excise taxes with multiproduct transactions i examine excise taxes levied on multiproduct retailers excise taxes reduce equilibrium output and decrease equilibrium product variety in the short run but taxes can raise output per product in the long run and induce entry excise taxes are overshifted into prices in a wide range of cases including under linear and concave demand conditions and excise taxes shift less than one for one into prices only when demand is highly convex multiproduct transactions substantively alter the efficiency of ad valorem and specific forms of excise taxes and affect the comparison of relative tax performance over short run and long run time horizons jel h25 h32 l11 l13 l81

the effects of taxation price control and government contracts in oligopoly and monopolistic competition abstract many government contracts with or policies towards oligopolistic sectors essentially involve private firms selling a given proportion or quantity of output to the government at a fixed price p r with the remainder being sold on the open market often this is combined with consumer rationing examples include cement and sugar in india and health housing and defence in many countries the paper investigates the effects of these schemes including sales and excise taxation on prices output and household welfare under oligopoly and monopolistic competition less government control reduced may raise prices and tax shifting can be above or below 100 percent

market performance with multiproduct firms we revisit the fundamental issue of market provision of variety associated with chamberlin spence and dixit stiglitz when firms sell multiple products both products and firms are horizontally differentiated we propose a general nested demand framework where consumers first decide upon a firm then which variant to buy and how much the nested ces is a special case we use it to determine the market s biases when firms compete in product ranges and prices the market system attracts too many firms with too few products per firm firms restrain product ranges to relax price competition but this exacerbates over entry

the usefulness of the wind up measure of pension liabilities a labor market perspective financial economists have long favored the use of a wind up measure of the firm s pension liabilities yet the pension liabilities of the firm also represent the pension wealth of its workers it is reasonable to presume that workers and shareholders have a common view of the pension contract if the wind up measure depicts the true pension liabilities of the firm then the wage concession granted by its workers must reflect the fact that the firm may choose to terminate the plan at any time data on the wageservice characteristics of the membership of a sample of final earnings plans in canada suggest contrary to the implications of the wind up measure that workers wages do not internalize accruing pension benefits on a year to year basis instead the data suggest that pension plans may be a vehicle through which a significant portion of the total compensation of individual employees is deferred until their later work years and that the wind up measure may well understate the pension liabilities of an on going firm the financial accounting standards board 4 or fasb recently proposed that net pension assets or liabilities appear on the corporate balance sheet in order to make operational the concept of the augmented balance sheet one must construct measures of both pension assets and pension liabilities the noncontroversial view at least among economists is that pension assets be valued at market the fasb endorses this view the measurement of pension liabilities on the other hand remains controversial financial economists such as sharpe 10 have traditionally advocated a market or wind up measure of the firm s pension liabilities the pensions due under the terms of the plan if it were to be immediately terminated are calculated and these pensions are then costed at current annuity rates the accrued benefit method without salary projection is the actuarial valuation method used in the calculation the wind up measure is the market value of the firm s pension liabilities since it identifies the precise amount that the firm would require to discharge its legal obligation if the plan were terminated 1 yet the fasb now rejects the use of this method of calculating the firm s

reversion taxes contingent benefits and the decline in pension funding abstract the evidence since the mid 1980s contradicts the axiom that firms maximize the arbitrage value of their tax exempt pension funds instead it suggests the emergence of a new minimum funding paradigm a prominent candidate to explain the change is a sequence of escalating reversion taxes enacted between 1986 and 1990 a valuable option to a pension plan sponsor is its ability to cancel the contingent portion of its pension obligations pension promises beyond those legally required as a result of reversion taxes this option value is preserved only if the firm maintains zero excess assets and falls in proportion to the amount of excess assets retained in the pension fund the potential for this tax policy to profoundly affect the economics of pension funding seems apparent by 1995 the cumulative effect of the new contribution behavior resulted in a 60 percent reduction in excess pension assets

saving puzzles and saving policies in the united states in the past two decades the widely reported personal saving rate in the united states has dropped from double digits to below zero first we attempt to account for the decline in the national income and product accounts nipa saving rate the macroeconomic literature suggests that 40 50 per cent of the drop since 1988 can be attributed to households spending stock market capital gains another 30 per cent is accounting transfers from personal saving into government and corporate saving because of the way pensions and capital gains taxes are treated in the nipa second while nipa saving measures are well suited to measuring the supply of new funds for investment and capital accumulation it is not clear that they should be the target of government saving policies finally we emphasize that the nipa saving rate is not useful in judging whether households are preparing for retirement or other contingencies many households have accumulated significant wealth primarily through retirement saving vehicles and capital gains even as the saving rate slid there remains a segment of the population who save little and whose behaviour appears untouched either by the stock market boom or the slide in personal saving we explore reasons and policy options for their puzzling low saving rate copyright 2001 oxford university press

financial incentives to mobilise local citizens as investors in low carbon technologies a systematic literature review abstract mobilising greater levels of private finance through local citizen investment in low carbon technologies can help bridge the capital shortfall to meeting climate objectives while also building societal support for the low carbon transition within this context we undertake a systematic review of literature assessing the impact of technology specific economic and financial incentives promoting greater levels of investment in low carbon technologies from local citizen investors both individuals and community groups we focus in particular on the impact of feed in tariffs compared to quota schemes grants tax incentives and soft loans the analysis suggests that local citizen investors do not necessarily act in an economically rational manner in response to these incentives it underscores the importance of understanding the preferences of target demographics the local context as well as the characteristics of the technologies in question and suggests interventions should be considered as part of wider policy packages while identifying challenges to be overcome through instrument design we find that feed in tariffs grants and tax incentives can be successful in mobilising greater levels of investment from local citizen investors but that soft loans tend to be less effective as a stand alone instrument the review identifies areas meriting further exploration in this emerging field of research

the efficiency of indirect taxes under imperfect competition abstract this paper considers the relative efficiency of ad valorem and unit taxes in imperfectly competitive markets we provide a simple proof that ad valorem taxes are welfare superior to unit taxes in the short run when production costs are identical across firms the proof covers differentiated products and a wide range of market conduct cost asymmetries strengthen the case for ad valorem taxation under cournot competition but unit taxation may be welfare superior under bertrand competition with product differentiation ad valorem taxation is superior with free entry under cournot competition but not necessarily under price competition when consumers value variety

money not morale the impact of desires and beliefs on private investment in photovoltaic citizen participation initiatives abstract a transition towards renewable energy production is one proposed solution as one means of reducing greenhouse gas emissions in this regard photovoltaic citizen participation initiatives are a cornerstone in fostering the diffusion of renewables allowing for active citizen engagement this article investigates the drivers behind people s decision to participate in two selected austrian citizen participation initiatives in the field of photovoltaics based on a survey of 870 potential adopters in addition to commonly used indicators variables assessing both people s desires their goals or preferences with respect to energy autonomy environmental protection financial aspects etc and their beliefs how likely they think their participation in a citizen participation initiative in the field of photovoltaics will help them achieve these goals are also included in the analysis the findings show that people s desires are not decisive in deciding on pv participation and that financial beliefs are the main driver behind joining such an initiative this focus on financial gain clearly poses a risk in any attempted transition towards renewable energy production as it indicates that adopters may withdraw from participation as soon as a more attractive investment opportunity becomes available it also indicates that subsidized feed in tariffs are likely to be essential in any long term transition policy

pass through and consumer search an empirical analysis retail price pass through is one of the most important issues facing manufacturers of consumer packaged goods although retailers tend to pass higher wholesale prices through to consumers quickly and completely they often do not pass on trade promotions currently asymmetric pass through is commonly thought to result from retailers exercise of market power alternatively it may be because of consumer search behavior and retailers competitive response we test this theory using a panel threshold asymmetric error correction model applied to wholesale and retail scanner data for ready to eat cereal for a number of retailers in the los angeles metropolitan market we find that consumer search behavior contributes significantly to imperfect pass through by allowing pass through to depend on market power and consumer search costs we find results that are contrary to the conventional wisdom namely market power causes retail prices to fall quickly and rise slowly whereas consumer search behavior causes retail prices to rise quickly and fall slowly precisely the rockets and feathers phenomenon

inter governmental institutions as promoters of energy policy diffusion in a federal setting this article is about diffusion processes behind the innovation of sub national energy policy measures in a federal system typically for the federal political system in switzerland the elements of the energy policy field are shaped by the principle of subsidiarity the aim is that cantons promote innovative problem solutions and regionally adapted implementation for this reason policy differences between cantons are large and create a need for coordination more concretely i will analyze the impact of inter cantonal institutions on different innovations in the field of energy policy the research question is approached with an event history analysis on three different innovative measures in the swiss cantons from 1990 to 2007 a more comprehensive picture of diffusion in one policy field is drawn with this approach the main contribution of this paper is the finding that intergovernmental institutions promote diffusion in one policy field only for measures with certain characteristics the internal determinants are therefore not a sufficient explanation

tax incidence in differentiated product oligopoly abstract we analyze the incidence of ad valorem and unit excise taxes in an oligopolistic industry with differentiated products and price setting bertrand firms both taxes may be passed on to consumers by more than 100 percent and an increase in the tax rate can increase short run firm profits and hence the long run number of firms we provide summary conditions for these effects to arise the conditions depend on demand curvatures and are written in elasticity form surprisingly the analysis largely corroborates cournot results with homogeneous demand

motivators for adoption of photovoltaic systems at grid parity a case study from southern germany in some countries photovoltaic pv technology is at a stage of development at which it can compete with conventional electricity sources in terms of electricity generation costs i e grid parity a case in point is germany where the pv market has reached a mature stage the policy support has scaled down and the diffusion rate of pv systems has declined this development raises a fundamental question what are the motives to adopt pv systems at grid parity the point of departure for the relevant literature has been on the impact of policy support adopters and recently local solar companies however less attention has been paid to the motivators for adoption at grid parity this paper presents an in depth analysis of the diffusion of pv systems explaining the impact of policy measures adopters and system suppliers anchored in an extensive and exploratory case study in germany we provide a context specific explanation to the motivations to adopt pv systems at grid parity

rivalry in price and location by differentiated product manufacturers in this article we estimate a model of strategic rivalry between food manufacturers in product design and pricing we derive a spatial structural model in which food manufacturers jointly select prices and the optimal attribute composition of their product lines we find that manufacturers have an incentive to locate yogurt products nearby others in attribute space and that products with the most similar attribute compositions enjoy the widest price cost margins our findings explain the observation that most consumer package goods tend to be very similar yet manufacturers appear to earn above normal profits copyright 2013 oxford university press

promoting renewable energy sources for heating and cooling in eu 27 countries abstract in addition to public policies aimed at improving the energy efficiency of buildings eu authorities have also promoted the use of renewable energy sources for heating and cooling uses res h c this paper analyses the main policy measures implemented in eu 27 countries up to 2009 i e subsidies tax incentives financial support and feed in tariffs twenty three member states mss have developed some of these policy measures the most widespread measure is the subsidy 22 mss have implemented these because from a political point of view subsidies provide a straightforward approach to promote the use of res h c secondly tax incentives have been used for reducing investment costs and making renewable energy profitable thirdly financial incentives and feed in tariffs have been used sparingly while financial incentives might be used more extensively for promoting res h c if they are accompanied by other policy measures feed in tariffs are not likely to be implemented significantly in the future because this measure is not designed for household heat producers

the comparison between ad valorem and specific taxation under imperfect competition abstract this paper compares ad valorem and specific taxation in two models of oligopoly with and without free entry predominantly ad valorem taxation implies a relatively low consumer price high tax revenue and when entry is precluded low profits ad valorem taxation dominates specific taxation from the welfare perspective the set of circumstances under which with free entry specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare improving and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

tax incidence under imperfect competition comment abstract delipalla and o donnell 2001 contains a formula for the incidence of specific and ad valorem taxes in a conjectural variation oligopoly model with potentially asymmetric firms the formula is incorrect we derive the correct formula and provide a discussion of the error and its implications for empirical studies of pass through

innovation diffusion public policy and local initiative the case of wood fuelled district heating systems in austria abstract this paper comprises a three level study on wood fuel utilisation for district heating in austria first we discuss the framework conditions for the diffusion in austria of rural biomass district heating bdh plants an energy conversion plant type which constituted a real innovation in the 1980s second we describe the diffusion of bdh systems in the austrian province of vorarlberg where a variety of biomass energy systems have been promoted by capital grants since 1993 as part of a dedicated bioenergy promotion programme third the paper contains a case study of a 2 mw bdh plant put into operation in 2000 in rankweil a small market town located in vorarlberg on the east side of the rhine valley analysis of the plant history reveals that an oversupply of forest residues caused by devastating storms and forest diseases together with the more general need to rejuvenate severely over aged forest stands created strong incentives to form local actor networks and initiatives to push for the adoption and diffusion of centralised biomass heating systems in rural areas in addition intensive lobbying and strong political and public support were necessary to successfully combat interventions by both the natural gas industry and influential gas supplied industrial enterprises finally a capital grant of 45 of eligible investment costs as well as careful capacity expansion and other planning significantly improved and safeguarded the economic viability of the plant these considerations combined with a dedicated forest restructuring programme render the plant one of the most successful integrated forestry and bdh projects in vorarlberg and an important model for later adopters overall the analysis sheds some light on the role of public policy local actors and economic and other framework conditions on the market diffusion dynamics of bdh in austria

taxation and welfare in an oligopoly with strategic commitment this paper establishes comparative statics results for an oligopoly model with strategic commitment firms compete in two stages in the first stage firms decide on strategic cost reducing r d investment whereas they choose output in the second stage taking an excise tax subsidy as a shift parameter in the second stage game the short run as well as long run effects on output cost reducing r d investment and second best welfare will be examined the crucial role played by the strategic substitutability of outputs as well as cost reducing r d investments is clarified and a variant of the le chatelier samuelson principle in the authors game theoretic model is obtained copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

naked slotting fees for vertical control of multi product retail markets abstract slotting fees are fixed charges paid by food manufacturers to retailers for access to the retail market this note considers this practice in the context of multi product markets with imperfectly competitive retailers a monopoly supplier of one good and competitive suppliers of other goods we show how the monopolist and the retailers can use naked slotting fees charges imposed on the suppliers of other goods to obtain vertically integrated monopoly profits

indirect taxation in vertical oligopoly this paper analyzes the effects of specific and ad valorem taxation in an industry with downstream and upstream oligopoly we find that in the short run i e when the number of firms in both markets is exogenous the results concerning tax incidence tend to be qualitatively similar to models where the upstream market is perfectly competitive however both over and undershifting are more pronounced potentially to a very large extent instead in the long run under endogenous entry and exit overshifting of both taxes is more likely to occur and is more pronounced under upstream oligopoly as a result of this a tax increase is more likely to be welfare reducing we also demonstrate that downstream and upstream taxation are equivalent in the short run while this is not true for the ad valorem tax in the long run we show that it is normally more efficient to tax downstream

variety pass through an examination of the ready to eat breakfast cereal market abstract we examine variety pass through effects that occur when multiproduct retailers adjust the length of their product lines in response to changes in wholesale prices studying variety pass through is essential to understanding how wholesale price changes transmit into retail prices when variety is endogenous using data from the ready to eat breakfast cereal category we find that retailers jointly adjust retail prices and the length of their product lines in response to changes in wholesale prices we show the importance of controlling for the endogeneity of retailers product line decisions when calculating price pass through rates

commodity price inflation retail pass through and market power abstract when commodity prices rise wholesalers and retailers of products derived from basic commodities respond by passing along at least a portion of the price increase to consumers in this paper we examine whether firms respond differently to positive commodity price shocks than to negative commodity price shocks that is whether commodity price volatility alters market power we exploit recent volatility in food commodity prices over the period 2007 2010 to investigate how commodity price shocks translate into market power in two different vertically structured food product industries potatoes and fluid milk for potatoes we find both wholesale and retail market power decreases increases during periods of rising falling commodity prices moreover price cost margins widen a substantially greater degree in response to negative shocks than margins narrow in response to positive shocks indicating that commodity price volatility increases market power for fluid milk we find that market power likewise declines during periods of rising commodity prices however market power does not significantly change during periods of falling commodity prices suggesting that commodity price volatility decreases market power

the role of pensions in the labor market a survey of the literature because employer sponsored group pension plans entail agreements between workers and their employers explicitly linking future payment and employment they offer an unusual window into long term employment relationships this review of recent research on pensions explores how pensions influence employee compensation retirement turnover and other matters central to the determination of labor s price and quantity over time the authors also outline some unanswered questions and difficult to reconcile findings because the pension promise involves an explicit and relatively well documented set of statements regarding future contingent payment and employment an examination of the design and operation of employersponsored group pension plans can yield important insights into the long term employment relationship specifically pension research illuminates some important labor market questions in two ways it offers insight into an important element of compensation in its own right and it furthers our understanding of labor markets in which long term

reversions of excess pension assets after takeovers this article evaluates pension asset reversions as a source of takeover gains in our sample of 413 takeovers pension funds were reverted by 15 1 of acquirers in the two years following hostile takeovers compared to 8 4 in the two years following friendly takeovers reversions following takeovers tend to occur in unit benefit plans where the potential for wealth transfer is the greatest these results are consistent with the view that hostile takeovers breach implicit contracts between firms and employees we estimate that the reversions can on average explain approximately 11 of the takeover premium in cases where they actually occur reversions are too small to be the sole or even dominant source of takeover gains

economic and co2 mitigation impacts of promoting biomass heating systems an input output study for vorarlberg austria this paper reports on an empirical investigation about the economic and co2 mitigation impacts of bioenergy promotion in the austrian federal province of vorarlberg we study domestic value added employment and fiscal effects by means of a static input output analysis the bioenergy systems analysed comprise biomass district heating pellet heating and automated wood chip heating systems as well as logwood stoves and boilers ceramic stoves and buffer storage systems the results indicate that gross economic effects are significant regarding both investment and operation of the systems and that the negative economic effects caused by the displacement of conventional decentralised heating systems might be in the order of 20 40 finally co2 mitigation effects are substantial contributing already in 2004 around 35 of the 2010 co2 mitigation target of the land vorarlberg for all renewable energy sources

excess entry vertical integration and welfare this article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry we give sufficient conditions on consumer preferences that lead to pareto improving vertical integration and demonstrate a close relationship between assumptions on preference for variety excess entry in monopolistically competitive markets and the welfare effects of vertical integration excess entry in downstream markets tends to give rise to pareto improving vertical integration we extend the analysis to vertical oligopoly and access price regulation

concentration product variety and entry for merger evidence from new product introductions in the u s food industry competing theories in industrial organization predict that more concentrated industries will lead to a smaller and more efficient variety of products or alternately a larger and less efficient array of products this paper presents an empirical study of these competing implications that estimates the impact of market concentration on new product introductions in a panel of nine food processing industries over 1983 to 2004 controlling for industry level unobservables using fixed effects and endogeneity of industry market structure we find that industry concentration promotes the introduction of new products preliminary evidence also suggests that new product introductions spur subsequent food industry mergers both conclusions are consistent with the entry for merger theory of product variety wherein small firms introduce new products in anticipation of profitable future mergers with concentrated firms

up the average cost curve inefficient entry and the new protectionism abstract a two country model is developed in which each country produces one good with increasing returns the goods being perfect or imperfect substitutes with cournot nash behavior and free entry certain restrictive trade policies have effects opposite to their favorable effect under noentry assumptions import tariffs and export subsidies lead to inefficient entry that raises rather than decreases the average production cost of and price charge by the domestic industry with negative welfare consequences we argue that these predictions of our model are closely consistent with extensive canadian data on entry exit and firms responses to trade liberalization

social impacts of community renewable energy projects findings from a woodfuel case study there is much current interest in the potential of community based renewable energy projects to contribute to transition towards low carbon energy systems as well as displacing fossil fuel consumption by increasing renewable energy generation projects are expected to have a range of social impacts which may result in additional positive sustainability outcomes these include potential to increase acceptance of renewable energy developments awareness of renewable and sustainable energy technologies and issues uptake of low carbon technologies and sustainable pro environmental behaviours to date however there has been little investigation of whether and how these impacts occur this paper presents results from qualitative research investigating the social impacts of a community woodfuel project as experienced by project participants and other local stakeholders findings show projects can raise awareness of renewable energy technologies and increase uptake of renewables overall the case study project successfully changed the local social context for development of woodfuel heating reducing risk for all involved in the future development of this sector particularly in the immediate locality there was some evidence of increased engagement with wider sustainability issues but this was limited to direct participants suggesting local projects need to be supported by wider systemic change to maximise impacts

entry barriers and economic welfare the relationship between economic welfare and the number of firms in a quasi cournot market is examined in the first place we presuppose the existence of a strong first best government that can enforce the marginal cost principle to the firms along with regulating the number of firms it is shown that there exist excessive number of firms at the free entry quasicournot equilibrium vis a vis the first best welfare maximizing number of firms the thrust of this result essentially survives even if we replace a utopian first best government by a secondbest government that leaves the firms to pursue their respective profit maximization freely and engages solely in regulating the number of firms it can be shown that the excess entry prevails again in this second best world recent studies in the theoretical industrial organization literature have uncovered several instances which cast serious doubt on the reasonableness of a widespread belief that increasing competition will increase welfare stiglitz 1981 p 184 it has been shown that there are cases which are not altogether unreasonable where social welfare will be increased by strengthening rather than weakening the protection of incumbent firms from the threat of potential entry this is in sharp contrast with the traditional belief 2 what is not known however is how robust these pathologies in fact are we intend to settle this problem by proving two excess entry theorems in the quasi cournot parametric conjectural variations homogeneous oligopoly model seade 1980a b in the first place we presuppose the existence of a strong first best government that could costlessly enforce the marginal cost pricing principle by firms in an oligopolistic market and regulate entry in pursuit of first best social welfare optimization it is shown that the number of firms at the free entry equilibrium exceeds the first best welfare optimizing number of firms the result has already been noted by von weizsacker 1980a b and others in terms of numerical examples our theorem 1 asserts that this phenomenon always holds true for the family of quasi cournot models at hand an implication of this result is that the existence of entry barriers which protect incumbent firms from potential competitors is not necessarily welfare decreasing in sharp contrast with the traditional belief a problem remains with theorem 1 however in that an omnipotent first best government does not exist in reality and the first best ideal is unrealizable in the actual economy therefore even if the intervention by a first best government with a view to restricting the number of firms within an industry may be welfare improving it does

the labor contract and true economic pension liabilities most pension covered workers in the united states are covered solely or primarily by defined benefit plans in these plans workers are typically promised a pension that is proportional to their years of service in the firm and their final wage depending upon how workers pay for it the existence of a pension in the labor contract may play either an important role or no role at all in the worker firm relationship this paper addresses the issue how workers pay for the cumulating pension benefit over their tenure cycle in the firm and derives several economic implications for the worker firm contract while the theory itself has ambiguous implications the data confirm the longstanding presumption that pensions offer strong incentives for the worker to complete the normal tenure cycle in the firm not to quit early but if this intuitive notion is accepted it is shown that a perhaps less intuitive notion is also true firms make workers longterm bondholders in the firm the same flow of worker pension savings that tie workers to the firm are not accounted for in the pension trust fund pension plans are significantly underfunded in a true economic sense this is a peculiar characteristic of the labor contract which raises several unanswered questions the paper also shows that the nature of the pension contract can play an important role in determining the wage service profile and the capitalized value of the firm recent contributions to the literature pose an interesting and unconventional view of pensions one which leads to the conclusion that pensions play a relatively minor role in the worker firm contract the argument has been implicitly made by burt barnow and ronald ehrenberg 1979 and william sharpe 1976 but has recently been stated more directly by jeremy bulow 1982 2 in essence their views rest on a legal interpretation of pension liabilities namely since the firm can legally terminate its pension plan anytime the firm s pension liabilities cannot exceed the present value of the nominal pension promises it would owe workers if the firm terminated the plan immediately if workers believe the firm will exercise its legal right it is intuitively apparent and easy to show that workers will deposit only that amount of compensation into the pension plan that they expect to receive upon immediate termination using this interpretation of pension plan liabilities pensions have no influence on whether the worker leaves or remains in the firm moreover it will be shown that if the pension contract is written in nominal terms reflecting the legal view workers are not bondholders in the firm pension plans are excessively overfunded an alternative view is that the pension plan is an implicit contract between the worker and the firm see for example jack treynor 1977 an implicit contract theory implies that workers anticipating careers with a firm will consider the package of wage and pension benefits they expect to collect over their life cycle it is shown that these expectations lead quite directly to several implications that the pension contract is written in real terms that firms intend to meet their pension promises and that the firm will re u s department of labor s 4521 washington d c 20210 the views expressed in this paper are my own and do not necessarily represent the views of the department of labor the paper has substantially benefited from the comments of pauline ippolito and discussions with jeremy bulow i am also indebted to robert clark gary fields alan gustman olivia mitchell james pesando john turner michael ward and participants at the labor relations workshop at cornell university and the law and economics workshop at the university of chicago for comments see my 1985a book 2 the argument is also implicit in other related papers see for example martin feldstein and randall morck 1982

unit tax versus ad valorem tax a tax competition model with cross border shopping abstract within the framework of spatial tax competition with cross border shopping we examine the choice of tax method between ad valorem tax and unit specific tax this study shows that governments endogenously choose the ad valorem tax method not because of a classic welfare reason but because it is a good strategy to compete for mobile consumers another key finding is that while governments are committed to the ad valorem tax method the choice leads to inferior outcome tax cutting competition becomes more serious when countries adopt ad valorem tax and competition in ad valorem tax results in smaller tax revenue than competition in unit tax

commodity taxation and imperfect competition a note on the effects of entry abstract this paper looks at the effects of allowing the number of firms to vary in seade s model of oligopoly and taxation we show that the normative and positive consequences of a specific commodity tax are affected by entry in significant ways

regional economic impacts of biomass based energy service use a comparison across crops and technologies for east styria austria abstract biomass action plans in many european countries seek to expand biomass heat and fuel supply mainly to be supplied by peripheral agricultural regions we develop a two plus ten region energy focused computable general equilibrium cge model that acknowledges land competition in analysing the sub state local regional economic implications of such a strategy embedded within a global context our model is based on a full cost analysis of selected biomass technologies covering a range of agricultural and forestry crops as well as thermal insulation the local regional macroeconomic effects differ significantly across technologies and are governed by factors such as net labour intensity in crop production the high land intensity of agricultural biomass products crowds out conventional agriculture and thus lowers employment and drives up land prices and the consumer price index the regional economic results show that net employment effects are positive for all forestry based biomass energy and also show for which agriculture based biomass systems this is true even when accounting for land competition when regional consumer price development governs regional wages or when the agricultural sector is in strong enough competition to the international market positive employment and welfare impacts vanish fully for agriculture based bio energy

on bond ratings and pension obligations a note financial analysts have been intrigued by bond ratings since john moody first started publishing them in 1909 bond ratings are assigned by three agencies moody s standard and poor s sp these ratings are widely publicized and are therefore critically important a bond s rating affects investors purchase decisions and consequently the issuing firm s cost of debt and indirectly its cost of equity

commodity prices and food inflation commodity prices rose at unprecedented rates between 2007 and 2008 in the year between july 2007 and july 2008 corn prices rose 51 9 soybean prices 74 4 wheat prices 104 5 and milk prices by 41 4 as farm prices reached their peaks policy makers became concerned over the potential impact on retail food price inflation and when farm prices be gan to fall in late 2008 interest shifted to how fast or whether retail prices followed boyle 2009 leibtag 2008 argues that the surge in commodity prices had little impact on con sumer prices because commodity inputs form a small part of the final product although true for some highly processed foods such as break fast cereals cookies and breads farm prices form a significant part of the retail price for fresh produce meat and dairy products in fact pass through rates from farm to retail prices are likely to vary depending on the nature of the production process gardner 1975 the competitiveness of the vertical supply channel bulow and pfleiderer 1983 kim and cotterill 2008 the number of products sold hamil ton 2009 and even the direction of the price change frey and manera 2007 the pass through rate is a simple and important concept but highly complex to measure previous research on this issue assumes

jeux sans frontieres tax competition and tax coordination when countries differ in size closer international integration is putting increasing pressure on existing national tax structures this paper uses a simple two country model to address a range of consequent policy concerns focusing particularly on the role of country size differences in size exacerbate the inefficiency from noncooperative behavior harming both countries the smaller country loses from harmonization to any tax rate between those set in the noncooperative equilibrium but both countries gain from the imposition of a minimum tax anywhere in that range the fully optimal response to freer cross border trade however may be to do nothing jel h20 h77

ad valorem platform fees indirect taxes and efficient price discrimination this article explains why platforms such as amazon and visa rely predominantly on ad valorem fees fees which increase proportionally with transaction prices it also provides a new explanation for why ad valorem sales taxes are more desirable than specific taxes the theory rests on the ability of ad valorem fees and taxes to achieve efficient price discrimination given that the value of a transaction to buyers tends to vary proportionally with the cost of the good traded