moral hazard and dynamic insurance data this paper exploits dynamic features of insurance contracts in the empirical analysis of moral hazard we first show that experience rating implies negative occurrence dependence under moral hazard individual claim intensities decrease with the number of past claims we then show that dynamic insurance data allow to distinguish this moral hazard effect from dynamic selection on unobservables we develop nonparametric tests and estimate a flexible parametric model we find no evidence of moral hazard in french car insurance our analysis contributes to a recent literature based on static data that has problems distinguishing between moral hazard and selection and dealing with dynamic features of actual insurance contracts methodologically this paper builds on and extends the literature on state dependence and heterogeneity in event history data jel d82 g22 c41 c14

adoption of agricultural innovations in developing countries a survey this paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector the survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms adoption nonadoption may not be appropriate in many cases where the actual decisions are defined over a more continuous range more attention needs to be given to the socio cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred the presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research since a number of simultaneous decisions may be involved furthermore the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies finally the impact of differential adoption rates on land holding distribution merits attention in future research

stochastic programming for decentralized newsvendor with transshipment abstract this paper discusses a family of two stage decentralized inventory problems using a unifying framework taxonomy depicted as a multilevel graph this framework allows us to model and link different problems of competing retailers who independently procure inventory in response to uncertain demand and anticipated inventory decisions of other retailers in this family of problems in the ex post stage the retailers exercise recourse actions in response to the realized demand and competitors chosen procurement levels for example retailers could coordinate inventory transshipment to satisfy shortage with overage based on profit sharing agreements our framework provides a unifying parsimonious view using a single methodological prism for a variety of problems equally importantly as recourse options are laid out our framework clarifies and contributes a modeling connection between problems in a clear taxonomy of models this unifying perspective explicitly links work that appeared in isolation and offers future research directions

existence of coordinating transshipment prices in a two location inventory model we consider a two location production inventory model where each location makes production decisions and is subject to uncertain capacity each location optimizes its own profits transshipment at a cost is allowed from one location to another we focus on the question of whether one can globally set a pair of coordinating transshipment prices i e payments that each party has to make to the other for the transshipped goods that induce the local decision makers to make inventory and transshipment decisions that are globally optimal a recent paper suggests for a special case of our model that there always exists a unique pair of coordinating transshipment prices we demonstrate through a counterexample that this statement is not correct and derive sufficient and necessary conditions under which it would hold we show that in some conditions coordinating prices may exist for only a narrow range of problem parameters and explore conditions when this can happen finally we study the effects of demand and capacity variability on the magnitude of coordinating transshipment prices

managing and reallocating inventory across two markets with local information abstract consider a firm that controls inventory centrally for two separate markets that are managed by regional managers having local demand information the central planner provides a dedicated inventory level to each market to ensure a minimum service level but can reallocate inventory once associated demands are filled how should such a firm solicit regional managers to share their local information so inventory levels can be set efficiently in this paper we study a forecast sharing game in such a firm where demand information lies within regions and inventory is managed by a central decision maker we show that incentives are misaligned and truthful information sharing is not an equilibrium we study two potential ways to improve the system a regional managers directly place orders rather than simply passing demand forecasts or b a pricing scheme for inventory reallocations is imposed we show that under direct ordering a unique pure strategy bayesian nash equilibrium exists and makes retailers place orders based on their true forecasts although the requested order quantities are not system optimal e g some inventory pooling benefits are lost under an endogenous transfer pricing mechanism set by the central planner we find that a first best truth telling equilibrium is possible under certain conditions we conduct a numerical study to examine the different cases and find that when the critical fractile is high direct ordering results in lower inventories while the reverse is true when the critical fractile is low expected profit comparisons show the value of local information

analysis on the growth of telecommunication services a global comparison of diffusion patterns with the development of the internet the telecommunication market has seen a rapid shift from voice based services to data based services relationships of substitutability and complementarity have emerged among communications technology services such as internet service mobile phone service and fixed telephone service the article analyses the diffusion patterns of communication services in different continents a modified logistic growth model is estimated using panel data for the years 1975 2004 the research forms a valuable framework for forecasting demand for new services based on the diffusion of incumbent services and can inform strategies for entering the communications network industry

a coordinating contract for transshipment in a two company supply chain we study a supply chain with two independent companies producing an identical product and cooperating through transshipment previous studies of this chain show that only under certain conditions linear transshipment prices could be found that induce the companies to choose the first best production quantities moreover even if such transshipment prices do exist they result in a unique division of total expected profit and thus they cannot accommodate arbitrary divisions of the profit using the generalized nash bargaining solution we derive coordinating transshipment prices that always give rise to a coordinating contract for the chain this contract relies on an implicit pricing mechanism

patterns of rainfall insurance participation in rural india take up of an innovative rainfall insurance policy offered to smallholder farmers in rural india decreases with basis risk between insurance payouts and income fluctuations increases with household wealth and decreases with binding credit constraints these results are consistent with the predictions of a simple neoclassical model with borrowing constraints other patterns are less consistent with the benchmark model for example participation in village networks and measures of familiarity with the insurance vendor are strongly correlated with insurance take up decisions and risk averse households are less not more likely to purchase insurance these results may reflect household uncertainty about the product given their limited experience with it

experimental identification of asymmetric information evidence on crop insurance in the philippines abstract i study asymmetric information in crop insurance in the philippines using a two level randomized field experiment and incentivized preference elicitation in this first experimental study of moral hazard in non health insurance preventable damages double on randomly insured plots among farmers with high trust in the insurance provider farmers prefer insurance on plots that are at risk of floods and crop diseases a sign of classic adverse selection and plots that are far away from home a sign of selection on anticipated moral hazard behavior resulting in 72 higher payouts on preferred plots overcoming these challenges requires leveraging new technologies

diffusion as time dependent result of technological evolution competition and policies the case of cleaner iron and steel technologies abstract the typical focus of diffusion analysis on one new technology and patterns of its evolution in time tends to neglect important features of technological evolution such as the dynamics of technological competition and the importance of the institutional framework this is particularly so for cleaner technologies which have to compete with well established technologies and of which diffusion dynamics are related to environmental policy too in this paper a new conceptual approach to innovation diffusion building on insights of evolutionary economic theory is proposed and applied to a case study on the diffusion of a cleaner ironmaking technology

statistical analysis of rainfall insurance payouts in southern india using 40 years of historical rainfall data this paper estimates a distribution for payouts on rainfall insurance policies offered to farmers in the state of andhra pradesh india in 2006 the authors find that the contracts primarily protect households against extreme tail events half the expected value of indemnities paid by the insurance are generated by only 2 percent of rainfall realizations contract payouts are significantly correlated cross sectionally and also inversely associated with real gdp growth the paper discusses the implications of these findings for the potential benefits of insurance to households the risks facing a financial institution underwriting rainfall insurance contracts and pricing

demand for a simple weather insurance product in india theory and evidence this article analyzes the demand for a simple rainfall based weather insurance product among farmers in rural india we explore the predictions of a standard expected utility theory framework on the nature of demand in terms of price the basis of the hedge and risk aversion using data from a randomized control trial we find that demand behaves as predicted it falls with price and basis risk and is hump shaped in risk aversion with price sensitivity decreasing at higher levels of basis risk we estimate a negative price elasticity of 0 58 and find that doubling the distance to a reference weather station decreases demand by 18 these results indicate that improving pricing and quality of insurance products can directly increase demand in addition we examine the impact of insurance training relative to other mechanisms designed to increase understanding the evidence suggests that increased incentives to learn or learning by using are more effective at increasing both understanding and demand finally we contribute to the scarce evidence on the demand for insurance over time in terms of our main interventions we find that the effect of premium subsidies persists over time while the impact of investments in new weather stations diminishes and the effect of increased training in the first season seems to disappear during the second season importantly while having previously purchased insurance does not encourage future uptake receiving a payout does this could reflect issues of trust in the product or the insurance company and constitutes an important topic for future research

incorporating technological change in diffusion models the theoretical and empirical implications of a static and dynamic logistic diffusion model are compared the dynamic model relaxes some assumptions of the static model by allowing for a flexible adoption ceiling for changes in the technology and for disadoption both models were used to estimate the diffusion of semi dwarf wheat varieties in the united states the dynamic model provides a better fit to the data and provides additional insights into the economic determinants of adoption in particular the importance of technological change in other areas here in fertilizer on the diffusion path of an innovation was shown

factors influencing the diffusion of electric arc furnace steelmaking technology in this paper the adoption of electric arc furnace steelmaking technology is examined within a growth model of technological diffusion the results indicate that the trend rate of adoption of electric are furnace technology is well represented by the s shaped growth curve further results indicate that the trend rate of adoption is for the most part stable with respect to locally changing factors to production such as input prices and activity levels it appears that inertial aspects have an overwhelming influence on the diffusion process

trade and environment an empirical analysis of the technology effect in the steel industry abstract the objective of this paper is to study the impact of free trade on global environmental quality by focusing on the technology effect that is the relationship between trade openness and the adoption diffusion of clean technologies the paper attempts to empirically verify the existence of the technology effect by looking at the relationship between trade policy regime or openness and the speed of clean technology diffusion in the steel industry focusing on a cleaner steel technology the electric arc furnace eaf in 30 steel producing countries over 25 years the results show that eaf technology is diffused faster in countries that have more open trade policy regimes thereby supporting the existence of the technology effect for the industry considered

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

innovation in academe the diffusion of information technologies this study investigates the diffusion of two early information technologies across 1348 institutions of higher education 1 the adoption of because it s time network bitnet a precursor to the internet as we know it today and 2 the adoption of the domain name system dns with its registration of domain names an essential feature of the modern internet we find that the time paths of adoption for both generally exhibit the typical s shape found for other innovations we identify factors likely responsible for the patterns observed and in the process extend the scope of the diffusion literature by incorporating insights from the optimization behaviour of nonprofits using a proportional hazards framework we find that faster adoption occurred among institutions focused on research and doctoral education as well as among select liberal arts colleges relative to nonselect colleges faster adoption also occurred for larger institutions suggesting that they benefited from economies of scale adoption w

agricultural decisions after relaxing credit and risk constraints the investment decisions of small scale farmers in developing countries are conditioned by their financial environment binding credit market constraints and incomplete insurance can limit investment in activities with high expected profits we conducted several experiments in northern ghana in which farmers were randomly assigned to receive cash grants grants of or opportunities to purchase rainfall index insurance or a combination of the two demand for index insurance is strong and insurance leads to significantly larger agricultural investment and riskier production choices in agriculture the binding constraint to farmer investment is uninsured risk when provided with insurance against the primary catastrophic risk they face farmers are able to find resources to increase expenditure on their farms demand for insurance in subsequent years is strongly increasing with the farmer s own receipt of insurance payouts with the receipt of payouts by others in the farmer s social network and with recent poor rain in the village both investment patterns and the demand for index insurance are consistent with the presence of important basis risk associated with the index insurance imperfect trust that promised

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item

dynamics of demand for index insurance evidence from a long run field experiment this paper estimates how experimentally manipulated experiences with a novel financial product rainfall index insurance affect subsequent insurance demand using a seven year panel we develop three main findings first recent experience matters for demand consistent with overinference from small samples second spillovers also matter in the sense that the recent payout experience of village co residents affects insurance demand about as much as one s own recent payout experience third the spillover effect decays as time passes while the effect of one s own experience does not we discuss implications of this analysis for commercial sustainability of this complicated but promising risk management technology