optimal incentive schemes with many agents the grossman hart principal agent model of moral hazard is extended to the multiple agent case to explore the use of relative performance in optimal incentive contracting under the assumption that the principal chooses incentive schemes to implement agent actions as nash equilibria necessary and sufficient conditions are derived for the optimality of independent contracts of rank order tournaments and for attainability of the first best in this context the relation of the principal s welfare to the correlation between the underlying randomness in outputs of different agents is also investigated finally some problems with the nash equilibrium implementation assumption are discussed in this paper we extend the grossman hart analysis of the principal agent problem to a multiple agent setting in this version of the problem a risk neutral principal is assumed to observe the output or a performance index for each risk averse agent the output of any agent depends on a privately observable action chosen by the agent and an exogenous random variable the realization of which is not observed either by the principal or by the agent before choosing its action we especially focus attention on the role of relative performance evaluation in optimal incentive contracts and the way this depends on properties of the underlying production technology and the joint distribution of the random variables affecting the outputs of different agents in section 2 of the paper we consider the principal s problem of finding an optimal incentive scheme and an action tuple for agents subject to the constraint that the latter be implemented as a nash equilibrium between agents by the chosen incentive scheme where agents must attain at least their reservation utilities a characterization of optimal incentive schemes is derived analogous to the grossman hart characterization for the single agent problem this characterization is then utilized to find sufficient and generically necessary conditions for a optimal contracts for any agent to be independent of the performance of other agents and b optimality of rank order tournaments where payments depend solely on ordinal comparisons of output across agents we then describe a necessary and sufficient condition for the principal to extract maximum advantage from relative performance clauses i e achieve the first best level of expected utility in the multiagent situation an implication of this result is that under fairly weak conditions perfect correlation in the underlying production uncertainties for different agents enables the principal to attain the first best if and only if sufficiently heavy penalties can be inflicted on agents we then enquire what happens in intermediate cases of non perfect correlation it turns out that while in general the principal s welfare is a continuous function of the correlation coefficient it is not always nondecreasing in the latter because the correlation coefficient is not a general measure of association between two random variables but rather a measure of linear association between them

drivers for the use of materials across countries abstract this paper analyses drivers for resource use and material productivity across countries this is not only relevant in light of soaring raw material prices but also because eu policies such as the thematic strategy on the sustainable use of natural resources com 2005 670 the eu raw materials initiative com 2008 699 and various similar policies internationally seek to better manage materials along their life cycle and across economies in order to better understand the system dynamics of material use our paper applies methodologies of material flow analysis and regression analysis to identify the major drivers for resource use and decoupling from gdp drivers are understood as those factors that exert influence on human activities to use resources a panel data set is taken for the european union for the years 1980 2000 eu 15 and 1992 2000 eu 25 the main drivers of resource use were found to be energy efficiency new dwellings and roads construction activities shortcomings of the methodology are also discussed

information and incentives the agency information problem this paper considers the use of imperfect information for risk sharing and incentive purposes when perfect observation of actions and outcomes is impossible making complete contracting infeasible the incentive insurance problem is defined to consist of two parts the choice of an information system and the design of a sharing rule based on the information system a generalized agency model is formulated to analyse this problem the agency models of ross 1973a b wilson 1968 stiglitz 1974 mirrlees 1976 harris and raviv 1979 holmstrom 1979 a o appear as special cases of the generalized model the analysis focuses on the value of information in the agency information problem the set of information systems which are valuable i e improve risk sharing and incentives in a pareto sense is characterized a problem independent ranking of information systems for the agency information problem is then characterized under the assumption that the agent s preferences are additive in money and actions the ranking may be viewed as a generalization of blackwell s ranking of information systems for decision problems to this particular game when the agent s risk preferences depend on his choice of action on the other hand it is shown that the blackwell ranking may be invalid randomized incentive schemes are shown to be efficient when the incentive effect of risk is positive and sufficiently large relative to the absolute risk aversion of the partners

a survey of agency models of organizations abstract in recent years neoclassical economists have begun to turn their attention to issues of firm organization stimulated in large part by methodological advances in the economics of incentives and incomplete information the paradigm on which much of this work is based views an organization as an agency relationship agency models incorporate two basic features of organizations incomplete information and goal conflict among members of the organization this essay characterizes and critiques the existing research on agency models of organizations in order to broaden the set of consumers of such models and to stimulate the production of new research

metabolic inequality and its impact on efficient contraction and convergence of international material resource use international inequality in material use decreased between 1970 and 2000 inequality stabilized 2000 to 2010 when global growth in material use accelerated material intensity has gained importance in shaping material use inequality inequality in material intensity has increased and shapes global material use

information competition and markets one of the dominant characteristics of modern capitalist economies is the important role played by competition not the peculiar static form of pure price competition embodied in the arrow debreu model but rather a dynamic competition more akin to the kind of competition represented by sports contests and other races including patent races in recent years there have been several attempts to explain why firms often base the pay of their workers and managers on relative performance see for example edward lazear and sherwin rosen 1981 such compensation schemes become desirable when three conditions are satisfied a the input effort of workers managers must not be directly observable at least without cost thus firms must either expend resources to monitor inputs or devise reward structures in which compensation is a function of variables such as output or profits which are themselves functions of inputs but are less costly to observe b the relationship between input and output must be stochastic so that by observing output one cannot perfectly infer what the input was c finally the stochastic disturbances which affect the relationship between input and output of different firms must be correlated by looking at the performance of one worker relative to that of others one can make better inferences about his effort than one can make without using this information not only can competition provide a basis of comparison which enables the design of reward structures that can simultaneously provide a high level of incentives with relatively low level risk but compensation schemes based on relative performance have the further advantage of automatically adjusting incentives to changes in the economic environment we refer to this as built in flexibility in a first best world with perfect information concerning the nature of the technology but where it is still costly to monitor individuals activities the compensation scheme would vary from time to time as the environment changed such changes in the compensation scheme are costly to implement and the information required to do so is seldom available when a task is easier the individual s rewards for performing the task should be reduced if pay is based on relative performance although all individuals perform better when they exert the same level of effort their compensation is automatically adjusted thus teachers frequently grade on the curve and a significant fraction of the pay of successful salesmen often consists of bonuses based on relative performance

analysis on major drivers of cement consumption during the urbanization process in china abstract accompanying by the rapid urbanization process of china unprecedented amounts of cement have been poured into urban construction over the last decade since research is still scarce on the factors underlying the cement consumption the motivation of this paper is to provide insight into cement based socioeconomic metabolism and to improve understanding of the linkage between human activities and cement consumption to explore the key impact factors of cement consumption an extended stirpat model is exploited in this paper to examine the effect of population gross domestic product gdp per capita cement consumption intensity fixed investment and urbanization level with regional panel data of china from 2005 to 2013 the empirical results indicate that fixed investment and gdp per capita are the decisive driving factors of cement consumption the unbalanced investment between infrastructure and people s livelihood reflects bias urbanization policy in china inverted u shaped nexus between cement consumption and urbanization as well as gdp per capita are observed in the empirical results moreover regional heterogeneities are taken into account in the model estimation on the ground of the empirical findings several policy recommendations are provided for policy makers it is suggested that policy makers should take account of the regional discrepancy and implement a sustainable urbanization strategy to curtail cement consumption only when excessive fixed investment is curbed does the enthusiasm of cement consumption calm down

monopoly provision of product quality and warranties an exploration in the theory of multi dimensional screening we address the monopoly problem of designing and pricing a product line of goods distinguished by different quality and warranty levels consumers vary in their evaluations of these attributes so that the problem is one of screening it is sufficiently complex that the local approach commonly used does not work instead we use new techniques for dealing with incentive constraints between nonadjacent consumer types these techniques allow us to characterize optimal allocations that may not be monotonic in particular although the more eager types of buyer do pay higher prices and yield the monopoly higher profit they may receive lower quality or lower warranty coverage we find preference restrictions that restore monotonicity concave risk tolerance implies that warranty coverage increases in type and constant absolute risk aversion implies that quality increases in type

the war of information we analyse political contests campaigns between two parties with opposing interests parties provide costly information to voters who choose a policy the information flow is continuous and stops when both parties quit parties actions are strategic substitutes increasing one party s cost makes that party provide more and its opponent provide less information for voters parties actions are complements and hence raising the advantaged party s cost may be beneficial asymmetric information adds a signalling component resulting in a belief threshold at which the informed party s decision to continue campaigning offsets other unfavourable information

turkey s energy efficiency assessment white certificates systems and their applicability in turkey abstract the last decade has seen an increase in the importance of energy efficiency and the sustainable use of energy resources due to their significant benefits for reducing a country s dependence on foreign energy resources and increasing awareness on environmental problems turkey aims to reduce its energy intensity by 20 up to 2023 and in order to accomplish this target the country plans to use energy more effectively in various industries and develop financial mechanisms for energy efficiency although much effort has been made to improve energy efficiency additional policies such as marked based incentives are still necessary this article deals with one of the many market based energy efficiency policies called tradable white certificates whc or energy efficiency obligations the current situation of the energy field in turkey and energy consumption by industries is presented first in this paper followed by potentials for energy efficiency in each industry and energy efficiency policies furthermore the theory and applicability of a whc system is introduced and discussed in terms of market conditions choice of obligated participants and market mechanisms and barriers for the turkish electricity and natural gas market to benefit from the residential and industrial energy savings potential

pathways to a resource efficient and low carbon europe abstract various environmental footprint concepts have already been developed and applied in sustainability research however these analyses tend to remain restricted to historical observation samples at least in comparison with related research activities in other environmental policy domains like e g climate policy it seems that applications of integrated assessment tools represent rather seldom exceptions within the resource policy domain our paper is therefore intended to strengthen the related evidence base we present recent projections from the dynamic multi region input output mrio simulation model ginfors global inter industry forecasting system which provide an outlook on global development trends until the year 2050 our detailed material footprint and climate policy assessment indicates that a global agreement on a policy mix will allow a clear turnaround towards climate protection and a sustainable use of natural resources without deteriorating economic performance if the eu decides unilaterally to lead the way then this turnaround could also be achieved for the eu while the eu would also benefit economically from this pioneering role a third pathway towards a resource efficient and low carbon europe quantifies the environmental and economic impacts of a strong transitional change induced by european citizens commitments to far reaching sufficiency objectives

analysing future trends of renewable electricity in the eu in a low carbon context the aim of this paper is to analyse the situation and trends of electricity from renewable energy sources res e in the eu up to 2030 taking into account several drivers and barriers and different maturity levels for the renewable energy technologies the methodology is based on the results of simulation models providing insights on future outlooks complemented with an analysis of regulations and other drivers and barriers regarding the most mature renewable electricity technologies the main drivers will be public policies carbon prices and support schemes and the expected up ward trend in fossil fuel prices and the main barriers are related to grid access administrative procedures and the exhaustion of places with the best wind resource for those already commercial but expensive technologies the main driver is support schemes but not carbon prices allowing the exploitation of the large potential for investment cost reductions barriers are mostly related to their high investment costs finally for those technologies which are emerging and immature further technical improvements as a result of r d efforts will be needed and they cannot be expected to significantly penetrate the european electricity market until 2030

backcasting sustainable freight transport systems for europe in 2050 european freight transport emissions and fuel consumption are projected to increase this study focuses on long distance freight transport ldft and explores possible sustainable futures through quantitative modeling the evaluation was part of european foresight process between researchers policy makers and freight companies freightvision greenhouse gas ghg emissions and energy demand of road rail and inland waterways were estimated for an eu 27 in 2005 development was extrapolated to 2050 based on technology and freight performance forecasts stakeholders found the forecasted ghg emissions and fossil fuel share unsustainable so alternative futures were developed with backcasting the developed emission model was run with random parameter combinations to screen a set of sustainable futures with an 80 reduction of ghg emissions and fossil fuel share freight transport performance was not controlled in the backcasts but several sustainable futures were found if significant changes in transport efficiency and energy mix are implemented in spite of agreeing on the importance of reducing emissions stakeholders had difficulties in choosing a preferred technological future simple models were found to be an effective tool for communicating the influence of various measures further research is recommended to screen preferable technological roadmaps from the broad range of available futures

key drivers for unsustainable resource use categories effects and policy pointers abstract prevailing resource use patterns of the global socio industrial metabolism are unsustainable an increasing number of people globally require ever more materials including energy carriers land and water for rising living standards and lifestyles converging towards western industrialised patterns therefore these resources will continue becoming both scarcer and depleted while environmental impacts associated with their consumption e g run away climate change will continue to rise for effective resource policies drivers for such unsustainable resource use and their effects need to be better understood and mapped by means of meta analysis of more than 60 sources of relevant literature we identified a set of ten driver categories that affect unsustainable resource use inter alia prevailing consumption and production patterns use and design of infrastructure and technology underlying paradigms and world views resource prices and the level of knowledge and information of resource users cumulative effects of the drivers contribute for instance up to 30 of phosphorus loss from soil and around 30 of building energy loss globally although the data does not allow clear cut causal attribution of effects it enables the distinction between direct and indirect drivers in relation to a multi dimensional network of drivers causing unsustainable resource use resource policy should combine policy objectives and instruments into policy mixes to target key drivers and their interrelations while policy mixes need to respond to context specific driver settings targeting consumer behaviour emerges as a general driver focus of policy mixes combining different instrument types and implementing them in a time dynamic sequence can mitigate trade offs between different instruments and in the longer term increase feasibility of profound behaviour changes

optimal multiperiod contracts and the gain from enduring relationships under private information informational asymmetries can play a key role in explaining the existence and nature of multiperiod contracts in an illustrative risk sharing model even relatively short two period contracts can be mutually beneficial if there is private information though one period contracts suffice otherwise further contracts which are pareto optimal relative to the environment and the information structure are defined and partially characterized an example illustrates how otherwise inefficient intertemporal tie ins can be used optimally to mitigate incentive problems the obvious borrowing lending schemes are not private information pareto optimal in these period by period actions are not sufficiently constrained discounting affects the form of the optimal contract but none of these qualitative conclusions

empirical estimates of the direct rebound effect a review beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed 2008 elsevier ltd all rights reserved

repeated insurance contracts and learning this article considers a repeated insurance model with incomplete information in which the insurer and the consumer both learn over time about the unknown risk category of the consumer care choices by young consumers affect the informational value of the accident history under an optimal scheme of long term insurance contracts young consumers will always be subsidized by old consumers and consumers who are reassessed as low risk types are always subsidizers i e reverse experience ratings we compare this optimal scheme with the set of contracts that would emerge in a competitive market if only short term contracting were possible these sequentially competitive contracts can lead to over investment in care by both young and old consumers relative to the optimum in contrast to the underinvestment problem associated with moral hazard in insurance

job assignments signalling and efficiency this article analyzes a model in which information about a worker s ability is only directly revealed to the firm employing the worker other firms however use the worker s job assignment as a signal of ability three results recur throughout the analysis first wage rates tend to be more closely associated with jobs than with ability levels second there is frequently an inefficient assignment of workers to jobs i e even when a firm has complete information about a worker s output third the severity of this inefficiency tends to be negatively correlated with the level of firm specific human capital in the economy

optimal contracts for experimentation this paper studies a model of long term contracting for experimentation we consider a principal agent relationship with adverse selection on the agent s ability dynamic moral hazard and private learning about project quality we find that each of these elements plays an essential role in structuring dynamic incentives and it is only their interaction that generally precludes efficiency our model permits an explicit characterization of optimal contracts

growth in global materials use gdp and population during the 20th century the growing industrial metabolism is a major driver of global environmental change we present an assessment of the global use of materials since the beginning of the 20th century based on the conceptual and methodological principles of material flow accounting mfa on the grounds of published statistical data data compilations and estimation procedures for material flows not covered by international statistical sources we compiled a quantitative estimate of annual global extraction of biomass fossil energy carriers metal ores industrial minerals and construction minerals for the period 1900 to 2005 this period covers important phases of global industrialisation and economic growth the paper analyses the observed changes in the overall size and composition of global material flows in relation to the global economy population growth and primary energy consumption we show that during the last century global materials use increased 8 fold humanity currently uses almost 60 billion tons gt of materials per year in particular the period after wwii was characterized by rapid physical growth driven by both population and economic growth within this period there was a shift from the dominance of renewable biomass towards mineral materials materials use increased at a slower pace than the global economy but faster than world population as a consequence material intensity i e the amount of materials required per unit of gdp declined while materials use per capita doubled from 4 6 to 10 3 t cap yr the main material groups show different trajectories while biomass use hardly keeps up with population growth the mineral fractions grow at a rapid pace we show that increases in material productivity are mostly due to the slow growth of biomass use while they are much less pronounced for the mineral fractions so far there is no evidence that growth of global materials use is slowing down or might eventually decline and our results indicate that an increase in material productivity is a general feature of economic development

gambling reputation repeated bargaining with outside options we study the role of incomplete information and outside options in determining bargaining postures and surplus division in repeated bargaining between a long run player and a sequence of short run players the outside option is not only a disagreement point but reveals information privately held by the long run player in equilibrium the uninformed short run players offers do not always respond to changes in reputation and the informed long run player s payoffs are discontinuous the long run player invokes inefficient random outside options repeatedly to build reputation to a level where the subsequent short run players succumb to his extraction of a larger payoff but he also runs the risk of losing reputation and relinquishing bargaining power we investigate equilibrium properties when the discount factor goes to 1 and when the informativeness of outside options diffuses in both cases bargaining outcomes become more inefficient and the limit reputation building probabilities are interior publication abstract

economic growth sustainable development and food consumption evidence across different income groups of countries abstract considering that high population and income growths will lead the coming decades an increase in global food demand is expected livestock products such as meat are closely related to this trend but also associated with impacts on the environment and public health from land and water depletion to greenhouse gases emissions and higher risks of non communicable diseases this trend raises doubts about the sustainability of the food industry and thus a solution is needed for the problem how to feed the world population without compromising present and future generations the literature suggests that meat consumption should be reduced for the sake of the environment and global population however without considering the effects that such reduction would have on the economy inspired by these facts this paper empirically analyses the interactions between food consumption economic growth and sustainable development measured by the index of sustainable economic welfare more specifically the paper assesses the effect that food consumption has on the economy the econometric analysis applies the autoregressive distributed lag model for 77 countries further distinguished by their income group from 1995 to 2013 the findings support that meat consumption has different impacts on economic growth and sustainable development considering different income groups however there is an evident dilemma between economic growth and sustainable development since meat consumption has contradictory effects on each thus it is crucial to understand how to promote sustainability i e reducing the environmental externalities and chronic health diseases without compromising economic growth

technological progress and sustainable development what about the rebound effect abstract sustainability concepts that rest on the idea of resource or energy efficiency improvements due to technological progress tend to overestimate the potential saving effects because they frequently ignore the behavioral responses evoked by technological improvements efficiency improvements also affect the demand for resources and energy and often an increase in efficiency by 1 will cause a reduction in resource use that is far below 1 or sometimes it can even cause an increase in resource use this phenomenon is commonly labeled the rebound effect which is well known among energy economists but never attracted much attention in ecological economics the paper starts with the traditional neoclassical analysis of the rebound effect in a partial equilibrium framework that concentrates on the demand of one particular energy service such as mobility or room temperature it also provides an overview of some of the main empirical studies based on this model that mostly confirm the existence of the rebound effect but are controversial about its actual importance however we have to go beyond the neoclassical single service model in order to take care of the variety of possible feedback affecting energy use the paper presents two important expansions of the single service model in order to show the potential relevance of the rebound effect to ecological economics first it is shown that in a multi services model it proves to be difficult to make general statements about the relevance of the rebound effect in this case the overall effect of an increase in energy efficiency on total energy use depends on the on the assumptions about the substitutability between the services considered and the direction of the income effect second the paper also tries to take care of the fact that changes in resource use or energy use are frequently just side effects of other forms of technological progress especially technological change of a time saving nature can have a large influence on energy use as many time saving devices for example faster modes of transport require an increase in energy consumption that is frequently reinforced by a rebound effect with respect to time this effect will be especially strong when wages are high and at the same time energy prices are low as is currently the case in most industrialized countries consequently the paper also provides a strong argument for the introduction of energy taxes

reputation and survival learning in a dynamic signalling model we consider the impact of reputation on the survival of a monopolist selling single units in discrete time periods whose quality is learned slowly if the seller learns her own quality at the same rate as customers a sufficiently bad run of luck could induce her to stop selling when she knows her quality a good seller never stops selling though at low reputations a bad seller does with some probability furthermore a seller with positive though imperfect information sells for the same number of periods whether her information is private or public we further consider the robustness of the central result when the seller s opportunities for strategic behaviour are limited

driving forces for aggregate energy consumption a cross country approach abstract although a cornerstone for development past and current energy use has often posed a major challenge for policymakers with respect to planning and management within this context in this paper an updated multi sectorial cross country assessment of energy consumption trends was undertaken aiming at identifying the main drivers of changes in aggregate energy consumption these drivers have been interpreted in the light of the policy measures that have been implemented over the years by different countries to achieve a sustainable development of the energy sector the cross country assessment encompasses a set of developed united kingdom portugal and spain and emerging brazil china and india countries resorting to the logarithmic mean divisia index lmdi decomposition method changes in the aggregate energy consumption were decomposed into three main explanatory effects activity structure and intensity the major findings achieved reflect the relevance of intensity and activity effects in detriment of the structural effect the assessment of energy consumption trends using the lmdi decomposition method provides critical information regarding which is the dominant factor that should be focused in policy design

global patterns of materials use a socioeconomic and geophysical analysis abstract human use of materials is a major driver of global environmental change the links between materials use and economic development are central to the challenge of decoupling of materials use and economic growth dematerialization this article presents a new global material flow dataset compiled for the year 2000 covering 175 countries including both extraction and trade flows and comprising four major material categories biomass construction minerals fossil energy carriers and ores industrial minerals first we quantify the variability and distributional inequality gini coefficients in international material consumption we then measure the influence of the drivers population gdp land area and climate this analysis yields international income elasticities of material use finally we examine the coupling between material flows and between income and material productivity measured in economic production per tonne material consumed material productivity is strongly coupled to income and may thus not be suitable as an international indicator of environmental progress a finding which we relate to the economic inelasticity of material consumption the results demonstrate striking differences between the material groups biomass is the most equitably distributed resource economically the most inelastic and is not correlated to any of the mineral materials the three mineral material groups are closely coupled to each other and economic activity indicating that the challenge of dematerializing industrial economies may require fundamental structural transformation our analysis provides a first systematic investigation of international differences in material use and their drivers and thus serves as the basis for more detailed future work

ossified materialism introduction to the special volume on absolute reductions in materials throughput and emissions drawing from papers in this special volume sv this introductory paper on absolute reductions argues that the magnitude scope and urgency of the sustainability challenge require a drastic change in global civilisation including a radical transformation of the institutional arrangements and socio technical systems that facilitate the pursuit of wellbeing the authors of this paper identify four main challenges to absolute reductions including the resource intensive conventional template for development macroeconomic structures and trade policies creating burden shifting and inequality a resourceefficiency improvements fallacy and the dominant consumerist culture and lifestyles the paper demonstrates

waiting for news in the market for lemons econometrica vol 80 no 4 july 2012 1433 1504 waiting for news in the market for lemons b y b rendan d aley and b rett g reen 1 we study a dynamic setting in which stochastic information news about the value of a privately informed seller s asset is gradually revealed to a market of buyers we con struct an equilibrium that involves periods of no trade or market failure the no trade period ends in one of two ways either enough good news arrives restoring confidence and markets reopen or bad news arrives making buyers more pessimistic and forcing capitulation that is a partial sell off of low value assets conditions under which the equilibrium is unique are provided we analyze welfare and efficiency as they depend on the quality of the news higher quality news can lead to more inefficient outcomes our model encompasses settings with or without a standard static adverse selection problem in a dynamic setting with sufficiently informative news reservation values arise endogenously from the option to sell in the future and the two environments have the same equilibrium structure k eywords dynamic games adverse selection information economics signaling 1 introduction c onsider an entrepreneur who is interested in selling her company due to liquidity constraints naturally she is better informed than the market about her company s fundamentals she would like to sell yet there is no reason she is forced to do so on any given day nor can she commit to delaying trade with every passing day that she retains ownership she gains or loses the day s profit and maintains the option to sell the next day if trade is in fact delayed then the market may learn about the value of the firm by observing cash flows investments customer base and so forth herein lies the key innovation of this paper we introduce an exogenous public information process news into a model of such settings we then study the implications for trading behavior efficiency and welfare we model the environment as a game played in continuous time where a risk neutral seller faces a competitive market there is common knowledge of gains from trade but the seller is privately informed about the asset s value i e her type which may be either high or low at each point in time prior to trade the seller receives offers from the market if an offer is accepted then the trade is consummated and the game ends if all offers are rejected then the seller consumes the type dependent flow payoff endowed by the asset contemporaneously information about the seller s type is publicly revealed we are grateful to a co editor and three anonymous referees for helpful comments and sug gestions we are greatly indebted to jeremy bulow michael harrison and andrzej skrzypacz for useful conversations comments and encouragement special thanks also to peter demarzo johannes horner ilan kremer jon levin paul milgrom yuliy sannikov bob wilson and sem inar participants at chicago chicago gsb duke mit kellogg nyu penn stanford olin wharton unc yale and the 7th annual duke northwestern texas io theory conference 2012 the econometric society doi 10 3982 ecta9278

repeated insurance contracts and moral hazard abstract an attempt is made to account for the frequently observed phenomenon of insurance companies offering discounts to clients who possess a favorable record of past claims we argue that such discounts provide a mechanism which enables both insurer and insured to counteract the inefficiency which arises from moral hazard

industrial symbiosis and the policy instruments of sustainable consumption and production abstract industrial symbioses iss and eco industrial parks eips are key concepts of industrial ecology ie the aim of iss and eips is to minimise inefficient material and energy use by utilising local by product and energy flows industrial symbioses tend to develop through spontaneous action of economic actors for gaining of economic benefit but these systems can be designed and promoted via policy instruments as well a literature review showed that national programmes for eco industrial parks can be found in different parts of the world in the action programmes and other sustainable consumption and production scp policy documents of the eu on the other hand industrial symbioses gain less recognition as a path to enhanced sustainable production in this article we consider this and also analyse how the evolution and environmental performance of an industrial symbiosis system centred on a finnish pulp and paper mill have been affected by scp policy instruments with regard to the system forming the subject of the case study and finnish industrial systems in general policy instruments have succeeded in reducing emissions but not in systematically encouraging operators toward symbiosis like activities all in all few studies exist on the overall impact of policy instruments promoting design of eco industrial parks it is not self evident that symbiosis like production systems would be sustainable in every case as the background assumptions for political promotion of eips suggest we concluded that industrial symbioses should be analysed and developed on a life cycle basis with documentation of the real environmental benefits due to efficient resource use and decreased emissions in comparison to standalone production iss can then bring eco competitiveness to companies in relation to scp tools such as environmental permits ecolabels and future product regulation based on the ecodesign directive in europe indirect encouragement of symbiosis through land use regulation and planning in such a way that material fluxes between companies are possible both in operations and in financial terms may prove effective the same holds for waste policies that encourage increased reuse of a company s waste by other enterprises

strategic communication with lying costs i study a model of strategic communication between an uninformed receiver and an informed but upwardly biased sender the sender bears a cost of lying or more broadly of misrepresenting his private information the main results show that inflated language naturally arises in this environment where the sender almost always claims to be of a higher type than he would with complete information regardless of the intensity of lying cost there is incomplete separation with some pooling on the highest messages the degree of language inflation and how much information is revealed depend upon the intensity of lying cost the analysis delivers a framework to span a class of cheap talk and verifiable disclosure games unifying the polar predictions they make under large conflicts of interest i use the model to discuss how the degree of manipulability of information can affect the trade off between delegation and communication copyright 2009 wiley blackwell

the sufficiency strategy would rich world frugality lower environmental impact abstract one alleged weapon against unsustainable environmental impact is for the wealthy to consume less this sufficiency strategy is to complement the efficiency strategy of lowering ratios of resource inputs to economic outputs the former would reduce the affluence factor in i pat the latter the technology factor that the latter strategy suffers from a consumption rebound is widely recognized this paper identifies a similar rebound when the affluence factor is autonomously lowered the lower initial demand lowers prices which in turn stimulates new demand by others the strategy moreover addresses only the rich raising questions of its theoretical maximum efficacy its proponents usually conflate frugality with the north south dichotomy and intra generational with inter generational equity moreover there are difficulties with the supporting arguments that frugality is good for one s own sake as well as for the environment and that the rich should lead the way to living more lightly personal behaviour change is furthermore not a substitute for international political efforts finally since all changes in right side factors of the i pat equation change other right side factors such indirect attacks on impact should be abandoned in favor of supply and emissions quotas