estimating the extent of potential competition in the korean mobile telecommunications market switching costs and number portability abstract number portability service in the mobile communications market is believed to play an important role in lowering the switching costs which can increase the level of competition among providers the aim of this study was to estimate the switching costs and consumers valuation of the number portability service in the korean mobile communications market using conjoint analysis and the stated preference approach the analysis showed that the switching costs have been lowered considerably since number portability has been in force however a significant level of switching costs still remains despite number portability finally this paper provides some implications for the competition strategy in the mobile communications market

preference uncertainty in stated preference studies facts and artefacts the ordinal scale and polychotomous choice methods are two widely used techniques for estimating preference uncertainty in stated preference studies this article presents the results of two experiments that apply these estimation techniques the first experiment was designed to compare and contrast the scores of the ordinal scale and polychotomous choice method the second experiment was conducted to test a scale that combines verbal expressions with numerical and graphical interpretations a composite scale the results of the study can be summarized in three key findings first the polychotomous choice method generates a higher proportion of yes responses than the conventional dichotomous choice elicitation format second the composite scale generates a significantly higher proportion of certain responses finally the ordinal scale performs poorly on the ground of construct validity

experimenting with multi attribute utility survey methods in a multi dimensional valuation problem abstract the use of willingness to pay wtp survey techniques based on multi attribute utility mau approaches has been recommended by some authors as a way to deal simultaneously with two difficulties that increasingly plague environmental valuation the first of these is that as valuation exercises come to involve less familiar and more subtle environmental effects such as ecosystem management lay respondents are less likely to have any idea in advance of the value they would attach to a described result the second is that valuation questions may increasingly be about multi dimensional effects e g changes in ecosystem function as opposed for example to changes in visibility from a given point mau has been asserted to allow the asking of simpler questions even in the context of difficult subjects and it is as the name suggests inherently multi dimensional this paper asks whether mau techniques can be shown to make a difference in the context of questions about preferences over and valuation of differences between alternative descriptions of a forest ecosystem making a difference is defined in terms of internal consistency of answers to preference and wtp questions involving three 5 attribute forest descriptions the method involves first asking mau structured questions attribute by attribute the responses to these questions allow researchers to infer each respondent s preferences and wtp second the same respondents are asked directly about their preferences and wtps the answer to the making a difference question based largely on comparing the inferred and stated results is not straightforward overall the inferred results are good predictors of what is stated but the agreement is by no means perfect and the individual differences are not explainable by the socio economic characteristics of the individuals since the technique involves creating a long somewhat tedious and even apparently confusing series of tasks though each task may itself be simple it is by no means clear that the prescription use mau techniques holds the same level of practical as of theoretical promise

coordinating regime switches the canonical model of strategic complementarities between individual actions which exhibits multiple equilibria under perfect information is extended with heterogeneous agents and imperfect information agents observe their own cost of action and the history of the levels of aggregate activity the distribution of individual characteristics evolves through a random process and individuals are rational bayesians under plausible conditions there is a unique equilibrium with phases of high and low activity and random switches applications may be found in macroeconomics and revolutions

impacts of long range increases in the fuel economy cafe standard i introduction and background in 1975 the u s government enacted legislation regulating the fuel efficiency of new motor vehicles the apparent objective of this law is to reduce american dependence on foreign oil after large increases in the price of petroleum in the late 1990s and with continued conflict in the middle east corporate average fuel economy cafe standards once again became a topic of interest a number of proposals for changing the cafe standards were discussed in congress in early 2002 culminating in a defeat in the senate of an amendment that would have required a 50 increase in the relevant cafe standards in place of that increase the senate voted to require the executive branch to examine the impact of further increases in the cafe standard this work evaluates the long term economic implications of raising the standard by 3 0 miles per gallon mpg above current levels in industry parlance this approach is sometimes referred to as technology forcing i choose 3 0 mpg because it reflects the focus of a may 2001 report by the vice president s task force on energy policy and because it reflects several legislative proposals in congress 1 the long term refers to a length of time such that manufacturers can adjust vehicle technologies and powertrain designs to reduce the amount of fuel required to move a given amount of mass or to achieve a given amount of performance or acceleration per gallon of fuel consumed previous work on cafe standards such as kleit 1990 and thorpe 1997 focused on short term responses to higher cafe standards where technology forcing was not an option for manufacturers the analysis is conducted under two different scenarios the first scenario is that cafe standards are not binding in the current marketplace the second scenario takes account of the current impact of cafe standards and then analyzes the costs and benefits of increasing the standards the costs of cafe standards are broken down into two areas the changes in consumer and producer surplus and the increase in externalities caused by the increased driving that higher cafe standards induce the plan of this article is as follows section ii reviews the history of cafe standards and briefly discusses the rationale for the regulation section iii develops a model in which the current cafe standard is assumed to be nonbinding section iv provides estimates of the impacts for a long term 3 0 mpg cafe increase under the assumption that the current standard is not binding section v then revises the model to take into account the arguably more realistic assumption that the existing cafe standard was in fact binding it then reports estimates for a long term 3 0 mpg increase section vi provides a brief cost benefit analysis of cafe increases and section vii provides a summary and conclusion ii background on automobile fuel economy standards a brief history of the cafe program the cafe program as enacted in 1975 called for all manufacturers selling more than 10 000 autos per year in the united states to reach the mandated cafe levels cafe levels rose from 19 0 mpg in 1978 to 27 5 mpg in 1985 and later years a manufacturer s domestic and foreign cars are placed in separate cafe categories based on the domestic context of the vehicle if a car has over 75 american context it is considered domestic and placed in the domestic pool otherwise it is placed in the foreign car pool see kleit 1990 for a discussion light trucks pickup trucks sport utility vehicles suvs and minivans were placed in a different cafe pool than cars when cafe standards were originally passed these vehicles represented a small fraction of the relevant market by 2001 however such vehicles made up approximately one half of the sales of personal vehicles in 2001 light trucks were required to reach 20 7 mpg there is no domestic and foreign division in the cafe regulation for light trucks

a rudimentary random matching model with divisible money and prices abstract we consider a version of kiyotaki and wright s monetary search model in which agents can hold arbitrary amounts of divisible money a continuum of stationary equilibria indexed by the aggregate real money stock exists with all trading occurring at a single price there is always a maximum level of the real money stock consistent with existence of such an equilibrium in the limit as trading becomes faster relative to discounting any real money stock becomes feasible in such an equilibrium in contrast to the original kiyotaki wright model higher equilibrium real money stocks unambiguously correspond to higher welfare in this costless production environment journal of economic literature classification numbers d51 e40

a paradox of thrift in general equilibrium without forward markets after 2008 the us personal saving rate had its strongest postwar jump from 2 to 5 and the investment ratio its sharpest fall from its postwar average of 16 to its lowest level of 12 the coordination of saving and investment is analyzed here in a theoretical model of general equilibrium with rational expectations and no forward market shocks affect preferences for future consumption a paradox of thrift is proven that formalizes an argument in the general theory of keynes but the equilibrium is a constrained pareto optimum textbook fiscal policies are neutral at best or inefficient

sine praejudicio economics and the 2014 scottish independence referendum the purpose of this paper is to analyse the contribution of expert economic opinion to the 2014 referendum campaigns on scottish independence we argue that the input from economics to both sides of the debate as well as to independent analysis was constrained by a mainstream economics framing the result was a focus on calculable outcomes predicated on unchanging institutions and behaviour and the question of currency arrangements that assumes the status quo is an optimal currency area as the consequences of constitutional change for institutions and behaviour are uncertain an equilibrium framework treats anything beyond calculable prediction as a shock inducing fear of the unknown in contrast a political economy approach is tailored to analysing uncertain developments and encompassing the broader issues relating to values democracy and power and is thus better suited to the analysis of constitutional change

multiattribute elicitation of wilderness preservation benefits a constructive approach abstract this paper contributes to the development of a constructive approach to evaluating environmental resources using a version of multiattribute value elicitation in a group setting section 1 discusses the assumptions and practices of group multiattribute elicitation for public policy decisions the good of interest is a potential doubling of designated wilderness areas in british columbia two groups totalling 28 subjects participated in intensive half day workshops in which they provided judgments regarding the amounts of tax revenues from forest industry activities each thought provincial residents should forego to achieve specified increases in wilderness preservation subjects were asked to consider direct and passive use values spiritual values and ecological service values subjects were also asked to consider separately the interests of the current generation and future generations of residents and to provide judgments regarding the marginal benefits of increasing preservation an initial aggregated valuation question was followed by five more disaggregated questions subjects then compared and reconciled their value judgments for the aggregated and disaggregated questions the results are generally comparable to those of a contingent valuation referendum based survey for the same valuation issues

when demand creates its own supply saving traps the mechanism by which aggregate supply creates the income that generates its matching demand called say s law may not work in a general equilibrium with decentralized markets and savings in bonds or money full employment is an equilibrium but convergence to that state is slow a self fullling precautionary motive

wealth and volatility we document that in the us over the course of the past century there has been a systematic negative relation between household wealth and business cycle volatility we develop a microfounded dynamic equilibrium model that contains elements of a traditional keynesian framework in which economic uctuations can be driven by sunspot type uctuations in household optimism or pessimism the novel feature is that the scope for equilibrium uctuations due to sunspots depends on the exogenously given value of household wealth when wealth is high consumers demand is not sensitive to unemployment expectations and the economy is robust to condence crisis when wealth is low consumers demand is sensitive to unemployment expectations the economy becomes vulnerable to condence driven uctuations and is in general more volatile in this case there is a potential role for public policies to stabilize demand we conclude by providing micro economic evidence on the importance of wealth in aecting the sensitivity of demand to aggregate conditions we show that during the great recession consumers with low

retrospectives the lost art of economics economists generally divide economics into two distinct categories positive and normative but how applied economics fits within these categories is unclear this paper argues that applied economics belongs in neither normative nor positive economics instead it belongs in a third category the art of economics currently many economists are trying to use a methodology appropriate for positive economics to guide their applied work work that properly belongs in the art of economics this three part distinction is not mine but dates back to a classic book the scope and method of political economy 1891 by john neville keynes in his book keynes argued that economists failure to distinguish the art of economics as a separate branch from positive and normative economics would lead to serious problems one hundred years later he has turned out to be clairvoyant

consumers preferences for the attributes of post pc results of a contingent ranking study with the explosive growth of the internet and the change in consumer demand post pc is emerging as a substitute for the existing desktop pc and laptop pc post pc is a new computer which is portable with wireless networking cheaper than the existing pc and specializing in the specific functions that consumers want rudimentary post pcs such as pda web pad and smart phone are already in use in the future owing to technological progress the heterogeneity of related companies and the low entry barrier various post pcs will be developed this paper attempts to analyse consumers willingness to pay wtp for post pc with such attributes as portability cpu speed data input method using key board or electric pen monitor size and price to this end a contingent ranking method is applied which makes the respondents rank hypothetical post pc alternatives featuring various combinations of attributes via a survey data collected in korea using the estimated wtp the shape and the capacity of future po

commodity price stabilization in imperfect or cartelized markets most studies of commodity price stabilization assume that all agents behave competitively however many commodities suitable for stockpiling are produced by countries with a significant share of the world market and commodity agreements themselves often result in cartelization of the market the paper explores the consequences of market power for the choice of storage rule and the degree of price stabilization it finds that with linear demand dominant producers choose more stable prices than under perfect competition and price stability increases with their market share with constant elastic demand the competitive degree of price stabilization is achieved

alternative approaches for incorporating respondent uncertainty when estimating willingness to pay the case of the mexican spotted owl abstract this paper explores the sources and patterns of respondents uncertainty regarding their willingness to pay wtp and presents alternative approaches for incorporating this uncertainty into estimation of the logit model recently proposed approaches are compared to methods proposed in this paper which allows for incorporation of uncertainty regarding both yes and no responses these approaches are evaluated by comparing the goodness of fit and variability of mean wtp extreme recoding of uncertain yes responses as no responses reduces the logit goodness of fit and the precision of the wtp estimate incorporating the degree of uncertainty of yes responses results in the highest goodness of fit and the smallest variability of mean wtp among the various models addressing uncertainty a regression model is used to determine the significant determinants of respondent uncertainty

liquidity and trading dynamics in this paper we build a model where the presence of liquidity constraints tends to magnify the economy s response to aggregate shocks we consider a decentralized model of trade where agents may use money or credit to buy goods when agents do not have access to credit and the real value of money balances is low agents are more likely to be liquidity constrained this makes them more concerned about their short term earning prospects when making their consumption decisions and about their short term spending opportunities when making their production decisions this generates a coordination element in spending and production which leads to greater aggregate volatility and greater comovement across producers

embracing model uncertainty strategies for response pooling and model averaging econometricians modeling stated preference sp data and most other types of data are confronted with the uncomfortable reality that our knowledge of the true model is limited with only certain variables suggested by the application at hand and general classes of functional forms and error structures suggested by the literature accepting our limited knowledge we pursue strategies for analyzing sp data that are more robust to uncertainties in our knowledge of the true model these include non parametric and parametric likelihood based tests of pooling responses from different elicitation formats and a frequentist based model averaging approach for estimating willingness to pay functions we argue that these strategies lead to increased econometric integrity and empower the ultimate users of models such as policy decision makers and even juries to better assess the robustness of the results we apply these approaches to an sp survey of saltwater angling in alaska which utilized split sample rankings and ratings elicitation methods while an important goal of our paper is to develop practicable modeling strategies that will ultimately lead to more robust conclusions and more confidence by the users of sp results an equally important goal is to engender a critical discussion of how we can make the analysis of sp data more robust

dynamic monetary equilibrium in a random matching economy this article concerns an infinite horizon economy where trade must occur pairwise using a double auction mechanism and where fiat money overcomes lack of double coincidence of wants traders are anonymous and lack market power goods are divisible and perishable and are consumed at every date preferences are defined by utility stream overtaking money is divisible and not subject to inventory constraints the evolution of individual and economywide money holdings distributions is characterized there is a welfare ordered continuum of single price equilibria reflecting indeterminacy of the price level rather than of relative prices

a comparison of models describing the impact of moral decision making on investment decisions as moral decision making in financial markets incorporates moral considerations into investment decisions some rational decision theorists argue that moral considerations would introduce inefficiency to investment decisions however market demand for socially responsible investment is increasing suggesting that investment decisions are influenced by both financial and moral considerations several models can be applied to explain moral behavior we test the suitability of a multiple attribute utility theory maut b theory of planned behavior and c issue contingent model of ethical decision making in organizations in an experimental setting 141 participants traded company shares in a computerized asset market over 12 periods companies varied in morality i e treatment of employees and in profitability i e expected dividends per share participants bids and asks for shares were recorded results indicate that moral considerations influence investment decisions controlling for profit differences between the three models are discussed

willingness to accept compensation for the environmental risks of oil transport on the amazon a choice modeling experiment abstract this paper looks at the question of whether subsistence level indigenous people place a value on the preservation of ecosystems independent of direct impacts of environmental change such as impacts on their production activities the economics literature generally suggests that non use values don t exist among the poor and in the informal sector of the economy we examine this issue through a choice modeling experiment a survey was conducted of rainforest communities who live on the banks of the amazon river rio solimoes in the vicinity of proposed oil and gas pipelines the data were analyzed in the choice modeling framework revealing relatively high amounts of compensation that were necessary in order to accept the potential ecosystem damages associated with oil transport even if the people were completely compensated for direct damages such as loss of access to productive resources these results suggest that environmental quality is important for its own sake a result that is very different from the implicit assumption among many economists

a constructive approach to air quality valuation in korea abstract this paper uses a new constructive contingent valuation approach based on the value structuring capabilities of multi attribute utility theory maut to help respondents construct and express environmental value judgments in monetary terms the maut approach adopts a decomposition procedure which seems to be more in harmony with the constructive nature of human values and the coping strategies of respondents dealing with complexity we provide an application of the approach in a survey of random population samples where we seek valuation of specific damages due to air pollution in seoul korea a developing country where the economic valuation of environmental impacts remains scarce a discussion of the results is also presented the overall results show that although empirical evidence is sparse there appears to be considerable scope for the use of the approach in environmental valuations

are results from non hypothetical choice based conjoint analyses and non hypothetical recoded ranking conjoint analyses similar conflicting findings have been found in previous research that compared choice based conjoint analysis and ranking conjoint analysis in a public good setting the present paper revisits this issue for a private good in a non hypothetical context using small and large choice sets our results suggest that in a small choice set setting participants preferences and willingness to pay are similar across the two conjoint analysis formats however in large choice sets a divergence between the two conjoint analysis formats emerges hence the two conjoint analysis formats can only be used interchangeably in small choice sets not in large choice sets

using conjoint analysis to quantify public preferences over the environmental impacts of wind farms an example from spain this paper focuses on the effect on people s utility of the potential environmental impacts of wind farm developments we report on research designed to provide insight into their preferences and we show how two alternative choice modelling techniques can be used to estimate them our results show that significant social costs in the form of environmental impacts can be associated with wind farm developments as relative environmental values are revealed by these methods it would be possible to develop wind farms in such a way that minimises the total social costs of the investment and which maximises its net benefits

using choice experiments to value the environment this paper we outline the choice experiment approach to environmental valuation this approach has its roots in lancaster s characteristics theory of value in random utility theory and in experimental design we show how marginal values for the attributes of environmental assets such as forests and rivers can be estimated from pair wise choices as well as the value of the environmental asset as a whole these choice pairs are designed so as to allow efficient statistical estimation of the underlying utility function and to minimise required sample size choice experiments have important advantages over other environmental valuation methods such as contingent valuation and travel cost type models although many design issues remain unresolved applications to environmental issues have so far been relatively limited we illustrate the use of choice experiments with reference to a recent uk study on public preferences for alternative forest landscapes this study allows us to perform a convergent validity test on the choice experiment estimates of willingness to pay

choice modelling approaches a superior alternative for environmental valuation in this paper we examine some popular choice modelling approaches to environmental valuation which can be considered as alternatives to more familiar valuation techniques based on stated preferences such as the contingent valuation method a number of choice modelling methods are consistent with consumer theory and its focus on an attribute based theory of value permits a superior representation of many environmental management contexts however choice modelling surveys can place a severe cognitive burden upon respondents and induce satisficing rather than maximising behavioural patterns in this framework we seek to identify the best available choice modelling alternative and investigate its potential to solve some of the major biases associated with standard contingent valuation we then discuss its use in the light of policy appraisal needs within the eu an application to the demand for rock climbing in scotland is provided as an illustration

a unified framework for monetary theory and policy analysis search theoretic models of monetary exchange are based on explicit descriptions of the frictions that make money essential however tractable versions of these models typically make strong assumptions that render them ill suited for monetary policy analysis we propose a new framework based on explicit micro foundations within which macro policy can be studied the framework is analytically tractable and easily quantifiable we calibrate the model to standard observations and use it to measure the cost of inflation we find that going from 10 percent to 0 percent inflation is worth between 3 and 5 percent of consumption much higher than previous estimates

using conjoint analysis to derive estimates of compensating variation abstract we use several approaches to derive estimates of hicksian compensating variation from conjoint ratings data the different estimation approaches produced mixed results with respect to consistency with utility theory statistical significance of key variables magnitude of welfare estimates and confidence bounds on welfare estimates these findings suggest conjoint analyses are not a panacea for the problems being debated regarding contingent valuation and travel cost methodologies and conjoint questions appear to share many of the advantages and disadvantages associated with dichotomous choice contingent valuation questions

an experimental approach to climate finance the impact of auction design and policy uncertainty on renewable energy equity costs in europe abstract this paper aims at shedding some lights on how policy induced uncertainty affects the cost of capital of renewable energy power plants to this end the paper focuses on renewable energy auctions and on the ongoing brexit negotiations first the paper reviews auction frameworks across europe and discusses the impact of the different designs on project risk then a stated preference approach is leveraged to investigate how policy design and the uncertainty regarding the future arrangements between the uk and the eu contribute to determine the cost of equity for renewable energy the results show that improved auction design can help to lower the equity cost between 0 5 and 1 5 the evidence on brexit is rather weak and if anything suggests only a higher relevance of these negotiations for english based investors than for those based in eu27

assessing community preferences for development projects are willingness to pay studies robust to mode effects abstract the demand driven approaches to development planning currently promoted by development agencies assume that it is possible to obtain accurate information about community preferences for project outputs whereas dozens of techniques are used to assess community preferences limited research has been conducted on the potential effects of data collection mode on findings in this research four different modes a household intercept and telephone survey and a series of focus group discussions were all employed to assess residents willingness to pay for improved water supply services in odessa ukraine findings from these exercises suggest that data elicitation mode effects such as social desirability and time pressures can bias the results obtained in demand assessment research and lead to substantively different conclusions and policy recommendations

is cultural heritage really important for tourists a contingent rating study in this article we present the results of a contingent rating study carried out on a sample of tourisits visiting scicli a sicilian town known for its baroque heritage in particular we focus on different attributes of tourism products namely season accommodation and cultural heritage to study how much each of these attributes weights in tourists preferences we also study how the socio demographic characteristics of people affect their evaluation of the different attributes of tourism products the heritage endowment appears to be far from being the most important factor this result is consistent across different socio demographic subgroups of interviewed persons

reconciling hayek s and keynes views of recessions recessions often happen after periods of rapid accumulation of houses consumer durables and business capital this observation has led some economists most notably friedrich hayek to conclude that recessions often reflect periods of needed liquidation resulting from past over investment according to the main proponents of this view government spending or any other form of aggregate demand policy should not be used to mitigate such a liquidation process as doing so would simply result in a needed adjustment being postponed in contrast ever since the work of keynes many economists have viewed recessions as periods of deficient demand that should be countered by activist fiscal policy in this paper we reexamine the liquidation perspective of recessions in a setup where prices are flexible but where not all trades are coordinated by centralized markets the model illustrates why liquidations likely cause recessions characterized by deficient aggregate demand and accordingly suggests that keynes and hayek s views of recessions may be closely linked in our framework interventions aimed at stimulating aggregate demand face a trade off whereby current stimulus postpones the adjustment process and therefore prolongs the recessions but where some stimulative policies may nevertheless remain desirable

dynamic coordination and the optimal stimulus policies this article studies stimulus policies in a simple macroeconomic model featuring a dynamic coordination problem that arises from demand externalities and fixed costs of investment in times of low economic activity firms face low demand and hence have lower incentives for investing which reinforces their low demand expectations in a benchmark case with no shocks the economy might get trapped in a low output regime and a social planner would be particularly keen to incentivise investment at times of low economic activity however this result vanishes once shocks are considered

valuing environmental policy options a case study comparison of multiattribute and contingent valuation survey methods this paper describes a promising new evaluation approach called a value integration survey that uses the objectives and tradeoffs expressed by participants to value environmental policy options this constructive technique which builds on the interactive elicitation process of decision analysts assists stakeholders in clarifying their values and in agreeing on a policy alternative the paper compares this multi attribute valuation method to contingent valuation surveys describes the sequence of respondents tasks and presents results from a case study comparison of contingent valuation and value integration survey methods in the context of valuing options for fire control in oregon s oldgrowth forests

the stories we tell a reconsideration of as ad analysis this paper explains that the as ad model as currently presented in the tests is seriously flawed it does not fulfill the minimum requirement of a model logical consistency its component parts are derived from models that reflect different and inconsistent models of the economy moreover the appropriate disequilibrium adjustment story that appropriately accompanies it is inconsistent with observed reality in this alternative model keynesian adjustment occurs through shifting as ad curves along institutionally determined price level vectors rather than through movements along the as ad curves

the impact of choice inconsistencies in stated choice studies a new test procedure revealing mutuallyinconsistent choices has been developed andapplied to stated choice data our analysisshows that inconsistent choices commonly occurin several stated choice tasks an applicationof the test to the norwegian value of timestudy data shows that failing to excludeinconsistent choices resulted in asubstantially higher value of time theinconsistent choices were made by less educatedparticipants as the tasks were undertaken inthe easy context of choosing travelalternatives with three attributes practitioners of more complex and cognitivedemanding designs should be particularilyconcerned with these results

estimating stated preferences with rated pair data environmental health and employment effects of energy programs abstract respondents stated preferences for attributes related to various electricity generation scenarios are analyzed using a series of pairwise ratings multiple observations for each respondent facilitate estimating individual scale parameters scale estimates can identify uninformative rating patterns and make it possible to delete such observations or adjust wtp calculations cross section time series analysis of the data indicates that nonprice attributes increase in salience during the course of the experiment thus later responses may be better indicators of preferences than earlier responses comparisons of polychotomous with dichotomous models indicate that most respondents relative preference ratings are not simply dichotomous but discriminate systematically along the rating scale