nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

grading minimum quality standards and the labeling of genetically modified products we relate the labeling of genetically modified gm products to the theory of grading and minimum quality standards the model represents three stages in the supply chain assumes a vertical product differentiation framework allows for the accidental commingling of non gm products and treats regulation as a purity threshold for non gm products we find that a non gm purity level that is too strict leads to the disappearance of the non gm product and that some quality standard benefits farmers indeed the standard that is optimal from the perspective of producers is stricter than what is optimal for consumers and for societal welfare

the elasticity of export demand for u s cotton the conceptually relevant elasticity for policy analysis is the total export demand elasticity which takes into account feedback effects of the u s price on other countries prices in this paper a total export demand elasticity for u s cotton is estimated in an extended armington framework the results indicate that the export demand facing the united states is probably elastic however estimated total demand elasticities are considerably less elastic than the estimated direct demand elasticities which do not account for feedback effects resulting from finite excess supply elasticities in the rest of the world in designing agricultural policy a knowledge of relevant elasticities is essential given the current economic climate characterized by volatile export markets and prices the price elasticity of export demand has received considerable attention economists however have not reached a consensus about the magnitude of this parameter in their review of studies of price elasticity of export demand for agricultural commodities gardiner and dixit report seven estimates of the elasticity of export demand for u s cotton ranging from 0 02 taylor and collins to 5 5 johnson because the policy recommendations based on the assumption of an elastic foreign demand could differ dramatically from those based on the assumption of inelastic foreign demand further research in this area is warranted the objective of this paper is to develop estimates of the elasticity of foreign demand for u s cotton the armington approach was used to formulate models for estimation because it is simple to formulate is a powerful method for modeling u s crop exports sarris 1981 thompson and had not been used extensively in modeling cotton trade the study differs from previous works by extending the armington framework to estimate total elasticities of demand in which feedback effects of u s price on the price of other countries cotton is taken into account results from this paper should be useful in estimating the elasticity of export demand for u s cotton and in demonstrating the importance of estimating total export demand elasticities

renewable resource economists and policy what differences have we made abstract this paper surveys developments in fisheries economics and fisheries policy over the past half century early work clarified the nature of the economic issues associated with open access laying the groundwork for changes in policies after coastal nations expanded their jurisdictions in 1976 perhaps the most important point made by economists is that property rights matter and that open access conditions create economic as well as biological problems the policy process has begun to create property rights systems although many of the world s fisheries still operate under mixed systems of regulations and open access incentives

public regulation of agricultural biotechnology field tests economic implications of alternative approaches federal oversight of agricultural biotechnology field testing is based on public concerns that unknown consequences could arise from such tests and that firms may not adequately consider the public consequences of their research and development activities in this paper four general types of ex ante and ex post approaches to manage public risks from field testing are explored the analysis shows that the approaches are least effective at facilitating the research process yet controlling public risks when the research firm is small in size and potential damages exceed the value of the firm

optimal harvesting of an age structured schooling fishery biologists have criticized traditional biomass models in fishery economics for being oversimplified biological stock assessment models are more sophisticated with regard to biological content but rarely account for economic objectives this study includes a full age structured population model for studying schooling fisheries and extends the delayed difference approach used in earlier studies we take the total harvest as the choice variable resulting in a simple analytical structure the model produces optimal steady states that may be higher or lower compared to the delayed difference formulation the model is applied to the baltic sprat fishery both ecological and harvesting cost data support specifying baltic sprat as a schooling fishery given nonlinear harvesting costs the optimal solution is a path toward a steady state with smooth annual harvest and population age structure sensitivity analysis shows that the optimal solution is highly dependent on the population level of the sprat s main predator baltic cod a linear cost function and an interest rate below 9 imply pulse fishing instead of smooth continuous harvesting given nonlinear harvesting cost the optimal steady state yield is rather insensitive to changes in the interest rate however under a high cod scenario interest rates of 10 or higher implies that no optimal steady state exists

the wisdom of the minority we consider a simple variant of the canonical model of social learning and show that in many situations it is optimal for an agent to abandon her own information and follow the minority rather than the majority this possibility depends on two economically meaningful requirements agents are differentially informed and observe only the number of agents having chosen each option such as consumers observing only market shares we show that minority wisdom arises when information is sufficiently heterogeneous and the well informed are not overly abundant yet the conditions necessary are not overly restrictive in fact it is possible for the minority to be wise even when the minority consists of a lone dissenter and a majority of citizens are well informed

concentration in ownership of plant variety rights some implications for developing countries this paper explores concentration levels in the ownership of intellectual property rights over plant varieties worldwide an analysis of data for 30 upov member countries shows a high degree of concentration in the ownership of plant variety rights for six major crops at the national level in the developed world much of this concentration has arisen owing to the rapid consolidation of the seed industry through mergers and acquisitions especially in the 1990s a high degree of concentration in the ownership of plant variety rights in combination with recent efforts to strengthen plant variety protection regimes is likely to have significant effects on the prospects for future innovation in plant breeding and the distribution of market power between companies for developing countries concentration in intellectual property right ownership may have important implications for the structure of domestic seed industries and access to protected varieties and associated plant breeding technologies these implications for developing countries are likely to become apparent in the context of the rapid spread of plant variety protection and access legislation emerging changes in the international exchange regime for plant material and liberalised investment policies permitting foreign investment in the seeds sector

estimating monetary policy effects when interest rates are close to zero abstract using a nonlinear structural var approach we estimate the effects of exogenous monetary policy shocks in the presence of a zero lower bound constraint on nominal interest rates and examine the impact of such a constraint on the effectiveness of counter cyclical monetary policies based on the data from japan we find that when interest rates are at zero the output effect of exogenous shocks to monetary policy is cut in half if the central bank continues to target the interest rate the conditional impulse response functions allow us to isolate the effect of monetary policy shocks operating through the interest rate channel when other possible channels of monetary transmission are present

welfare economics of decision making with changing preferences the paper considers the properties a decision tree needs to guarantee that there are no preferences such that the sophisticated equilibrium is pareto dominated when all agents act completely myopically it shows that the only decision trees with this property are the most trivial problems the analysis is generalized to agents who are not completely myopic and gives an example of union and shareholder conflict to illustrate the results 1 this paper is concerned with the welfare aspects of decision making in a non cooperative game where the players have different preferences over future actions and must move sequentially typically two outcomes are analysed in this context one is the naive or myopic outcome which is the result of all individuals making irrational myopic choices and the other is the sophisticated or perfect equilibrium 1 the results of hammond 1976 show that if there is no essential inconsistency2 between agents preferences then these two outcomes coincide the welfare comparison when there is essential inconsistency remains an open question and this paper will attempt to provide some answers although this issue has not been explicitly considered the terminology perfect and sophisticated compared to myopic or naive is itself persuasive the literature has tended to enhance this view e g blackorby et al 1973 the sophisticated solution would appear to be an improvement over naive planning by explicitly considering the future preferences each generation realises a level of utility greater than that which is possible under inconsistent naive planning it will be shown that this view is incorrect for all degrees of myopia of course there are many cases where the perfect equilibrium in non cooperative games is inefficient thus it is not surprising that actions by some agents which deviate from rational behaviour can result in a better outcome for all agents it is less obvious that if everyone behaved myopically this is possible yet it will be shown that in all but the most trivial decision trees there always exist preferences such that this is true the following section outlines the model that will be used and section 3 contains the results section 4 gives a topical economic example that reduces to the decision tree structure used extensively in section 3 this example clarifies the structure of the results and also highlights some of the difficulties with introducing precommitment

open access common property and scarcity rent in fisheries open access resources are frequently not managed efficiently resulting in falling stock levels and a declining income for fishermen in the late 1970 s the policy response to this problem was the implementation of 200 mile fishing zones which enabled the european union to formulate and implement the common fisheries policy aimed at among other things conservation and distribution of available stocks in germany this shift from an open access regime towards a common property regime had favourable outcomes the trend of falling prices was reversed the conclusion was that intertemporal efficiency had increased as a result of inter governmental policy apparently a wedge was formed between price and marginal harvesting costs implying that scarcity rent had returned as a component of prices

do lower yielding farmers benefit from bt corn evidence from instrumental variable quantile regressions abstract there have been serious questions about whether lower yielding farmers in developing countries who are typically poor smallholders benefit from genetically modified crops like bacillus thuringensis bt corn this article examines this issue by estimating the heterogeneous impacts of bt corn adoption at different points of the yield distribution using farm level survey data from the philippines a recently developed estimation technique called instrumental variable quantile regression ivqr is used to assess the heterogeneous yield effects of bt corn adoption and at the same time address potential selection bias that usually plague impact assessment of agricultural technologies we find that the positive yield impact of bt corn in the philippines tend to be more strongly felt by farmers at the lower end of the yield distribution this result suggests that bt corn could be a pro poor technology since most of the lower yielding farmers in the philippines are poor smallholders with low incomes

valuing product innovation genetically engineered varieties in us corn and soybeans we develop a discrete choice model of differentiated products for us corn and soybean seed demand to study the welfare impact of genetically engineered ge crop varieties using a unique data set spanning the period 1996 2011 we find that the welfare impact of the ge innovation is significant in the last five years of the period analyzed our preferred counterfactual indicates that total surplus due to ge traits was 5 18 billion per year with seed manufacturers appropriating 56 of this surplus the seed industry obtained more surplus from ge corn whereas farmers received more surplus from ge soybeans

market share dynamics in a duopoly model with word of mouth communication abstract we analyze dynamic price competition in a homogeneous goods duopoly where consumers exchange information via word of mouth communication a fraction of consumers who do not learn any new information remain locked in at their previous supplier in each period we analyze markov perfect equilibria in which firms use mixed pricing strategies market share dynamics are driven by the endogenous price dispersion depending on the parameters we obtain different classes of dynamics when firms are impatient there is a tendency towards equal market shares when firms are patient there are extended intervals of market dominance interrupted by sudden changes in the leadership position

risk perceptions endogenous demand and regulation of agricultural biotechnology abstract this paper presents a dynamic model of optimal product regulation in which consumer acceptance and the rate of product innovation are included as endogenous variables insights derived from the model are used to critically evaluate recent policy controversies regarding regulation of agricultural biotechnology the results of the analysis indicate that if regulatory policy significantly affects consumer risk perceptions more stringent regulatory requirements than those based solely on scientific risk assessment may be economically efficient when demand is endogenously affected by regulatory policies industry may also benefit from stronger regulations even if this results in a significant increase in product development costs

imperfect information and dynamic conjectural variations this article analyzes oligopoly interaction in an environment where firms are imperfectly informed about the evolution of the market demand curve the analysis develops a two period cournot framework under the assumptions that demand shifts are positively serially correlated that firms never directly observe the demand curve and that firms never observe the previous quantity decisions of rivals firms do draw inferences about the position of the demand curve from past observations on prices consequently the current output of a firm will influence the current market price which will then influence rivals inferences about future demand the future output decisions of rivals will respond accordingly the theory predicts negative dynamic conjectural variations essentially a firm perceives that an increase in its output will lower the current market clearing price which will cause rival firms to think that the demand curve has shifted down and hence induce them to lower their outputs in the future

surplus distribution from the introduction of a biotechnology innovation we examine the distribution of welfare from the introduction of bt cotton in the united states in 1996 the welfare framework explicitly recognizes that research protected by intellectual property rights generates monopoly profits and makes it possible to partition these rents among consumers farmers and the innovating input firms we calculate a total increase in world surplus of 240 3 million for 1996 of this total the largest share 59 went to u s farmers the gene developer monsanto received the next largest share 21 followed by u s consumers 9 the rest of the world 6 and the germplasm supplier delta and pine land company 5

high and declining prices signal product quality high and declining prices signal a high quality product high prices are the efficient means of signaling because the consequent loss of sales volume is most damaging for lower cost lower quality products as time passes and the number of informed consumers increases the signaling distortion lessens resulting in a declining price profile the prediction of high and declining prices is robust across a variety of dynamic models and is consistent with recent empirical findings copyright 1991 by american economic association

econometric modeling of fisheries with complex life histories avoiding biological management failures abstract economics of the fishery has focused on the wastefulness of common pool resource exploitation pure open access fisheries dissipate economic rents and degrade biological stocks biologically managed fisheries also dissipate rents but are thought to hold biological stocks at desired levels we develop and estimate an empirical bioeconomic model of the gulf of mexico gag fishery that questions the presumptive success of biological management unlike previous bioeconomic life history studies we provide a way to circumvent calibration problems by embedding our estimation routine directly in the dynamic bioeconomic model we nest a standard biological management model that accounts for complex life history characteristics of the gag biological intuition suggests that a spawning season closure will reduce fishing pressure and increase stocks and simulations of the biological management model confirm this finding however simulations of the empirical bioeconomic model suggest that these intended outcomes of the spawning closure do not materialize the behavioral response to the closure appears to be so pronounced that it offsets the restriction in allowable fishing days our results indicate that failure to account for fishing behavior may play an important role in fishery management failures

unconventional monetary policies in the euro area japan and the united kingdom the global financial crisis hit hard in the euro area the united kingdom and japan real gdp from peak to trough contracted by about 6 percent in the euro area and the united kingdom and by 9 percent in japan in all three cases central banks cut interest rates aggressively and then as policy rates approached zero deployed a variety of untested and unconventional monetary policies in doing so they hoped to restore the functioning of financial markets and also to provide further monetary policy accommodation once the policy rate reached the zero lower bound in all three jurisdictions the strategy entailed generous liquidity support for banks and other financial intermediaries and large scale purchases of public and in some cases private assets as a result central banks balance sheets expanded to unprecedented levels this paper examines the experience with unconventional monetary policies in the euro zone the united kingdom and japan the paper starts with a discussion of how quantitative easing forward guidance and negative interest rate policies work in theory and some of their potential side effects it then reviews the implementation of unconventional monetary policy by the european central bank the bank of england and the bank of japan including a narrative of how central banks responded to the crisis and the evidence on the effects of unconventional monetary policy actions

generating enhanced fishery rents by internalizing product quality characteristics this paper demonstrates howadditional rents are generated in a fisherycharacterized by intraseasonal variation infish characteristics including size condition and composition based on anexpanded conceptual model of the optimalharvest rule fish characteristics affect preand post harvest production yields and outputprices a dynamic empirical model which uses asystem of quality characteristics and anhedonic equation illustrates the complexrelationships and management choices associatedwith internalizing seafood qualitycharacteristics in a hake fishery the modelretains the regulated open access managementsystem but controls intertemporal andintersectoral quotas production portfolios and total allowable catch results demonstratethat including revenue side effects frominternalizing fish quality can generatesignificantly greater rents and reduce therelative benefits of increased productionyields if excluded bioeconomic models canunderestimate the level of regulatory rentdissipation and overemphasize managementobjectives such as full utilization whichcould misdirect processing decisions and resultin a suboptimal resource management plan implications for data collection multidisciplinary analysis and improvements inmarine resource management are discussed

intellectual property rights and the welfare effects of agricultural r d the profound changes that have affected agriculture in modern times are perhaps best illustrated by the evolution of production techniques due to mechanization new chemical inputs such as herbicides pesticides and fertilizers genetic selection of crops and animals new crop varieties and countless other technical and organizational improvements these innovations have allowed a generalized increase in physical output while at the same time agriculture has suffered a massive exodus of labor forces towards the non farm sectors indeed a stylized fact of developed countries post war growth is that productivity in agriculture has grown faster than in other sectors jorgenson and gollop 1992 this remarkable record naturally begs the question of what is at its root and a view that commands considerable consensus is that agricultural productivity growth is due to past investments in scientific research and development r d

seasonal harvest patterns in multispecies fisheries fishers face multidimensional decisions when to fish what species to target and how much gear to deploy most bioeconomic models assume single species fisheries with perfectly elastic demand and focus on inter seasonal dynamics in real world fisheries vessels hold quotas for multiple species with heterogeneous biological and or market conditions that vary intra seasonally we analyze within season behavior in multispecies fisheries with individual fishing quotas accounting for stock aggregations capacity constraints and downward sloping demand numerical results demonstrate variation in harvest patterns we specifically find 1 harvests for species with downward sloping demand tend to spread out 2 spreading harvest of a high value species can cause lower value species to be harvested earlier in the season and 3 harvest can be unresponsive or even respond negatively to biological aggregation when fishers balance incentives in multispecies settings we test these using panel data from the norwegian multispecies groundfish fishery and find evidence for all three we extend the numerical model to account for transitions to management with individual fishing quotas in multispecies fisheries we show that under some circumstances fishing seasons could contract or spread out

valuing varieties with imperfect output quality measurement markets for agricultural products may be inefficient when signals do not adequately reflect product characteristics important to market participants preferences can be explicitly reflected in price premiums for measurable characteristics using hedonic methods however when product quality information is costly to obtain the problem is compounded bundling of quality traits by variety can serve to signal product quality a procedure is developed to derive the value of different varieties in meeting buyer demands an application to the hard red spring market wheat illustrates the use of a procedure to distinguish among varieties and provides empirical support for the existence of akerlof s lemon market in the release of wheat varieties

are there differences in the effectiveness of quantitative easing at the zero lower bound in japan over time using a time varying parameter vector autoregression tvp var framework with a new set of sign restrictions we study the changing effectiveness of the bank of japan s quantitative easing policies over time we specifically analyse the so called zero interest rate policy from 1999 to 2000 the quantitative easing policy from 2001 to 2006 and most recently the so called abenomics strategy our results indicate important differences of the quantitative easing qe shocks on the japanese economy over time more specifically we find important time variation in the responses of core cpi and real gdp with regard to the different monetary policy episodes in japan we find somewhat more pronounced effects on core cpi during abenomics the responses of the price level are generally found to be stronger and more significant than those of real gdp this holds particularly for the abenomics period these results are mirrored by our variance decomposition analysis

price competition for an informed buyer abstract this paper investigates price competition with private information on the demand side two sellers each offer a different variety of a good to a buyer endowed with a private binary signal on their relative quality the model provides an informational foundation to differentiation in hotelling s price competition game equilibrium comparative statics is performed with respect to the prior belief and the precision of the private information competition is fierce when the prior strongly favors one seller and private signals are relatively uninformative sellers equilibrium profits may fall with the revelation of public information and are nonmonotonic in the prior belief journal of economic literature classification numbers c72 d43 d82 l15

consumer search with observational learning this article studies observational learning in a consumer search environment consumers observe the purchasing decision of a predecessor with similar preferences consumers rationally emulate by initiating their search at the firm from which their predecessor purchased free riding on search effort and reacting less to price changes prices are nonmonotone in search costs and may be as low as marginal costs we discuss several extensions and show that the effect of emulation on prices is stronger when i the number of firms increases ii consumers first visits are more elastic with respect to market shares and iii prices are adjusted more frequently

an ex ante economic and policy analysis of research on genetic resistance to livestock disease trypanosomosis in africa abstract this paper undertakes an ex ante economic analysis of research on how resistance to trypanosomosis a dominant livestock disease in africa can be maintained and enhanced while retaining and reinforcing characteristics of economic importance to farmers and on how trypanotolerance can be imparted to susceptible animals while retaining their other important traits the results indicate that potential benefits to research historically field based but increasingly biotechnology driven range from two to nine times potential costs and that the internal rate of return on investments can be six times the real interest rate field based research while exhibiting lower potential benefits on aggregate than does biotechnology research is also less costly and because of its more immediate payback has higher internal rates of return returns to biotechnology research hinge on close links with field based research and on strategic but relatively small incremental human and capital investments the results also suggest that further research is needed to consistently identify and track the impacts of alternative intellectual property rights iprs options on the levels and distributions of biotechnology research benefits

benefits and costs of food safety regulation abstract this paper begins with a review of the concepts and methods that can be used to quantify the benefits and costs of food safety regulations on the cost side where research is only beginning to emerge this paper also provides an analytical framework for measurement of the costs of statutory regulations in the form of design and performance standards this paper also discusses the use and limitations of currently available benefit and cost information for quantitative regulatory impact assessment using the assessment of the mandatory haccp and pathogen reduction regulations in the united states as an example the paper concludes with suggestions for future research on quantifying benefits and costs of food safety regulations

ex ante analysis of the benefits of transgenic drought tolerance research on cereal crops in low income countries this article develops a framework to examine the ex ante benefits of transgenic research on drought in eight low income countries including the benefits to producers and consumers from farm income stabilization and the potential magnitude of private sector profits from intellectual property rights iprs the framework employs country specific agroecological drought risk zones and considers both yield increases and yield variance reductions when estimating producer and consumer benefits from research benefits from yield variance reductions are shown to be an important component of aggregate drought research benefits representing 40 of total benefits across the eight countries further estimated annual benefits of us 178 million to the private sector suggest that significant incentives exist for participation in transgenic drought tolerance research

a test of the theory of exhaustible resources an empirical test of the theory of exhaustible resources requires an estimate of the time path of the shadow price of the unextracted resource that generally is not observable because of the prevalence of vertical integration in natural resource industries in this paper we use duality theory to derive an econometric model that provides a statistical test of the theory of exhaustible resources a restricted cost function is used to obtain estimates of the shadow prices of unextracted resources the procedure is illustrated with data for the canadian metal mining industry for this industry the empirical implications of the theory of exhaustible resources are strongly rejected

bertrand supertraps we study oligopoly price competition between multiproduct firms firms whose products interact in the profit function specifically we focus on the impact of intrafirm product interactions on the level of equilibrium profits this impact may be decomposed in two different ways a a direct effect keeping the competitors actions fixed plus a strategic effect i e through the competitors actions or alternatively b a competitive advantage effect change in firmi only plus an imitation effect change in all other firms we derive conditions such that a the strategic effect more than outweighs the direct effect and conditions such that b the imitation effect more than outweighs the competitive advantage effect bertrand supertraps for example an increase in the degree of economies of scope would increase profits if prices were fixed or if the change were limited to firmi s cost function however if all firms increase the degree of economies of scope then all firms receive lower profits a variety of other applications is considered including learning curves core competencies demand synergies systems competition compatibility bundling network effects switching costs durable goods long term contracts

intrinsic fish characteristics and intraseason production efficiency a management level bioeconomic analysis of a commercial fishery biological changes in pacific whiting merluccius productus and corresponding production yields were used to model a vertically integrated fishery from harvest through processing the seasonal bioeconomic programming model incorporated stock dynamics with the interactive economic effects of intrinsic fish quality the harvest schedule and quota allocation between heterogeneous user groups the optimal management plan would maximize discounted net industry revenues npv given a minimum spawning biomass npv was maximized when the intraseason timing of harvest coincided with the seasonal improvement in fish quality e g following spawning and or migration npv was only marginally affected however by the quota allocation between groups

testing the efficiency of extraction from a stock resource the theoretical conditions for efficient extraction from a known stock resource by a competitive mining firm are reviewed these conditions are tested using proprietary data from a mining firm output price data and coefficient estimates from a translog cost system are used to compute the in situ value of the resource and the stock effect changes in the in situ value over time are then statistically compared with the expected price path the results reject the hypothesis that the data are consistent with the theoretical model and the maintained hypotheses variations of the basic model that incorporate a time varying discount rate an alternative expected price series and a constraint on the rate of output are also tested and rejected 46 references 10 tables

management of a multiple cohort fishery the hard clam in great south bay this paper develops a reasonably general multiple cohort model and derives conditions for optimal harvest and age structure based on a discrete time control problem which maximizes the present value of net revenues subject to recruitment and spawning constraints the model is applied to the hard clam resource in great south bay which is located on long island new york the steady state optimum calls for exclusive harvesting of the younger and more valuable littleneck cohorts leaving the older and less valuable cherrystone and chowder cohorts to specialize in regeneration most of the models employed by economists to characterize renewable resources have presumed that the resource population can be adequately described by a single index or state variable such a view is consistent with much of the classical literature in physical biology where population growth was described using the logistic equation lotka volterra such models may be inadequate however when dealing with a resource where recruitment and fecundity are dependent on the population s age structure or where the revenues and costs of resource exploitation vary with the age at harvest clark biologists have been aware of the importance of age specific attributes and have developed several models to characterize the population dynamics of a single species lewis and leslie independently developed models where the abundance of various

the effectiveness of quantitative easing evidence from japan abstract this study contributes to current research on quantitative easing we provide a novel analysis of the quantitative easing effectiveness as an unconventional monetary policy tool in japan over the last two decades the paper advances current research on quantitative easing by exploring quantitative easing through the prism of the monetary transmission mechanism we examine the response of japanese regional banks to the quantitative easing operations conducted by the bank of japan from the early 2000s till 2015 the analysis is performed within the framework of the bank lending channel under the unconventional monetary policy strategies we find that small sized regional banks underline the significant positive effect of quantitative easing on gross domestic product and inflation that works through the securities holdings and leverage preferences monetary authorities should pay particular attention to policies for such banks and banks with a high level of non performing loans deposit growth after a quantitative easing shock is only present in large sized banks with low npls holdings

the effects of imperfect competition on the size and distribution of research benefits studies of agricultural research benefits usually assume perfectly competitive markets studies that have allowed for market power of agribusiness firms have generally assumed unrealistic pure monopsony or monopoly behavior this paper allows for processing firms to exhibit a range of degrees of oligopsony power in buying raw farm products and oligopoly power in selling processed farm products the results indicate that different types of research induced technical change can exacerbate or ameliorate distortions from the exercise of market power by agribusiness firms which affects the size and especially the distribution of research benefits

the potential benefits of herbicide resistant transgenic rice in uruguay lessons for small developing countries abstract in many developing countries the potential benefits from adopting a transgenic variety developed by a multinational corporation are limited by the crop s small production base this paper presents an ex ante evaluation of the economic impact of herbicide resistant transgenic rice in a small developing country uruguay to fully account for the multinational s market power the firm s seed markup is assumed to affect the adoption rate for the variety stochastic simulation techniques are employed to understand how potential benefits may vary with changes in technology yield costs and adoption parameters the results indicate a 1 82 million mean net present value for producers from the development and utilization of transgenic rice in uruguay and 0 55 million for the multinational these relatively small multinational firm benefits suggest that a firm will not undertake significant efforts to develop transgenic varieties adapted to local conditions without either strategic partnerships with local institutions or access to wider regional markets

advertising as signal jamming abstract this paper considers a model of informative advertising that allows firms to jam the consumers signals on product quality before choosing prices at a second stage we find that the price competition at the second stage may overrule the basic insights from the signal jamming approach in other areas of application as a consequence a firm may advertise more intensely the higher is the difference of the expected product qualities moreover a firm s optimal advertising intensity can decrease with quality uncertainty

on the informational role of quantities durable goods and consumers word of mouth communication a dynamic incomplete information game is set up to study the introduction of a durable good when consumers can learn its quality from previous buyers high sales today imply fewer potential buyers tomorrow but each buyer will have better information about the good consumers are fully rational and can update their beliefs even when they do not directly receive information in equilibrium no news is bad news a low quality firm follows a fly by night strategy randomizing over the timing of sales a high quality firm spreads out its sales more smoothly solving a stochastic dynamic programming problem copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

why market shares matter an information based theory consider a duopoly market in which consumers have heterogeneous information about the quality differential q of the two goods when firms are ignorant about q consumers rationally believe that a firm with high market shares is likely to produce a high quality good as a result firms try to signal jam the inferences of consumers and compete for market shares beyond the level explained by short run profit maximization when firms know q multiple equilibria may exist but there is always one equilibrium in which market shares signal quality and then the market tends to be more competitive

an empirical model of fishery dynamics abstract the multiple cohort approach to population dynamics is seldom used for empirical analysis of catch and effort data due to the complexity of the resulting models and to limitations on available data the present paper addresses these problems by adopting a discrete time framework and simplifying assumptions for growth mortality and recruitment the result is a readily estimated econometric model of the commercial catch that is consistent with the multiple cohort paradigm this model is applied to catch and effort data for the california abalone fishery and the estimates obtained are used to analyze policy

drawing conclusions from structural vector autoregressions identified on the basis of sign restrictions abstract this paper discusses the problems associated with using information about the signs of certain magnitudes as a basis for drawing structural conclusions in vector autoregressions we also review available tools to solve these problems for illustration we use dahlhaus and vasishtha s 2019 study of the effects of a u s monetary contraction on capital flows to emerging markets we explain why sign restrictions alone are not enough to allow us to answer the question and suggest alternative approaches that could be used

pharmaceutical and industrial traits in genetically modified crops coexistence with conventional agriculture this paper discusses the implications of using genetically modified crops to biomanufacture pharmaceuticals and industrial compounds from the perspective of their co existence with conventional agriculture such plant made pharmaceuticals and plant made industrial products rely on exciting scientific and technological breakthroughs and promise new opportunities for the agricultural sector but they also entail novel risks the management of the externalities and of the possible unintended economic effects that arise in this context is critical and poses difficult questions for regulators

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

price and quality in a new product monopoly in a signal extraction model of consumer behaviour higher prices signal higher quality products for a new product monopoly even without cost asymmetries across different qualities moreover higher quality products earn greater expected profits and the monopolist has an incentive to provide even transient improvements in quality finally the monopolist has a positive incentive to conduct market research about quality and produces more information than is socially optimal

conducting monetary policy at very low short term interest rates can monetary policy committees accustomed to describing their plans and actions in terms of the level of a short term nominal interest rate find effective means of conducting and communicating their policies when that rate is zero or close to zero the very low levels of interest rates in japan switzerland and the united states in recent years have stimulated much interesting research on this question and have led some central banks to make changes in their operating procedures and communications strategies in this paper we will give a brief overview of current thinking on the conduct of monetary policy when short term interest rates are very low or even zero monetary policy works for the most part by influencing the prices and yields of financial assets which in turn affect economic decisions and thus the evolution of the economy when the short term policy rate is at or near zero the conventional means of effecting monetary ease lowering the target for the policy rate is no longer feasible however it would be a mistake to think that monetary policy was impotent we discuss three strategies for stimulating the economy at an unchanged level of the policy rate these involve i providing assurance to investors that short rates will be kept lower in the future than they currently expect ii changing the relative supplies of securities in the marketplace by altering the composition of the central bank s balance sheet and iii increasing the size of the central bank s balance sheet beyond the level needed to set the short term policy rate at zero quantitative easing we also discuss the costs and benefits of very low interest rates an issue that bears on the question of whether the central bank should take the policy rate all the way to zero before undertaking alternative policies

duopoly information equilibrium cournot and bertrand abstract in a duopoly model where firms have private information about an uncertain linear demand it is shown that if the goods are substitutes not to share information is a dominant strategy for each firm in bertrand cournot competition if the goods are complements the result is reversed furthermore the following welfare results are obtained 1 i with substitutes in cournot competition the market outcome is never optimal with respect to information sharing but it may be optimal in bertrand competition if the products are good substitutes with complements the market outcome is always optimal 2 ii bertrand competition is more efficient than cournot competition 3 iii the private value of information to the firms is always positive but the social value of information is positive in cournot and negative in bertrand competition

the effects of monetary policy in japan this article interprets time series facts regarding the sources of business fluctuations in japan and attempts to uncover possible characteristics of the effects of monetary policy over the last two decades it argues that given the institutional features of the bank of japan s operating procedures a simple recursive vector autoregressive var model that consists of interest rates money stock prices and output all in first differences may serve as a useful benchmark for japan the main finding is that monetary policy shocks in fact have a persistent effect on real output especially in the rise and fall of japan s bubble economy in the late 1980s

renewable resources with endogenous age classes and allocation of land it is shown that if it is optimal to allocate all land to forestry the long run stationary state is a cyclical solution around an equilibrium with an even timber flow the equilibrium cycles vanish when it is optimal to allocate some fraction of land outside forestry we present numerical examples on the transitional dynamics and long and short run timber supply when land conversion is costly the cycles do not vanish and the long run equilibrium between forestry and agriculture is represented by a continuum

optimal sharing of foodborne illness prevention between consumers and industry the effect of regulation and liability consumers and the food industry can both prevent foodborne illness two questions are explored what is the socially optimal level of preventative effort by each and can tort and regulatory instruments induce such behavior analysis is complicated by two aspects of food safety technology one party s effort can affect the marginal effectiveness of the other party s effort and damage functions can be nonconvex previous analysis of accidents under torts and regulation fails to consider these generalizations indeed results concerning the ability of tort and regulatory instruments to induce first best and second best behavior often contradict previous results in the literature

productivity growth in world agriculture sources and constraints during the last half century advances in crop production came from expansion in areas irrigated from more intensive application of fertilizers and crop protection chemicals and from crop varieties that were more responsive to technical inputs and management advances in animal production came from genetic improvements and advances in animal nutrition differences among developed and developing countries in output per hectare and per worker have widened if these gaps are to be narrowed agricultural research capacity in developing countries will have to be substantially strengthened

information in cournot signaling with incomplete control abstract we embed signaling in the classical cournot model in which several firms sell a homogeneous good the quality is known to all the firms but only to some buyers the quantity setting firms can manipulate the price to signal quality because there is only one price in a market for a homogeneous good each firm incompletely controls the price signal through the quantity decision we characterize the unique signaling cournot equilibrium in which the price signals quality to the uninformed buyers we then compare the signaling cournot equilibrium with the full information cournot equilibrium signaling is shown to increase the equilibrium price moreover under certain conditions regarding the composition of buyers the number of firms and the distribution of costs across firms the effects of signaling and market externality cancel each other in other words the profits under signaling cournot equal the profits of a cartel in a full information environment

bt cotton in india field trial results and economic projections abstract the performance of bt cotton in india is analyzed on the basis of field trial data from 2001 the amounts of pesticides applied during the trials were reduced to one third of what was used in conventional cotton while under severe pest pressure yield gains were 80 productivity effects are modeled econometrically with a damage control specification the first approval for the commercial cultivation of bt hybrids was given in 2002 by 2005 the technology is expected to cover one quarter of total indian cotton area medium term projections show sizeable welfare gains for the overall economy with farmers being the main beneficiaries

social learning and delay in a dynamic model of price competition abstract this paper studies dynamic price competition between two firms selling differentiated durable goods to two buyers whose valuations of the two goods depend on their own private type as well as that of the other buyer we derive a key intertemporal property of the equilibrium prices and construct an equilibrium based on this property we show that social learning reduces the equilibrium prices in the sense that when the buyers are more interdependent and hence have a stronger incentive to wait and see the firms respond by lowering their period 1 prices interestingly we find that this response by the firms along with the intertemporal property of the equilibrium prices implies that buyers delay their decisions less often when they become more interdependent

waterfall versus sprinkler product launch strategy influencing the herd a seller decides the price and sequence in which a product of unknown value is introduced to consumers consumers inspect the product before consumption and observe past prices and sales consumption at a high price is informative for later consumers as it indicates that the product is likely to be of high value i show that on an average prices decrease over time however expected revenue on an average rises over time for a high enough discount factor i find that for extreme beliefs the firm introduces the product to all consumers but for intermediate values the product is introduced only to one consumer

price and advertising signals of product quality we present a signaling model based on ideas of phillip nelson in which both the introductory price and the level of directly uninformative advertising or other dissipative marketing expenditures are choice variables and may be used as signals for the initially unobservable quality of a newly introduced experience good repeat purchases play a crucial role in our model a second focus of the paper is on illustrating an approach to refining the set of equilibria in signalling games with multiple potential signals

a test of the hotelling rule using old growth timber data the paper tests hotelling s prediction that scarcity rent for a non renewable resource will rise at the rate of discount in a market equilibrium we perform the test using data for old growth timber a resource that is effectively non renewable in contrast to previous studies for this resource a measure of scarcity rent is directly observable in the form of stumpage price bids in timber auctions we construct a model that allows for replanting and captures the institutional framework of the western u s timber market the modified hotelling rule that we derive is not rejected in several of our specifications

systemic failure in the provision of safe food abstract many deficiencies in the capacity of a food system to deliver safe products are systemic in nature we suggest a taxonomy of four general ways in which a systemic failure might occur one relates to the connectedness or topology of the system another arises from mistrust on the part of downstream parties concerning signals on product attributes production processes and the performance of regulatory mechanisms a third arises when asymmetric information leads to low incentives for preserving food quality finally inflexibilities in adapting to different states of nature may leave the system vulnerable to failures innovations in information technology and institutional design may ameliorate many problems while appropriate trade industrial organization science and public infrastructure policies may also fortify the system

mineral depletion with cost as the extraction limit a model applied to the behavior of prices in the nickel industry abstract this article follows papers by pindyck and heal and barrow in applying a hotelling type depletion model to a particular resource industry in this case that of nickel by means of the model the resource rent per ton of nickel is calculated as the proper index of extractive resource scarcity the time path of this resource rent indicates that the model explains industry behavior well and that as in the two previous studies depletion has been an important determinant of prices and rents in this industry

mining of the forest and the time path of the price of timber abstract the paper analyzes the effect of transportation site specific costs and the effect of mining depletion of the forest on the time path of the price and of the net price of timber in two forestry models the models differ in that one has zero costs and the other has positive costs the analyses yield the standard mining theory results for certain cases they also yield extentions of these results for cases with growth of the harvested trees and or regeneration on the harvested land the paper concludes as one would expect that the theory of the mine is useful in analyzing the time path of the price of timber

markets and rent dissipation in regulated open access fisheries abstract using a model of regulated open access resource use with markets we illustrate the potential complexity of interactions between markets product quality excess effort and regulatory behavior in fisheries our model assumes two product types one of which is processed and storable the model describes the equilibrium that results when effort responds to open access incentives and when regulators respond to effort growth by mitigating its potential harmful effects on biomass safety we use numerical simulations to demonstrate a mechanism by which market growth leads to the diversion of raw inputs into the inherently inferior market the result is a scenario in which rents are dissipated not only because excessive inputs raise costs but also because inferior product types reduce revenues we conclude with an illustrative decomposition of rent gains into revenue and cost savings gains from rationalizing a hypothetical fishery demonstrating the potential significance of market side rents

a signal jamming theory of predation we propose a new theory ofpredation based on signal jamming in our model the predator s characteristics are common knowledge while the entrant is uncertain of his own future profitability the entrant uses his current profit to decide whether to remain in the market and the predator preys to jam or interfere with this inference problem thus our model differs from those based on reputation effects in which the predator preys to signal information about himself

food safety and product liability abstract this paper focuses on the u s product liability system for food poisoning cases and makes six key points first current legal incentives to produce safer food are weak though slightly stronger in outbreak situations and in markets where foodborne illness can be more easily traced to individual firms far less than 0 01 of cases are litigated and even fewer are paid compensation second even if potential plaintiffs can overcome the high information and transaction costs necessary to file lawsuits monetary compensation provides only weak incentives to pursue litigation firms paid compensation in 56 of the 294 cases examined in this study and the median compensation was only 2 000 before legal fees third indirect incentives for firms may be important and deserve more research for example firms may be influenced by costly settlements and decisions against other firms in the same industry fourth confidential settlements health insurance and product liability insurance distort legal incentives to produce safer food fifth the ambiguity about whether microbial contamination is natural or an adulterant hinders the legal system from effectively dealing with food safety issues sixth a brief comparison of the incentives from u s and english legal systems suggests that more research is needed to understand the strengths weaknesses and relative impact of each country s legal system on the incentives to produce safer food

bayesian analysis of latent threshold dynamic models we discuss a general approach to dynamic sparsity modeling in multivariate time series analysis time varying parameters are linked to latent processes that are thresholded to induce zero values adaptively providing natural mechanisms for dynamic variable inclusion selection we discuss bayesian model specification analysis and prediction in dynamic regressions time varying vector autoregressions and multivariate volatility models using latent thresholding application to a topical macroeconomic time series problem illustrates some of the benefits of the approach in terms of statistical and economic interpretations as well as improved predictions supplementary materials for this article are available online

a test of the hotelling valuation principle time series tests of the hotelling r percent rule for natural resource prices have not been strongly supportive but the tests and the data are subject to serious difficulties we propose here an alternative testing strategy based on another but less widely known implication of the hotelling model we test this implication which we call the hotelling valuation principle by regressing the market values of the reserves of a sample of u s domestic oiland gas producing companies on their estimated hotelling values we find that the estimated hotelling values account for a significant portion of the observed variations in market values and that the hotelling measures are better indicators of the market values of petroleum properties than two widely cited publicly available alternative appraisals

a hotelling faustmann explanation of the structure of christmas tree prices we examine the relationship between a tree price and a tree age height using a hotelling faustmann type model of optimal plantation management which accounts for the possibility of replanting and biological growth the model predictions are tested using the data on christmas tree prices in north carolina collected in december 1997 the estimates show that in general the rates of change in prices between adjacent age cohorts reflect a competitive equilibrium in the capital market thus supporting the hotelling faustmann paradigm rigorous empirical testing of the basic economic models of optimal natural resource pricing has proven to be difficult the source of the difficulty has been the unavailability of micro level data on either prices or extraction harvest rates for in situ resource stocks 1 for nonrenewable resources hotelling s famous pricing rule has rarely been tested with firm level data stollery s study of the international nickel company of canada supported hotelling s rule and miller and upton s study of oil company values supported a corollary called the hotelling valuation principle most other studies such as halvorsen and smith and farrow have refuted this bedrock of natural resource economics in fact two studies of old growth timber essentially a nonrenewable resource provide some of the most compelling support for the hotelling model berck johnson

economic inefficiency in a revenue setting the norwegian whitefish fishery the main focus in the inefficiency literature is on suboptimal input use and how this causes increased costs due to technical and allocative inefficiency production or cost functions are then typ

labeling regulations and segregation of first and second generation genetically modified products innovation incentives and welfare effects we review some of the most significant issues and results on the economic effects of genetically modified gm product innovation with emphasis on the question of gm labeling and the need for costly segregation and identity preservation activities the analysis is organized around an explicit model that can accommodate the features of both first generation and second generation gm products the model accounts for the proprietary nature of gm innovations and for the critical role of consumer preferences vis a vis gm products as well as for the impacts of segregation and identity preservation and the effects of a mandatory gm labeling regulation we also investigate briefly a novel question in this setting the choice of research direction when both cost reducing and quality enhancing gm innovations are feasible

legal systems institutional environment and food safety in the aftermath of the recent food scares the united states and the united kingdom face major challenges to maintain a safe food system regulators on opposite sides of the atlantic are facing rapid product and process innovations changes in consumption behaviors expansion of international trade and discovery of new food hazards the u k and the u s demonstrate different approaches to manage safety risks this article will focus on two issues the reasons behind the differences in the american and english policy approaches to food safety and how these differences impact u s safety outcomes a comparative legal framework is provided to understand how food safety is elicited in the economy and the incentive implications of the different institutional settings these two different lenses because they differ so teach us about the fundamental sources of safety the u k s prevalent doctrine is parliamentary sovereignty and leads to a regulatory framework while the u s is based on constitutional supremacy and relies on a legal framework the source of safety under a regulatory framework is the government bureaucracy while the u s legal framework provides an important point of departure the constitutional standing of the firm and the consumer we argue that while the u k system is structured to work through a regulatory framework to enhance the supply of safety in the economy the u s system is much less directed the legal system the subject of this article plays an important role not only in discouraging breach but also in acting as a check on the discretionary authority of the regulator in the end the u s and the u k may have equally safe food systems but what differs is the fundamental source of the safety supply the practical implication is that safety in the food system emerges from several sources not just through regulation therefore direct importation of u k style regulatory approaches may not be effective within a u s constitutional setting

impact of bt cotton on pesticide poisoning in smallholder agriculture a panel data analysis while substantial research on the productivity and profit effects of bt cotton has been carried out recently the economic evaluation of positive and negative externalities has received much less attention here we focus on farmer health impacts resulting from bt related changes in chemical pesticide use previous studies have documented that bt cotton has reduced the problem of pesticide poisoning in developing countries but they have failed to account for unobserved heterogeneity between technology adopters and non adopters we use unique panel survey data from india to estimate unbiased effects and their developments over time bt cotton has reduced pesticide applications by 50 with the largest reductions of 70 occurring in the most toxic types of chemicals results of fixed effects poisson models confirm that bt has notably reduced the incidence of acute pesticide poisoning among cotton growers these effects have become more pronounced with increasing technology adoption rates bt cotton now helps to avoid several million cases of pesticide poisoning in india every year which also entails sizeable health cost savings