collective action and group heterogeneity voluntary provision versus selective incentives several studies have concluded that heterogeneity within a group facilitates the initiation of collective action however a recent analysis found that heterogeneity can either facilitate or impede collective action depending on factors like the strength of the temptation to free ride reconciling these conclusions is difficult because the earlier studies assumed that public goods are provided voluntarily whereas the later analysis assumed that selective incentives like norms or laws can mandate cooperation i examine the link between group heterogeneity and collective action in three regimes voluntary systems in which actors make unrestricted decisions to participate in collective action compliance systems in which actors create and enforce norms that compel others to participate in public goods production and balanced systems in which actors can create and enforce compliance norms or oppose such norms the analysis reveals a complex link among group heterogeneity collective action and the type of regime by fostering the organization of previously atomized groups and weakening the cohesion of highsolidarity groups heterogeneity in contribution costs and valuation of the public good can reduce social power differentials

cooperative management of groundwater resources in the presence of environmental externalities this paper investigates how cooperation among users can achieve a better management of groundwater in the presence of environmental externalities cooperation allows users to internalize the damages caused by their activities and reduce extractions the paper develops a game theoretical framework to assess the value of cooperation in an aquifer that is divided into three sub aquifers that are being overly exploited two types of externalities are modeled first water extractions in each sub aquifer impact water levels in neighboring sub aquifers extraction externality second the three sub aquifers are also connected to an ecosystem and thus decisions in each sub aquifer affect the health of the ecosystem environmental externality a cooperative game theory model is applied the model empirically shows how the uncontrolled extractions in each sub aquifer affects neighboring groundwater users but also cause severe impacts to the linked ecosystem the model is tested empirically in one of the most important aquifers in spain the eastern la mancha aquifer the results illustrate how both extraction and environmental externalities interact in affecting the likelihood of cooperation among the users the paper estimates the value of cooperation and its stability with and without the environmental externality

the ambiguous impact of inequality on local resource management abstract the impact of inequality on the ability of human groups to undertake successful collective action is investigated with special reference to overexploitation of common property resources in voluntary provision problems on the one hand inequality has an ambiguous impact on the feasibility of the efficient outcome even though better endowed agents contribute more to collective action in regulated settings on the other hand inequality tends to reduce the acceptability of available regulatory schemes and therefore to make collective action more difficult

the influence of private contractual failure on regulation the case of oil field unitization an analysis of the interdependence between regulation and private contractual failure reveals that the feasible range of regulation is restricted by the same forces that block private agreement the focus of the study is oil field unitization regulation in oklahoma texas and wyoming federal lands from 1948 through 1975 despite large potential gains from unitization private negotiations fail because of lease heterogeneities and information problems regarding lease value estimates in response the federal and state governments have adopted strikingly different policies to encourage unitization with different results only the federal government s regulations are effective because they surmount information problems texas has the least successful regulation the paper argues that the policy differences are due to the political influence of small firms that benefit from nonunitized production 25 references 2 tables

euler equations and money market interest rates a challenge for monetary policy models standard macroeconomic models equate the money market rate targeted by the central bank with the interest rate implied by a consumption euler equation we use u s data to calculate the interest rates implied by euler equations derived from a number of specifications of household preferences correlations between these euler equation rates and the federal funds rate are generally negative regression results and impulse response functions imply that the spreads between the euler equation rates and the federal funds rate are systematically linked to the stance of monetary policy our findings pose a fundamental challenge for models that equate the two

vertical targeting and leakage in carbon policy in this paper we examine the intersection between two important aspects of climate policy design the first is the point of regulation should it be placed on pollution sources carbon rich inputs or consumers this issue of upstream versus downstream regulation is one that we will refer to as vertical targeting the second aspect concerns the external effects of a local climate policy leakage occurs when par tial regulation results in an increase in emissions in unregulated parts of the economy this paper examines how regulators choice of upstream versus downstream environmental regulation affects emissions in other countries with lax environmental regulation these two elements of climate policy are closely related in many contexts the selection of the point of regulation in the vertical chain is influenced if not driven by concerns over extrajurisdictional impacts given the global nature of the pollutant regulators in any specific jurisdiction need to be mindful of how local limits will effect global emissions regions imposing greenhouse gas restrictions may consume more than they produce of carbon intensive goods such as gasoline or cement in such cases regulations imposed on consumers can reach upstream to producers located outside the regulated areas for example by raising the cost of consuming carbon intensive electricity in california regulators in that state hope to reduce the combustion of coal in other regions of the western united states it is important to recognize that vertical tar geting is but one mechanism through which regulators can combat leakage much academic research and legislation has focused on the legal and economic merits of border adjustments such as import tariffs based on carbon content

the effect of initial lease periods on price discovery in laboratory tradable fishing allowance markets abstract newly established tradable fishing allowance markets are often accompanied by a period of high price volatility these fluctuations complicate capital investment decisions and play a significant role in determining outcomes for the traders involved this paper reports an evaluation of two market design features that may reduce volatility during price discovery a uniform price auction in which all trades within a period take place at the same price and an initial lease period which prohibits permanent allowance transfers at the beginning of the program we find that initial lease periods effectively reduce volatility once permanent trading is introduced

estimating the causal effect of water scarcity on the groundwater use efficiency of rice farming in south india abstract there is no consensus among researchers on the influence of scarcity on common pool resource use some suggest that scarcity leads to prudent use whereas others suggest that it will cause over extraction of resources this issue is particularly of interest for developing countries where natural resources are becoming scarce at an alarming rate this paper investigates the causal association between water scarcity and groundwater use efficiency in a rice based cropping system in south india where groundwater is increasingly becoming a scarce resource contextualization of the work is done under the premise of reported contradictions concerning the scarcity efficiency nexus using a two stage approach the causality is estimated first farm level groundwater use efficiency gwue scores are calculated using non parametric efficiency analysis and then these inefficiencies are linked to farm level scarcity indicators using the inverse probability weighting method our results showed a negative causal association between farm level water scarcity and gwue indicating the existence of competitive appropriation behavior in the face of scarcity hence policy measures to conserve groundwater should include supply enhancement to remove the threat of immediate scarcity on farm to avoid inefficient pumping in addition to demand management measures and improved governance

collective choice in the commons experimental results on proposed allocation rules and votes we analyse and empirically examine a multi level common pool resource cpr game consisting of a collective choice level game and an operational level game in the collective choice game participants anonymously propose allocation rules to be used in the operational game and vote anonymously on the proposed rules majority and unanimity rules are investigated our major finding is that both types of voting rules substantially increase efficiency relative to a baseline with no opportunity for collective choice but the distributional consequences of the rules differ to understand the process by which efficiency is improved better we examine four predictive theories related to proposals votes and outcomes

regulating consumer financial products evidence from credit cards we analyze the effectiveness of consumer financial regulation by considering the 2009 credit card accountability responsibility and disclosure card act we use a panel data set covering 160 million credit card accounts and a difference in differences research design that compares changes in outcomes over time for consumer credit cards which were subject to the regulations to changes for small business credit cards which the law did not cover we estimate that regulatory limits on credit card fees reduced overall borrowing costs by an annualized 1 6 of average daily balances with a decline of more than 5 3 for consumers with fico scores below 660 we find no evidence of an offsetting increase in interest charges or a reduction in the volume of credit taken together we estimate that the card act saved consumers 11 9 billion a year we also analyze a nudge that disclosed the interest savings from paying off balances in 36 months rather than making minimum payments we detect a small increase in the share of accounts making the 36 month payment value but no evidence of a change in overall payments jel codes d0 d14 g0 g02 g21 g28 l0 l13 l15

the role of uncertainty and learning for the success of international climate agreements abstract transnational externalities e g transboundary pollution trade contagious diseases and terrorism warrant coordination and cooperation between governments but this proves often difficult one reason for the meager success is the public good character of many of these economic problems encouraging free riding another reason one might suspect is uncertainty surrounding most environmental problems and in particular climate change this provides often an excuse for remaining inactive paradoxically some recent papers have concluded just the opposite the veil of uncertainty can be conducive to the success of international environmental cooperation in this paper we explain why and under which conditions this can be true however we argue that those conditions are the exception rather than the rule most important we suggest a mechanism for those conditions where learning has a negative effect on the success of cooperation which removes this effect or even turns it into a positive effect our results apply beyond the specifics of climate change to similar problems where cooperation generates positive externalities

contractual responses to the common pool prorationing of crude oil production this paper examines bargaining among firms to mitigate rent dissipation following the major oil discoveries of 1926 35 because of high bargaining costs firms chose prorationing instead of consolidation and unitization and success varied the analysis also shows that prorationing took the form it did because concession such as per well quotas were required to draw in small operations and the quotas led to predictable responses regarding rent dissipation prorationing despite its costs controlled total field production and costs conserved natural reservoir energies and lengthened field life when private agreements failed the parties successfully appealed for state enforcement since similar heterogeneities influnce regulations elsewhere in the economy detailed analysis of bargaining among firms is essential for insight into the emergence of various institutional forms 33 references 3 tables

the optimum quantity of debt abstract we find that the welfare gains to being at the optimum quantity of debt rather than the current us level are small and therefore concerns regarding the high level of debt in the us economy may be misplaced this finding is based on a model of a large number of infinitely lived households whose saving behavior is influenced by precautionary saving motives and borrowing constraints this model incorporates a different role for government debt than is found in standard models and it captures different cost benefit trade offs on the benefit side government debt enhances the liquidity of households by providing an additional means of smoothing consumption and by effectively loosening borrowing constraints on the cost side the implied taxes have adverse wealth distribution and incentive effects in addition government debt crowds out capital via higher interest rates and lowers per capita consumption

does information matter in the commons experimental evidence abstract common pool resources cprs typically involve interaction where precise information about payoffs is absent however all experimental studies of cprs we are aware of study environments where the payoff structure is known in this paper we address the behavioral consequences of two degrees of information on the mapping between decisions and payoffs we run two treatments one with complete information on the payoff structure and one with none remarkably aggregate behavior is not significantly different between the two treatments in both cases the aggregate tendencies converge to the nash equilibrium furthermore the best reply dynamics organize individual behavior in both treatments remarkably well

consumption time in household production implications for the goods time elasticity of substitution abstract under some reasonable assumptions we show analytically that the goods time elasticity of substitution will be greater if consumption time is not included as an input an empirical example with food production is consistent with this result

household balance sheet channels of monetary policy a back of the envelope calculation for the euro area abstract this paper formulates a back of the envelope approach to study the effects of monetary policy on household consumption expenditures we analyze several transmission mechanisms operating through direct partial equilibrium channels intertemporal substitution and net interest rate exposure and indirect general equilibrium channels net nominal exposure as well as wealth collateral and labor income channels the strength of these forces varies across households depending on their marginal propensities to consume their balance sheet composition the sensitivity of their own earnings to fluctuations in aggregate labor income and the responsiveness of aggregate earnings asset prices and inflation to monetary policy shocks we quantify all these channels in the euro area by combining micro data from the hfcs and the eu lfs with structural vars estimated on aggregate time series we find that the indirect labor income channel and the housing wealth effect are strong drivers of the aggregate consumption response to monetary policy and explain the cross country heterogeneity in these responses

asymmetric information may protect the commons the welfare benefits of uninformed regulators we examine an entry deterrence model in the commons we investigate in which contexts asymmetric information among firms becomes welfare improving and in which settings an uninformed regulator may prefer to assess and disseminate information about the available stock among firms

the voluntary provision of a pure public good the case of reduced cfc emissions and the montreal protocol abstract this paper applies the theory of the voluntary provision of a pure public good to the behavior of nations to curb chlorofluorocarbon cfc emissions during the late 1980s by devising an empirical test we determine that these cutbacks in emissions are consistent with nash behavior when taste parameters are controlled the relationship between emission cutbacks and national income is nearly linear as implied by the theory if the sample is purged of potential outliers then the linear relationship results a significant taste parameter is the extent of political and civil freedoms while a marginally significant parameter is geophysical position in terms of latitude

common property institutions and sustainable governance of resources abstract the literature on common property based resource management comprises many important studies that seek to specify the conditions under which groups of users will self organize and sustainably govern resources upon which they depend using three of the more comprehensive such studies and with an extensive review of writings on the commons this paper demonstrates that the enterprise of generating lists of conditions under which commons are governed sustainably is a flawed and impossibly costly research task for a way out the paper examines the relative merits of statistical comparative and case study approaches to studying the commons it ends with a plea for careful research design and sample selection construction of causal mechanisms and a shift toward comparative and statistical rather than single case analyses such steps are necessary for a coherent empirically relevant theory of the commons

managing local commons theoretical issues in incentive design local commons encompass a wide range of resources whose shared feature is the need for some form of collective management in what follows we shall be concerned mainly with the problems of implementing a collective management plan whatever the mechanisms invoked many recent contributions to the literature have stressed that relatively informal collective management of common property resources can in the right circumstances avoid the severe resource degradation predicted by the tragedy of the commons nevertheless both empirical and theoretical arguments suggest that cooperative behavior may be only partial and the incentives of short term self interest only partially held in check under what circumstances then can more formal implementation mechanisms make good the deficiency and given that formal incentives are typically stronger than informal ones are there any reasons why informal incentives might nevertheless sometimes be preferred

dynamic programming models of fishing competition it is natural to consider the stock of any renewable resource as a capital stock and treat the exploitation of that resource in much the same way as one would treat accumulation of a capital stock this has been done to some extent by cohn clark and gordon monro and by ngo van long whose papers contain a discussion of this point of view however the analysis is much simpler than it appears in the literature especially since the interaction between markets and the natural biological dynamics has not been made clear three issues which have been raised only tangentially are important for the understanding of the economics of renewable resources the first arises from the fact that the fish population might not be able to sustain the market determined amount of fish and hence should be allocated optimally over time second there is the cost externality here costs are affected by the size of the stock of fish which again affects the optimal allocation over time the third issue is how central planning typically used in capital theory can be employed as a tool in analyzing a decentralized economy with perfect futures markets and property rights in this paper a simple framework using only elementary mathematical techniques will be provided in which many important results new to the literature as well as many familiar results can be derived one bonus of this approach is that much of the previous literature can be organized and rationalized the simplicity of the mathematics has the effect of revealing the underlying economic intuition of the subject throughout the paper as a matter of convenience the selfrenewing resource will be referred to as fish however it should be clear that the analysis is perfectly general in that it can be applied to any self renewing resource in fact by specializing the production function an elementary exposition of the theory of exhaustible resources is implicit there are two main sections to this work plus an appendix the first section analyzes the time path of prices output and resource stock under the assumption of free entry competition and the second section studies optimal planning or perfect competition in the first part of the discussion of each market structure extraction costs are assumed to be independent of the size of the fish stock in the second part of each section this assumption is relaxed finally the appendix contains several of the results used in the body of the paper the case of free entry competition can be treated in a very simple manner each period s output is determined by the intersection of the demand and marginal harvesting cost curves i e supply equals demand subtracting this output from the natural dynamics yields the dynamics of free entry competition using this technique it is easy to see the conditions under which free entry competition leads to the exhaustion of the stock of fish furthermore the free entry case serves as a benchmark by which to evaluate the effects of the institution of property rights on the exploitation of the resource the case of a centrally planned economy is studied next this case is shown to be identical to a competitive outcome in which property rights are clearly defined and prices and outputs are endogenously determined so as to be consistent with demand conditions one result coincidentally is that it is possible that the optimal solution might be obtained without property rights the tech the hebrew university university of virginia university of illinois and northwestern university respectively research support from the national science foundation under grants soc 77 27340 and soc 7905900 and the us israel bsf under grant 1828 79 is gratefully acknowledged

governing a groundwater commons a strategic and laboratory analysis of western water law we examine strategic behavior in groundwater depletion within the setting of state governance of groundwater resources in the american west solving a dynamic common pool resource model for its optimal solution and its subgame perfect equilibrium provides benchmarks for behavior observed in laboratory experiments three forms of legal rules common pool depletion with a rule of capture to establish ownership absolute ownership doctrine entry restrictions prior appropriation doctrine and stock quotas correlative rights doctrinekre examined in terms of their impact on individual strategic behavior in laboratory experiments

can incomplete information lead to under exploitation in the commons abstract this paper analyzes the protection of a common pool resource cpr through the management of information specifically we examine an entry deterrence model between an incumbent perfectly informed about the initial stock of a cpr and an uninformed potential entrant in our model the appropriation of the cpr by the incumbent reduces both players future profits from exploiting the resource in the case of complete information we show that the incumbent operating in a high stock common pool overexploits the cpr during the first period since it does not internalize the negative external effect that its first period exploitation imposes on the entrant s future profits this inefficiency however is absent when the commons totally regenerate across periods under incomplete information we identify an additional form of inefficiency in particular the incumbent operating in a low stock cpr underexploits the resource in order to signal the low available stock to potential entrants deterring entry

economic assessment of the regional clean air incentives market a new emissions trading program for los angeles this article documents the methodology used to compare policy alternatives considered for reclaim an emissions trading program for los angeles which commenced january 1994 reclaim reduces no x and so x emissions from stationary sources with declining emissions credit allocations the emissions trading model etm includes credit supply and demand spatial restrictions and opportunity costs of owning credits the etm solves interactively with a regional model that estimates economic impacts predicted emissions distributions are input into airshed and exposure models the models predict similar improvements in air quality and public health as command and control regulations but with lower costs and employment impacts

property rights in a fishery regulatory change and firm performance a new method is introduced and applied to the british columbia halibut fishery to analyze changes in productivity of firms harvesting a natural capital stock the index number technique decomposes the contributions of output prices variable input prices fixed inputs and productivity to firm profits adjusted for changes in the natural capital stock an application of the method is given using micro level data from a common pool resource the indexes provide a ready made comparison of all firms to the most profitable firm per unit of resource stock benchmarking with the decompositions also allows firms and regulators to improve overall industry performance by allowing them to analyze what components are contributing most to relative economic profits

microeconomic heterogeneity and macroeconomic shocks in this essay we discuss the emerging literature in macroeconomics that combines heterogeneous agent models nominal rigidities and aggregate shocks this literature opens the door to the analysis of distributional issues economic fluctuations and stabilization policies all within the same framework in response to the limitations of the representative agent approach to economic fluctuations a new framework has emerged that combines key features of heterogeneous agents ha and new keynesian nk economies these hank models offer a much more accurate representation of household consumption behavior and can generate realistic distributions of income wealth and albeit to a lesser degree household balance sheets at the same time they can accommodate many sources of macroeconomic fluctuations including those driven by aggregate demand in sum they provide a rich theoretical framework for quantitative analysis of the interaction between cross sectional distributions and aggregate dynamics in this article we outline a state of the art version of hank together with its representative agent counterpart and convey two broad messages about the role of household heterogeneity for the response of the macroeconomy to aggregate shocks 1 the similarity between the representative agent new keynesian rank and hank frameworks depends crucially on the shock being analyzed and 2 certain important macroeconomic questions concerning economic fluctuations can only be addressed within heterogeneous agent models

the externalities associated with the common property exploitation of groundwater abstract in this paper the rate of groundwater extraction under the common property arrangement is the outcome of a dynamic game played with feedback strategies the analysis clarifies the externalities associated with the common property extraction of groundwater and identifies an risk externality that arises when firms are risk averse identifying the various externalities bears on the development of appropriate forms of groundwater management in particular the risk externality would be unknown to the watermaster of a central control agency suggesting the need for creative decentralized forms of groundwater management

earnings and consumption dynamics a nonlinear panel data framework we develop a new quantile based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption log earnings are the sum of a general markovian persistent component and a transitory innovation the persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock consumption is modeled as an age dependent nonlinear function of assets unobservable tastes and the two earnings components we establish the nonparametric identification of the nonlinear earnings process and of the consumption policy rule exploiting the enhanced consumption and asset data in recent waves of the panel study of income dynamics we find that the earnings process features nonlinear persistence and conditional skewness we confirm these results using population register data from norway we then show that the impact of earnings shocks varies substantially across earnings histories and that this nonlinearity drives heterogeneous consumption responses the framework provides new empirical measures of partial insurance in which the transmission of income shocks to consumption varies systematically with assets the level of the shock and the history of past shocks

cadillac desert revisited property rights public policy and water resource depletion to alleviate arizona s dependence on groundwater the federal government subsidized construction of the central arizona project cap to import water from the colorado river in exchange for the subsidy arizona reformed its groundwater law to eliminate common property pumping and to ban groundwater mining after the year 2025 we build a model of water resource development in which imported water is a capacity constrained backstop the model is applied to quantify the welfare effects of alternative cap construction dates and arizona groundwater laws we reach two general conclusions first cap was completed 86 years too early in 1987 at a deadweight loss of 2 612 billion ironically construction in 1987 yielded lower surplus than never constructing cap second the political exchange of reform for subsidy introduced a greater loss 2 612 billion than it corrected 0 810 billion the exchange was worse than doing nothing at all

political preferences for the pork barrel a generalization this paper provides a rational explanation for the observation of oversized coalitions often approaching unanimous size in the realm of distributive policies distributive policies are those which concentrate benefits in specific geographic areas states congressional districts while spreading costs through general taxation the explanation offered here that legislators may rationally prefer universalism to hard ball coalition politics generalizes earlier work of weingast and fiorina in particular it extends their results to pork barrel politics i e projects that are economically inefficient and demonstrates how packages of economically inefficient projects can nevertheless be politically popular the main theoretical feature that induces preferences for universalism is uncertainty over the composition of winning coalitions and consequently the desire for the political insurance that universalism provides

endogenous provision and appropriation in the commons munity creating the potential of avoiding the tragedy of the commons that characterizes resource use under open access bromley serious difficulties remain however in managing the resource in a way that is socially optimal because of the rival nature of appropriation by individual members achieving the social optimum requires either inducing a noncooperative behavior by individual members that mimics what co

the tragedy of the commons in international fisheries an empirical examination abstract historically all capture fisheries have proven hard to manage internationally shared stocks face an additional impediment to effective management previous fisheries studies estimate gains from cooperation for particular species or locations but evidence is lacking on the wider effect that international sharing has in relation to other variables that affect stock status this paper is an attempt to shed a broader light on the effect of sharing by identifying whether shared fish stocks are systematically more exploited i compile exploitation status biological and economic data into a unique two period panel of more than 200 fish stocks from around the globe with which i test the theoretical implications of sharing the empirical results from ordered category estimation suggest that shared stocks are indeed more prone to overexploitation

common pool resource appropriation under costly cooperation abstract in addition to the usual fixed costs we introduce variable costs in a community s effort to cooperate in extracting from a common pool resource using a standard supervision mechanism these variable costs are shown to be an increasing function of individual members incentives to default the model explains why we frequently observe communities that all cooperate and have relatively similar resource endowments and yet achieve very different levels of extraction

non cooperative institutions for sustainable common pool resource management application to groundwater as demands for limited natural resources increase developing management institutions that ensure the sustainability of such resources is essential many natural resources are common pool resources cprs managed under different non cooperative cooperative and externally imposed management frameworks while early studies of non cooperative cpr management suggest inevitable tragedy of the commons here we discuss how users can avoid tragic outcomes by changing their decision making rationales and exploitation strategies even in a non cooperative environment this paper introduces and compares various types of non cooperative institutions that are available to manage cprs these management institutions are then applied using a numerical groundwater exploitation example to determine how different planning variables are affected by the choice of management institution results indicate that cpr users can improve their gains by considering the externalities and developing long term exploitation plans as opposed to short term plans with no consideration of externalities that result in rapid exhaustion of the resource and lead to the so called tragedy of the commons

consumption versus expenditure previous authors have documented a dramatic decline in food expenditures at the time of retirement we show that this is matched by an equally dramatic rise in time spent shopping for and preparing meals using a novel data set that collects detailed food diaries for a large cross section of u s households we show that neither the quality nor the quantity of food intake deteriorates with retirement status we also show that unemployed households experience a decline in food expenditure and food consumption commensurate with the impact of job displacement on permanent income these results highlight how direct measures of consumption distinguish between anticipated and unanticipated shocks to income whereas measures of expenditures obscure the distinction

the tragedy of the commons revisited identifying behavioral principles abstract the theme of hardin s renowned the tragedy of the commons is that the common pool resource is dissipated to the level where the average value of extraction equals the wage rate in the long run when the number of appropriators is unlimited yet experimental results and rapid deforestation in tropical countries follow a contrasting pattern even though the number of appropriators is limited the common pool resource is dissipated more than the nash equilibrium predicts first given these market or experimental observations we identify two behavioral principles share maximization and difference maximization second we characterize these principles at nash equilibrium

economic heterogeneity and the commons effects on collective action and collective goods provisioning summary the question of how economic and socio cultural heterogeneity impacts commons management has been receiving increasing attention but without resolution however the issue is increasingly important in a globalizing world this paper builds upon recent theoretical works to provide a clearer understanding of the conditions under which we might expect economic inequality to have positive or negative effects of critical importance to the argument is the distinction between the problem of collective action and the problem of providing collective goods a synthetic set of predictions is subsequently developed and tested with a comparative analysis of case studies of fisheries and irrigation systems

coping with the tragedy of the commons game structure and design of rules the paper provides an assessment of some recent results of the large amount of new institutional economics analyses investigating a common pool resource setting with a specific focus on game theory models most of the studies have used a non cooperative approach in order to explain how under provision for the resource or its over use the so called tragedy of the commons can be avoided within given management rules they show how the characteristics of the game payoff matrix repetition or of the users group size wealth heterogeneity and moral norms may give incentives for the latter to play in a way that benefits all users by contrast much fewer articles have used a formalized approach to assess the possibility for players to design new rules to overcome the initial tragedy of the commons the article ends with some proposals of directions for future research

international equity and differentiation in global warming policy ne of the major obstacles to reaching a comprehensive agreement on global warming is the setting of greenhouse gas emission reduction targets for individual countries long standing tensions between industrialized and developing countries have raised the issue of equity in burden sharing moreover individual industrialized nations have pleaded special circumstances and have sought differentiation in their obligations this paper analyzes alternative rules for distributing tradable carbon dioxide emissions permits a non linear programming model which distinguishes between allocation based and outcome based rules is used to analyze the relative welfare outcomes the model is applied to the world body of nations and yields several important policy implications

estimates of returns to scale elasticity of substitution and the thrifty food plan meal poverty rate from a direct household meal production function abstract many nutritional policies are designed to make home food production more affordable and yet very little is actually known about the home food production process a better understanding of home food production can be used to help explain shortcomings in current nutrition policies and consequently help in designing better nutrition policies this paper provides results from several home meal production function specifications that are rather robust the median returns to scale and elasticity of substitution between money and time is in the 1 2 1 9 range and 33 56 range respectively indicating increasing returns to scale but difficulty in substituting money for time in home meal production a home meal poverty rate is estimated which is the percentage of the sample that produces fewer meals at home than consistent with dietary guidelines the estimated home meal poverty rate is about 85 which is consistent with recent research taking a less rigorous approach though the approach taken here is novel the overall message is consistent with the recent literature time is a more important factor in achieving nutritional targets than money

household heterogeneity and the transmission of foreign shocks abstract we study the role of heterogeneity in the transmission of foreign shocks we build a heterogeneous agent new keynesian small open model economy hanksome that experiences a current account reversal households portfolio composition and the extent of foreign currency borrowing are key determinants of the magnitude of the contraction in consumption associated with a sudden stop in capital inflows the contraction is more severe when households are leveraged and owe debt in foreign currency in this setting the revaluation of foreign debt causes a larger contraction in aggregate consumption when debt and leverage are concentrated among poorer households closing the output gap via an exchange rate devaluation may therefore be detrimental to household welfare due to the heterogeneous impact of the foreign debt revaluation our hanksome framework can rationalize the observed fear of floating in emerging market economies even in the absence of contractionary devaluations

oil field unitization contractual failure in the presence of imperfect information an empirical analysis of the impact of transaction costs on contracting shows that imperfect in formation can seriously limit the effectiveness of private contracting the case under study is the widespread failure of private crude oil producing firms to use us oil fields to reduce rent dissipation rent dissipation follows as multiple firms compete for migratory oil in common oil pools unitization is the obvious private contractual solution to rent dissipation the authors argue that despite large net gains from unitization imperfect information and information asymmetries among the negotiating parties regarding lease values prevents consensus on unit shares as a result contracts are often not completed or only fragmented units are completed 9 references 1 figure 4 tables

credit crises precautionary savings and the liquidity trap we use a model a la bewly huggett ayagari to explore the eects of a credit crunch on consumer spending households borrow and lend to smooth idiosyncratic income shocks facing an exogenous borrowing constraint we look at the economy response after an unexpected permananent tightening of this constraint the interest rate drops sharply in the short run and then adjusts to a lower steady state level this is due to the fact that after the shock a large fraction of agents is far below their target holdings of precautionary savings and this generates a large temporary positive shock to net lending we then look at the eects on output here two opposing forces are present as households can deleverage in two ways by consuming less and by working more we show that under a reasonable parametrization the eect on consumer spending dominates and precautionary behavior generates a recession if we add nominal rigidities two things happen i supply side responses are muted and ii there is a lower bound on the interest rate adjustment these two elements tend to amplify the recession caused by the credit tightening

addressing global environmental externalities transaction costs considerations is there a way to understand why some global environmental externalities are addressed effectively whereas others are not the transaction costs of defining the property rights to mitigation benefits and costs is a useful framework for such analysis this approach views international cooperation as a contractual process among country leaders to assign those property rights leaders cooperate when it serves domestic interests to do so the demand for property rights comes from those who value and stand to gain from multilateral action property rights are supplied by international agreements that specify resource access and use assign costs and benefits including outlining the size and duration of compensating transfer payments and determining who will pay and who will receive them four factors raise the transaction costs of assigning property rights i scientific uncertainty regarding mitigation benefits and costs ii varying preferences and perceptions across heterogeneous populations iii asymmetric information and iv the extent of compliance and new entry these factors are used to examine the role of transaction costs in the establishment and allocation of property rights to provide globally valued national parks implement the convention on the international trade in endangered species of wild fauna and flora execute the montreal protocol to manage emissions that damage the stratospheric ozone layer set limits on harvest of highly migratory ocean fish stocks and control greenhouse gas emissions jel d23 p14 q22 q51 q54 q58

an experimental examination of fisheries with concurrent common pool and individual quota management i introduction how user communities exploit and develop institutions to manage common pool resources attracts attention from across the social sciences e g national research council 2002 dynamic common pool resources such as aquifers forest soils and fisheries are a focus because of their potential to sustain income and provide food and water security particularly in traditional communities and in vulnerable communities in the developing world e g arnason kelleher and willman 2009 baland and platteau 1996 economic analyses have been directed primarily at identifying extraction levels that central planners can impose in order to maximize the highest sustainable flow of resource benefits conrad 2010 wilen 2000 while political scientists sociologists and anthropologists have studied the governance structures that establish use norms and policies and the conditions under which users can successfully manage the resource without central intervention e g agrawal 2002 ostrom 2009 recent trends in management have introduced economically significant examples of dynamic resources where a central planner constrains the full extent of the interseason externality ensuring sustainable resource levels and extractions but other externalities persist within seasons that have the potential to dissipate much of the rent the most prevalent examples are in fisheries where management agencies use biological fish stock assessments to establish a hard seasonal total allowable catch tac for each fishery to ensure stock health in many fisheries catch share programs allocate shares of the tac as quota to groups or to individuals who then can or must form cooperatives to manage intraseason externalities caused by concurrent production congestion in season growth patterns or market timing interest is added because these groups called sectors in many fisheries are often self identifying and multiple sectors participate in each fishery harvesters can affiliate around harvesting methods management preferences geography or any other factor on the one hand this strategy could be a method for carving users into groups that meet ostrom s 2009 conditions and thus supporting self management of intraseason externalities e g cunningham and bostock 2005 aoki and hayami 2001 townsend shotton and uchida 2008 wilson nielsen and dengbol 2003 on the other hand it could be a technique for breaking political gridlock preventing more efficient economic management of the inter or intraseason externalities e g acheson and gardner 2011 kuperan and sutinen 1998 while such sectorization programs are thought to have many benefits such as an increase in legitimacy incorporating local knowledge and getting managers out of the business of setting individual allocations prospective and retrospective economic analysis of these policies is difficult because if different sectors choose different regulations the fishery can be regulated by multiple management systems concurrently this presents two significant challenges to analysts assessing the effects of such catch share programs first they must figure out not only how harvesters in each sector will respond to the harvesting strategies of others in their sector but also how the sectors will strategize against one another where contemporaneous congestion or price externalities are present some sectors rules might permit members to strategically adjust their harvesting behavior to respond to harvesting strategies of other sectors thus a theoretical and empirical framework requires harvesters to make daily decisions that are subject to cumulative annual constraints within a dynamic game with different types of players reflecting each sector in addition the counterfactual policy environment against which the sector program will be assessed must take into account the shifts in targeting and market timing behavior that not only reflect changes in the rules that apply to sector members but also the different rules under which harvesters are operating

how do markets manage water resources an experiment we experimentally test how a private monopoly a duopoly and a public utility allocate water of differing qualities to households and farmers most of our results are in line with the theoretical predictions overexploitation of the resources is observed independently of the market structure stock depletion for the public utility is the fastest followed by the private duopoly and private monopoly on the positive aspects of centralized public management we find that the average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly

groundwater focusing on the real issue most studies of the welfare economics of groundwater have focused mainly on the dichotomy between optimal control of groundwater use and no control at all this article argues that under circumstances that generally prevail in semiarid zones assigning property rights to groundwater and permitting the market to determine the allocation of water use can lead to a second best solution an argument is made that if potential users would be allowed to coase bargain with incumbent users on the issuance of new groundwater rights the second best solution is elevated to a pareto optimal solution this article is also a tale of two states water law and performance in new mexico and arizona

income and wealth heterogeneity in the macroeconomy how do movements in the distribution of income and wealth affect the macroeconomy we analyze this question using a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity our main finding is that in the stationary stochastic equilibrium the behavior of the macroeconomic aggregates can be almost perfectly described using only the mean of the wealth distribution this result is robust to substantial changes in both parameter values and model specification our benchmark model whose only difference from the representative agent framework is the existence of uninsurable idiosyncratic risk displays far less cross sectional dispersion and skewness in wealth than u s data however an extension that relies on a small amount of heterogeneity in thrift does succeed in replicating the key features of the wealth data furthermore this extension features aggregate time series that depart significantly from permanent income behavior

inequality and conservation on the local commons a theoretical exercise to analyse the effect of asset inequality on co operation within a group we consider a twoplayer nonco operative model of conservation of a common pool resource overexploitation by one user affects another s payoff by reducing the next period catch we give necessary and sufficient conditions such that conservation is a nash equilibrium and show that increasing inequality does not in general favour full conservation however once inequality is sufficiently great further inequality can raise efficiency thus the relationship between inequality and economic efficiency is u shaped finally we analyse the implications for conservation if players have earning opportunities outside the commons the daily livelihood of vast masses of the rural poor in many countries depends on the success with which common pool resources cprs such as forest resources grazing lands in shore fisheries and irrigation water are managed and on the environmental consequences of their management understanding the factors that lead to success or failure of community management of these resources is thus critical to rural development cpr management is a collective action dilemma a situation in which mutual cooperation is collectively rational for the group as a whole but individual cooperation is not necessarily individually rational for each member one factor that has not always been recognised as critical to the outcome of collective action dilemmas is heterogeneity among the resource users in this paper our attention will be largely restricted to a single but potent kind of heterogeneity inequality in asset ownership olson 1965 hypothesised that inequality might favour the provision of a public good

2 the institutional structure of production 1 prize lecture to the memory of alfred nobel december 9 1991 this abstract was borrowed from another version of this item

taxes and time allocation evidence from single women and men the classic model of becker 1965 suggests that labor supply decisions should be analyzed within the broader context of time allocation and market good consumption choices but most empirical work on policy has focused exclusively on measuring impacts on market work this paper examines how income taxes affect time allocation during the entire day and how these time allocation decisions interact with expenditure patterns using the panel study of income dynamics from 1975 to 2004 we analyze the response of single women s housework labor supply and other time to variation in tax and transfer schedules across income levels number of children states and time we find that when the economic reward to participating in the labor force increases market work increases and housework decreases with the decrease in housework accounting for approximately two thirds of the increase in market work analysis of repeated cross sections of time diary data from 1975 to 2004 shows that home production decreases substantially when market hours of work increase in response to policy changes data on expenditures from the consumer expenditure survey from 1980 to 2003 show some evidence that expenditures on market goods likely to substitute for housework increase in response to a greater incentive to join the labor force the baseline estimates imply that the elasticity of substitution between consumption of home and market goods is 2 61 the results are consistent with the becker model meanwhile single men show little response to changes in tax policy and we are able to rule out an elasticity of substitution between home and market goods for this group of more than 1 52

the structure of a contract and the theory of a non exclusive resource the process of arriving at a useful concept of analysis is not only slow and painful but also may go astray and attain nothing useful someone begins with one example or observation followed by a theory which is intuitively plausible a theoretical term associated with a vague concept is coined examples of a seemingly different type emerge which call for another theory the process goes on as examples and theories continue to accumulate the different categories under the same heading of analysis serve only to confuse and each associated theory becomes ad hoc such has been the fate of the concept of externality a more useful approach i think is via contractual conditions the example chosen for illustration is marine fisheries where the fishing right is taken

the life cycle model of consumption and saving a central implication of life cycle models is that agents smooth consumption we review the empirical evidence on smoothing at frequencies from within the year up to across a lifetime we find that life cycle models particular those which incorporate realistic features of markets and goods have more empirical successes than failures we also show that some apparent deviations from theoretical predictions imply very small welfare losses for agents finally we emphasize that the coherence of life cycle models imposes an important discipline when incorporating new features into models

carbon markets 15 years after kyoto lessons learned new challenges abstract carbon markets are substantial and they are expanding there are many lessons from market experiences over the past eight years there should be fewer free allowances better management of market sensitive information and a recognition that trading systems require adjustments that have consequences for market participants and market confidence moreover the emerging market architecture features separate emissions trading systems serving distinct jurisdictions and a variety of other types of policies exist alongside the carbon markets this situation is in sharp contrast to the top down integrated global trading architecture envisioned 15 years ago by the designers of the kyoto protocol and raises a suite of new questions in this new architecture jurisdictions with emissions trading have to decide how whether and when to link with one another stakeholders and policymakers must confront how to measure the comparability of efforts among markets as well as relative to a variety of other polic

international cooperation for sale abstract this paper shows that strong asymmetry among countries warrants a change in the rules of the game of global public goods provision with the consequence that cooperation by some countries is bought by others and aggregate welfare is increased perhaps substantially side payments on their own have virtually no effect on the outcomes that can be sustained by self enforcing cooperative agreements but when the rules of the game are changed by strong asymmetry when some countries are effectively committed to being non signatories to an agreement eschewing money transfers side payments become the vehicle for increasing participation in a cooperative agreement

choosing rules to govern the commons a model with evidence from mexico abstract i develop a model to assess distributive rules observed in field data on 48 mexican farmer managed irrigation systems households decide whether to contribute maintenance effort the aggregate amount of which affects the level of output distributive rules with congruence between the sharing of collective costs and benefits elicit the highest level of effort empirically however incongruent rules dominate the surveyed systems i argue that transaction costs offset some efficiency benefits of congruent rules i estimate a model of rule choice inequality and the age of the water users association strongly increase the likelihood that a system chooses proportional water allocation

common pool resources with free mobility i introduction to date most of the experimental research on common pool resources cpr has been concerned with the overexploitation problem within one community several studies as in casari and plott 2003 visser 2006 and fehr and gachter 2000 emphasize that mutual monitoring and sanctions against excessive use and free riding can be welfare improving in cpr and public good settings furthermore ostrom 1990 and others highlight the importance of clearly defined boundaries for successful self governance in the commons however in and out population migration may be a significant factor in resource use across communities examples include international fisheries or pastureland under extensive grazing the purpose of this study is to consider the effect of migratory pressure on such mobile commons in this article we relax the assumption of no entry and study how an agent s free mobility between communities affects resource use population migration is free in the tiebout 1956 sense we assume that agents mobility is costless our work differs from previous research in that it addresses the mobility issue by looking at multiple localities each with a cpr under either sanctions or open access regime we compare resource extraction behavior under different resource use regimes sanctions vs no sanctions using laboratory experiments conducted in two countries the united states and mongolia examples of commons with multiple locations are widespread in national and world economies extensive livestock production prevalent in mongolia kyrgyzstan niger and mali relies on low forage value grassland which requires movement of herders over large territories subsuming many localities similarly fisheries around international waters involve resource use problems across many localities or even countries for instance pink salmon in the north east pacific is harvested in canadian american and russian waters some localities may have regulations such as sanctions to promote the efficient use of the resource whereas others are still unregulated the alaskan salmon fisheries in chignik were governed at certain times by a cooperative fleet that shared catch equally among members and at other times by an independent fleet in such a way that unregulated fishermen were free to join cooperatives as studied in deacon parker and costello 2008 in new england users move among separately managed resources such as groundfish shellfish and baitfish within single political jurisdictions to reflect the high mobility aspect of such settings we extend the existing experimental laboratory research on cpr to allow for two communities in which citizens are free to choose the place to extract the resource in each community there is a territory with resources for harvesting activity we consider two possible community management regimes for each locality a unregulated community with no rules toward the grazing activity and b decentralized sanctioning mechanism as studied in casari and plot 2003 we consider this sanctioning system as an example of an institution that has a historical precedence and that has been shown to restore the efficiency of the common properties in closed communities the research questions are how does free mobility affect the performance of the sanctioning system if one locality is regulated and the other is not would the sanctioning institution withstand the migratory pressure from the unregulated locality how does the difference in a management regime affect agents decisions on which locality to join we address these questions in an experimental two community cpr framework where participants make decisions regarding the location to harvest and the harvesting level moreover we compare the setting with exogenously imposed institutions to a setting where the institutions in each locality are chosen by majority voting this comparison allows us to consider differences between representative democracy and direct democracy

not enough money or not enough time to satisfy the thrifty food plan a cost difference approach for estimating a money time threshold abstract food production at home requires money and time food assistance programs focus exclusively on the money cost while ignoring the time cost this one dimensional focus could undermine the effectiveness of food assistance programs in the spirit of vickery 1977 this paper uses a cost difference approach to develop a money time threshold and several related metrics to determine whether money or time is the most limiting resource in reaching the thrifty food plan tfp target in our empirical analysis we find that when time is ignored single headed households spend on average 35 more than required to meet the tfp target however when time is included these households spend on average 40 less than required to meet the tfp target in addition we find that when time is ignored 62 of single headed households on average spend enough money to reach the tfp target but when time is included only 13 of single headed households spend enough on average to reach the tfp target our empirical results suggest that time is more constraining than money in reaching the tfp target these results imply that metrics solely focusing on money could severely underestimate the gap between actual expenditures and those required to reach the tfp target

determinants of collective action on the local commons a model with evidence from mexico i develop a model of cooperation in small irrigation systems i give conditions under which an equalizing redistribution of wealth increases the level of equilibrium cooperation but also show that some redistributions that increase inequality can also increase cooperation the distributive rule a combination of arrangements for maintenance cost sharing and water allocation also affects the cooperation level i estimate statistical models of cooperation for three maintenance indicators using field data from a study of mexican irrigation societies social heterogeneity and landholding inequality are significantly associated with lower maintenance distributive rules that allocate water proportionally to landholding size likewise reduce maintenance

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

modeling effort and lobbying in a heterogeneous common pool resource setting extraction from a common pool resource cpr such as a fishery can lead to socially inefficient and undesirable outcomes as a result of appropriation problems through regulation of the cpr users may achieve a more profitable and socially efficient outcome feeny et al land econ 72 2 187 205 1996 delve into some of the assumptions made by traditional cpr models and how use of those assumptions provides an incomplete framework to guide fishery policy in the theoretical models we develop we relax two of those assumptions cpr users are homogeneous and are unable to create or influence management of the resource we note a case where regulation of the individual user can induce others to harvest more and relate this to the slippage effect concept regarding resource sustainability we document situations where incentives exist for cpr users to lobby for tighter regulations and thus increase profits by limiting the tragedy of the commons influence

the risk free rate in heterogeneous agent incomplete insurance economies abstract why has the average real risk free interest rate been less than one percent the question is motivated by the failure of a class of calibrated representative agent economies to explain the average return to equity and risk free debt i construct an economy where agents experience uninsurable idiosyncratic endowment shocks and smooth consumption by holding a risk free asset i calibrate the economy and characterize equilibria computationally with a borrowing constraint of one year s income the resulting risk free rate is more than one percent below the rate in the comparable representative agent economy

contracting problems and regulation the case of the fishery the inefficiencies of common property fisheries are of continuing concern to economists the early work by scott gordon 1954 and anthony scott 1955 outlined the problem and later studies by james crutchfield and giulio pontecorvo 1969 and frederick bell 1972 provided empirical estimates of the losses that result those studies were followed by the dynamic models of colin clark 1976 and james quirk and vernon smith 1970 of optimal harvest rates and the use of corrective taxes or quotas to achieve them but in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria most fisheries retain common property aspects with overcapitalization and excessive labor input why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper we examine a number of fisheries but focus on the texas shrimp industry which is one of the nation s most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere it is considered overcapitalized and catch per unit of effort is falling 2 examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses the regulatory environment in texas is complicated by conflict within the fishery between inshore and offshore fishermen the latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the gulf the inshore fishery is highlighted by another issue the recent resettlement of some 30 45 000 vietnamese refugees including many fishermen along the texas coast marine advisory service paul starr their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights bay shrimpers have lobbied the texas legislature for broad limits on new entrants yet ironically the sale of additional boats by individual shrimpers to the vietnamese has facilitated entry of the refugees into the fishery regulations in the texas shrimp and other fisheries are incomplete leaving many options for rent dissipation uncontrolled because of high contracting costs among fishermen and political factors that mold government actions contracting costs are high among heterogeneous fishermen who vary principally with regard to fishing skill 3 montana state university and texas a m university respectively we benefitted from comments by terry anderson raymond c battalio gardner brown oscar burt micha gisser wade griffin john r moroney anthony d scott peter temin and participants in workshops at texas a m university and the university of washington research assistance was provided by scott barnhart and phil mizzi funding was provided by sea grant texas a m university throughout this paper we use the terms common property and open access interchangeably here the terms describe a situation where no property rights group or individual exist s for the resource 2catch per unit of effort in the inshore texas gulf and federal gulf waters is presented for 1963 77 by w l griffin c g tydlacka and w e grant they show catch per unit of effort generally falling in inshore and offshore waters while catch per unit of effort fluctuates from year to year it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 the common property nature of the fishery is reflected in the following statistics since 1975 the number of vessels has grown by 23 percent nelson swartz for fish houses the record of entry is similar between 1970 a d 1977 the number of firms grew from 259 to 287 though during that period many left the industry as others entered the number of fish houses was calculated from license data supplied by the texas parks and wildlife department the record of entry by fish houses suggests that monopsony as discussed by colin clark and gordon munro is absent in the fishery 3there may be minor differences in labor leisure choices and capital but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill government regulations in the texas bays restrict capital and our empirical evidence shows boats to be relatively homogeneous

earmarked taxation and political competition abstract although tax earmarking constitutes a voluntary constraint for government s policymaking it is widely used in the real world this paper investigates the electoral dimension of earmarking in a model of political competition with ideological parties its main contribution is to derive new insights on the relationship between earmarking and parties probability of winning the elections we find that the electoral pressure may favor the existence of tax earmarking equilibria but that it sometimes creates a tendency against earmarked taxation even when as shown by brett and keen 2000 brett c keen m 2000 political uncertainty and the earmarking of environmental taxes journal of public econonomics 75 315 340 incumbent governments have strong incentives to use earmarking rules to constrain future policymakers

a review of the stern review on the economics of climate change how much and how fast should we react to the threat of global warming the stern review argues that the damages from climate change are large and that nations should undertake sharp and immediate reductions in greenhouse gas emissions an examination of the review s radical revision of the economics of climate change finds however that it depends decisively on the assumption of a near zero time discount rate combined with a specific utility function the review s unambiguous conclusions about the need for extreme immediate action will not survive the substitution of assumptions that are consistent with today s marketplace real interest rates and savings rates

sharing clams tragedy of an incomplete commons abstract a dispersive phase is part of the reproductive cycle of most living organisms when economic agents are limited to harvesting a renewable resource from a fixed geographical area dispersion of the resource creates a tragedy of the commons a dynamic optimization problem is constructed where economic agents control fixed areas the growth of the resource occurring in each area disperses it is shown that the desired stock size for maximizing agents in their own area decreases inversely with the amount of leakage the degree to which the resource is common the socially optimal stock in each region is a function of the marginal profit for all areas that receive dispersing organisms and may be greater than the privately optimal stock for an area if that area captured all of its own resource growth this effect is enhanced if the dispersal rate is stock dependent possibly creating a double tragedy in a source and sink situation the socially optimal solution may involve eliminating all harvesting in the source region

time to eat household production under increasing income inequality eating requires the raw food materials that make up meals and also the time devoted to buying food preparing meals and eating them and cleaning up afterwards using time diary and expenditure data for the u s for 1985 and 2003 i examine how income and time prices affect time and goods inputs into this household produced commodity focusing on these two years between which income and earnings inequality increased allows examining how household production is affected by changing economic opportunities the results demonstrate that both inputs into eating increase with income and that higher time prices at a given level of income reduce time inputs over this period the relative goods intensity of producing this commodity increased especially at the lower part of the income distribution and the average time input dropped substantially the results are consistent with goods time substitution being relatively difficult for eating and with substitution being more difficult as production expands

consumption dynamics under time varying unemployment risk abstract in response to an adverse labor market shock a calibrated heterogeneous agent model predicts that aggregate spending on durable goods falls mainly due to the ex ante increase in income uncertainty caused by higher unemployment risk in contrast aggregate spending on nondurable goods falls mainly due to the ex post income losses associated with realized unemployment spells when households hold little liquid assets the nondurable spending response is amplified whereas the durable spending response is dampened these differences stem from micro level adjustment frictions involved in purchases of durable goods the model is corroborated with evidence from micro survey data

direct estimates of household production abstract using time diary and expenditure data for a set of american households in 2003 and 2004 i examine the relation between the inputs into eating time food purchasing preparation consumption and clean up and goods purchased foods goods and time expenditures are positively correlated and direct estimates of a ces household production function indicate the relative difficulty of goods time substitution in producing this commodity

oligopoly extraction of a common property natural resource the importance of the period of commitment in dynamic games the theory of noncooperative dynamic games has provided an extremely powerful framework for studying many of the classic questions in industrial organization for example questions about resource extraction advertising research and development investment in new capacity and barriers to entry where interactions over time among few firms are involved however an important methodological issue arises when economic competition over time is modeled as a dynamic game the issue is the appropriate formulation of the players strategy spaces

political uncertainty and the earmarking of environmental taxes abstract far from being used to secure a double dividend by reducing distorting taxes revenues from environmental taxes seem quite often to be earmarked to particular spending programs in the us for example a range of such taxes feed into environmental trust funds such earmarking runs counter to standard notions of good practice in taxing and spending this paper develops and explores an explanation of such apparent inefficiencies in terms of political uncertainty roughly a green incumbent may chose to earmark revenues if the efficiency loss from doing so is outweighed by the value of constraining subsequent and potentially non green policy makers from wasting the funds raised it emerges for example that those most likely to earmark are green politicians who are politically weak and that earmarking then enables such a policy maker to set the corrective tax higher than they otherwise would but nevertheless lower than the pigovian tax

the power and limitations of proportional cutbacks in common pool resources abstract this paper examines the success and limitations of proportional cutbacks as an allocation rule for improving the performance of common pool resources cprs two field cases one success and one failure motivate the analysis for symmetric cprs we establish the existence of efficiency enhancing proportional cutbacks we then introduce complications that arise in the presence of asymmetries which induce a continuum of proportional cutbacks that raise efficiency above nash equilibrium calibrating a linear quadratic cpr model to global carbon dioxide emissions the efficiency and distributional consequences of proportional cutbacks like those embodied in the kyoto protocol are derived