gas and nuclear systems and a selection of renewable sources hydroelectric wind and solar power for the us europe china and india from 1965 to 2014 for each case we will investigate whether the diffusion level of traditional sources sustains or prevents the spread of renewables and vice versa for the us and europe we will take into account the link between the 2008 2009 financial crisis and the slowdown in consumptions as a matter of fact the energy sector is characterized by uncertainty due to the depletion of finite energy sources the technological and economical problems of renewables and the hypothesis of shale gas as a possible bridge to renewables that could delay the spread of latter ones in this scenario six year forecasts are provided until 2020

nonlinear production path and an alternative reserves estimate for south asian natural gas abstract natural gas is a finite resource that may be estimated directly through geophysical methodologies or indirectly through historical production data the rapid growth in consumption of this limited natural resource strictly connected to the oil economy may lead to its imminent depletion and a related economic crisis the transition to a new economy based on renewable and sustainable energy resources is a crucial challenge for the next decades at world and regional levels with different dynamics therefore an accurate forecast of the availability of natural gas is important to ensure a sustainable energy policy providing essential information about the timing of this transition postulating a finite life cycle of recoverable resources in this paper we investigate the natural gas production of four neighboring south asian states bangladesh india myanmar and pakistan we use a number of homogeneous diffusion models with convenient extensions and check the model validation in terms of prediction capability the results indicate that india and myanmar have already extracted more than 50 of their ultimately recoverable natural gas resources urr whereas good prospects for natural gas extraction remain in the near future for bangladesh and pakistan the four neighboring asian states can build a sustainable power reserve system for natural gas to meet their increasing demand within a medium term horizon some further policy implications are also suggested in this paper

the german energy transition modeling competition and substitution between nuclear power and renewable energy technologies abstract this paper studies some quantitative aspects of the energy transition in germany the energiewende which envisages the complete abandonment of nuclear power and a strong reliance on photovoltaic and wind energy for electricity provision the major aim is to shed light on and measure with indirect tools the possible social effects on competition and substitution dynamics characterizing such transition in doing so an analysis on the innovation diffusion framework is proposed through the application of two diffusion models for a duopolistic competition unrestricted and standard ucrcd to the annual time series of consumption of nuclear and renewables wind and solar energy in germany in order to test empirically the presence of such substitution effect the obtained results confirm this conjecture and show that renewables have exerted a significant and measurable effect in determining the observed decline of nuclear power consumption in particular we find that the diffusion of renewables wind and solar is characterized by a high within word of mouth testifying the widespread belief of germans towards the energy transition while the parallel diffusion of nuclear power is characterized by a highly negative cross word of mouth due to the competing role exerted by renewables

the risk of contagion from multimarket contact abstract it is conventional wisdom that the strategic linkage of markets that is enabled by multimarket contact typically increases the profitability of cooperation among rivals we find to the contrary that a strong force against strategic linkage results from imperfect monitoring of adherence to cooperation with such imperfections strategically linking markets can lower payoffs by permitting the impact of adverse shocks in one market to spread to others consequently players of repeated games on more than one front may find it strictly advantageous to avoid linking strategies on a front with clear monitoring to outcomes on a front with error prone monitoring one implication is that antitrust competitive strategy and foreign policy analyses have presumed too broadly that multimarket contact fosters cooperation the game theoretic equilibria characterized here shed light on why players such as firms and nations sometimes strategically link fronts in their rivalry and sometimes take care to articulate that some fronts of particularly volatile conflicting interests will not trigger broader adverse moves against the rival

mutual forbearance in experimental conglomerate markets we conduct economic experiments to gauge the level of cooperation between conglomerate rivals first we run control experiments to observe cooperation between subjects acting as duopolists in one of two markets in the control experiments subject pairs choose a quantity xi or yi from a payoff matrix in a repeated game relatively less cooperation is observed in the y market than in the x market a second series of experiments then combines the two payoff matrices to create a conglomerate setting facing each other in two markets opponents now choose an xi yi pair each period we find that conglomeration encourages more coperation in the y market but less cooperation in the x market time series analysis of our conglomerate subjects choices strongly supports the recent game theoretic propositions in bernheim and whinston 1990

does competition spur innovation the case of yardstick competition this paper investigates the effect of yardstick competition on firms incentives to invest in cost reducing innovations we show that an increase in the intensity of yardstick competition for which we provide a natural measure increases the incentives to innovate

policy linkage and uncertainty in international agreements i introduction negotiations over the north american free trade agreement nafta brought issues concerning the environment and a country s environmental policies to the forefront of international trade negotiations as a result nafta includes several environmental provisions as well as an environmental side agreement the side agreement established a commission to review each country s environmental standards and environmental enforcement record in addition the side agreement includes an enforcement mechanism to ensure that each country upholds its standards by threatening the withdrawal of trade benefits for noncompliance thus nalfta ties the benefits of the trade policy portion of the agreement to compliance in a side agreement concerning domestic policies in this sense nafta appears to reflect a belief in the benefits of linking issues e g trade and domestic policy obligations within an integrated agreement the question of when issues should be linked will only grow in importance in coming years as issues of trade and the environment or other domestic policy issues like labor standards move to the forefront indeed at the ministerial meetings in 1994 at the close of the uruguay round many general agreement on tariffs and trade gatt delegates renewed demands for the relationship between trade and various domestic policies including environmental policy labor standards and competition policy to be examined the question of how to integrate environmental issues into the world trade organization wto will no doubt be accompanied by questions of whether to enforce environmental obligations with the threat of the suspension of trade concessions many free trade advocates have argued that environmental issues and other domestic concerns should be negotiated in separate international agreements that are divorced from the gatt wto framework in effect calling for two separate nonlinked agreements thei r primary concern is that disputes with respect to environmental policy will undermine the previous gains made in liberalizing trade barriers in contrast many environmentalists argue that environmental concerns should be more fully integrated into existing international agreements a linked agreement their main concern is that any environmental agreement that is separate from the gatt wto framework will be unenforceable without the threat of trade policy retaliation this article addresses these concerns with a theoretical analysis of the benefits and costs of linking issues like trade and domestic policy within a unified agreement under conditions of uncertainty the theory of self enforcing trade agreements has been well established by dixit 1987 bagwell and staiger 1990 and riezman 1991 who showed how countries can support low tariffs within a repeated relationship by configuring the tariff agreement so that each country fears that a decision to cheat on the agreement would trigger a costly retaliatory episode in the future ederington 2002 extended this repeated tariff game to include two policy instruments trade and domestic policy and showed that under conditions of perfect information cross retaliation e g enforcing cooperative domestic policies with the threat of trade policy retaliation does not help support a more efficient agreement intuitively even though trade policy sanctions are a stronger punishment to cheating they are not necessary because countries have less incentive to deviate from the agreement with their domestic policy thus with perfect information linked and nonlinked agreements are functionally equivalent however this leaves unanswered the question of whether or not cross retaliation may be beneficial or detrimental under conditions of imperfect monitoring it seems natural to relax the assumption of perfect information especially with respect to domestic policies and other nontariff trade barriers

the winds of change how wind firms assess germany s energy transition abstract in september 2010 the german government initiated a plan to shift from fossil fuels to renewable energies with nuclear power as a bridging fuel following the fukushima nuclear disaster however the government decided to immediately shut down almost half of germany s reactors and phase out the rest by 2022 the outcome of germany s energy transition energiewende from high carbon and nuclear sources of power to renewable energies has implications for germany s prosperity and may serve as either a positive or negative model for other countries achieving the energiewende will require the commitment of germany s renewable energy companies whose opinions on the transition have not yet been reported this article seeks to help fill this gap by relating the views of over 80 percent of germany s wind industry per market share the firms in our study are mostly optimistic about the government s ambitious targets but express concern over the prospects for offshore wind lagging network expansion and the efficacy of extant legislation to support the transition from the government s side cost concerns have already led to discussions of slowing the transition leading to a push pullback policy approach for the transition to proceed smoothly fundamental issues such as market design must be resolved

economic effects of renewable energy expansion a model based analysis for germany abstract the increasing utilization of renewable energy sources res is a major energy policy strategy in many countries worldwide germany is a forerunner in the deployment of res and has ambitious goals for the future the support and use of renewables affects the economy it creates business opportunities in sectors producing renewable energy facilities but comes with costs related to supporting its deployment this paper analyses and quantifies the net balance of economic effects associated with renewable energy deployment in germany until 2030 to this end we use a novel model the sectoral energy economic econometric model this is an econometric multi country model which for germany contains a detailed representation of industries including 14 renewable energy technology sectors our results show that renewable energy expansion can be achieved without compromising growth or employment the analysis reveals a positive net effect on economic growth in germany net employment effects are small but also positive their size depends strongly on labour market conditions and policies results at the industry level indicate the size and direction of the need for restructuring across the sectors of the germany economy

correction to the paper optimal product launch times in a duopoly balancing life cycle revenues with product cost the aim of this note is to correct an error in the formulation of theorem 1 by savin and terwiesch savin s c terwiesch 2005 optimal product launch times in a duopoly balancing life cycle revenues with product cost oper res 53 1 26 47

multimarket contact and pricing evidence from the u s cement industry abstract we empirically examine the effect of multimarket contact on pricing in the u s cement industry a model of price and quantity formation is estimated for a panel of 25 regional cement markets over 16 years the results indicate that the divergence of price from marginal cost in a particular market is directly related to the extent of multimarket contact among firms in that market

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

collusive conduct in duopolies multimarket contact and cross ownership in the mobile telephone industry the deregulation of the telecommunications industry has resulted in a variety of industry structures which have been created in hopes of increasing competition one example is the licensing of cellular telephone services in the united states where the fcc created duopolies in which two firms were granted licenses to compete in strictly defined product and geographic markets taking advantage of the unique regulatory environment we test to what degree duopolistic competition leads to competitive market outcomes we find that cross ownership and multimarket contact are important factors in explaining non competitive prices

sequential market entries and competition modelling in multi innovation diffusions abstract the diffusion of innovations for simultaneous processes cannot take into account and properly explain systematic perturbations due to competition substitution effects if they are examined one by one a first aspect in simultaneous competing diffusions is the distinction between simultaneous market entries synchronic competition and sequential entries diachronic competition in the latter case the beginning of competition may upset the first entrant s diffusion a second important aspect in multiple competition is represented by the choice to model the word of mouth effect either at the category level balanced model or at the brand level separating the within brand effect from the cross brand one unbalanced model in this paper balanced models are studied and we propose a model that allows for a change in the parameter values of the first entrant as soon as the second one enters the market the resulting differential system has a closed form solution that enables through sales data an empirical validation of the assumptions underlying the model structure improving the forecasting accuracy an application to pharmaceutical drug competition is discussed

the german energy transition as a regime shift abstract in this paper i use the resilience framework to interpret the project of transforming the german energy system into a renewable energy sources res based system the so called energiewende as a regime shift this regime shift comprises several transformations which are currently altering the technological political and economic system structure to build my argument i first sketch how technological political and economic developments reduced the resilience of the conventional fossil nuclear energy regime and created a new res regime second i depict recent changes in german public discourse and energy policy as the shift to the res regime third i highlight the challenges involved with increasing the resilience of the res regime in particular sufficient resilience of the electricity transmission grid appears to be crucial for facilitating the transformation of the whole energy system

assessment of the actual sustainability of nuclear fission power this paper uses 19 criteria to assess whether nuclear fission power can be a part of sustainable development this yes or no qualitative evaluation is due prior to ongoing marketability assessment and promotion of nuclear power by for example the iaea the iea and the uk government the criteria are classified into five groups planet results demonstrate that the incompatibility of nuclear expansion with electricity efficiency and full renewable power deployment largely overshadows the carbon free steam generation of nuclear fission prosperity analyses show that including rolled off costs and risks would raise bills to heights difficult to quantify due to doubts long term invisibility and irreversibility risks may be catastrophic and are not insurable while weaponry proliferation adds a further dimension people analyses reveal that some nuclear power is affordable for present generations when many costs remain unpaid however developing countries cannot afford the capital costs and technology intensity and catastrophes wreak havoc on national economies singling out exposed communities losing their habitats politics assessments demonstrate that nuclear technocracy dominates the scene in many countries the technocrats heavily influence policy makers the media and celebrities speaking out in favor of nuclear we identify the need for an independent global agency and for independent national nuclear regulatory institutions to safeguard the public interest

renewable electricity generation in germany a meta analysis of mitigation scenarios german energy policy targets envision a share of electricity from renewable energy sources res e of at least 80 in 2050 how can the transformation of the german electricity sector be achieved and at what costs this paper addresses these questions by means of a meta analysis of 10 recent model based mitigation scenarios for germany it turns out that the scenarios exploit the three basic strategic options of increasing the share of res e domestic res e generation electricity demand reductions and res e imports to substantially different extents domestic res e generation increases in all scenarios particularly from onshore and offshore wind scenarios that rely heavily on reducing electricity demand require a relatively low expansion of domestic res e generation despite detailed technical analyses insights on the costs of the transformation remain limited a discussion of underlying scenario assumptions reveals that it is unclear whether i res e and system integration technology development will be as cost competitive as postulated ii implicitly assumed institutional requirements will be realized and iii relevant actors in the transformation process will be incentivized accordingly therefore future research should pursue a thorough assessment of strategic options for transforming the german electricity system that consistently integrates technologies institutions and actors

a diffusion theory model of adoption and substitution for successive generations of high technology products this study deals with the dynamic sales behavior of successive generations of high technology products new technologies diffuse through a population of potential buyers over time therefore diffusion theory models are related to this demand growth furthermore successive generations of a technology compete with earlier ones and that behavior is the subject of models of technological substitution building upon the bass bass f m 1969 a new product growth model for consumer durables management sci 15january 215 227 diffusion model we develop a model which encompasses both diffusion and substitution we demonstrate the forecasting properties of the model by estimating parameters over part of the data and projecting shipments for later periods

living by the golden rule multimarket contact in the u s airline industry this paper examines empirically the effects of multimarket contact on pricing in the u s airline industry the analysis of the time series and cross sectional variability of airline fares in the 1000 largest domestic city pair routes reveals the presence of statistically significant and quantitatively important multimarket effects fares are higher in city pair markets served by carriers with extensive interroute contacts these findings are consistent with the claims of industry experts that airlines live by the golden rule i e that they refrain from initiating aggressive pricing actions in a given route for fear of what their competitors might do in other jointly contested routes during his testimony mr steven b elkins senior director of marketing systems development for northwest airlines cited an example in which northwest lowered fares on night flights that were flying with empty seats in a number of routes from minneapolis and upper midwest cities to various west coast cities he said that continental airlines swiftly responded by cutting prices in important northwest markets mr elkins s memo advises northwest pricing analysts we will live by the golden rule in his testimony he explained that the golden rule in that context was that i did not want my pricing analyst initiating actions in another carrier s market like chicago for fear of what that other carrier might do to retaliate wall street journal october 9 1990 p b1