the housing market impacts of shale gas development using data from pennsylvania and an array of empirical techniques to control for confounding factors we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source well productivity and visibility results indicate large negative impacts on nearby groundwater dependent homes while piped water dependent homes exhibit smaller positive impacts suggesting benefits from lease payments results have implications for the debate over regulation of shale gas development jel l71 q35 q53 r31 technological improvements in the extraction of oil and natural gas from unconventional sources have transformed communities and landscapes and brought debate and controversy in the policy arena shale gas plays underlying the populated northeastern united states were thought to be uneconomical less than ten years ago but now contribute a major share of us gas supply 1 natural gas has been hailed as a bridge to energy independence and a clean future because of its domestic sourcing and compared with coal and petroleum derivatives its smaller carbon footprint and reduced emissions of other pollutants e g particulates sulfur dioxide car

sticks and carrots two incentive mechanisms supporting intra group cooperation abstract in this note we introduce two distinct incentive mechanisms that support dynamic intra group cooperation in the context of prisoner s dilemma payoffs rewards for cooperating and punishments for defection where the rewarding or punishing party may be outside the relationship

on the early holocene foraging to early agriculture we consider a world in which the mode of food production foraging or agriculture is endogenous and in which technology grows exogenously within a model of coalition formation we allow individuals to form co operative communities bands of foragers or farmers rationally at the lowest levels of technology equilibrium entails the grand coalition of foragers a co operative structure which avoids over exploitation of the environment but at a critical state of technology the co operative structure breaks down through an individually rational splintering of the band at this stage there can be an increase in work and through the over exploitation of the environment a food crisis in the end technological growth may lead to a one way transition from foraging to agriculture

the futures and forward price differential in the nordic electricity market abstract this note investigates price differentials between electricity forwards and portfolios of short term futures with identical delivery periods at the nordic power exchange nord pool since both contracts are traded at the same exchange there is no influence of for example different market microstructure and default risk when examining the effect of the marking to market of futures on the price differential although the prices of the futures portfolios are on average below the corresponding forward prices these price differentials are on average not statistically significant and not economically significant when taking transaction costs into account given the characteristics of the electricity contracts under observation this is consistent with the predictions of the cox et al 1981 model and indicates efficient pricing in the nord pool forward market in contrast to previous results

endogenous formation of coalitions with composite goods abstract we construct a model of endogenous formation of coalitions when three goods are necessary for a composite good and composite goods are substitutes for each other this analysis extends economides and salop s journal of industrial economics xl 1992 105 model of composite goods where two goods are necessary we analyze the welfare implications of coalition structure and investigate which coalition structure leads to the highest social welfare the paper investigates whether the most desirable coalition structure represents an equilibrium and provides a sufficient condition for the socially efficient coalition structure to be a stable nash coalition structure

valuing nuclear energy risk evidence from the impact of the fukushima crisis on u s house prices abstract behavioral economics suggests that individuals overweight recent unexpected and or rare events when updating beliefs this study investigates the effect of such an event the fukushima nuclear crisis in 2011 on the learning process of a local environmental risk by evaluating how perceptions of the risk of a nuclear accident are capitalized into house prices near nuclear power plants npps in the u s our results provide new evidence on the dynamics of the effect spatially the impact was concentrated in a 4 km radius around npps and temporally it peaked a half year later and dissipated one year after the crisis

political coalition breaking and sustainability of policy reform abstract this paper examines the need and potential for coalition breaking in policy reform efforts related to agriculture and the environment the objective is to consider traditional policy tools that can break existing political coalitions given the powerful noncompetitive role of strong interest groups such as government bureaucracy and large trading organizations choice of the policy mix is modeled as a cooperative game a modification of the nash bargaining solution is used to endogenize coalition formation this framework is then used to examine the potential for an external development agency to promote environmental interests in the policy formation process the results explain how in some countries a small increase in strategic aid may achieve a major breakthrough in policy reform even if past activities have been unproductive and how in other countries a major increase in aid may be fruitless

property tax limits local fiscal behavior and property values evidence from massachusetts under proposition abstract this paper examines the impact of a specific property tax limit proposition 2 1 2 in massachusetts on the fiscal behavior of cities and towns in massachusetts and the capitalization of that behavior into property values proposition 2 1 2 places a cap on the effective property tax rate at 2 5 and limits nominal annual growth in property tax revenues to 2 5 unless residents pass a referendum allowing a greater increase the study analyzes the 1990 1994 period a time when massachusetts municipalities faced significant fiscal stress because of a 30 cut in real state aid and a demographically driven increase in school enrollments the findings include the following 1 proposition 2 1 2 significantly constrained local spending in some communities with most of its impact on school spending 2 constrained communities realized gains in property values to the degree that they were able to increase school spending despite the limitation and 3 changes in non school spending had little impact on property values

do binding agreements solve the social dilemma we investigate whether binding agreements can provide a solution to the social dilemma that arises in the presence of pure public goods by signing a binding agreement players can prevent free riding by the contributors to a public good however a well known theoretical result is that the outcome of the endogenous formation of agreements is not necessarily efficient in our setting the individual level of contribution to the public good increases with the size of the coalition reaching an agreement and the global coalition is always the socially optimal structure agreements form sequentially and the equilibrium outcome is an asymmetric structure which consists of two coalitions our experiment therefore lends force to the theoretical result that outcomes may be inefficient in fact we observe an outcome which is even less efficient than that predicted by the equilibrium agreement structure however it seems that when subjects reach agreements they do so with the intention of cooperating rather than free riding furthermore it seems that they learn to cooperate over time and reach the global agreement more often towards the end of sessions keywords

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

mergers and the importance of fitting well abstract this paper highlights the importance of partners fitting well for a stable merger to arise if all firms fit perfectly no stable merger can be performed on the contrary if not all firms are compatible a stable merger may arise

do plants decrease pollution reduction efforts during a recession evidence from upstate new york chemical plants during the us great recession us communities often experience economic hardship with plant or business closings contributing to high unemployment rates in this circumstance communities and local governments may prioritize economic recovery over environmental improvement thereby weakening community and government pressure against polluting plants in an attempt to explore the concern this study examines the impact of local economic downturn on nearby chemical plants toxic release reduction behavior a total of 351 plants in upstate new york and their toxic release inventory data were analyzed for 5 years 2006 2010 the results show plants toxic release reduction efforts were reduced when unemployment and plant closing rates were high therefore the findings highlight a possible limitation to regulatory approaches that rely on public pressure to motivate better environmental performance

why do households without children support local public schools linking house price capitalization to school spending while residents receive similar benefits from many local government programs only about one third of all households have children in public schools we argue that capitalization of school spending into house prices can encourage even childless residents to support spending on schools we identify a proxy for the extent of capitalization the supply of land available for new development and show that towns in massachusetts with little undeveloped land have larger changes in house prices in response to a plausibly exogenous spending shock towns with little available land also spend more on schools we extend these results using data from school districts in 46 states showing that per pupil spending is positively related to the percentage of developed land this positive correlation persists only in districts where the median resident is a homeowner and is stronger in districts with more elderly residents who do not use school services and have a shorter expected duration in their home our findings support models in which capitalization encourages the provision of durable local public goods and provides an additional reason why some elderly support local school spending

measuring environmental effects on property values without hedonic regressions abstract the effect of environmental nuisances on property values has been frequently studied using hedonic regressions yet that method has extensive data and estimation requirements the technique developed in this paper uses repeat sales on houses to substantially reduce these requirements the technique adjusts for depreciation between sales and allows for nonzero error covariance terms when a house has been sold more than twice the effect of highway noise on property values is studied using this method and the results are statistically equivalent to the results of an extensive hedonic study for the same area

promise scholarship programs as place making policy evidence from school enrollment and housing prices abstract place based promise scholarship programs which guarantee financial aid for qualifying graduates of a school district have proliferated in recent years using data from multiple sites we compare the evolution of school enrollment and residential real estate prices around program announcement dates within promise eligible and surrounding areas while our estimates indicate that enrollment increased following promise announcements merit based programs generated relative increases in white enrollment housing prices respond strongly in neighborhoods with better primary schools and in the upper half of the housing price distribution we conclude that these programs have important and under studied distributional considerations

uncertainty of governmental relief and the crowding out of flood insurance this paper discusses the problem of crowding out of insurance by co existing governmental relief programs the so called charity hazard in the context of different institutional schemes of governmental disaster relief in austria and germany we test empirically whether an assured partial relief scheme as in austria drives a stronger crowding out of private insurance than a scheme promising full relief which is subject to ad hoc political decision making as in germany our general finding is that the institutional design of governmental relief programs significantly affects the demand for private natural hazard insurance

estimating the marginal willingness to pay function without instrumental variables abstract the hedonic model of rosen 1974 has become a workhorse for valuing the characteristics of differentiated products despite a number of well documented econometric problems including a source of endogeneity that has proven difficult to overcome here we outline a simple likelihood based estimation approach for recovering the marginal willingness to pay function that avoids this endogeneity problem using this framework we find that marginal willingness to pay to avoid violent crime increases by sixteen cents with each additional incident per 100 000 residents accounting for the slope of the marginal willingness to pay function has significant impacts on welfare analyses

the estimation of demand parameters in hedonic price models this paper shows that the econometric problem of estimating hedonic demand parameters is not a standard identification problem caused by demand supply interaction as has been often assumed estimation procedures based on this assumption lead to biased results the hedonic estimation problem is instead caused by the endogeneity of both prices and quantities when households face a nonlinear budget constraint an instrumental variables solution to this problem is suggested using instruments that exogenously shift the budget constraint

risk self protection and ex ante economic value abstract we develop three propositions about the ex ante value of reduced risk if there is a continuous outcome distribution and if self protection influences outcome probability and severity then 1 unobservable utility terms cannot be eliminated from the ex ante value expressions 2 knowledge of the convexity or the nonconvexity of dose response functions is insufficient to sign changes in these expressions and 3 self protection expenditures need not be a lower bound measure of these expressions therefore many restrictions applied in recent empirical work on the economic value of risk changes are not immediately transferable to settings where endogenous risks prevail

collusion exclusion and inclusion in random order bargaining this paper examines the profitability of three types of integration in a cooperative game solved by a random order value e g the shapley value collusion between players i and j is a contract merging their resources in the hands of one of them say i this contract can be represented as a combination of exclusion which lets i exclude j s resource but not use it himself and inclusion which lets i use j s resource but not exclude j from it this representation yields a third difference condition on the characteristic function that determines the profitability of collusion generalizing existing results for specific games namely collusion is profitable unprofitable when the complementarity of the colluding players is reduced increased by other players

bidding for the surplus a non cooperative approach to the shapley value abstract we propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero monotonic environments with transferable utility the mechanism consists of a bidding stage followed by a proposal stage we show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the shapley value payoffs we extend our results to implement the weighted shapley values finally we generalize our mechanism to handle arbitrary transferable utility environments the modified mechanism generates an efficient coalition structure and implements the shapley values of the super additive cover of the environment journal of economic literature classification numbers c71 c72

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

do environmental right to know laws affect markets capitalization of information in the toxic release inventory abstract this paper investigates how information contained in the u s environmental protection agency s toxic release inventory tri program one of the largest environmental right to know programs affects prices in the housing market i use a strengthening of the reporting requirements for the chemical lead in 2001 as exogenous variation to test for housing price changes near existing firms who must now report using a difference in differences specification i find that listing an existing firm in the toxic release inventory lowers housing prices up to 11 within approximately 1 mile the results suggest that housing market participants do capitalize into prices at least some information conveyed by the tri program

a one stage model of link formation and payoff division abstract in this paper we introduce a strategic form model in which cooperation structures and divisions of the payoffs are determined simultaneously we analyze the cooperation structures and payoff divisions that result according to nash equilibria strong nash equilibria and coalition proof nash equilibria we find that no cycle will be formed if a player claims a positive amount for the formation of one of its links and that a player does not necessarily profit from a central position in a cooperation structure journal of economic literature classification numbers c71 c72

strategy proofness and essentially single valued cores revisited abstract we consider general allocation problems with indivisibilities where agents preferences possibly exhibit externalities in such contexts many different core notions were proposed one is the individually rational core ir core whereby blocking is only allowed via allocations where the non blocking agents receive their endowments we show that if there exists an allocation rule satisfying individual rationality efficiency and strategy proofness then for any problem for which the ir core is non empty the allocation rule must choose an ir core allocation and all agents are indifferent between all allocations in the ir core we further show that the result cannot be generalized to supersets of the ir core we apply our result to housing markets coalition formation and networks

entry and exit patterns of toxic firms we pair an establishment level dataset from texas with public information available in the toxics release inventory tri to evaluate the standing of dirty industries in texas census tracts with a focus on environmental justice concerns the share of nonwhite residents in a tract is positively correlated with the number of tri reporting firms and an inverse u shaped relationship characterizes the number of tri reporting firms and a tract s median income even after controlling for factor prices and other covariates which might drive firm location decisions entrants that report to the tri are more likely to locate in areas with a higher share of nonwhite residents firms that report to the tri are also more likely to enter areas with a low share college graduates in contrast the number of entrants from industries which do not have tri reporters is negatively related to the percent of nonwhite residents in a tract firms in these non reporting industries are also more likely to enter areas with a high share of college graduates polluters appear to agglomerate raising concerns about both chemical releases being concentrated in certain tracts and also affecting nonwhite dense areas disproportionately the strength of these effects often depend on an urban rural classification with rural areas experiencing the most pronounced concerns moreover tri reporting firms are less likely to exit the market relative to their peers which operate in the same industry but do not need to file tri reports suggesting releases may affect a region in the long run

core existence in vertically differentiated markets we prove that a sufficient condition for the core existence in a n firm vertically differentiated market is that the qualities of firms products are equispaced along the quality spectrum this result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder

the axiomatic approach to three values in games with coalition structure we present a unified framework for a broad class of values in transferable utility games with coalition structure including the owen coalitional value and two weighted versions with weights given by the size of the coalitions we provide three axiomatic characterizations using the properties of efficiency linearity independence of null coalitions and coordination with two versions of balanced contributions inside a coalition and weighted sharing in unanimity games respectively

on the stability of coalition structures abstract we resolve a seeming conflict between a non existence result on solutions to coalition formation in hedonic games barbera s gerber a 2007 a note on the impossibility of a satisfactory concept of stability for coalition formation games economics letters 95 85 90 and the universal existence of stable coalition structures in tu games under the value casajus a 2008 outside options component efficiency and stability games and economic behavior forthcoming doi 10 1016 j geb 2007 04 003

information as regulation the effect of community right to know laws on toxic emissions abstract there is growing academic and policy level interest in the use of information as quasi regulatory mechanisms such as toxic release inventory tri and green labels mandatory disclosure requirements have been touted as market based incentives that may affect firm behavior we provide new evidence on the effectiveness of disclosure requirements by examining firm behavior in response to disclosures of tri emissions we find that firms with the largest stock price decline on the day this information became public subsequently reduced emissions more than their industry peers this is consistent with the view that financial markets may provide strong incentives for firms to change their environmental behavior

organization and functioning of liberalized electricity markets an overview of the dutch market abstract in this paper we examine the organization and the functioning of the dutch electricity market first we describe the organization of the dutch electricity supply chain and the role of the main market participants including the transmission system operator distribution system operators program responsible parties and metering companies we then describe the organization of financial trading and clearing mechanism of electricity through the organized futures exchange the european energy derivatives exchange and the spot market amsterdam power exchange which includes the day ahead market and intra day markets we also detail the functioning of the imbalance market and reserve capacity management in the netherlands through a set of numerical analysis we provide an exploratory analysis of the apx day ahead spot prices and the real time imbalance prices using electricity price data from 2002 to 2013 we observe the price spikes both in the day ahead and imbalance markets usually occur around 6 10 am and 5 7 pm we also observe that in the imbalance market system overages happen significantly more often than shortages pointing out that the market tends to buy more than what is demanded this could be explained by the risk attitude of the market participants in the imbalance market

the effect of emission information on housing prices quasi experimental evidence from the european pollutant release and transfer register in this paper we study whether the release of pollutant emission information has an effect on housing prices the event under study is the publication of the first wave of emission quantity data from the european pollutant release and transfer register in 2009 our analysis is based on quarterly housing prices at the german postal code level for the years 2007 2011 and provides the first evidence from europe on this research question estimating a differences in differences model and controlling for observable differences in land use housing type distribution tax revenues and other postal code area characteristics by means of propensity score matching we find no significant effect of the release of emission information on the value of houses in affected postal code areas this result survives a number of robustness checks designed to assess whether our findings are due to data aggregation issues or the actual treatment definition this leads to the conclusion that on an aggregate level the 2009 publication of e prtr data did not have an immediate and noticeable effect on housing prices in germany

house prices during siting decision stages the case of an incinerator from rumor through operation abstract the impact of an undesirable land use on house prices is not constant over time previous proximity studies which employed only discrete changes in information such as an epa superfund site announcement ignored potentially important phases of the adjustment process this study explicitly measures how the effects of an undesirable land use evolve over the siting process and life of the disamenity some price response to rumors of a facility is indicated and the evidence that prices respond at groundbreaking before operation is strong the distance premium persists at least 7 years after the facility begins operations

international fisheries agreements a game theoretical approach this paper surveys the application of game theory to the economic analysis of international fisheries agreements the relevance of this study comes not only from the existence of a vast literature on the topic but especially from the specific features of these agreements the emphasis of the survey is on coalition games an approach that has become prominent in the fisheries economics literature over the last decade it is shown that coalition games were first applied to international fisheries agreements in the late 1990s addressing cooperative issues under the framework of characteristic function games then progressively this cooperative approach was combined with non cooperative elements such as the stability analysis of the agreements finally partition function games which model coalition formation endogenously were introduced and became the standard approach to study the formation and stability of international fisheries agreements a key message that emerges from this literature strand is that self enforcing cooperative management of internationally shared fish stocks is generally difficult to achieve hence the international legal framework and regulations play a decisive role on ensuring cooperation over the use of these resources

valuing the urban hukou in china evidence from a regression discontinuity design for housing prices abstract this paper explores the demand side of hukou household registration acquisition in china by estimating the market valuation of urban hukou based on jinan city s acquiring the hukous by purchasing houses policy this paper uses houses with a floor area slightly larger and slightly smaller than the minimum required as the treatment and control groups respectively to implement a regression discontinuity design the results show that residents willingness to pay for urban hukou in jinan city was approximately 90 000 126 000 yuan in 2017 we also find great heterogeneity in different housing submarkets the value of hukou is much higher in immigrant dominated housing markets and top primary school districts our findings are robust to parametric and nonparametric estimates and different model specifications we perform falsification tests by assuming a false policy introduction date and placebo tests based on rental data our analysis offers insights for hukou system reform and public services provision

revisiting the relationship between spot and futures prices in the nord pool electricity market abstract this work discusses potential pitfalls of applying linear regression models for explaining the relationship between spot and futures prices in electricity markets in particular the bias coming from the simultaneity problem the effect of correlated measurement errors and the impact of seasonality on the regression results studying a 13 year long 1998 2010 price series of spot and futures prices at nord pool and employing regression models with garch residuals we show that the impact of the water reservoir level on the risk premium is positive which is to be expected but contradicts the results of botterud et al 2010 we also show that after taking into account the seasonality of the water level the storage cost theory proposed by botterud et al 2010 to explain the behavior of convenience yield has only limited support in the data

on the core the weber set and convexity in games with a priori unions this paper deals with the concepts of core and weber set with a priori unions a la owen as far as we know the owen approach to games with a priori unions has never been studied from the coalitional stability point of view thus we introduce the coalitional core and coalitional weber set and characterize the class of convex games with a priori unions by means of the relationships between both solution concepts

supply response to agricultural insurance risk reduction and moral hazard effects this paper examines the consequences of agricultural insurance for expected supply the effect of insurance is shown to decompose into a risk reduction effect as well as a moral hazard effect the direction and magnitude of these effects depend on the parameters of the insurance contract producer s risk preferences and the underlying technology two models are considered for this purpose in the first model widely employed in the literature a producer controls only one input the second model uses a dual approach to extend the results to the case where a producer controls multiple inputs

participative democracy and local environmental issues the present paper deals with the management of environmental quality at the level of a city more precisely we propose two different contractualisms among citizens that allow them to reduce the polluting emissions caused by their consumption of both a private and a collective good in the first contractualism the mayor proposes to citizens to establish neighbourhood committees they have the responsibility of defining the total amount of polluting emission by private and public transportation means in their neighbourhood it comes out that the mediation of the neighbourhood committees brings out a lower total pollution than in the case where each individual citizen acts on his own interest however the emission level brought out by the neighbourhood committees is not pareto optimal on the other hand extending the first coalitional game by a supplementary stage focused on bargaining between the neighbourhood committees allows us to define a participative democracy procedure this two stage procedure brings about a pareto optimal pollution level 2008 elsevier b v all rights reserved

inequality at birth some causes and consequences recent research shows that health at birth is affected by many factors including maternal education behaviors and participation in social programs in turn endowments at birth are predictive of adult outcomes and of the outcomes of future generations exposure to environmental pollution is one potential determinant of health at birth that has received increasing attention a large literature outside of economics advocates for environmental justice and argues that poor and minority families are disproportionately exposed to environmental hazards i provide new evidence on this question showing that children born to less educated and minority mothers are more likely to be exposed to pollution in utero and that white college educated mothers are particularly responsive to changes in environmental amenities i estimate that differences in exposure to toxic releases may explain 6 of the gap in incidence of low birth weight between infants of white college educated mothers and infants of black high school dropout mothers this abstract was borrowed from another version of this item

coalition formation as a dynamic process abstract we study coalition formation as an ongoing dynamic process with payoffs generated as coalitions form disintegrate or regroup a process of coalition formation pcf is an equilibrium if a coalitional move to some other state can be justified by the expectation of higher future value compared to inaction this future value in turn is endogenous it depends on coalitional movements at each node we study existence of equilibrium pcfs we connect deterministic equilibrium pcfs with unique absorbing state to the core and equilibrium pcfs with multiple absorbing states to the largest consistent set in addition we study cyclical as well as stochastic equilibrium pcfs

a game theoretic mathematical programming analysis of cooperative phenomena in oligopolistic markets this paper investigates cooperative behavior in an industry that supplies a homogeneous product and consists of oligopolistic firms the analysis is conducted within a game theoretic framework in which each firm is viewed as a player whose strategy is its level of production by defining a suitable characteristic function that evaluates the worth of each possible coalition we attempt to quantify the individual and collective bargaining powers of firms in order to predict merger or contractual agreements and production strategies in particular we define three games via three characteristic functions each of which is based upon some assumed market behavior on the part of the players for each game we investigate whether the firms would choose to remain separate or form a grand coalition or some other coalition structure for some insightful special cases we are able to establish the resulting outcome and assert whether a core allocation of profits among members of an emerging coalition exists and whether the shapley value allocation belongs to the core in the more general case we use the u s copper industry as an example to illustrate how shapley values may be used to determine possible emerging coalition structures

the timing and strategic role of self protection self protection has private goods characteristics as it reduces own exposure to pollution given a certain level of pollution we study the effect of timing self protection before after or simultaneously with abatement we find that self protection when timed before abatements has strategic effects in this case self protection shifts the second stage subgame perfect nash equilibrium of abatements such that own contributions of abatement are decreased and those of the other country are increased thereby shifting future abatement costs to the other country when countries cooperate only on abatement the incentives to shift future abatement costs are greater contrary to intention cooperation on abatement may in fact worsen environmental quality if it does not include self protection

climate clubs overcoming free riding in international climate policy notwithstanding great progress in scientific and economic under standing of climate change it has proven difficult to forge inter national agreements because of free riding as seen in the defunct kyoto protocol this study examines the club as a model for international climate policy based on economic theory and empirical modeling it finds that without sanctions against non participants there are no stable coalitions other than those with minimal abatement by contrast a regime with small trade penalties on non participants a climate club can induce a large stable coalition with high levels of abatement jel q54 q58 k32 k33

the comparative statics of cumulative distribution function changes for the class of risk averse agents abstract the primary question addressed is when does a particular change in the cumulative distribution function cdf describing a random variable always cause all risk averse decision makers to adjust the choice variable in the same direction a necessary and sufficient condition involving both the decision model and the cdf change is derived this condition allows the researcher to determine the tradeoff between assumptions on the economic model and the cdf changes which are necessary and or sufficient to yield determinate comparative static results several applications are included

endogenous formation of coalitions the formation of coalitions is a fundamental problem in game theory by a coalition is meant a group of players e g economic or political agents which decide to act together as one unit relative to the rest of the players this includes the instances of syndicates unions cartels blocks political parties parliamentary coalitions etc we would like to emphasize that forming a coalition does not eliminate the individual players as decision makers in all interactions with the other players coalition members act as one unit it may be useful to think of a representative agent taking their place 2 however this arrangement will continue only as long as each player finds it desirable to act this way further bargaining occurs among the members of each coalition on how to divide what they obtained together thus the existence of coalitions implies that the interactions among the players will be conducted on two levels first among the coalitions and second within each coalition most of the existing models in economics and game theory assume that the coalition structure is given exogenously instead we try here to obtain it as an endogenous outcome of our model namely we want to be able to predict which coalitions will in fact form in each given situation 3 our theory combines two kinds of game theoretic concepts value and stability the basic idea is first to evaluate the players prospects in the various coalition structures and then based on these values to find which ones are stable we will call this value coalition structure value or cs value for short the reason we are considering coalition structures i e partitions of the set of players into disjoint coalitions rather than just coalitions is that in general players may find it to their advantage to join forces in some situations and to act separately in others all depending on the way the other participants are organized this implies that both the value and the stability concepts should depend on the entire coalition structure the cs value we analyze in this paper was first developed by owen 7

the effect of power plants on local housing values and rents abstract this paper uses restricted census microdata to examine housing values and rents for neighborhoods in the united states where power plants were opened during the 1990s compared to neighborhoods with similar housing and demographic characteristics neighborhoods within 2 miles of plants experienced 3 7 decreases in housing values and rents with some evidence of larger decreases within 1 mile and for large capacity plants in addition there is evidence of taste based sorting with neighborhoods near plants associated with modest but statistically significant decreases in mean household income educational attainment and the proportion owner occupied

conflict leads to cooperation in demand bargaining abstract we consider a multilateral nash demand game in which short sighted players come to the bargaining table with requests for both coalition partners and the potentially generated resource we prove that the resulting process converges with probability one to a state in which all players agree on a strictly self enforcing division of resources i e a strict core allocation highlighting group dynamics we show how the myopic actions of players may lead to the break up of groups in the short run but can ultimately bring about a situation from which a strictly self enforcing allocation can be reached

on coalitional semivalues in this paper we propose a characterization of the coalitional value for transferable utility games owen 1977 and we define and study coalitional semivalues which are generalizations of semivalues dubey neyman and weber 1981

endogenous trading bloc formation in a north south global economy the majority of the trading blocs to date are between similar countries rather than between developed and developing countries this paper provides a rationale for why trading blocs among similar countries may arise as an equilibrium phenomenon it develops a model of an asymmetric world economy in which there are at least four countries the countries are differentiated with respect to their market size and they choose their trading partners in the coalition proof nash equilibrium either there is global free trade or free trade areas are formed among similar countries la plupart des blocs commerciaux sont formes de pays similaires plutot que de pays developpes et en voie de developpement ce memoire explique pourquoi ce genre de resultat peut emerger en tant que phenomene d equilibre on developpe un modele d economie mondiale asymetrique dans lequel il y a au moins quatre pays les pays different par la taille et la nature de leurs marches et choisissent leurs partenaires commerciaux dans un equilibre libre de coalitions a la nash ou bien il existe un regime global de libre echange ou bien des zones de libre echange entre pays similaires emergent

self insurance against natural disasters abstract expenditures on self insurance to mitigate the effects of natural disasters on the value of private assets are examined in a model where individuals are partially insured against financial loss by a public relief program and where private insurance is unavailable the model predicts that optimal private expenditures on self insurance will be excessive or insufficient according to the nature of the technology by which individuals protect their assets the comparative static effects of variations in the level of public compensation individual wealth and attitudes toward risk and the degree of environmental uncertainty on self insurance expenditures and on the magnitude and frequency of public compensation are also characterized and their implications for remedial government policies are examined

coalition formation in standard setting alliances we present a theory for predicting how business firms form alliances to develop and sponsor technical standards our basic assumptions are that the utility of a firm for joining a particular standard setting alliance increases with the size of the alliance and decreases with the presence of rivals in the alliance especially close rivals the predicted alliance configurations are simply the nash equilibria i e those sets of alliances for which no single firm has an incentive to switch to another alliance we illustrate our theory by estimating the choices of nine computer companies to join one of two alliances sponsoring competing unix operating system standards in 1988

a theory of environmental risk disclosure abstract the regulation of environmental risks increasingly emphasizes the awareness and empowerment of stakeholders the success of this approach however seems to depend crucially on the quality of environmental disclosures in this paper we investigate the amount and quality of the information that would be voluntarily delivered to some stakeholder by a potential polluter we find that information may be hazier when the stakeholder is confident or naive a priori the cost of analyzing the received reports increases little with their complexity or a polluter s net expected payoff from undertaking an industrial activity that would turn out to be unsafe is small a worried stakeholder and a low cost of producing more accurate figures on the other hand favor disclosure of high quality information by delivering information of very good quality safe firms can set themselves apart more easily from dangerous ones the higher the relative ex post payoff from their current industrial activity implications of this framework for the scope and design of public programs of environmental disclosure are briefly examined

the effects of adaptation measures on hurricane induced property losses which fema investments have the highest returns abstract this paper evaluates the relative effectiveness of fema expenditures on hurricane induced property losses we find that spending on fema ex ante mitigation and planning projects leads to greater reductions in property losses than spending on ex post adaptation programs specifically a one percent increase in annual spending on ex ante risk reduction and warning projects reduces damages by 0 21 percent while a one percent increase in ex post recovery and clean up spending reduces damages by 0 12 although both types of program spending are effective we find the marginal return from spending on programs that target long term mitigation and risk management to be almost twice that of spending on ex post recovery programs with the predicted increases in the frequency and severity of north atlantic hurricanes in the future our findings suggest there are important potential gains that could be realized from the further diversification of fema spending across project categories

a limit theorem for the core of betrand oligopoly games with externalities abstract this paper formulates the concept of betrand oligopoly partition games furthermore it is demonstrated that such well defined games have positive externalities more importantly the core is proved to approximate the equal division solution in infinite markets

vertical integration with endogenous contract leadership stability and fair profit allocation abstract this paper studies vertical integration in serial supply chains with a wholesale price contract we consider a business environment where the contracting leader may be endogenously changed before and after forming the integration a cooperative game is formulated to normatively analyze the stable and fair profit allocations under the grand coalition in such an environment our main result demonstrates that vertical integration is stable when all members are pessimistic in the sense that they are sure that they will not become the contracting leader if they deviate from the grand coalition we find that in this case the grand coalition s profit must be allocated more to the retailer and the members with higher costs nevertheless we also show the conditions under which the upstream manufacturer can have strong power as in traditional supply chains

estimates of the impact of crime risk on property values from megan s laws abstract we estimate the willingness to pay for reductions in crime risk using the location and move in dates of sex offenders we find significant effects of sex offenders locations that are geographically localized house prices within 0 1 miles of a sex offender fall by 4 percent on average we then use this finding to estimate the costs to victims of sexual offenses and find costs of over 1 million per victim far greater than previous estimates however we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk jel k42 r23 r31

on the emergence of an mfn club equal treatment in an unequal world motivated by gatt we endogenize the formation of a club whose members have to abide by the mfn principle of non discrimination the underlying model is that of oligopolistic intraindustry trade while an mfn club does not alter average tariff levels across countries it increases aggregate world welfare makes non members worse off and can immiserize its high cost members these results imply that i core wto rules such as mfn are valuable even if multilateral negotiations deliver limited trade liberalization and ii the distributional effects of mfn maybe one reason why developing countries have been granted special and differential treatment at the wto jel classification f13 f10 f15

a competitive partnership formation process a group of heterogeneous agents may form partnerships in pairs all single agents as well as all partnerships generate values if two agents choose to cooperate they need to specify how to split their joint value among one another in equilibrium which may or may not exist no agents have incentives to break up any existing partnerships or form new partnerships this paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps when an equilibrium exists partnership and revenue distribution will be automatically and endogenously determined by the process moreover several fundamental properties of the equilibrium solution and the model are derived

economic development and losses due to natural disasters the role of hazard exposure abstract our contribution is to show that the relationship between wealth and disasters is mainly formed by the exposure to disaster hazard we first build a simple analytical model that demonstrates how countries that face a low hazard of disasters are likely to see first increasing losses and then decreasing ones with increasing economic development at the same time countries that face a high hazard of disasters are likely to experience first decreasing losses and then increasing ones with increasing economic development we then use a cross country panel dataset in conjunction with a hazard exposure index to investigate whether the data is consistent with the predictions from the model in line with our model we find that the relationship of losses with wealth crucially depends on the level of hazard of natural disasters faced by countries

the socially stable core in structured transferable utility games we consider socially structured transferable utility games for every coalition the relative strength of a player is measured by a power function the socially stable core consists of the socially and economically stable payoff vectors it is non empty if the game itself is socially stable the socially stable core consists of a finite number of faces of the core generically it consists of a finite number of payoff vectors convex tu games have a non empty socially stable core irrespective of the underlying social structure when the game is permutationally convex the socially stable core is shown to be non empty if the power vectors are permutationally consistent and is shown to contain a unique element if the power vectors are permutationally compatible we demonstrate the usefulness of the concept of the socially stable core by applying it to structured hierarchy games sequencing games and the distribution of water

regulation and capitalization of environmental amenities evidence from the toxic release inventory in massachusetts environmental regulation in the united states has undergone a slow evolution from command and control strategies towards market based regulations one such innovation is the toxics release inventory tri a regulation that requires polluting e rms to publicly disclose information about their toxic emissions the basic tenet of this regulation is that it corrects for informational asymmetries between polluters and households allowing communities to pressure polluters to decrease their emissions policy makers have judged the tri a tremendous success as national releases declined by 43 between 1988 and 1999 yet many of the fundamental problems which are known to lead to the classic failure of the coase theorem such as high transaction costs and dife culties in organizing cast doubt on the effectiveness of disclosure rules alone to lead to an efe cient outcome in the caseof pollution we use an event study methodology with high quality data on house prices and other local attributes to assess the extent to which the public values changes in toxic releases and thus the success of tri our major e ndings include 1 declines in toxic releases appear unrelated to any political economy variables that might lead to public activism 2 initial information released under tri had no signie cant effect on the distribution of house prices and 3 house prices show no signie cant impact of declines in reportedtoxic releases over time standard errors aresmall enoughthat we can reject the hypothesis that large declines in toxic releases lead to more than a 0 5 increase in house prices these results also hold when we control for differences in the availability of information on tri and the possible effect of expectations our e ndings cast doubt on the ability of the public to process complex information on hazardous emissions and support the coase theorem in that right to know lawssuch as tri may not be the most effective form of environmental regulation

does federal disaster assistance crowd out flood insurance abstract we empirically analyze whether federal disaster aid crowds out household purchase of disaster insurance we combine data on annual household flood insurance purchases for the united states over the period 2000 2011 with data from the two main u s post disaster federal aid programs fema s individual assistance grants and sba s low interest disaster loans estimating both fixed effects and instrumental variable models to account for the endogeneity of disaster assistance grants we find that receiving individual assistance grants decreases the average quantity of insurance purchased the following year by between 4000 and 5000 the reduction we find is roughly 3 of the mean insurance coverage in the sample but larger than the average flood related ia grant in our sample which is 2984 ia is currently limited and larger grants could have different impacts the crowding out is on the intensive margin we find no impact on take up rates likely because there is a requirement that recipients of disaster aid purchase an insurance policy we do not know how take up rates might change without such a requirement low interest post disaster government loans have no systematic effect on insurance purchases

pricing of monthly forward contracts in the nord pool market this paper investigates whether the pricing of forward contracts in the nord pool market is efficient monthly forward contracts were introduced in the nord pool market in 2003 likewise quarterly contracts that will replace seasonal contracts were introduced in 2004 for a transition period these contracts together with the pre existing seasonal and yearly contracts constitute the forward market in an efficient forward market the price of a seasonal forward contract should equal the time weighted average of the underlying monthly forward contracts in this paper we use historic forward price information to evaluate whether this relationship holds true and find that there are inefficiencies in the pricing

quantitative overeducation and cooperative game theory abstract overeducation is an empirical phenomenon in two dimensions qualitative and quantitative quantitative overeducation addresses a firm s decision to train more employees than needed one explanation for this decision is modeled in this article that of classical bargaining power the main idea is that after investing in human capital the employer uses employees outside the firm to raise the bargaining power when he negotiates with the employees within the firm on how to share the profit of the firm to model this we use cooperative game theory for the first time the labor market is modeled by a coalition structure and the payoffs are determined by the value casajus 2009

hedonic prices and implicit markets estimating demand and supply functions for differentiated products in choosing the level of quality to purchase the buyer of a differentiated product also chooses a point on the marginal price schedule for that product hence in general the demand functions for product characteristics cannot be consistently estimated by ordinary least squares market equilibrium results in a matching of characteristics of demanders and suppliers this matching restricts the use of buyer and seller characteristics as instruments when estimating demand and supply functions for product characteristics the paper develops these issues a stochastic structure for hedonic equilibrium models is then proposed identification results are presented and estimation procedures are outlined

the effect of legalizing retail marijuana on housing values evidence from colorado does legalizing retail marijuana generate more benefits than costs this paper provides a first step toward addressing that question by measuring the benefits and costs that are capitalized into housing values we exploit the time series and cross sectional variations in the adoption of colorado s municipality retail marijuana laws rmls and examine the effect on housing values with a difference in differences strategy our estimates show that the legalization leads to an average 6 increase in housing values indicating that the capitalized benefits outweigh the costs in addition we find suggestive evidence that this relatively large housing value appreciation is likely due to rmls inducing strong housing demand while having no discernible effect on housing supply finally we show that the effect of rmls is heterogeneous across locations and property types jel k20 r28

insurance design in the presence of safety nets abstract safety net assistance and insurance exist to manage risk and improve welfare this shared goal may lead to crowding out in a new approach this paper analyzes the interaction of assistance with two dimensions of insurance design level of coverage and types of risks covered in a society of risk averse vulnerable individuals and risk neutral assistance providers pareto improvements in welfare are achieved through incompleteness in the types of risks covered the results imply that safety nets promote demand for and the emergence of incomplete insurance these results have a wide application to insurance markets where safety nets are available including health care disaster aid and social welfare

stable coalition structures with externalities this paper argues that the sign of external effects of coalition formation provides a useful organizing principle in examining economic coalitions in many interesting economic games coalition formation creates either negatie externalities or posi tie externalities for nonmembers examples of negative externalities are research coalitions and customs unions examples of positive externalities include output cartels and public goods coalitions i characterize and compare stable coalition structures under the following three rules of coalition formation the open

environmental information provision market valuation and firm incentives an empirical study of the japanese prtr system the environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets previous studies using tobin s q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response which may mislead conclusions to overcome this problem we simultaneously estimate the functions of the intangible asset the replacement cost and the toxic chemical risk we find that the japanese financial market does not value risk associated with toxic chemical releases nevertheless even without market valuation firms increase investment to reduce pollution 2010 by the board of regents of the university of wisconsin system

sharing the surplus an extension of the shapley value for environments with externalities economic activities both on the macro and micro level often entail wide spread externalities this in turn leads to disputes regarding the compensation levels to the various parties affected we propose a method of deciding upon the distribution of the gains costs of cooperation in the presence of externalities when forming the grand coalition is efficient we show that any sharing rule satisfying efficiency linearity dummy player and a strong symmetry axioms can be obtained through an average game adding an additional axiom we identify one unique rule satisfying these properties