empathy conditioned conservation walking in the shoes of others as a conservation farmer conservation tillage on farms can improve downstream water quality using a dual interests theoretical framework guided by the metaeconomics approach this paper examines the role of self interest and shared other interest in the conservation tillage adoption decision the data is from a 2007 survey of farmers in the blue river tuttle creek watershed of nebraska and kansas logit models show that farmers who temper their pursuit of self interest with shared other interest reflecting empathy sympathy are more likely to adopt conservation tillage habit and control also play a role farmers pursue a joint and interdependent own interest and not only self interest as presumed in microeconomics

vertical control of price and inventory this paper offers a simple approach to the theory of decentralizing inventory and pricing decisions along a supply chain we consider an upstream manufacturer selling to two outlets which compete as differentiated duopolists and face uncertain demand demand spillovers between the outlets arise in the event of stockouts the price mechanism in which each outlet pays a two part price and chooses price and inventory virtually never coordinates incentives efficiently contracts that can elicit first best decisions include resale price floors or buy back policies retailer held options to sell inventory back to the manufacturers

resale price maintenance in an oligopoly with uncertain demand abstract this paper considers a model where oligopolistic manufacturers sell to consumers through competitive retailers who face demand uncertainty the setup is a symmetric duopoly with product differentiation and a perfectly competitive retail market in the game with unconstrained price competition there is price dispersion in the retail market in the game with resale price maintenance rpm manufacturers profits are higher retail inventories are at least as high and total surplus is at least as high the effect of rpm on consumer surplus is ambiguous rpm also precludes possible coordination failure between the manufacturers

raising retailers profits on vertical practices and the exclusion of rivals resale price maintenance rpm slotting fees loyalty rebates and other related vertical practices can allow an incumbent manufacturer to transfer profits to retailers if these retailers were to accommodate entry upstream competition could lead to lower industry profits and the breakdown of these profit transfers thus in equilibrium retailers can internalize the effect of accommodating entry on the incumbent s profits consequently if entry requires downstream accommodation entry can be deterred we discuss policy implications of this aspect of vertical contracting practices jel l14 l22 l25 l42 l81 this paper considers the upstream exclusionary effect of vertical practices that create rents for downstream retailers without carrying a contractual obligation for exclusivity 1 examples of interest include allowing the manufacturer to set the price at which a retailer sells to consumers resale price maintenance or rpm periodic lump sum payments to retailers through slotting fees or loyalty rebates and mar ket division schemes such as the allocation of clients to specific retailers or the use of exclusive territories we explore equilibria that can arise when an upstream incumbent uses a vertical practice of the sort outlined above to share industry profits with retailers we show that if entry by another upstream manufacturer leads to competition that reduces industry profits sufficiently and entry requires accommodation by retailers then equilibria exist in which retailers do not accommodate the entrant this results in exclusion in essence the vertical practice creates a quasi rent that retailers in equilibrium have an incentive to protect

parallel imports price controls and innovation the impact of parallel trade on innovation in r d intensive industries such as pharmaceuticals is a hotly debated question in antitrust and ip policy the well known argument that parallel trade dampens innovation by undermining firms ability to price discriminate has been challenged by recent literature the argument is that with endogenous price controls parallel trade increases innovation by reducing governments incentives to set particularly low price caps in this paper we show that this result crucially depends on the degree of homogeneity of the trading countries the result only holds if consumers in poorer countries have a relatively similar demand for medication as consumers in richer countries instead when countries are relatively heterogeneous parallel trade dampens innovation and lowers welfare by exporting price cap regulation from poorer to richer countries these findings are in line with recent case evidence we also show that when patent length is endogenous richer countries will tend to choose longer patent protection with parallel trade whereas equilibrium price caps tend to be tighter in that case

equilibrium parallel import policies and international market structure in a north south vertically differentiated duopoly the analysis in this paper derives equilibrium government policies towards parallel imports by incorporating strategic interaction at the policy setting stage and the product market the model sheds new light on i the effects of parallel import policies on pricing behavior of firms and ii the interdependence of national parallel import policies if demand asymmetry across countries is sufficiently large the north forbids parallel imports to ensure its firm sells in the south thereby generating international price discrimination the south s most preferred market outcome as the equilibrium when demand structures are relatively similar across countries the north permits parallel imports and uniform pricing its most preferred market outcome obtains

retailers as agents and the limits of parallel trade abstract the volume of retail level parallel trade is surprisingly small despite persistent international price differences we offer an agency based explanation by considering competition between an original home manufacturer and a foreign retailer the model endogenizes the role of the retailer as an agent with private information on the perceived quality of the good in its own market the manufacturer cannot control the retailer once the latter has ordered its sales quantity but it can limit the initial offer if parallel trade is permitted this offer will fall if there is incomplete information resulting in a small or zero volume of parallel trade this outcome makes both the original producer and foreign consumers worse off while offering little benefit to home consumers compared to the case where such trade is banned

capacity investment under postponement strategies market competition and demand uncertainty we consider duopoly models where firms make decisions on capacity production and price under demand uncertainty capacity and price decisions are made respectively ex ante and ex post demand realizations the interplay between the timings of demand realization and production decision endows firms with different capabilities flexible firms can postpone production decisions until the actual demand curve is observed but inflexible firms cannot under general demand structures and cost functions we characterize the equilibrium for a symmetric duopoly and establish the strategic equivalence of price and quantity competitions when firms are flexible we investigate the stochastic order properties of capacity and profit and show that they both increase for a flexible firm when the market is more volatile we find that flexibility allows a firm to increase investment in capacity and earn a higher profit while benefiting customers by keeping the price in a narrower range strategic equivalence implies that

returns system with rebates we consider a variant of the newsvendor problem atomistic retailers each buy merchandise from a monopoly supplier for resale at a market determined common retail price that depends upon the total industry order quantity and upon a stochastic demand after the orders are filled the supplier learns the realization of demand but the retailers do not we show that in this setting a returns system with rebates with previously set buy back price for returns and ex post payments from the supplier to each retailer per unit actually sold implements the optimal production and sales strategy attaining maximum expected profit in the channel

an elementary proposition concerning parallel imports abstract this paper demonstrates that when countries individually choose whether or not to prohibit parallel imports a global nash equilibrium involves the permitting of parallel importing into all relevant foreign markets i e global uniform pricing this result is sensitive in a straightforward way to the tariff setting powers of countries and to the specification of a government s objective function i e political economy considerations we also show that when countries can prevent parallel exports then any nash equilibrium involves global price discrimination

manufacturers and retailers in the global economy we develop a general equilibrium model to capture key features of the retailing and of the manufacturing industry in order to understand how these two industries interact and how labor is allocated between them we show that the observed shift in employment from manufacturing to retailing the rise in retailer product assortment and the emergence of slotting allowances in many retail markets are consistent with the global integration of product markets while higher retail market concentration is best explained by technological change in retailing we also identify a novel benefit from market integration consisting of efficiency gains in the vertical distribution chain

immigration quotas and skill upgrading a reason why immigration policy is such a contended issue is that often immigrants end up obtaining the right to vote and hence may affect future policies this paper offers a dynamic general equilibrium model of immigration policy in each period a heterogeneously skilled population chooses an immigration policy by majority vote voters anticipate that immigration affects the skill premium and the skill composition of the electorate the main insight is the existence of a trade off between skill complementary immigration and the resulting shift in political power i argue that a reasonably parameterized version of the model is consistent with the main features of us immigration

multi period modeling of two way price commitment under price dependent demand abstract this paper examines the use of price commitment policies in dynamic contracting in multiple period finite time horizons two specific forms of price commitment are considered one on the part of the retailer through a retail fixed markup contract and one on the part of the manufacturer through a price protection contract optimal policies for each form of price commitment are analytically derived as are optimal policies for the traditional price only and centralized supply chain scenarios that we use as comparisons we prove that optimal retail price and order size solutions exist in each period under the assumption of non increasing price dependent demand we show that the existence of retailer inventory between periods causes the optimal policies to differ from a static single period model further we show that a supplier offers a price protection policy as a signal to the retailer to resolve the gaming that naturally occurs under price only this effectively decouples the multi period dynamic contracting setting into repeated single period scenarios however the resulting behavior can actually inhibit supply chain performance on the retail commitment side we find that retail fixed markup policies are quite effective in improving supply chain efficiency we show that such policies can lead to pareto improvement over price only contracts and can even coordinate the supply chain in some situations

comparing the profitability of organic and conventional production in family farming empirical evidence from brazil abstract several studies have compared the profitability of organic and conventional producers but present very conflicting results although in the majority of these papers selection bias due to observables is accounted for the possibility of selection based on unobservables has been largely overlooked in this paper we compare these two types of producers using a large and unique data of about 4 2 million family farmers in brazil standard propensity score matching techniques are used together with the procedure recently developed by oster forthcoming to address concerns about omitted variables our results confirm the working hypothesis that organic producer s profits are lower than conventional ones

surplus maximization and optimality i identify assumptions under which policies that maximize expected surplus are pareto optimal even when expected consumer surplus does not even locally represent preferences over price income lotteries besides the oft made partial equilibrium assumptions that only one price varies and that income changes do not aect demand the two other assumptions are that every consumer s indirect utility function is supermodular in price and income and policies order prices by a single crossing property supermodularity holds precisely if relative risk aversion exceeds the income elasticity of demand a mild condition the single crossing property appears strong but holds in many applications that use expected surplus

does local labeling complement or compete with other sustainable labels a conjoint analysis of direct and joint values for fresh produce claim as a way to explore the increasing use of sustainability labels in the marketplace this study analyzes the differential values and interactive effects of sustainable production claims organic fair trade and carbon footprint and location claims through a conjoint choice experiment included in a 2008 u s survey locally grown is the highest valued claim and its value is further enhanced with fair trade certification but carbon intensive local products are discounted more severely than those sourced from other locations some negatively valued claims imports and carbon footprint can be mitigated by combining them with other claims organic and fair trade copyright 2011 oxford university press

resale price maintenance and interlocking relationships dampening of interbrand as well intrabrand competition is often advanced to justify per se illegality of rpm we analyze this argument in a context where rival manufacturers distribute their products through the same competing retailers we show that rpm indeed limits the exercise of competition at both levels and can generate industry wide monopoly pricing the impact on prices depends on the extent of potential competition at either level as well as on the parties influence in determining the terms of the contracts our analysis sheds a new light on ongoing legal developments and is supported by recent empirical studies

the effects of advertising on resale price maintenance this research combines the market power and market competition perspectives on advertising under the framework of a generalized theoretical model in minimum resale price maintenance rpm in order to investigate the effects of advertising on rpm using the real options approach the effects of advertising on retail price will impact the value of rpm further influence the incentive of manufacturers to impose rpm through brand penetration and promotional pricing effects advertising is likely to influence rpm under the condition of retail price competition when the brand penetration effect is dominant advertising will discourage manufacturers from imposing rpm advertising will encourage manufacturers to impose rpm when the promotional pricing effect is dominant rpm not only substitutes advertising but also complements advertising

strategic competition and optimal parallel import policy this paper shows that parallel import policy can act as an instrument of strategic trade policy we demonstrate this result in two country international duopoly where a domestic monopolist competes with a rival rm in the foreign market if it chooses to incur the xed investment cost of exporting the two rms sell horizontally dierentiated goods and compete in prices when the foreign market is signi cantly larger than the domestic one the home rm gains if it is unable to price discriminate its desire to not deviate too far from its optimal monopoly price in the domestic market makes it credibly less aggressive in price competition abroad which softens price competition and raises pro ts on the other hand when the foreign market is not signi cantly larger it is optimal for the home country to forbid parallel imports since international price discrimination yields higher pro ts to the home rm we draw out the implications of the two types of parallel import policies for global welfare

adoption of organic farming are there differences between early and late adoption based on the fact that not all farmers adopt a technology at the same time it is argued in this paper that the distinction between groups is important because early medium and late adopters respond differently to economic and non economic factors when they consider whether to take up organic farming or not the individual effects on adoption between the groups are identified by the use of multinomial logit analysis the results provide evidence that there are significant differences in the characteristics between the adopter groups the findings also reveal that the factors that affect adoption play a different role for early medium and late adopters particularly with regard to farming intensity age information gathering as well as attitudes of the farmer more specifically early adopters were the youngest to adopt organic farming and their decisions were found to be less profit related compared to other groups late adoption is constrained by risk considerations while environmental attitudes and social learning were identified to be important determinants for all adopter groups overall the findings strongly suggest that for policy measures to be effective the current state of diffusion has to be taken into account

demand uncertainty inventories and resale price maintenance we show that a manufacturer facing uncertain demand and selling through a competitive retail market may wish to support adequate retail inventories by preventing the emergence of discount retailers in our model discounters offer low prices made possible by low probability of being saddled with unsold inventories in the event of slack demand full price retailers are compensated for a higher probability of unsold inventories by a higher retail price when they sell we show that preventing discounting increases the manufacturer s wholesale demand and profits and we delineate demand conditions under which equilibrium inventory holding and consumer welfare increase

resale price maintenance and spatial price discrimination abstract in this article we examine resale price maintenance rpm in a classic model of downstream retailers engaging in spatial price discrimination we show that a resale price floor increases the total profit of the upstream monopoly when transport cost product differentiation is relatively low importantly this profitable rpm floor can also enhance social welfare and even consumer surplus a resale price ceiling can also be profitable and always improves consumer surplus and social welfare we argue that such findings support a rule of reason approach to rpm

organizational structure of a global supply chain in the presence of a gray market information asymmetry and valuation difference we consider a global supply chain of a multinational firm mnf with domestic and foreign markets in the presence of a gray marketer in particular we investigate the organizational structure of the mnf for pricing centralization vs decentralization when the foreign division of the mnf competes with the gray marketer the foreign division has a private information on the market potential and customers have a valuation difference between the products sold by the foreign division and the gray marketer in this situation while centralized pricing may control the gray marketer s activities decentralized pricing may take advantage of a local manager s private information especially when a significant valuation difference of customers exists due to product or service differentiation we analyze the trade offs in the choice of organizational structure for pricing and the impact of information asymmetry and valuation difference on this choice also we show that decentralization can be further improved by an incentive adjustment of profits between divisions which has a potential to increase all divisions and mnf s total profits over centralization

controlling opportunism in vertical contracting when production precedes sales in a make to stock vertical contracting setting with private contracts when retailers do not observe each other s stocks before choosing their prices an opportunism problem always exist in contract equilibria but public market wide resale price maintenance rpm can restore monopoly power however other widely used tools which do not fall under antitrust scrutiny and require only private bilateral contracts such as buyback contracts also allow the producer to fully exercise his monopoly power we conclude that a more lenient policy toward rpm is unlikely to affect the producer s ability to control opportunism

parallel imports challenges from unauthorized distribution channels we examine the problem of parallel imports unauthorized flows of products across countries which compete with authorized distribution channels the traditional economics model of a discriminating monopolist that has different prices for the same good in different markets requires the markets to be separated in some way usually geographically the profits from price discrimination can be threatened by parallel imports that allow consumers in the high priced region some access to the low priced marketplace however as this article shows there is a very real possibility that parallel imports may actually increase profits the basic intuition is that parallel importation becomes another channel for the authentic goods and creates a new product version that allows the manufacturer to price discriminate we propose a two country three stage model to quantitatively study the effects and strategies in the third stage and in the higher priced country where parallel imports have entered we characterize the resulting market segmentation one segment of consumers stays with the authorized version as they place more value on the warranty and services that come with the authorized version another segment switches to parallel imports because a lower price is offered due to lack of country specific features or warranties parallel imports also generate a third and new segment that would not have bought this product before unlike counterfeits that are fabricated by imitators all parallel imports are genuine and sourced from the manufacturer in the lower priced country through authorized dealers therefore the manufacturer s global sales quantity should increase but profit may rise or fall depending on the relative sizes and profitability of the segments a profit maximizing parallel importer should set price and quantity in the second stage after observing the manufacturer s prices in both countries there will be a threshold of across country price gap above which parallel imports would occur in the first stage the manufacturer can anticipate the possible occurrence of a parallel import its price and quantity and its effect on authorized sales in each country to make a coordinated pricing decision to maximize the global supply chain profit under some circumstances the manufacturer should allow parallel imports and under others should prevent them through a stackelberg game we solve for the optimal pricing strategy in each scenario we then find in one extension that when the number of parallel importers increases the optimal authorized price gap should narrow but the prices and quantities of parallel imports may rise or fall in another extension we nd that when the manufacturer has other means such as monitoring dealers differentiating designs and unbundling warranties to contain parallel imports the authorized price gap can widen as a function of the effectiveness of nonpricing controls in summary parallel imports may help the manufacturer to extend the global reach of its product and even boost its global profit if the manufacturer offers a discount version through its authorized dealers it is running a high risk of confusing customers and tarnishing brand images parallel imports may cause similar concerns for the manufacturer but unauthorized dealers are perceived as further removed from the manufacturer therefore there is less risk of confusing consumers when parallel imports are channeled through unauthorized dealers furthermore they are more nimble in diverting the product whenever their transshipment and marketing costs are small enough not to offset the authorized price gap and the valuation discount this may explain why some manufacturers fiercely fight parallel imports while others knowingly use this alternative channel

the strategic perils of delayed differentiation the value of delayed differentiation also known as postponement for a monopolist has been extensively studied in the operations literature we analyze the case of imperfectly competitive markets with demand uncertainty wherein the choice of supply chain configuration i e early or delayed differentiation is endogenous to the competing firms we characterize firms choices in equilibrium and analyze the effects of these choices on quantities sold profits consumer surplus and welfare we demonstrate that purely strategic considerations not previously identified in the literature play a pivotal role in determining the value of delayed differentiation in the face of either entry threats or competition these strategic effects can significantly diminish the value of delayed differentiation in fact under plausible conditions these effects dominate the traditional risk pooling benefits associated with delayed differentiation in which case early differentiation is the dominant strategy for firms even under cost parity with delayed differentiation we extend the main model to study the effects of alternate market structures asymmetric markets and inventory holdback our results in particular that for a broad range of parameter values early differentiation is a dominant strategy even under cost parity with delayed differentiation are robust to these relaxations

demand uncertainty and price maintenance markdowns as destructive competition this paper offers a new theory of destructive competition the authors compare minimum resale price maintenance to retail market clearing in a model with a monopolistic manufacturer selling to competitive retailers in both the resale price maintenance and flexible price games retailers must order inventories before the realization of demand uncertainty the authors find that manufacturer profits and equilibrium inventories are higher under resale price maintenance than under market clearing surprisingly consumer surplus can also be higher in which case unfettered retail competition can legitimately be called destructive copyright 1997 by american economic association

parallel imports demand dispersion and international price discrimination parallel imports goods imported by unauthorized resellers are advocated worldwide for undermining international price discrimination for a continuum of markets we find that uniform pricing by a monopolist yields lower global welfare than third degree discrimination if demand dispersion across markets is large though uniform pricing avoids output misallocation too many markets go unserved mixed systems permitting discrimination across but not within designated groups of markets yield significantly higher welfare than uniform pricing or unrestricted multimarket discrimination and can pareto dominate uniform pricing thus while parallel imports might benefit some countries our results weaken the multilateral case for allowing them

diffusion of food policy in the u s the case of organic certification organic food certification policy and programs are an interesting case to explore in terms of policy diffusion as there has been interesting dynamics between the federal and state levels and great diversity in the pace of diffusion across states at the same time this policy diffusion underlies a very dynamic marketplace that has relied on government based certification policies and programs to stabilize and support growth of the organic food sector the focus of this paper is a cross section time series analysis of organic policy adoptions over the past several decades to explore the types of factors that have influenced diffusion across time and space although federal policy activity has been a key driver of this dynamic there are several other state specific factors that also help to explain the differential diffusion of policies in this realm

resale price maintenance and forward integration into a monopolistically competitive industry in this paper we adopt the ces model of product differentiation for the downstream stage of the industry with an upstream monopolist we first show that resale price maintenance is equivalent to forward integration and that both increase profits then we demonstrate that forward integration by an upstream monopolist will reduce welfare for the industry prices fall with forward integration but the integrating firm contracts the number of downstream subsidiaries so drastically that the reduced diversity more than offsets the gains from lower prices

why parallel trade may raise producers profits abstract this paper shows that a manufacturer may benefit from parallel trade in addition to an intuitive condition about the effect of demand shocks this occurs when competitive retailers must order inventories before they know the realization of demand and for products whose sale value drops at the end of the demand period for these types of products letting retailers trade unsold inventories generally results in larger orders placed with the manufacturer and higher manufacturer profit the model provides a simple explanation as to why the volume of parallel trade is now very large and accepted by manufacturers for some products such as automobiles clothes toys consumer electronics musical recordings cosmetics and perfumes

parallel imports and repair services abstract this study explores the welfare effects of parallel imports when the producer may refuse to provide repair services for parallel imported units which reduces the degree of price convergence between countries if the probability of the product s breakdown is endogenously determined by the producer permitting parallel imports could increase the probability because a higher probability leads to a larger price gap as a result it is possible that prices increase and welfare deteriorates in both countries this negative welfare effect is more likely to emerge as the liberalization of trade in goods proceeds the prohibition of service discrimination recovers the positive welfare effect

dedicated vs product flexible production technology strategic capacity investment choice this paper studies the optimal investment strategies of an incumbent and a potential entrant that can both choose between a product flexible and dedicated technology in a two product market characterized by uncertain demand the product flexible production technology has certain advantages especially when the economic environment is uncertain on the other hand the dedicated production technology allows a firm to commit to production quantities this gives strategic advantages which can outweigh the value of flexibility it turns out that both firms prefer for some scenarios the dedicated production technology however we find that in a game with sequential technology choices both firms investing dedicated will not be an equilibrium especially when the economic environment is more uncertain the incumbent overinvests in product flexible capacity to force the entrant to choose the dedicated technology then the incumbent is the only firm with the product flexible production technology which results in a high payoff

casting the naturalization of asylum seekers as an economic problem the asylum seekers who choose the level of investment in the host country specific human capital and the government of the host country that chooses the probability of naturalization are modeled as optimizing economic agents in a setting not of their choosing

conversion subsidies for organic production results from sweden and lessons for the united states organic conversion subsidies used in europe are less likely to be politically acceptable in the united states where organic agriculture development is market driven persistent barriers to conversion in the united states include limited availability of and access to production and market information training in management systems and cost of conversion related investments by determining whether these factors affect the requirement of a subsidy to convert we can suggest whether u s policy makers need to provide subsidies to encourage conversion and identify policy variables consistent with market based approaches that could stimulate conversion a utility difference model is used with swedish data to analyze factors that determine whether a subsidy is required to motivate organic conversion the results show that farmers requiring subsidies manage larger less diversified farms and are more concerned with organic inspection quality and adequacy of technical advice access to more market outlets and information sources substitutes for payment level in the farmer s utility function indicating that services rather than subsidies may be used to encourage organic agriculture to the extent that conditions are similar in the u s organic sector market based programs such as cost sharing for conversion and market access improvement should stimulate growth of this industry 2000 elsevier science b v all rights reserved

commodity taxation and parallel imports we examine the interaction between commodity taxes and parallel imports in a two country model with imperfect competition while governments determine non cooperatively their commodity tax rate the volume of parallel imports is determined endogenously by the retailing sector we compare the positive and normative implications of having commodity taxes based on destination or origin principle we show that as the volume of parallel imports increases non cooperative origin taxes converge while destination taxes diverge moreover origin taxes are more similar and lead to higher aggregate welfare levels than destination taxes

reply to do returns policies intensify retail competition returns policies are common in many sectors of retail distribution padmanabhan and png 1997 showed that with demand uncertainty a returns policy could improve manufacturer profitability under certain conditions wang 2004 showed that returns policies do not change manufacturer profitability when demand is certain and retailing is competitive we show that returns policies do increase manufacturer profitability by attenuating retailer price competition when demand is low and intensifying competition when demand is high importantly this effect holds only in the presence of demand uncertainty further the conditions under which a returns policy raises the manufacturer s profit are weaker when retailing is a duopoly than when retailing is a monopoly this suggests that returns policies serve both to manage competition and mitigate demand uncertainty

how to escape a declining market capacity investment or exit this paper considers a firm that faces a declining profit stream for its established product the firm has the option to invest in a new technology with which it can produce an innovative product while having the option to exit at any point in time in the presence of an exit option earlier work determined the optimal timing to invest where it was shown that higher uncertainty might accelerate investment timing in the present paper the firm also decides on capacity this extension leads to monotonicity i e higher uncertainty delays investment timing we also find that higher potential profitability of the innovative product market increases the incentive to invest earlier where however we get the counterintuitive result that the firm invests in smaller capacity finally if quantity has a smaller negative effect on price the firm wants to acquire a larger capacity at a lower investment threshold

will farmers trade profits for stewardship heterogeneous motivations for farm practice selection we investigate the trade off agricultural producers face between profits and stewardly activities when selecting farm practices instead of the profit maximization framework we model producer behavior in an expanded utility framework built on production technology and including two utility components self and social interests the framework introduces inherent heterogeneity and social environmental motivations into farmer behavior based on this model we hypothesize that there are farmers that are willing to forego some profit to engage in stewardly farm practices with an empirical study we provide evidence that some farmers are willing to make this sacrifice results are consistent with the multi utility hypothesis

seeking asylum in europe seeking asylum in europe over the last three decades the annual number of applications for asylum in the countries of the european union has increased from about 15 000 to more than 300 000 this has sparked a political backlash a revolution in policy a lively academic debate but very little economic analysis although the causes of asylum flows and the effects of policy are much discussed they have rarely been the subject of quantitative analysis this article examines the evolution of asylum flows and asylum policy across the eu since the early 1980s it investigates the effects of war and conflict economic incentives and asylum policies on the total numbers and on the proportions going to the different countries of the eu special attention is given to the growth of policy restrictiveness across the eu and to the harmonization of asylum policies contrary to some views policy has worked to stem the flows but it has been overwhelmed by other forces timothy j hatton

decomposing local a conjoint analysis of locally produced foods increasingly foods are marketed as locally grown we use stated preference data from a choice based conjoint instrument to address two issues surrounding consumer demand for locally produced goods 1 what is the geographical extent of local and 2 is the value consumers place on local production distinct from other factors that are often confounded with locally produced foods such as farm size and product freshness we find our subjects place similar value on products produced in state and nearby and that consumers willingness to pay for local production is independent from values associated with product freshness and farm size copyright 2008 oxford university press

to certify or not to certify separating the organic production and certification decisions this article separates the decision to be certified organic into the decision to use organic practices and the subsequent decision to certify those practices using data from a survey of us fruit and vegetable producers we document that many producers are using organic practices but choosing not to certify philosophical beliefs and perceived risk of losses due to disease weeds and insects have the largest impact on the decision to use organic practices producers who use organic practices and direct market are less likely to certify moreover we find that the certification process discourages certification

entry deterrence by timing rather than overinvestment in a strategic real options framework this paper examines a dynamic incumbent entrant framework with stochastic evolution of the inverse demand in which both the optimal timing of the investments and the capacity choices are explicitly considered we find that the incumbent invests earlier than the entrant and that entry deterrence is achieved through timing rather than through overinvestment this is because the incumbent invests earlier and in a smaller amount compared to a scenario without potential entry if on the other hand the size of the investment is exogenously given the investment order changes and the entrant invests before the incumbent does

farmers adoption of integrated crop protection and organic farming do moral and social concerns matter we investigate empirically the role of moral and social concerns in farmers decision to adopt integrated crop protection ip and organic farming of a survey questionnaire has been sent to 1286 fruit growers and vegetable producers located in the french areas of alpes de haute provence hautes alpes and vaucluse analysis of individual responses n 243 shows that although economic concerns play a strong role a significant number of respondents give high importance to moral and social ones we also examine how these considerations matter according to different crop protection strategies that is conventional farming ip and of using a multinomial logistic regression we find that 1 social concerns e g showing to others one s environmental commitment drive both ip and of adoption 2 moral concerns e g do not feel guilty about one s choices increase the probability of organic farming adoption only and 3 farmers who give high importance to economic concerns e g cutting production costs are less likely to adopt of

effects of sourcing structure on performance in a multiple product assemble to order supply chain abstract this paper addresses the strategic pricing decisions of a decentralized assemble to order system and the effects of sourcing structure on system performance we consider an assemble to order system consisting of two substitute products and three components manufactured by different suppliers demand for the products is price sensitive the selling prices for the products are jointly determined by firms in the system we study the system under both centralized and decentralized decision making situations for the centralized system we demonstrate that there exists a unique optimal pricing solution for the decentralized system we show that there exists a unique nash equilibrium in the players pricing game we further analyze the effects of different sourcing structures on the system performance and the assembler s performance we find that reduction of suppliers in the system does not guarantee improvement of system performance different sourcing structures have different impacts on performance when the two dedicated components are sourced from a single supplier and the common component is sourced from another independent supplier the system and the assembler s performance become worse we show that the decentralized system can be effectively coordinated and the system performance can be improved with a simple profit sharing contract finally we provide comprehensive numerical examples to demonstrate some important managerial insights

capacity optimization under uncertainty the impact of operational time lags time lags in switching operational modes are typical in the manufacturing and power sectors but are not treated in most real options models in this paper we consider a firm that has the opportunity to suspend and to resume production infinitely many times subject to a time lag after each startup decision we contribute to the literature by allowing the firm to determine its level of installed capacity in conjunction with its optimal investment timing we find that an increase in the length of the time lag results in an increase in the optimal capacity level capacity optimization also interacts with the length of the time lag to affect investment timing and the triggers to suspend and resume production thereby weakening the result about hysteresis from a standard real options model under the assumption of a fixed level of capacity a longer lag speeds up the decision to resume operations due to a positive upside to the revenue but delays the suspension of operations by contrast with capacity optimization a longer time lag results in a larger capacity choice which can indirectly delay the investment decision and the timing to resume operations this indirect effect dominates when the level of market uncertainty is low and the time lag is initially small

the value of flexibility in make to order systems the effect of demand correlation we consider a manufacturer of mass customized modular products who orders components under demand uncertainty and sets prices produces to order and trades excess components in a secondary market after this uncertainty is resolved the sequence of events reflects in a parsimonious fashion the considerable reduction in demand uncertainty between the procurement stage and the selling season typical of industries with long supply lead times and short product life cycles we prove that in contrast to conventional wisdom the value of production flexibility and expected profit increase with demand correlation if and only if commonality between the corresponding products does not exceed a threshold we also prove that the value of flexibility and expected profit may each increase or decrease with demand variability depending on demand correlations and component commonalities across the entire product line finally we prove that when demand shocks are independent the optimal product prices are positively correlated if and only if the degree of commonality between the corresponding products exceeds a threshold

demand uncertainty and returns policies manufacturers facing uncertain demand may induce distributors to carry ample stocks of their products by agreeing to accept returns of unsold goods for credit the authors model the manufacturer s decision to accept returns showing that this decision depends crucially on the nature of the demand uncertainty uncertainty over customer arrivals favors returns while uncertainty over consumers valuation of the manufacturer s product leads distributors to set retail prices too high from the manufacturer s standpoint when returns are allowed the authors show that returns can be expected to raise retail prices while maintaining shrinking distributor margins copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association