institutionalizing the triple helix research funding and norms in the academic system abstract what are the institutional mechanisms that enable or hinder the development of new forms of knowledge production this issue has been slightly neglected in the discussion of the triple helix to redress this shortcoming the authors suggest an institutionalist complement to the triple helix model the article analyzes the institutional regulation of academic research with a special emphasis on how norms in the academic system are constituted via research funding it is argued that funding is a key mechanism of change in the norm system since its reward structure influences the performance and evaluation of research the empirical analysis is based on the public financing of technical research in sweden with comparisons made with other countries the structure of research funding has been reformed in all the countries studied in addition to continuing recognition for scientific merit the reforms have had the effect of emphasizing the commercial potential and the societal relevance of the research supported the two dominant models of research funding an intra academic model and a top down interventionist model seem to be replaced partly with a catalytic one however there are counteracting tendencies some agencies still reproduce a model of reputational control and a collegial orientation among researchers it is concluded therefore that the forces of change and continuity are engaged in a process of negotiation about the normative regulation of academic research

regulating stock externalities under uncertainty abstract using a simple analytical model incorporating benefits of a stock costs of adjusting the stock and uncertainty in costs we uncover several important principles governing the choice of price based policies e g taxes relative to quantity based policies e g tradable permits for controlling stock externalities as in weitzman rev econom stud 41 4 1974 477 the relative slopes of the marginal benefits and costs of controlling the externality continue to be critical determinants of the efficiency of prices relative to quantities with flatter marginal benefits and steeper marginal costs favoring prices but some important adjustments for dynamic effects are necessary including correlation of cost shocks across time discounting stock decay and the rate of benefits growth applied to the problem of greenhouse gases and climate change we find that a price based instrument generates several times the expected net benefits of a quantity instrument

forms of trust and conditions for their stability of the three principal approaches to trust we decided to investigate in greater detail the one in which trust is regarded as a belief that the individuals involved hold about a relationship trust was defined as a delegatory relationship based on anticipation of the delegatee s behaviour we reached four main conclusions first the solution to the problem posed by the indeterminacy of trust lies in the differentiation and hierarchisation of the various forms of trust contractual organisational and tacit on the basis of their degree of irreversibility and stability second contractual trust is unstable because it comes up against the problem of guarantees of individual intentions this leads to the third conclusion rational evaluation by individuals cannot by itself establish trust which is based on collective beliefs practices and rules fourth we identified two conditions for the stability of trust the creation of irreversibilities through adherence to a rule and the creation of a confidence interval within which different interpretations of contradictory individual strategies are tolerated thus the viability of the various forms of trust depends on the ability of institutions and organisations to create rules that are likely when applied to produce an interval in which tolerance of mutual intentions is the norm these analyses of trust hence highlight the role of time and period of time in the notion of trust

hedonic price indexes for spreadsheets and an empirical test for network externalities in this article i first estimate hedonic price equations for computer spreadsheet programs and then use the analysis to empirically test whether network externalities exist in this industry the study shows that consumers are willing to pay a significant premium for spreadsheets that are compatible with the lotus platform and for spreadsheets that offer links to external databases and a similar premium for spreadsheets that offer local area network externalities finally the quality adjusted real price of computer spreadsheets declined by approximately 15 per year from 1986 to 1991

dynamic competition with network externalities why history matters we consider dynamic competition among platforms in a market with network exter nalities a platform that dominated the market in the previous period becomes focal in the current period in that agents play the equilibrium in which they adopt the focal platform whenever such equilibrium exists yet when faced with higher quality competition can a low quality platform remain focal in the finite horizon case the unique equilibrium is efficient for patient platforms with an infinite time horizon however there are multiple equilibria where either the lowor high quality platform dominates if qualities are stochastic the platform with a better average quality wins with a higher probability even when its realized quality is lower and this probability increases as platforms become more patient hence social welfare may decline as platforms become more forward looking

correlated uncertainty and policy instrument choice abstract for two decades environmental economists have generally maintained that benefit uncertainty is irrelevant for choosing between price and quantity instruments but that cost uncertainty matters with the identity of the efficient instrument depending upon the relative slopes of the marginal benefit and cost functions but in the presence of simultaneous correlated uncertainty such policy instrument recommendations may be inappropriate with plausible values of relevant parameters the conventional identification of a price instrument will be reversed to favor instead a quantity instrument the opposite reversal from the choice of a quantity instrument to a price instrument seems less likely to occur

privatization in eastern europe irreversibility and critical mass effects abstract this paper proposes a model to shed light on two important policy features of privatization in central and eastern europe the idea of a necessary critical mass of privatization on one hand and the great difficulties encountered in the actual privatization process on the other the model incorporates a positive externality related to the size of the private sector multiple equilibria may arise for political and economic reasons policies of free distribution are analysed with the model they may eliminate the danger of policy reversals due to excess unemployment but may at the same time increase the relative cost of restructuring leading in some cases to pareto inferior outcomes

is commercialization good or bad for science individual level evidence from the max planck society abstract based on new data this paper studies the invention disclosure licensing and spin off activities of max planck institute directors over the time period 1985 2004 analyzing their effects on the scientists subsequent publication and citation records consistent with prior findings inventing does not adversely affect research output mixed results are obtained with regard to commercialization activities the analysis suggests qualifications to earlier explanations of positive relationships between inventing and publishing

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

competing technologies the learning curve and rational expectations abstract the problem of choice between several variants of a technology subject to dynamic learning economies is examined in a rational expectations model with overlapping adopters it is shown that even with rational expectations the long term market outcome depends sensitively on the pattern of early chance events and that only one variant of the technology will come to dominate the market in the long run this variant need not be the one which is socially optimal or most promising technically

institutionalized biases in the award of research grants a preliminary analysis revisiting the principle of accumulative advantage abstract accumulative advantage in the research system may allow elite groups to secure a disproportionate share of resources using grant submissions data to a uk research council associations between success in securing grants and potential sources of advantage are explored including membership of the peer review cadre departmental standing track record gender and ethnicity success in securing grants is associated with several potential sources of advantage suggesting that factors other than the quality of the research proposed influence outcomes differential access to these may contribute to the observed biases in the number of grants won against women and non white groups

navigating the impact innovation double hurdle the case of a climate change research fund this paper analyses how the funding for research grants was allocated from a specific research fund which aimed to support innovative research projects with the potential to have research impact by reducing carbon emissions the fund received a total of 106 proposals of which 27 were successful at obtaining financial support our aims were to test which factors influenced the funding decision and to discover whether or not and to what extent the fund met its intended objectives through the allocation of monies the allocation process and its outcomes were analysed using correlation logistical and linear regression to test our research hypotheses using this research funding process as a single study we found that trying to clear the impact innovation double hurdle in a single funding initiative ultimately compromises both goals this paper therefore contributes to our understanding of innovation management within the context of carbon emission reduction and explains which factors influenced success in securing research monies through the funding process

coherence and the credibility of convertibility announcements abstract the recent devaluation crisis in mexico and its tequila effect elsewhere illustrate that two credibility problems associated with convertibility policies currency boards are announcements that violate truth telling and a non zero probability of policy failure we derive the trade off between these problems when announcements resemble cheap talk the strategic uncertainty created by this trade off implies that both the government and investors should recognize the presence of fed watchers who exploit any policy inconsistency for their own gain in this context credibility can be restored if the policy is coherent if it eliminates the marginal benefits for fed watching jel e63 e58 f40 1997 published by elsevier science ltd

platform selection in the lab abstract emerging literature explores experimental platform selection games these games converge rapidly on the superior platform under a wide range of conditions we replicate the remarkable results of hossain and morgan 2009 in which such a game tips almost perfectly to the superior platform next we show that platform coordination fails when seemingly innocent increases in out of equilibrium payoffs are introduced the inflated payoffs keep the best reply structure unchanged and do not influence players security levels our design allows control for the explanatory force of risk dominance we find that equilibrium selection theory is unable to account for coordination failure while observed behavior is consistent with non rational learning furthermore and contrary to the literature we find that efficiency suffers when an inferior platform is granted initial monopoly

managing partially protected resources under uncertainty it is common wisdom that open access leads to the inefficient use of resources and private ownership of resources improves efficiency however the impact of enclosure and efficient management of some resource pools on other open access resource pools is poorly recognized the problem is common to many congestion prone facilities including roads parks fisheries antibiotics grazing lands and wilderness areas in this paper we analyze the optimality of price and quantity instruments in regulating resource use when there is uncertainty about congestion costs price instruments are found to be preferable to quantity instruments and strictly so when demand is less than perfectly elastic we also explore the effect of market power by resource owners on the relative efficiency of the two instruments

escaping carbon lock in this article explores the climate policy implications of the arguments made in understanding carbon lock in unruh 2000 which posited that industrial countries have become locked into fossil fuel based energy systems through path dependent processes driven by increasing returns to scale carbon lock in arises through technological organizational social and institutional co evolution culminating in what was termed as techno institutional complex tic in order to resolve the climate problem an escape from the lock in condition is required however due to the self referential nature of tic escape conditions are unlikely to be generated internally and it is argued here that exogenous forces are probably required

commercial fisheries under price uncertainty abstract the deterministic models applied in economics of fisheries are extended to comprise price uncertainty and risk aversion among the fishing units it is proved that in the open access fishery both the total fishing effort and the number of fishing units are reduced as the variance of the price increases that the total fishing effort may be smaller in the open access fishery than in the optimal fishery at a high variance that only a fixed producer price system can create a first best optimum and that a tax on revenue is more efficient than both fishing unit quotas or tax on catch

biodiversity conservation in a dynamic world may lead to inefficiencies due to lock in effects and path dependence abstract although biodiversity is generally diminishing in some areas its conservation is expanding however the exact path of this expansion is uncertain this can lead to problems of path dependence and lock in effects path dependence describes situations where history strongly influences present decisions and lock in effects refer to situations where an earlier decision provides strong incentives to follow a particular path even if more efficient alternatives are available later on we develop a conceptual ecological economic model to investigate which ecological and economic parameters favour the appearance of efficiency losses in biodiversity conservation due to path dependence and lock in effects in a dynamic two period two region model generally we find that efficiency losses occur if there are signals that guide the first period budget into a region that later turns out to be suboptimal if both time periods had been considered right from the beginning to illustrate the conservation relevance of our findings we present potential efficiency losses through path dependence in the hypothetical case of applying offsets to conserving the endangered maculinea teleius butterfly near the city of landau in germany

funding for innovation in small firms the role of government abstract this paper examines some of the issues facing innovative small firms the shortage of enterprise funding for such small firms can be explained by the uncertainty associated with such ventures uncertainty which is magnified in the case of hightechnology firms we characterise the uncertainty as an information gap both technological and commercial which is exacerbated by an asymmetry of interest between the founders of a firm and private sector sources of finance we explore the sources of this uncertainty and examine the effect that one government scheme the small firms merit awards for research and technology smart has had in offsetting such problems some suggestions for improvements in policy in the light of the experience of smart are put forward

stuck between a roc and a hard place barriers to the take up of green energy in the uk abstract this paper examines the uk mechanisms for ensuring future investment in renewable energy through consumer adoption of green energy tariffs and the renewable obligation certificate roc system using a national survey and focus groups the stated willingness by uk customers to pay a premium for renewable or green energy and actual take up of such tariffs is assessed substantial differences between willingness to pay for and the adoption of green energy tariffs are reported this disparity is linked to a range of factors including consumer confusion lack of supply complexities of constructing green source tariffs under the roc system and a lack of customer trust it is concluded that the re definition of the green energy market in favour of green source tariffs greater direct compliance with the renewable obligation by addressing supply constraints and efforts in providing clearer information and choices for consumers via a compulsory green energy accreditation scheme are required if willing consumers are to contribute to investment in renewable energy

adaptation as information restriction the hot stove effect individuals and social systems are often portrayed as risk averse and resistant to change such propensities are characteristically attributed to individual organizational and cultural traits such as risk aversion uncertainty avoidance discounting and an unwillingness to change this paper explores an alternative interpretation of such phenomena we show how the reproduction of successful actions inherent in adaptive processes such as learning and competitive selection and reproduction results in a bias against alternatives that initially may appear to be worse than they actually are in particular learning and selection are biased against both risky and novel alternatives because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation they are reduced whenever the reproduction of success is attenuated in particular when adaptation is slowed made imprecise or recalled less reliably the propensity to engage in risky and new activities is increased these protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly however they increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run

tax versus quota regulation a stochastic model of the fishery in a deterministic setting it has been demonstrated that taxes and quotas can be equivalent regulatory instruments and that both can in principle induce an optimal allocation of resources in markets where externalities are problematic in this paper we consider growth harvest and demand uncertainty within the context of canada s pacific halibut fishery and find that while taxes remain the preferred instrument the welfare losses arising from the use of individual boat quotas are minor

theorizing path dependence a review of positive feedback mechanisms in technology markets regional clusters and organizations the concept of path dependence has often been criticized as vague and only narrowly applicable although we can find some very refined definitions of the concept we also find a wide range of empirical phenomena being described as path dependent we argue that more detailed accounts of the positive feedback mechanisms that form paths can take path dependence beyond this state of being overdetermined but under specified reviewing three well described cases of path dependent dynamics in technology markets regional clustering and organizations we define a core set of positive feedback mechanisms that constitute path dependence at different analysis levels and clarify the relationship between positive feedback and increasing returns we show that path dependent processes that is processes driven by positive feedback that veer toward rigidity or lock in can be but do not have to be found under many labels including structural inertia coevolution or institutional persistence we conclude that a precise definition of path dependence does not need to be at odds with the concept s widespread use in understanding organizational and industrial development processes copyright 2013 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

indirect methods for regulating externalities under uncertainty it is sometimes necessary or appropriate to correct an externality by intervening in the market for a privately traded commodity with which the externality is linked in these situations ad valorem taxation is a viable policy option it is argued that some combination of specific and ad valorem taxes will always outperform regulations which fix price administratively but that quantity standards may outperform taxes the analysis is applied to a problem in international trade

inefficient standard adoption inertia and momentum revisited i introduction since the establishment of the theory of network effects economists have been concerned with the question of whether a market with network effects will tend to settle on the socially optimal standard it has been postulated that markets may exhibit excess inertia once a technological standard is in place a new superior standard may not displace it because of installed base effects alternatively markets may exhibit excess momentum consumers may adopt a new standard too quickly ignoring the stranding effect they are having on previous users similar issues arise in the adoption of language and social norms the literature has investigated various conditions under which one of these inefficiencies arises such inefficiencies are of particular concern for open technologies such as the qwerty and dvorak keyboards 1 the situation is somewhat different when individual firms own standards in that case a simple argument seems to indicate that there is no possibility that an inefficient standard will persist if a new standard is superior in any objective sense there are gains to be made from switching to it once the standard has been adopted the firm can appropriate these gains therefore the firm has incentive to lower the initial price enough to induce adoption of the standard the preceding argument is made in liebowitz and margolis 1999 and repeated in spulber 2002 spulber expresses a general skepticism about the likelihood of inefficiencies when property rights are defined and markets exist critics might claim that previous models that imply inefficient standard adoption are unrealistic in some way and that if such models were modified slightly the inefficiency would disappear i reconsider the issue of inefficient standard adoption using a parsimonious yet compelling model assuming only that there are successive generations of finitely lived consumers that preferences are heterogeneous and that there are network effects among users adoption decisions can be inefficient this is true even if consumers can coordinate efficiently within a generation and a firm can act as a coordinating device across generations the model presented here generates some of the same results found in other papers collectively but in a more general setting and with more robust results if there is an established standard and a superior alternative emerges no single generation of consumers will be willing to switch to the new standard if the switching cost the loss of network benefit from breaking with past users is too high it may be that the benefits to future generations of consumers are large enough that from a social standpoint it would be efficient for one generation to adopt the new standard even if it is privately optimal for that generation to retain the old standard on the other hand the current generation considers only its own switching cost and not the cost it imposes on the previous generation leading to potential overadoption of new technology even for proprietary standards it is not clear that the incentive of the firm to induce adoption matches the social incentive in particular if consumer preferences are heterogeneous the firm will not be able to price in such a way to extract all of the additional surplus gained from the new standard on the other hand the firm will be able to appropriate some of the surplus generated by the network effect itself which is present for any standard and thus does not affect the social incentive to change standards it is not possible to address this issue with a two period model as in some of the previous literature see for example choi 1994 choi and thum 1998 katz and shapiro 1986 if a new technology is introduced in the second period but then the game ends the welfare of future generations of consumers is neglected 2 this article also differs from previous infinite horizon models of technology adoption

innovation systems and inertia in r d location norwegian firms and the role of systemic lock in abstract this paper seeks to enquire why firms ceteris paribus tend to concentrate their r d activities at home using a systems of innovation si approach we argue that r d inertia is associated with structural inertia and resultant systemic lock in interaction within an si is a self reinforcing mechanism which may or may not lead to ex post efficiency lock in can be efficient when technologies and institutions maintain the competitiveness of firms on the other hand radical innovations or technological discontinuities may require new institutions and resources but systemic lock in may prevent rapid reaction firms can use a voice strategy by intervening to modify the appropriate institutions in the existing si or an exit strategy by seeking alternative si which more closely fit their needs in the case of norway two groups of firms exist group a benefit from a systemic lock in these are large firms in traditional sectors which are highly embedded and around whom the norwegian si has been built these firms engage in voice and loyalty group b are in science based sectors for whom lock in results in inefficiencies and use exit slowly expanding r d abroad to seek competences in technologies not available domestically

demand dynamics with socially evolving preferences in this work we first identify a few stylized facts concerning microconsumption acts second building on them we develop a simple model of boundedly rational consumers who endogenously evolve their preferences via both innovation and social imitation third we explore some statistical properties of the demand patterns generated by the model which despite its simplicity are surprisingly in line with the empirical evidence these results we suggest bring encouraging support to microfoundations of demand theory based on cognitive and behavioral foundations more in tune with the psychological and sociological evidence based on heterogeneous agents who are much less rational and much more social than in standard theory and who collectively discover along the way what they like within a growing universe of available commodities

argentina s currency board collapse weak policy or bad luck two basic views can be discerned in post mortems of argentina s currency board 1 that weak fiscal policy was fundamentally to blame and 2 that the peso had become too severely overvalued for the peg to survive this paper evaluates the evidence for these rival interpretations the real effective exchange rate index did not indicate massive overvaluation but this index does not capture the effects on the equilibrium rate of the sudden stop in capital flows to emerging markets after 1998 it also understates the amount of adjustment required for argentina to reach the equilibrium rate because neighbour countries dollar exchange rates were held up by argentina s overvaluation as is indicated by their depreciation in 2002 argentina was particularly vulnerable to the sudden stop because of the extreme volatility of its portfolio inflows fiscal policy simulations suggest that even with a substantially improved primary balance from 1994 onwards loss of investor confidence would still have triggered unsustainable debt dynamics once the recession began to bite after 1998 the stagnation of output and prices in argentina created a yawning gap between the interest rate on debt and the rate of growth of nominal gdp had the currency been floated in say 1995 the real devaluation of the peso would still have pushed up the debt gdp ratio but higher output would have left greater scope for addressing this by running a sizeable primary surplus moreover the more gradual depreciation under floating might have allowed the economy to adjust to higher debt service payments without resort to default the imf has criticised itself for not pressing for tighter fiscal policy in the 1990s a more fundamental criticism would be that it was seduced by the bipolar model into complacency about adjustment to real shocks and forgetting the teachings of optimum currency area theory

the dynamics of innovation from national systems and mode 2 to a triple helix of university industry government relations abstract the triple helix of university industry government relations is compared with alternative models for explaining the current research system in its social contexts communications and negotiations between institutional partners generate an overlay that increasingly reorganizes the underlying arrangements the institutional layer can be considered as the retention mechanism of a developing system for example the national organization of the system of innovation has historically been important in determining competition reorganizations across industrial sectors and nation states however are induced by new technologies biotechnology ict the consequent transformations can be analyzed in terms of neo evolutionary mechanisms university research may function increasingly as a locus in the laboratory of such knowledge intensive network transitions

the economics of convention c onventions regulate much of economic and social life yet they have received surprisingly little attention from economists by a convention we mean a pattern of behavior that is customary expected and self enforcing everyone conforms everyone expects others to conform and everyone has good reason to conform because conforming is in each person s best interest when everyone else plans to conform lewis 1969 familiar examples include following rules of the road adhering to conventional codes of dress and using words with their conventional meanings conventions with direct economic implications include species of money and credit industrial and technological standards accounting rules and forms of economic contracts indeed it would scarcely be an exaggeration to say that almost all economic and social institutions are governed to some extent by convention the main feature of a convention is that out of a host of conceivable choices only one is actually used this fact also explains why conventions are needed they resolve problems of indeterminacy in interactions that have multiple equilibria indeed from a formal point of view we may define a convention as an equilibrium that everyone expects in interactions that have more than one equilibrium the economic significance of conventions is that they reduce transaction costs imagine the inconvenience if whenever two vehicles approached one another the important exceptions are sugden 1986 and ullman margalit 1977 the interested reader might also refer to the symposium on social norms that appeared in the fall 1989 issue of this journal with articles by sugden 1989 and elster 1989

the role of funding agencies in the cognitive development of science abstract the influence of the policies of funding agencies on cognitive developments in science has never been systematically evaluated in this paper it is endeavoured to gather the knowledge we have on this subject and to answer two questions by what means and processes is the distribution of funding resources transformed into scientific information and knowledge processes who is deciding on the distribution of funds within funding agencies and how is this related to incremental or innovative cognitive developments in science the major argument is that because funding resources contribute significantly to the chances of doing research and therefore to the maintenance or contesting of existing power relations in the scientific field the policy making in funding agencies is the focus of diverse interests the structure norms and interests within funding agencies explain both the divergence in policy output and the often conservative implications with regard to cognitive scientific developments

landing fees versus fish quotas the relative efficiency of landing fees versus quota controls to achieve given escapement levels is examined the criterion is profit per year over a given time horizon the model employed is a discrete version of the logistic model where growth is influenced by a random variable simulations are used to compare landing fees and quota controls under imprecise stock estimates variable availability of fish and random fish prices while ecological uncertainty combined with imprecise stock estimates favors fee control as shown byweitzman the opposite can be the case under uncertainty about the availability of fish or fish price

bad eggs learning by doing and the choice of technology we model long run economic development through technology adoption under scientific uncertainty about environmental effects there are four possible long run equilibria in a socially planned economy high growth adopt rapidly but abandon damaging technologies once revealed ddt cfcs cautious brake the introduction of new technologies to avoid mistakes genetically modified organisms no growth halt technological progress to preserve secondary knowledge and collapse adopt rapidly without ever abandoning damaging technologies in the base parameterization a short sighted social planner chooses the cautious strategy a far sighted planner chooses the high growth strategy unless damages are irreversible in which case the cautious strategy again dominates regulatory options in the market economy are investigated pollution taxes do not affect the firm s level of precaution if they can only be applied after the adopting firm has reaped the benefits however they do encourage the abandonment of damaging technologies liability rules do affect precaution but may lead to excessive caution or even a no growth trap

approach paths to the steady state a performance test of current period decision rule solution methods for models of renewable resource management this paper compares the perfor mance of approximately optimal current period analytical solution methods for models of re newable resource management focus is placed on linear quadratic analytical dynamic pro gramming and on steady state based current period decision rules based on taylor s series approximation of the value function these are compared against an intertemporal decision rule used with backward induction in the context of a discrete time stylized model of the northern anchovy fishery of california decision rules based on taylor s series track the optimal ap proach path very well with social surplus less than one percent below the optimum surplus in comparison the linear quadratic formulation failed to track the optimal path as well with social surplus of more than seven percent below the optimum these results are interesting in light of the common conviction that approximat ing the value function with a taylor s series is not appropriate for discrete time renewable re source modeling

controlling stock externalities in a common property fishery subject to uncertainty abstract two methods are examined for regulating stock externalities under uncertainty quotas and taxes dynamic programming is used to characterize the externalities precisely the accuracy with which the current size of the resource stock can be monitored is found to be of crucial importance in the choice between tax and quota regulation if the current stock is observed without error taxes are capable of outperforming any quota

the optimal tax for maximum economic yield fishery regulation under rational expectations abstract this paper examines the optimal tax to achieve maximum economic yield mey exploitation in a rational expectations model of a competitive open access fishery to analyze the dynamic evolution of resource use a structural model which explains the relationship between the firm and the industry is presented the unregulated equilibrium is contrasted with the potential mey conditions under which the unregulated equilibrium will be mey are explored in addition a tax is devised which will cause non mey competitive exploitation to become mey when the tax is implemented