a uk carbon energy tax a carbon energy tax has been proposed by the european commission to start as us 3 per barrel oil equivalent in 1993 rising to us 10 in 2000 the effects of this tax on the uk economy can be assessed by using a large scale energy environment economy model in which energy demand is treated by means of aggregate equations for energy users and fuel share equations for electricity and each of the main fossil fuels the electricity supply industry is represented in the model by simulating the characteristics of each existing generating station and of a range of new station types and by allowing the model to choose the fuels used from relative fuel prices and prices of capital inputs this approach contrasts with the multimodel approach used in most studies of the effects of the tax the tax is introduced as a tax on imports and domestic output of fossil fuels in proportion to their carbon and energy content with the tax being passed on through the economic system depending on the use of the fuels thus the electricity industry is faced with higher prices for coal gas and fuel oil and chooses to burn the different fuels according to their relative prices four scenarios are developed which vary according to the way the tax revenues are recycled through reductions in vat or in income tax rates and whether the tax is introduced throughout the european community or throughout the oecd if the tax is european it is assumed that the energy intensive industries will be exempt the outcome is that the tax is sufficient to stabilize co2 emissions over the period 1990 2005 at 12 below base levels by the end of the period there is an overall saving of energy compared to base and a further switch to gas in electricity generation the effects on the macroeconomy are rather small and as the revenues are recycled rather than saved by the government gdp growth is likely to increase under the tax by some 0 2 above base this confirms other studies in which revenues are recycled but contradicts many results from studies in which revenue recycling is ignored or incomplete the effects on the energy intensive industries are expected to be small in all the scenarios but 14 of tax revenues are lost if the industries are exempt

integration of spatial markets studies of spatial market integration draw their implications from a theory which assumes that there are no intraregional transport costs an alternative theory is offered based on the assumptions that buyers and sellers are spatially dispersed and intraregional transport costs are significant this implies that the market is a linked oligopoly or oligopsony and that market integration tests are tests of alternative oligopoly price formation processes for example collusive basing point pricing produces results typically assumed to imply efficiently integrated markets while competitive fob pricing does not the theoretical implications are illustrated with an analysis of hog prices in canada

exact and heuristic solutions of the global supply chain problem with transfer pricing we examine the example of a multinational corporation that attempts to maximize its global after tax profits by determining the flow of goods the transfer prices and the transportation cost allocation between each of its subsidiaries vidal and goetschalckx vidal c j goetschalckx m 2001 a global supply chain model with transfer pricing and transportation cost allocation european journal of operational research 129 1 134 158 proposed a bilinear model of this problem and solved it by an alternate heuristic we propose a reformulation of this model reducing the number of bilinear terms and accelerating considerably the exact solution we also present three other solution methods an implementation of variable neighborhood search vns designed for any bilinear model an implementation of vns specifically designed for the problem considered here and an exact method based on a branch and cut algorithm the solution methods are tested on artificial instances these results show that our implementation of vns outperforms the two other heuristics the exact method found the optimal solution of all small instances and of 26 of medium instances

spatial price competition and the demand for freight transportation this paper addresses two important issues of econometric freight transportation demand analysis the simultaneity between quantity shipped and mode destination choice and the effect of spatial price competition on the demand the use of switching regression techniques allows estimation of the model because shipment size and mode destination choice are derived from the same optimization problem in the theoretical model spatial price competition determines the company s market area and therefore determines its sales and shipment sizes the empirical model provides consistent estimates of unconditional freight demand the estimates are necessary to forecast transportation flows and derive elasticities for policy analysis

is there a role for biofuels in promoting energy self sufficiency and security a cge analysis of biofuel policy in thailand given the rising price of crude oil some developing countries including thailand are looking towards developing their domestic renewable energy resources in particular biofuels however there are concerns about the possible adverse effects such a policy strategy would have on key variables such as sectoral output land allocation and the effects of prices particularly food prices this study develops a computable general equilibrium cge model of the thailand economy that features enhancements of the energy sector and uses it to analyze the government s recent renewable energy development plan this plan aims to increase domestic energy use from renewable sources to replace fossil fuel imports the study simulated specific policies contained in the plan among other things we found that promoting biofuel use causes a rapid increase in the price of biofuel and biofuel feedstock in the short run whereas these prices only increase slightly in the long run due to more elastic supplies the prices of food and other products marginally increase implying that food security is not undermined by the policy on the basis of the findings the study recommends a review of some of the targets because they were found to be rather high and a phasing in of others

entry strategies for multinational enterprises and host countries abstract a multinational enterprise mne has a number of investment strategies to enter into a foreign market such as foreign direct investment fdi joint venture jv exclusive licensing el and others in contrast a host government also has the choice to introduce a suitable entry strategy into its local market with the objective of maximizing its tax revenue or national social welfare in this paper we explore the optimal strategies for not only a mne but also a host country

green taxes can we protect the environment and improve the tax system at the same time on a cursory inspection public economics appears to provide a straightforward and compelling answer of yes to the question posed in the title to this paper as economists have long argued appropriately designed taxes can in principle at least efficiently restrain levels of polluting activities and in addition such taxes will generate revenues so that we can reduce rates on other forms of taxation that distort the functioning of the economy green taxes in short promise a double dividend they can both reduce excessive levels of pollution and increase the efficiency of the overall tax system at least so several economists have argued recently 17 20 but is this really so with the growing recognition of the enormous revenue potential of certain environmental taxes especially carbon taxes to address the problem of global warming public economists have returned to this question with a new round of research efforts directed both to understanding the properties of pollution taxes as revenue sources and to estimating their revenue potential and the magnitude of their effects on the economy and the newly emerging literature is producing some quite astonishing and very troubling findings in this paper i want to review this work and explore its implications when viewed in relation to some other research it appears to suggest that most forms of regulatory activity at least those that increase the costs of the regulated activities may have hitherto unappreciated costs of a stunning magnitude what many of us would have taken to be second order side effects of environmental and other regulatory policies can be of a magnitude that compromises to a significant extent their welfare enhancing properties having reviewed this body of work i wish also to explore some issues in the political economy of green taxes it is helpful to begin by briefly putting the issue in historical perspective

the double marginalization problem of transfer pricing theory and experiment in this paper we find that the idea of using optional two part tariffs as a basis for tariff renegotiations in a bilaterally monopoly setting is a solution to the double marginalization problem that theoretically 1 creates a stable equilibrium 2 at the overall efficient level 3 without the presence of a central management through experimental testing we find that the efficiency of this mechanism is significantly higher than the efficiency of simple direct negotiation both under symmetrically and asymmetrically distributed information

looking towards policies supporting biofuels and technological change evidence from france abstract the increasing constraints on crude oil resources contribute to the emergence of liquid biofuels as an alternative for road transport fuels the european union eu parliament called for a 7 limit on crop based biofuels by 2030 and proposed increasing the incorporation target for advanced biofuels within the proposals under discussion in relation to the post 2020 eu renewable energy directive red ii by 2021 2030 the main objective of this work is to assess the economic impacts of the eu parliament s decision concerning first generation biofuels we also determine the conditions under which advanced biofuels could become available by examining the evolution of oil prices and public subsidies we employ a recursive dynamic computable general equilibrium cge model calibrated on the french economy advanced biofuels are modelled as latent technology and we include biofuel by products our simulations provide guidelines for public decision makers to design alternative fiscal policies to support biofuels in a context of regulatory uncertainty

the demand for intercity public transport the case of business passengers using a stated preference survey on business passengers travelling by rail or air between the two largest cities in sweden business passengers preferences for different modes of transport and their corresponding attributes are investigated compared to what previous studies have found the values put on attributes are very high this including the environmental impact of the modes this is largely explained by the fact that business passengers do not bear the cost of the trip but still have the possibility of deciding the mode of transport the usefulness of a more flexible specification of the demand for transport is explored using a random parameter logit model it is found that there is a gain in using a random parameter model compared to a standard logit model in the sense that it provides richer information about passengers preferences however no consistent pattern is found in the differences in willingness to pay for attributes between the econometric specifications

cost based transfer pricing under r d risk aversion in an integrated supply chain abstract this paper examines the economic role of transfer pricing for a vertically integrated supply chain when a risk averse production division manager faces uncertainty on the outcomes from r d investment in particular we compare two representative cost based transfer pricing methods full cost and variable cost pricing we construct an economic model based on the assumption that r d investment reduces the expected fixed costs of a production factor as well as the variable production costs we show that a firm s profit under full cost transfer pricing is greater than that under variable cost transfer pricing under certainty contrary to this benchmark result variable cost pricing becomes more profitable than full cost pricing when the risk averse manager bears relatively high risk

a game theoretic approach to transfer pricing in a vertically integrated supply chain we study the problem of setting transfer prices in a vertically integrated supply chain in which the divisions share technology and transactions costs we develop a cooperative game that provides transfer prices for the intermediate products in the supply chain this model is applied both when the market prices for these products are known and also when their valuations differ we provide a solution that is fair and acceptable to all divisions in the perfect information case the shapley value generates the transfer prices while in the asymmetric case we obtain transfer prices from the solution to a linear program

transfer pricing of a service department facing random demand copyright c 1996 elsevier science b v all rights reserved most servic departments have occasionally idle capacity and occasionally saturated capacity the reason for these phenomena is that a service department faces a random demand for the service it renders how shall its transfer pricing be influenced by this randomness we discuss this question by analyzing an abstract model of a service department the model depicts a service department as an m d 1 queueing system with an upper limit ul on the time in the system potential input to the system is operating departmentsr requests for service which arise according to a poisson process all requests for service take the same amount of time the net benefit defined as the benefit minus any direct costsr of satisfying a request is uniformly distributed and is known at the time the request materializes if the net benefit is larger than the net transfer price defined as the transfer price minus any direct costsr and the delivery time does not exceed ul then the request is submitted to the service department we develop two algorithms to find the optimal transfer pricing and the best simple transfer price respectively numerical computations indicate that the expected net benefits earned per unit time by employing the solutions found by the two algorithms differ by at most 3 we also investigate the relationship between the best simple net transfer price and the cost of service capacity

a general unconstrained model for transfer pricing in multinational supply chains multinational supply chains operate in more than one country or tax jurisdiction and face decision problems concerned with trade flows of resources products and services transfer prices and allocation of transport costs between their divisions these decisions must consider for the sake of optimality corporate and governmental parameters such as the payment of dividends and royalties ownership of and control over subsidiaries income taxes differentials duties and quotas etc in this paper we generalize and extend the theory of the multinational firm to the case of multinational supply chains we propose a model that is more general and comprehensive than the previous ones proposed in the literature to be more specific our model integrates many of the previous research factors and includes new ones such as transport costs and duty drawbacks which are critical for supply chains that operate under international trade regulations under the maximization of the repatriated earnings objective we study the optimality conditions of the corporate decision variables to derive managerial guidelines and to determine how decisions regarding trade quantities transfer prices and transport cost allocations affect the amount of taxes to be paid to host governments as well as the total after tax repatriated earnings of the corporation

convenience yield without the convenience a spatial temporal interpretation of storage under backwardation a mathematical programming model of the wheat marketing system of western australia manifests a typical pattern of regionwide stocks held at a negative intertemporal spread measured at the port no stocks are held at a monetary loss in terms of local prices any apparent loss is an illusion from spatial aggregation of stocks and attribution of incentives at one locality to storers at all locations moreover as the premium for immediate delivery at the port rises stocks increase at relatively inaccessible inconvenient locations where prices are low allowing more to be shipped from locations more convenient to the port

vertical control and price versus nonprice competition this paper considers a manufacturer distributing a product through retailers who compete in price and service which reduces the time it takes to purchase a good the mix of these instruments that maximizes collective profit is determined by the tastes of consumers on the product margin whereas decentralized retailers consider as well the tastes of consumers on the interretailer margins given search or travel costs consumers with low time costs are overrepresented on the interretailer margins in considering customers on the wrong margin retailers are therefore biased toward price competition this distortion that can be corrected with vertical restraints

macroeconomic modeling for assessing sustainability of bioethanol production in thailand abstract the development of bioethanol can bring about socio economic and environmental impacts to support the sustainability analysis of bioethanol development and the decision making on bioethanol promotion in thailand this study aims at assessing the socio economic and environmental effects of bioethanol production using recursive dynamic computable general equilibrium cge modeling the assessment is carried out based on the bioethanol production targets in thailand s alternative energy development plan aedp 2015 capturing cassava ethanol and molasses ethanol simulation scenarios are set up to incorporate the role of bioethanol support policies such as tax reduction production efficiency improvement and widening the price gap between gasoline and gasohol into the analysis the results show that increasing bioethanol production together with improving the efficiency of feedstock cultivation is the most efficient way to enhance economic growth however the higher production and consumption would also lead to more irrigation water demand and air emissions the presentation of bioethanol support policies role in promoting bioethanol along with widespread socio economic and environmental effects focus are novel not only are the results useful for the decision making towards sustainable bioethanol development the methods presented in this study should also be a guideline for other socio economic and environmental impact assessment schemes

economic impact of ethanol promotion in mexico a general equilibrium analysis abstract in this paper we analyze the economic impact of a decision to produce ethanol in mexico comparing the effect of a subsidy to initiate ethanol production with that of alternative public policies public support of biofuels has been a public policy goal since 2008 and the promotion of ethanol remains an active part of the government agenda the evidence used to encourage or alter the policy is by necessity chiefly based on international experience in this study we use a computable general equilibrium model cge to estimate the impact of ethanol production on the mexican economy using cost data from brazil we introduce ethanol into a mexican social accounting matrix and insert a latent sector into the model to analyze ethanol promotion our results show that subsidies to ethanol would increase agriculture production but at the expense of aggregate welfare by contrast alternative clean energy policies appear to advance economic growth to a greater extent

fair transfer price and inventory holding policies in two enterprise supply chains abstract a key issue in supply chain optimisation involving multiple enterprises is the determination of policies that optimise the performance of the supply chain as a whole while ensuring adequate rewards for each participant in this paper we present a mathematical programming formulation for fair optimised profit distribution between echelons in a general multi enterprise supply chain the proposed formulation is based on an approach applying the nash bargaining solution for finding optimal multi partner profit levels subject to given minimum echelon profit requirements the overall problem is first formulated as a mixed integer non linear programming minlp model a spatial and binary variable branch and bound algorithm is then applied to the above problem based on exact and approximate linearisations of the bilinear terms involved in the model while at each node of the search tree a mixed integer linear programming milp problem is solved the solution comprises inter firm transfer prices production and inventory levels flows of products between echelons and sales profiles the applicability of the proposed approach is demonstrated by a number of illustrative examples based on industrial processes

a global supply chain model with transfer pricing and transportation cost allocation abstract we present a model for the optimization of a global supply that maximizes the after tax profits of a multinational corporation and that includes transfer prices and the allocation of transportation costs as explicit decision variables the resulting mathematical formulation is a non convex optimization problem with a linear objective function a set of linear constraints and a set of bilinear constraints we develop a heuristic solution algorithm that applies successive linear programming based on the reformulation and the relaxation of the original problem our computational experiments investigate the impact of using different starting points the algorithm produces feasible solutions with very small gaps between the solutions and their upper bound ub

an operational profit sharing and transfer pricing model for network manufacturing companies abstract new age companies are forging partnerships with other firms to market products that have been assembled through manufacturing activities distributed at different locations these locations belong to more than one company and the product passes through these different sites during its manufacturing stages this manufacturing collaboration is known as network manufacturing according to the network philosophy companies form alliances to manufacture a product and share in its operating profits this paper proposes a framework and methodology for profit sharing and transfer pricing between network companies we propose a paradigm that enables maximization of operating profits by the manufacturing network in its larger supply chain suggesting a departure from the model that maximizes profits for the individual company within the sphere of its own supply chain

gray market trade with product information service in global supply chains abstract this paper investigates the economic effects of a product information service when potential consumers who are segmented by their taste exist in gray markets specifically we construct an economic model that considers a multinational firm mnf who expands business to a country and chooses whether to provide information service regarding product characteristics if receiving the information consumers in a specific segment whose taste suits the characteristics have positive utility from consuming the product while those in other segments have no utility by contrast consumers in all segments have positive expected utility before consuming the product without information with these settings we demonstrate that there arises the equilibrium that the mnf provides no information service when gray market trade i e parallel trade is allowed in the country leading to lower consumer welfare than when it is prohibited a primary finding in the equilibrium is that such a situation arises especially when potential consumers are less segmented in this situation the regulator in the country should ban the parallel imports so as to enhance consumer welfare the result is counterintuitive and notable because one might intuitively infer that gray market trade is less desirable when customers are more minutely segmented and the product information service is thus more specific and necessary

biofuel development in ghana policies of expansion and drivers of failure in the jatropha sector abstract biofuel development was mainly promoted in several parts of africa as an energy security or rural development strategy jatropha was the biofuel feedstock that received the most interest across africa from investors however jatropha expansion gave rise to a number of contested issues which produced conflicts winners and losers access to land was at the heart of several of these conflicts though some success stories of individual jatropha projects have been documented the overwhelming majority of these projects in africa have either collapsed or faced significant difficulties understanding the reasons behind the failure of the jatropha sector is an important gap in the academic literature while the lessons learnt from failed projects could inform future policies and practices this literature review synthesizes the key drivers of failure of the jatropha sector in ghana as identified in the literature and complemented through site visits and expert interviews it identifies a number of reasons behind the failure of individual jatropha projects such as poor business planning institutional barriers limited community participation unfair compensation practices obstacles posed by civil society and unconstructive involvement of chiefs the findings indicate the systemic nature of these problems as they often worked synergistically to catalyse the collapse of many jatropha projects in ghana re vitalising the biofuel and especially the jatropha industry is virtually impossible given the current challenges this would require a renewed political interest in ghana particularly to deal with the deficits of the land administration institutions

returns policy new model introduction and consumer welfare abstract this paper investigates how economic outcomes differ for new model introduction between two extreme contracts outright sales contract and returns policy contract with full credit under the outright sales contract we show that the retailer s incentive to introduce a new model can lead to a reduction of consumer welfare when the retailer is moderately risk averse the primary conclusion from this study is that the returns policy contract resolves this conflict between firms and consumers and that the supply chain introduces the new model only when consumer surplus from the new model is higher than that from the old model

spatial price policies reconsidered the authors provide a comparison of three spatial price policies uniform pricing mill pricing and spatial price discrimination profits consumer surplus and social surplus are compared in a duopoly model until recently oligopoly analysis has been stalled because of nonexistence of equilibrium through the addition of product heterogeneity using a logit specification existence can be restored and price policies compared in contrast to monopoly analysis consumer surplus is highest under uniform pricing and lowest under mill pricing profit and social surplus follow the opposite ranking government regulation to encourage mill pricing may therefore benefit firms to the detriment of consumers copyright 1989 by blackwell publishing ltd

coordinating advertising and pricing in a manufacturer retailer channel abstract cooperative advertising is a practice that a manufacturer pays retailers a portion of the local advertising cost in order to induce sales cooperative advertising plays a significant role in marketing programs of channel members nevertheless most studies to date on cooperative advertising have assumed that the market demand is only influenced by advertising expenditures but not by retail price this paper addresses channel coordination by seeking optimal cooperative advertising strategies and equilibrium pricing in a two member distribution channel we establish and compare two models a non cooperative leader follower game and a cooperative game we develop propositions and insights from the comparison of these models the cooperative model achieves better coordination by generating higher channel wide profits than the non cooperative model with these features a the retailer price is lower to consumers and b the advertising efforts are higher for all channel members we identify the feasible solutions to a bargaining problem where the channel members can determine how to divide the extra profits

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

energy taxation and the double dividend effect in taiwan s energy conservation policy an empirical study using a computable general equilibrium model abstract faced with pressure from greenhouse gas reductions and energy price hikes the taiwan government is in the process of developing an energy tax regime to reflect environmental external costs and effectively curb energy consumption as well as mitigate co2 emissions through an adequate pricing system this study utilizes a cge model to simulate and analyze the economic impacts of the draft energy tax bill and its complementary fiscal measures under the assumption of tax revenue neutrality the use of energy tax revenue generated for the purpose of reducing income tax is the best choice with double dividend effects since it will effectively stimulate domestic consumption and investment and consequently mitigate the negative impacts of the distortionary tax regime the double dividend effect is less significant however when the supplementary measures being used are for government expenditure nevertheless all supplementary measures have effectively reduced energy consumption which means they have delivered at least the first dividend in the sense of co2 emissions control it has been verified in this study that having adequate public finance policy measures is the key to realizing the double dividend effect

profitable pricing when market segments overlap in this paper we analyze profitable pricing strategies when market segments overlap overlapping markets are segments that are not perfectly sealed and leakage between them can occur different consumers are assumed to incur possibly different transaction costs if they choose to purchase in the low price market a monopolist seller knows the distribution of transaction costs across consumers and must choose an optimal pricing strategy in particular the monopolist must decide whether to charge a single price or to price differentiate conditions are derived under which price differentiation will be the most profitable strategy when price differentiation is optimal the equilibrium amount of leakage is determined endogenously unlike the standard economics textbook model of price discrimination in which zero leakage is determined exogenously and is usually given as a necessary condition for price discrimination we show that zero leakage is not necessary for differential pricing to be optimal and that

the impact of parallel imports on investments in cost reducing research and development abstract we develop a two country model of endogenous investment in process innovation by a manufacturer facing competition from parallel imports pi we find that the distortions associated with pi inhibit innovation however the difference between the manufacturer s expected profits under successful and failed innovation is u shaped in the cost of engaging in pi thus the reduction in r d investment depends on both legality of pi and transport costs the reduction in innovation could harm global welfare depending on whether the manufacturer was deterring pi with a high wholesale price if so banning such trade would raise expected welfare

implementing a biofuel economy in the eu lessons from the sustoil project and future perspectives for next generation biofuels abstract the aim of this article is to illustrate main economic and environmental ghg emission reductions effects of implementing a biofuel economy and to discuss the potential of establishing advanced biofuels in the european union the study is based on the recently completed eu fp7 sustoil research project the main question addressed is the eu policy objective of achieving 20 ghg emission reductions using 20 of renewables by the year 2020 to contribute to the achievement of this policy we run and execute through a computable general equilibrium model a simulation experiment of implementing a bio based economy using biorefineries in the production process main results suggest that a biorefineries working from oil seeds and their by products will lead to a large increase in the amount of this crop grown particularly in eastern europe b this increase will be accompanied by a decrease in sectoral gdp in several other areas c oil and electricity prices will generally fall in across the eu with a particularly notable trend in eastern europe and d a reduction in carbon emissions is achieved but this will be insufficient to meet the eu 20 target this latter result would suggest to speed the technological process towards the use of next generation biofuels in the eu furthermore these results advocate for a leading role expected to play by eastern eu countries over the next years the expected increase in the cultivation of energy crops could conflict with the availability of land for food crops the potential for establishing next generation biofuels in the eu with adequate support policies would be essential for guaranteeing energy and food security in the long run

optimal transfer pricing schemes for work averse division managers with private information abstract this paper models a decentralized firm under information asymmetry and effort disutility on the part of managers we assume that managers choose efforts before observing some private information however after the effort choice managers receive private information on their cost parameters which they report to the headquarters there exist many situations in which managers need to take efforts before obtaining private information for example the regular maintenance effort on the machine the effort on rd 2 under certain demand conditions managers cannot receive any information rent benefit for their private information even if they have the option to renege on the contract after obtaining their private information

optimal storage and marketing over space and time borrowing from the theory of optimal resource extraction we develop the mechanism guiding efficient commodity storage and marketing over producing regions through the crop year optimal storage occurs at producing areas and time in storage varies directly with distance to market prices grow with interest rates in locations where storage is efficient but more slowly elsewhere which explains why market prices i e prices at the market grow more slowly than interest rates the model is empirically supported by examining storage in the corn belt rates of price growth at various points and quarterly grain marketings

an economic theory of vertical restraints vertical restraints imposed by manufacturers on the prices locations and sales of retail firms represent a puzzling departure from the simple price mediated exchange of conventional markets in this article we analyze the theoretical basis for these restraints in a setting where retailers inform consumers and are imperfectly competitive and where a manufacturer has some monopoly power we identify three potential externalities affecting retailers decisions these externalities lead to the failure of simple uniform price contracts to coordinate the incentives of retailers with the objective of maximizing combined manufacturer and retailer profits we identify the packages of vertical restraints that are minimally sufficient under various conditions to neutralize the externalities and to achieve the joint profit maximum

integrating bioenergy into computable general equilibrium models a survey in the past years biofuels have received increased attention since they were believed to contribute to rural development energy security and to fight global warming it became clear though that bioenergy cannot be evaluated independently of the rest of the economy and that national and international feedback effects are important computable general equilibrium cge models have been widely employed in order to study the effects of international climate policies the main characteristic of these models is their encompassing scope global models cover the whole world economy disaggregated into regions and countries as well as diverse sectors of economic activity such a modelling framework unveils direct and indirect feedback effects of certain policies or shocks across sectors and countries cge models are thus well suited for the study of bioenergy biofuel policies one can currently find various approaches in the literature of incorporating bioenergy into a cge framework this paper gives an overview of existing approaches critically assesses their respective power and discusses the advantages of cge models compared to partial equilibrium models grouping different approaches into categories and highlighting their advantages and disadvantages is important for giving a structure to this rather recent and rapidly growing research area and to provide a guidepost for future work

spatial competition and geographic grain transportation demand on the mississippi and illinois rivers using a model of spatial competition between grain elevators i estimate a model of transportation demand for grain elevators located along the mississippi and illinois rivers this analysis uses a unique set of interview data collected by the tennessee valley authority tva both the theory and the data suggest that there are geographic patterns in barge demand elasticity patterns which are empirically uncovered using an endogenous switch point model these results are of central importance to policy makers as they call into question assumptions made by the models currently used for measuring the benefits of inland waterway improvements

strategic interactions between channel structure and demand enhancing services in this paper we investigate how opportunities to invest in demand enhancing services for a product line affect the interactions between a manufacturer and her dealer many demand enhancing services e g after sales support warranty repair etc can be provided either by the manufacturer or they can be delegated to the dealer we first show that when a manufacturer retains control of such services the dealer will have an incentive to choose a decentralized organizational structure as a means of committing to non product line pricing since this will encourage the manufacturer to invest more in demand enhancing services we then consider a game that is played between the manufacturer and the dealer in which the dealer chooses between centralized product line pricing or decentralized non product line pricing operations and the manufacturer chooses between insourcing the services i e providing them herself or outsourcing them to the dealer we find that the equilibrium depends on which if any channel partner has the ability to act as a stackelberg leader if the dealer can move first then the equilibrium will always be outsourced services and centralized dealer operations however if either the manufacturer moves first or if neither partner can move first then the equilibrium can be either insourced services and decentralized dealer operations or outsourced service and centralized dealer operations

the effects of railroad development on price convergence among the states of the usa from 1866 to 1906 this study examines the effects of the reduced transaction costs on the price behaviours in the second half of the nineteenth century where declines in transaction costs were mainly caused by railroad development during this period it employs a panel test introduced by levin and lin 1992 on the convergence of wheat and corn prices using a panel of 48 us states from 1866 to 1906 the results show that by decreasing transportation costs railroads played an important role in price convergence among states of the usa for wheat and corn during the postbellum period

a market driven transfer price for distributed products using mathematical programming a distributed product has its manufacturing activities distributed among many locations these locations could belong to one or more firms in a manufacturing network often components needed to manufacture a distributed product move through different nodes in the network and sometimes across international borders hence a transfer price is needed for the purpose of estimating duties and drawbacks being aware of the fact that transfer price can be used to manipulate taxable profits many countries have instituted rules concerning transfer price estimation for example in the united sates the internal revenue service irs says that the right price is the market value but for many components it is difficult to find a free market similar products may exist in the market but they may have different attributes in such cases it is important to be able to estimate the market driven transfer price given other similar products in the open market we develop a method using a mathematical programming model and providing companies an opportunity to work proactively with the irs in a cooperative manner in order to avoid costly audit and litigation this way companies avoid penalties and also gain certainty regarding tax liability an example illustrating the method is presented

transfer pricing and decentralized dynamic lot sizing in multistage multiproduct production processes abstract this paper presents the use of a transfer pricing system to coordinate business units in a wagner whitin type model for a decentralized lot sizing problem in a dynamic multistage multiproduct environment the paper includes two major proofs 1 a transfer pricing system enabling optimal decentralized lot sizing is characterized the transfer pricing system can be interpreted as a generalization of the reciprocal method or step down allocation method in cost location accounting and 2 based on a wagner whitin type theorem and the kakutani fixed point theorem it is shown that such a transfer pricing system exists