arbitrage clientele effects and the term structure of interest rates this paper derives a new and intuitive estimation procedure for the term structure under potential tax arbitrage no a priori assumptions regarding the equality of the prices and present values of bonds are made the data are employed to determine whether this equality holds and an appropriate estimator is thereby endogenously derived the suggested estimator is based on the optimizing behavior of an investor in a market with frictions and emerges directly from the solution of the dual of the no arbitrage optimization problem in addition the proposed estimator benefits from being both theoretically sound and straightforward to apply

why hasn t tax competition triggered a race to the bottom some quantitative lessons from the eu abstract the integration of european financial markets in the early 1980s created an environment of near perfect capital mobility across countries that had harmonized indirect taxes but maintained large differences in factor taxes the years that followed witnessed several rounds of competition in capital taxes with puzzling results instead of the dreaded race to the bottom in capital taxes the uk lowered its capital tax to a rate closer to those of france germany and italy while capital taxes changed slightly in these countries the uk increased its labor tax marginally but the other countries increased theirs sharply this paper shows that these results are consistent with the quantitative predictions of a dynamic neoclassical general equilibrium model of tax competition that incorporates the key international externalities of tax policy operating via relative prices wealth distribution and fiscal solvency tax competition is modeled as a one shot game over time invariant capital taxes with dynamic payoffs relative to a status quo calibrated to european data the calibration is preceded by an empirical analysis that shows that the relationship linking taxes to labor supply and the investment rate in the model are in line with empirical evidence and that domestic taxes seem to respond to foreign taxes the solutions of the games show that when countries compete over capital taxes adjusting labor taxes to maintain fiscal solvency there is no race to the bottom and the nash equilibrium is close to observed taxes in contrast if consumption taxes adjust to maintain fiscal solvency competition over capital taxes triggers a race to the bottom but this outcome entails large welfare gains surprisingly the gains from coordination are small in all of these experiments

acreage decisions under risk the case of corn and soybeans an acreage supply response model is developed under expected utility maximization the resulting framework is used to specify and estimate a system of risk responsive acreage equations for corn and soybeans in the united states particular attention is given to the truncation effects of government price supports on the distribution of corn and soybean prices also a wealth variable is included in the acreage equations the empirical results indicate that risk and wealth variables play an important role in cornsoybean acreage decisions the analysis also shows that cross commodity risk reduction is important in acreage allocation decisions

producer surplus and risk this paper examines the welfare economics of producer behavior under risk aversion hicksian marshallian and money equivalent measures are explored it is found that under decreasing absolute risk aversion compensating variation is less than the ordinary marshallian surplus which is less than the money equivalent measure under constant absolute risk aversion all measures coincide finally bounds on compensating and equivalent variations using ordinary producer surplus in a manner analogous to willige approach in consumer theory under certainty are studied similar results hold mutatis mutandis for input demands

arbitrage bounds in markets with noisy prices and the puzzle of negative option prices implicit in bonds abstract the term structure of interest rates has occupied economists for many years this is testimony to the importance of the term structure or equivalently valuation operator and to the difficulty of obtaining reliable estimates of it until recently it was not possible to reconcile the theoretical existence of a multiplicity of valuation operators in an incomplete bond market and the empirical nonexistence of even a single one mackay and prisman estimating valuation operators in incomplete market with noises can noise complete the market working paper 1996 tackle this problem in this paper an amendment to and a generalization of their methodology is presented the amendment preserves the linearity of valuation operators and allows use of efficient linear programming techniques further it facilitates an admissible consideration of the puzzle of negative option prices embedded in bonds the empirical results presented in this paper were obtained using data on extendable government of canada bonds the results indicate that although the gap between the lowest and the highest prices assigned to a cash flow by different valuation operators is significant it is not sufficient to resolve the above mentioned puzzle

u k financial market returns 1955 2000 we present and analyze new monthly index series for u k financial assets covering equities bonds bills and inflation the data are consistent with the crsp ibbotson series for the united states we use our indices to estimate equity and bond premia and to make international comparisons especially with the united states germany and japan we illustrate potential uses of the new series by investigating stock market seasonality inflation linked bonds real dividend growth rates and the small firm effect while some of our findings resemble u s results we also report differences between u k and u s stock market behavior copyright 2001 by university of chicago press

equilibrium analysis of supply chain structures under power imbalance abstract this paper investigates the implications of channel power on supply chain stability in a setting where multiple suppliers sell substitutable products through a common retailer such supply chains have been traditionally analyzed as one or two stage stackelberg non cooperative games with all suppliers sharing balanced equal decision making power in this paper we relax this assumption and formulate game theoretic models to examine scenarios where one supplier can act as the stackelberg leader consequently we analyze new supply chain structures and introduce the notion of structure dominance a novel approach to analyze the performance of supply chains that has practical implications thus a decision maker can employ the concepts of structure dominance to determine whether there exist supply chain scenarios that are more stable than others i e less prone to power reconfigurations at both agent and group level we find that power imbalance causes significant declines in supply chain profits and the more balanced the agents are the higher their profits when demand is linear regardless of product competition it develops that neither the manufacturer stackelberg nor the retailer stackelberg supply chains are stable structures in our generalized setting but that structures where power is equally split between agents provide for best stability and performance

differential taxation and the equilibrium structure of interest rates equilibrium coupon bond pricing relationships given differential taxation are derived under uncertainty assuming that both corporate and municipal bonds were originally issued at par but are currently selling at a discount the impact of differential taxation upon the term structure and coupon structure of interest rates is investigated while the tax structure of interest rates is uniquely characterized differential taxation substantially alters the prevailing equilibrium structure of interest rates

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

inflation real interest rates and the bond market a study of uk nominal and index linked government bond prices this paper estimates expected future real interest rates and inflation rates from observed prices of uk government nominal and index linked bonds the estimation method takes account of imperfections in the indexation of uk index linked bonds it assumes that expected log returns on all bonds are equal and that expected real interest rates and inflation follow simple time series processes whose parameters can be estimated from the cross section of bond prices the extracted inflation expectations forecast actual future inflation more accurately than nominal yields do the estimated real interest rate is highly variable at short horizons but comparatively stable at long horizons changes in real rates and expected inflation are strongly negatively correlated at short horizons but not at long horizons

complementary goods creating capturing and competing for value this paper studies the strategic interaction between firms producing strictly complementary products with strict complements a consumer derives positive utility only when both products are used together we show that value capture and value creation problems arise when such products are developed and sold by separate firms nonintegrated producers although the firms tend to price higher for given quality levels their provision of quality is so low that in equilibrium prices are set well below what an integrated monopolist would choose when one firm can mandate a royalty fee from the complementor producer as often occurs in arrangements between hardware and software makers we find that the value capture problem is mitigated to some extent and consumer surplus rises however because royalty fees greatly reduce the incentives of the firm paying them to invest in quality the arrangement exacerbates the value creation problem and leads to even lower total quality surprisingly this result can reverse with competition specifically when the firm charging the royalty fee faces a vertically differentiated competitor the value creation problem is greatly reduced opening the door for the possibility of a pareto improving outcome in which all firms and consumers benefit it is worth noting that this outcome cannot be achieved by giving firms the option of introducing a line of product variants competition serves as a necessary commitment ingredient

can carbon tax eat opec s rents abstract we consider the optimal emission tax for a stock pollutant when the pollutant flow is also regulated by a resource exporting cartel we consolidate clarify and generalize a set of previous results to obtain clear isolation of the pigouvian and trade policy components of the tax because of the trade policy component the tax can shift more rents from the cartel than the pollution causes damage related costs this leads to the possibility that the pollution problem accompanied by the coordination of taxation can bring about net benefits at the expense of the cartel

tax induced bias in forward rates term premiums and the term structure of interest rates abstract this paper s analysis on the tax induced bias in forward rates enables us to better understand the structure of term premiums and the term structure of interest rates and to obtain a better estimate of the future interest rate in particular the anomaly of negative term premiums regarding long maturities as reported by fama 1984 is resolved

term structure forecasts of inflation this paper investigates the information in the term structure of interest rates about future inflation using u k data the author finds that at horizons of up to four years the term structure has predictive value for inflation outcomes the term structure could thus provide a guide to the setting of monetary policy copyright 1992 by royal economic society

tax effects in term structure estimation this study is a refinement and an extension of an earlier study by mcculloch of tax effects in the regression equation for term structure estimation this study includes tests for tax effects and heteroskedasticity a reconsideration of the need for an instrumental variable and a search for the capital gains tax rate in addition to the ordinary income tax rate there are two major findings 1 statistically significant taxinduced bias in the non tax adjusted equation and 2 evidence that the capital gains tax is misspecified in the tax adjusted equation it is well known e g see 4 2 pp 727 30 and 25 that the yield curve is an imperfect surrogate for the term structure of interest rates and various methods have been developed to estimate the term structure directly by regressing prices on payments in a sample of default free securities 1 since investors are concerned with the after tax payments on securities it is desirable to incorporate tax effects in term structure estimation mcculloch 22 and schaefer 26 29 have employed different approaches to the tax effect problem mcculloch employed the regression approach and searched for a single tax rate

term structure multiplicity and clientele in markets with transactions costs and taxes the authors investigate term structure with realistic transactions costs and taxes its properties are derived from a certain no arbitrage condition via duality theory in convex programming transactions costs imply an infinite multiplicity of term structures a simple example with realistic transactions costs shows that this multiplicity can induce a valuation range of over 277 basis points transactions costs also allow equilibrium without short sale restrictions the authors find the minimum transactions costs that prevent arbitrage in addition the exact conditions for weak clientele in which investors will not buy some bonds and may not sell any that they already hold are established most research on the pricing of riskless bonds hereafter bonds uses a noarbitrage model equilibrium pricing is based on the assumption that there is no buy and hold investment strategy that provides riskless arbitrage profit however most of these studies ignore transactions costs 2 the clientele model hereafter ss developed by stephen schaefer 19 adopts a no arbitrage assumption na equivalent to the existence of a valuation operator this operator is a vector of discount factors known as the term structure ss shows that na implies the existence of a tax bracket specific term structure that ensures that the bonds after tax present values do not exceed their prices ss also shows that in markets with spanning positive term structures consistent with na will not exist for some brackets see his example in subsection iva below investors in such brackets would have arbitrage opportunities to resolve this na violation and make equilibrium feasible ss assumes a prohibition on shorting this implies clientele effects in the usual sense i e investors in some brackets hold some but not all bonds there may be however a bracket in which investors hold positive amounts of all bonds this would be a

economic behavior under temporal uncertainty a considerable amount of research has focused on the effects of uncertainty on economic behavior in the absence of complete risk markets private risk bearing is widely believed to influence economic decisions arrow 1 sandmo 23 chavas 4 dalal 6 and others have investigated the role of uncertainty in resource allocation for example sandmo 23 has proposed a theory of the firm under risk he showed how risk and risk aversion can have a negative effect on production decisions

air passenger duties as strategic tourism taxation abstract there has been a recent debate on the rationale and economic impacts of air passenger duties apds linked to puzzling empirical results on this topic we argue that an approach from strategic tourism taxation can improve our understanding of these results apd set by origin countries of tourists can be viewed as an instrument for extracting economic rents that would otherwise be retained by tourism destinations a theoretical model of strategic taxation between an origin and two destinations is developed to illustrate this idea we find that countries strategies may end up with winners and losers or with all parties facing welfare losses the game outcome depends on countries market shares of profits and the substitutability between tourism services provided by different destinations the findings suggest that the economic impacts of apds recently evaluated in the literature might be biased because of the omission of other countries potential tax reactions

willingness to pay measures and expectations an experiment in studies of the willingness to pay for various environmental commodities services it is typically explicitly or implicitly assumed that the respondent has perfect has perfect foresight this paper which is based on a questionnaire completed by examining if and how the value of a hunting permit is affected by the hunter s expectations regarding the outcome of the hunting in particular the willingness to pay is estimated as a function of expected values as well as variances of different variables using a question which reflects an extension of jensen s inequality to the multivariate case as well as measures of downside risk it is shown that risk attitudes are important determinants of the willingness to pay for a hunting permit

international tax coordination regionalism versus globalism tax competition for mobile capital can undermine the attempts of governments to redistribute income from rich to poor i study whether international tax coordination can alleviate this problem using a general equilibrium model synthesizing recent contributions to the tax competition literature the model highlights the crucial distinction between global tax coordination and regional coordination with high capital mobility between the tax union and the rest of the world the welfare gain from regional capital income tax coordination is only a small fraction of the gain from global coordination even if the tax union is large relative to the world economy

refutable implications of the firm model under risk curvature properties of the indirect utility function are shown to be necessary and sufficient for refutable behavioural postulates in the form of comparative static results reciprocity relations and restrictions on output and input responses for firm models under risk these postulates are independent of onerous restrictions on risk preference technology or random variable distribution as an exposition the complete set of refutable implications for a multi output firm operating under price risk is derived at the data means these implications are not rejected when they are tested using firm level data but both risk neutrality and constant absolute risk aversion are rejected at individual observations one implication is rejected almost as frequently as risk neutrality and constant absolute risk aversion

tax induced clientele effects in the market for british government securities abstract this paper develops a new methods for measuring tax effects in bond markets and presents empirical results for british government securities the basic idea is to construct a least cost portfolio which for investors in a given tax bracket dominates a given bond a portfolio is said to dominate a bond if it provides cash flows which are at least as great in every period and has a lower price in effect our method calculates an upper bound on the value of a bond to investors in a given tax bracket the results demonstrate i the existence of clientele effects and ii the absence of an effective tax rate

on capturing oil rents with a national excise tax this paper argues that since the supply of oil in the ground is inelastic the incidence of a sales tax on oil maintained forever at a fixed rate would fall entirely on the oil suppliers in the world economy however the elasticity of supply of oil to a single country depends on that country s imports as a share of world output and on the elasticity of demand for that country the paper calculates optimal tax rates for a country as a function of these variables and estimates optimal oil tax rates for the u s for some oecd countries separately and for the u s plus the oecd collectively current u s tax rates are shown to be far below optimal values

correcting externalities through taxes on subsidies to related goods abstract optimal corrective taxation is considered in the presence of externalities in cases where only related goods i e complements to or substitutes for externality creating goods can be taxed in the context of identical individuals and separable externalities taxing and subsidizing complements and substitutes to externalities are analyzed first the circumstances under which it is optimal to operate on one market only for a related good are examined second cases are identified where optimality requires taxes on substitutes for or subsidies to complements to a good which generates negative externalities

do countries compete over corporate tax rates this paper tests whether oecd countries compete with each other over corporate taxes in order to attract investment we develop two models with firm mobility countries compete only over the statutory tax rate or the effective average tax rate while with capital mobility countries compete only over the effective marginal tax rate we estimate the parameters of reaction functions using data from 21 countries between 1983 99 we find evidence that countries compete over all three measures but particularly over the statutory tax rate and the effective average tax rate this is consistent with a belief amongst governments that location choices by multinational firms are discrete we also find evidence of concave reaction functions consistent with the model outlined in the paper

risk aversion and yield uncertainty in duality models of production a mean variance approach a duality model of production is developed that endogenizes stochastic output decisions under risk aversion the model incorporates both yield and price uncertainty and nonlinear mean variance risk preferences this permits modeling of the firm s expected output supply and input demand decisions under risk and also in principle the firm s output variance decisions the duality model is tractable for empirical research

bond returns liquidity and missing data this paper examines holding period returns to constant duration portfolios of u s govern ment notes and bonds and measures the return premium generated by liquidity differences in bonds the approach compares constant duration portfolios constructed in two distinct ways one using only bonds issued in the most recent treasury auction one using all other bonds comparisons of the resulting series are made meaningful by choosing narrow du ration ranges in the portfolio formation procedure this in turn induces a missing data problem in the created time series parameters of return distributions are therefore estimated employing a maximum likelihood framework that explicitly accounts for the missing data it is estimated that recently issued bonds are priced to return a premium of around 55 basis points per annum over otherwise equivalent instruments

the decline in idiosyncratic values of us treasury securities abstract unique features and market frictions can lead to idiosyncratic pricing for some us treasury securities this study uses a linear programming lp model to measure aggregate idiosyncratic pricing of t notes and t bonds from 1980 to 2016 we document an average idiosyncratic pricing of 0 11 per 100 par as compared to an average bid ask spread of 0 08 further idiosyncratic pricing declined dramatically from the early 1980s to the 2010s empirical evidence suggests that the 1986 tax reform act increasing issue sizes and improving market liquidity contribute to the decline at the individual security level we identify factors contributing to and mitigating idiosyncratic pricing

production location decision and free entry oligopoly abstract this paper presents a simple oligopolistic model of location in which all firms in an imperfectly competitive industry are assumed to produce a homogeneous output and make cournot conjectures about their rivals input and location decisions within this framework this paper points out that the key difference between oligopoly and monopoly is the following in the case of monopoly a positive shift in demand requires that a monopolist increase his output but in the case of oligopoly an increase in industry output may or may not increase output per firm because of the number of firms at free entry equilibrium is not constant it is shown that in an oligopoly model of location that allows free entry the demand condition plays an important role on the determination of industrial location

a new linear programming approach to bond portfolio management this paper derives and tests a new linear programming lp approach to bond portfolio management the model elicits possible tax clientele effects in the pricing of u s gov ernment coupon bonds and simultaneously derives the optimal tax specific bond portfolio analytically the model derives these results by exploiting for a given tax bracket the price differential of an after tax stream of cash flows it accomplishes this objective by purchasing at the ask price underprieed bonds for the specific tax bracket while sim ultaneously selling at the bid price overpriced bonds the model requires that the net cash flow inclusive of purchased and sold bonds be nonnegative at all future dates the problem s formulation standardizes the position taken in each bond to a maximum of one unit one of the model s appealing features is the parsimonious number of required calcu lations only one lp program need be run per tax bracket in addition to obtaining an optimally chosen tax specific bond portfolio the model also measures the after tax term structure of spot u s government interest rates for both tax exempt and taxable investors finally the superior monthly holding period rates of return on the optimal taxspecific bond portfolio demonstrate an important property ofthe model s output

strategic pigouvian taxation stock externalities and polluting non renewable resources este trabajo propone una extension del modelo de wirl y dockner 1995 disenado para analizar la interdependencia bilateral a largo plazo entre un cartel exportador de un recurso y una coalicion de paises importadores en primer lugar se incorporan los efectos agotamiento al analisis de las propiedades intertemporales de un impuesto pigouviano en segundo lugar se calculan los equilibrios feedback de stackelberg los resultados muestran que la dinamica del impuesto depende criticamente del nivel del dano medioambiental marginal ademas tambien demuestran que el impuesto definido por el equilibrio de nash perfecto de markov es un impuesto pigouviano neutral en el sentido que solo corrige la ineficiencia causada por la externalidad del stock sin embargo para el equilibrio feedback de stackelberg el impuesto es ventajoso para los paises importadores ya que la imposicion pigouviana estrategica reduce el poder de mercado del cartel

some stronger measures of risk aversion in the small and the large with applications the arrow pratt measures of risk aversion for von neumann morgenstern utility functions have become workhorses for analyzing problems in the microeconomics of uncertainty they have been used to characterize the qualitative properties of demand in insurance and asset markets to examine the properties of risk taking in taxation models and to study the interaction between risk and life cycle savings problems to name just a few applications equally importantly they have generated the linear risk tolerance class of utility functions which has provided canonical examples in such diverse areas as portfolio theory and the theory of teams despite these successes there have been a number of areas for which the results have been weaker than hoped it is natural to use the risk aversion measures to compare the behavior of individuals in risky choice situations for example consider the individual portfolio choice problem in a two asset world with a riskless asset and a risky asset if individual a has a uniformly higher arrow pratt coefficient of risk aversion than individual b then b will always choose a portfolio combination with more wealth invested in the risky asset but suppose that both assets are risky now there is no obvious sense in which the more risk averse individual can be said to hold a less risky portfolio but it seems strange that such a simple alteration should destroy the analytics which support the basic intuition similarly consider the basic insurance problem if one individual a is more risk averse than another b in the arrow pratt sense it follows that a will pay a larger premium to insure against a random loss than will b typically though an individual evaluates partial rather than total insurance that is only some gambles can be insured against and others must be retained in this case even when the gambles which are retained are independent from those which are insured it is no longer true that the individual whose arrow pratt measure of risk aversion is higher will pay a larger insurance premium the situation is no better when we consider comparative statics exercises for a single individual decreasing absolute risk aversion in the sense of arrow and

on the theory of the competitive firm under uncertainty when initial wealth is random since sandmo s seminal paper on the theory of the competitive firm under output price uncertainty there has been considerable research on this topic 2 5 6 10 11 14 in all these studies it is assumed that in the absence of complete contingent markets output price risk is the only source of uncertainty for the firm however this may not be a realistic assumption in particular as argued by kihlstrom et al 7 it appears reasonable to consider the case where some of the initial wealth of the firm is held in risky assets in that case initial wealth is uncertain and should be modelled as a random variable the objective of this paper is to investigate the introduction of random initial wealth in sandmo s theory of the firm under price uncertainty in sandmo s model a number of important comparative static results e g the conditions under which the supply function is upward sloping 14 69 or under which increased price uncertainty reduces supply 5 depends critically on the sign of a particular expression stated in lemma 2 in ishii 5 while sandmo 14 69 shows this expression is non negative under arrow pratt decreasing absolute risk aversion it can be verified that his proof no longer holds when initial wealth is random therefore the comparative static analysis conducted by sandmo 14 batra and ullah 2 and ishii 5 is no longer valid and gives ambiguous results under initial wealth uncertainty the reason is that the arrow pratt measures of risk aversion 1 12 are too weak for making comparisons in situations where there is more than one source of uncertainty 13 then what can be deduced from the theory of the competitive firm in the realistic case where both initial wealth and output price are uncertain we will show here that meaningful results on the behavior of the competitiv firm under uncertainty can be obtained provided that the arrow pratt measures of risk aversion 1 12 are replaced by the ross measures of risk aversion 13 in particular a comparative static analysis of the production decisions using ross characterization of risk behavior is presented a number of new results are derived on the properties of risk responsive supply and input demand functions under both price and initial wealth uncertainty

lease valuation when taxable earnings are a scarce resource in this paper we examine leasing as a tax arbitrage instrument analysis of a sample of uk leases presented in this paper suggests that lessors earn large positive npvs our theoretical model seeks to explain these positive npvs in terms of a market price for a scarce resource that we identify as scarce taxable earnings using these prices the model permits a lessor to determine whether the profitability of a proposed set of lease contracts can be improved by writing e different set of contracts that makes better use of the lessor s taxable earnings there may be two reasons why an initial portfolio of contracts may be suboptimal either there may be clienteles or the leasing market may be inefficient subsequently we discuss reasons why the leasing market may be characterized by clienteles and using two different samples of leases we test whether the leasing market is segmented and efficient in this paper we examine leasing as a tax arbitrage instrument with asymmetrical tax positions between lessors and lessees there will be positive net present values npvs to lease transactions see myers dill and bautista 21 analysis of a sample of united kingdom uk leases presented in this paper suggests that lessors earn large positive npvs our theoretical model seeks to explain these positive npvs in terms of a market price for a scarce resource that we identify as scarce taxable earnings there are two implications of our model one for financial intermediaries that act as lessors and the other for financial economists interested in the leasing market the model permits a lessor to determine whether the profitability of a proposed set of lease contracts can be improved upon by writing a different set of contracts that makes better use of the lessor s taxable earnings there may be two reasons why an initial portfolio of contracts that a lessor is about to write may be suboptimal either there may be clienteles because the leasing market

the impacts of australia s departure tax tourism versus the economy abstract this study estimates the flow and expenditure effects of the recent increase in australia s passenger movement charge pmc as well as the economic impacts on the australian economy and the tourism industry after discussing the nature of the pmc it outlines the types of industry stakeholder concerns as to its effects on tourism both before and after the recent increase it then presents a framework developed by the authors that can be used to distinguish the effects of the increased pmc on the wider economy and on different tourism markets a computable general equilibrium model is then used to estimate the economic impacts of the increased charge on different australian tourism markets inbound outbound and domestic the implications of the modelling results for the validity of the industry criticisms of the pmc are discussed the results confirm that the tourism industry will suffer though it also indicates that the australian economy will gain thus there is a clash between the industry and wider economic interests the types of issues addressed in this paper can inform policy making regarding the gainers and losers from departure tax increases in tourism destinations generally

how ict shifts the power balance of tourism distribution channels abstract the restructuring process of the tourism sector and of the distribution channels caused by information and communications technologies ict may have altered the power positions in the channels in the literature the relationship between structure and power has been analyzed under the structure conduct performance paradigm and the structure conduct outcome framework the question is if the structure is antecedent or consequence of power balance in the channel our objective and contribution is to provide a common framework for both approaches by including the two different conceptualizations of the structure and analyzing their cause effect link with the power balance moreover we show that the two concepts of structure have a strong link with power balance but that the nature of the link might be very different market structure is exogenous and might be considered an antecedent and channel structure is endogenous suggesting that it is intimately interrelated with power balance and that the cause effect link works in the two directions

immunization as a maxmin strategy the purpose of this paper is to broaden the analysis of immunization when it is viewed as amaxmin strategy several results are demonstrated which provide a new interpretation of maxmin strategy by using a more general theory of lagrangians we clarify the exact assumptions required for the duration strategy and the maxmin strategy to be equivalent in a world with taxes it is shown that in a world with taxes the immunization strategy requires the portfolio to satisfy a constraint about the bond to be included in addition to the duration constraint

constrained choices under risk there has recently been a revival of interest in the implications of rationing for economic theory extending the work of samuelson 21 tobin and houthakker 24 and pollak 16 recent papers by bruno 3 howard 8 latham 13 and neary and roberts 15 have explored the theory of producer and consumer behavior under quantity rationing these developments have provided useful hypotheses in the investigation of economic behavior for example they have stimulated a reexamination of macroeconomic disequilibrium however previous work seems to have focused on economic models in the absence of uncertainty yet given that production decisions are often made before output prices are known and in the absence of complete contingent markets sandmo 22 batra and ullah 2 and others have developed the theory of the competitive firm under price uncertainty under the expected utility maximization hypothesis such a theory provides useful information about the influence of changing economic conditions or of risk behavior on production decisions but because of the presence of short run adjustment costs leading to short run input fixity or because of regulatory or institutional constraints quantity rationing often influences production decisions in order to evaluate how rationing influences such decisions there is a need to develop a conceptual model of constrained choices of the firm under risk the objective of this paper is to explore the implications of quantity rationing in the context of production theory under price uncertainty by introducing risk and risk behavior it extends the classical analysis of quantity constrained production decisions 3 21 the implications of quantity constraints for risk responsive choice functions are derived using the concepts of compensated choice functions and virtual prices it is shown that expected price effects can be decomposed into substitution effects and wealth effects the substitution effects measure the effects of a change in expected price on the compensated choice functions the compensation being made through a change in initial wealth holding expected utility constant the wealth effects characterize risk preferences since a non zero wealth effect reflects a departure from an arrow pratt constant absolute risk aversion utility function the influence of rationing on the properties of ordinary as well as compensated choice functions is analyzed in details by deriving the implications of quantity constraints for firm behavior under uncertainty the paper presents a number of useful results concerning the influence of risk or technology on economic behavior under rationing for example a