patent protection in developing countries and global welfare wto obligations versus flexibilities abstract this paper develops a north south model to evaluate the south s incentive for patent protection when a northern firm s investment in quality enhancing research and development r d is affected by its patent policy the model is used to a evaluate the impact of requiring the south to fulfill its key wto obligation of instituting patent protection and b to address the role of two major flexibilities that wto members enjoy with respect to their patent policies the freedom to implement exhaustion policies of their choosing and the right to use compulsory licensing cl subject to certain stipulations two forces drive the model how much the firm invests in r d and whether or not selling in the south maximizes its global profit cl improves consumer access in the south and can even raise innovation and global welfare provided the south implements patent protection innovation and welfare are higher if the north follows national as opposed to international exhaustion however the south s incentive for patent protection is not necessarily stronger under national exhaustion not only is cl more likely to be used under international exhaustion the welfare gain resulting from its application is also higher relative to that under national exhaustion

consumer preference and willingness to pay for a renewable fuel standard rfs policy focusing on ex ante market analysis and segmentation abstract total energy consumption of oil in 2050 is expected to increase to 1 6 times its level in 2005 and greenhouse gas ghg emissions in the transportation sector will be second only to the electricity sector in order to reduce ghg emissions in transportation leading countries have started to implement renewable fuel standard rfs policies other countries such as korea have recently started implementing rfs policies in order to comply with the proposed global ghg reduction target however previous research did not consider the impact of rfs policy on consumer acceptance levels therefore this study analyzes consumer preferences and willingness to pay wtp for rfs to provide detailed policy strategies this study conducts additional analysis using market segmentation and sensitivity analysis the results indicate that consumers generally accept the cost of implementing an rfs policy if the cost falls between krw 101 78 liter usd 0 33 gal and krw 187 26 liter usd 0 60 gal in addition consumer wtp for implementing an rfs policy changes when the income exceeds krw 5 million usd 4229 1 in driver group and relatively lower income groups tend not to support rfs policies based on the results of this study we can suggest proper pricing policies for each income group and a public relations strategy to improve the level of policy acceptance

transport and low carbon fuel a study of public preferences in spain abstract transport is essential for the control of future greenhouse gas ghg emissions and thus a target for active policy intervention in the future yet social preferences for policies are likely to play an important role in this paper we first review the existing literature on preferences regarding low ghg car fuels but also covering policy instruments and strategies in this area we then present the results of a survey of spanish households aimed at measuring preferences for climate change policies we find a positive willingness to pay wtp in the form of higher car fuel prices for a policy to reduce ghg emissions through biofuels there is however significant heterogeneity in public preferences due to personal motivations accounted for via factor analysis of responses to attitudinal questions and to socio demographic variables

pharmaceutical cost sharing systems and savings for healthcare systems from parallel trade this paper studies the consequences of parallel trade in a two country model it compares a coinsurance scheme consumers pay a percentage of the drug price and an indemnity insurance scheme reimbursement is independent of the drug price with respect to changes in copayments and public health expenditure in the destination country copayments for patients decrease to a larger extent under indemnity insurance whereas reductions in public health expenditure occur only under coinsurance in the source country copayments increase less under coinsurance whereas health expenditure is reduced more under indemnity insurance in both countries total expenditure under parallel trade is lower

assessment of public acceptance and willingness to pay for renewable energy sources in crete abstract the aim of this study is to analyse and to evaluate the citizens public acceptance and willingness to pay wtp for renewable energy sources res in crete for this purpose a contingent valuation study was conducted using a double bound dichotomous choice format to elicit people s wtp and factors affecting it residents of 1440 households all over crete were interviewed face to face major conclusions can be used as a basis for sustainable energy planning for policies and the formulation of awareness campaigns and for res investment programs and projects in order to prepare implementation conditions and enhance public acceptance of renewable energy investments and programmes mean wtp per household was found to be 16 33 to be paid quarterly as an additional charge on the electricity bill larger willingness to pay was reported by those with high family income and residence size those having a higher level of energy information and awareness concerning climatic change those who have invested in some energy saving measures and those who suffer from more electricity shortages than others

parallel imports price controls and innovation the impact of parallel trade on innovation in r d intensive industries such as pharmaceuticals is a hotly debated question in antitrust and ip policy the well known argument that parallel trade dampens innovation by undermining firms ability to price discriminate has been challenged by recent literature the argument is that with endogenous price controls parallel trade increases innovation by reducing governments incentives to set particularly low price caps in this paper we show that this result crucially depends on the degree of homogeneity of the trading countries the result only holds if consumers in poorer countries have a relatively similar demand for medication as consumers in richer countries instead when countries are relatively heterogeneous parallel trade dampens innovation and lowers welfare by exporting price cap regulation from poorer to richer countries these findings are in line with recent case evidence we also show that when patent length is endogenous richer countries will tend to choose longer patent protection with parallel trade whereas equilibrium price caps tend to be tighter in that case

optimal capital income taxation with incomplete markets borrowing constraints and constant discounting for a wide class of infinitely lived agent models chamley has shown that the optimal capital income tax rate is zero in the long run lucas has argued that for the u s economy there is a significant welfare gain from switching to this policy this paper shows that for the bewley class of models with incomplete insurance markets and borrowing constraints the optimal tax rate on capital income is positive even in the long run therefore cutting the capital income tax to zero may well lead to welfare losses

equilibrium parallel import policies and international market structure in a north south vertically differentiated duopoly the analysis in this paper derives equilibrium government policies towards parallel imports by incorporating strategic interaction at the policy setting stage and the product market the model sheds new light on i the effects of parallel import policies on pricing behavior of firms and ii the interdependence of national parallel import policies if demand asymmetry across countries is sufficiently large the north forbids parallel imports to ensure its firm sells in the south thereby generating international price discrimination the south s most preferred market outcome as the equilibrium when demand structures are relatively similar across countries the north permits parallel imports and uniform pricing its most preferred market outcome obtains

retailers as agents and the limits of parallel trade abstract the volume of retail level parallel trade is surprisingly small despite persistent international price differences we offer an agency based explanation by considering competition between an original home manufacturer and a foreign retailer the model endogenizes the role of the retailer as an agent with private information on the perceived quality of the good in its own market the manufacturer cannot control the retailer once the latter has ordered its sales quantity but it can limit the initial offer if parallel trade is permitted this offer will fall if there is incomplete information resulting in a small or zero volume of parallel trade this outcome makes both the original producer and foreign consumers worse off while offering little benefit to home consumers compared to the case where such trade is banned

public s willingness to pay a premium for bioethanol in korea a contingent valuation study abstract bioethanol be a renewable energy is well known to mitigate the greenhouse gas emissions compared with conventional gasoline thus the korean government is considering the introduction of a be mandate in which the legal blend is 5 be and 95 gasoline e5 until 2020 in order to expand be use we should examine the public acceptability of the introduction which incurs a rise in the fuel price this study attempts to assess the public s willingness to pay wtp a premium for introducing the e5 program in korea to this end a contingent valuation cv survey of 1000 randomly selected consumers was conducted in 2014 across the nation we used a one and one half bound dichotomous choice question in the cv survey and applied the spike model to handle the wtp data with zeros the mean wtp a premium for the e5 per liter is estimated to be krw 290 usd 0 27 which is statistically meaningful at the 1 level this value amounts to 15 6 of the gasoline retail price in 2014 krw 1856 or usd 1 70 and can be interpreted as the external benefit of be we can conclude that gasoline consumers in korea are ready to pay a significant premium for the e5

parallel imports and the pricing of pharmaceutical products evidence from the european union we consider policy issues regarding parallel imports pis of brand name pharmaceuticals in the european union where such trade is permitted we develop a simple model in which an original manufacturer competes in its home market with pi firms the model suggests that for small trade costs the original manufacturer will accommodate the import decisions of parallel traders and that the price in the home market falls as the volume of parallel imports rises using data from sweden we find that the prices of drugs subject to competition from parallel imports fell relative to other drugs over the period 1994 1999 econometric analysis finds that parallel imports significantly reduced manufacturing prices by 12 19 there is evidence that this effect increases with multiple pi entrants

liquid capital and market liquidity this article considers how the supply of liquid capital affects the liquidity of asset markets the article views the former notion as a technological property of real investments and the latter as an endogenous property of financial market equilibrium and describes a channel by which the two are linked when agents hold more wealth in technologically liquid investments a marginal adjustment to portfolio holdings alters discount rates less causing a smaller price impact thus even without intermediaries or frictions the stock of transformable capital may be a crucial determinant of the resilience of financial markets

analyzing public preferences and increasing acceptability for the renewable portfolio standard in korea abstract in order to respond to the challenge of climate change similar to other countries korea has announced various policies to vitalize the development and uptake of renewable energy the renewable portfolio standard rps is the most striking example of a policy in this area this study employs a conjoint survey and bayesian mixed logit model to analyze consumer preferences for specific attributes of the rps policy it analyzes households marginal willingness to pay mwtp for the rps with specific attributes and simulates the degree of household acceptability of the policy through a scenario analysis comparison between costs and benefits of implementing the policy is also attempted by analyzing the households mwtp with the actual transition expense of rps implementation incurred by electricity supply companies the simulation results provide implications for improving rps policy implementation households consider the creation of new jobs as the most important policy attribute followed by increase in electricity prices damage to forests reduction in co 2 emissions and length of power outages moreover the korean household is willing to accept an increase of up to 1 39 in its electricity prices relative to 2012 and the median mwtp of each household for rps implementation is krw 734 99 month usd 0 67 month

labeling renewable energies how the language surrounding biofuels can influence its public acceptance abstract despite growing interest and investments in biological fuels little is known of how the public form opinions toward this alternative fuel technology this study examines public opinion of biofuels by focusing on several factors that can be expected to influence citizens opinions about the issue first we tested the results of a framing experiment that was embedded within a public opinion survey this experiment explored how the public responded to the term biofuels as compared to the term ethanol our results suggest that overall respondents tended to react more favorably to the former as opposed to the latter term second we examined the impacts of sociodemographics on public attitudes toward biofuels we found that while sociodemographics did little to consistently explain attitudes toward biofuels there was clear evidence of ideological influences on attitudes with self identifying democrats showing more positive attitudes overall finally we explored the interaction between political partisanship and our experimental manipulation we found evidence that our wording manipulation differed based on the political party identification of our respondents with democrats fluctuating greatly in their assessments depending upon whether they were asked to evaluate biofuels or ethanol

transaction costs and consumption abstract the rational expectations permanent income hypothesis re pih fails to explain several well documented features of consumption behavior first the estimated marginal propensity to consume mpc for unanticipated transitory income shocks is often much higher than what the theory warrants second the estimated mpc is typically much bigger for small shocks of this type than for large shocks third consumption is often smoothed against large anticipated future income changes but not always against small changes this paper argues that these findings can be reconciled within a re pih model that includes a cash in advance constraint and an assumption that the agent is required to pay a fixed transaction cost to transfer wealth between cash and assets key results of the paper include first the agent follows an s s rule with respect to cash holdings when he makes wealth transfer decisions second the mpc within the no transfer band is higher than that out of the band and can be as high as exactly equal to one and third the agent smoothes consumption in response to news of large future income changes but not necessarily to small ones

renewables portfolio individual preferences and social values towards res technologies abstract the massive deployment of renewable energy sources represents a high priority for greece in order to comply with the directive 2009 28 ec on the promotion of the use of energy from renewable sources by 2020 in this perspective aegean islands especially lesvos are endowed with a considerable potential of a portfolio of renewables a fact that the entrepreneurial interest has already been targeted however regulatory attempts for a massive penetration of renewables do not take seriously into account preferences and risk perceptions of local communities where the proposed projects are to be installed the aim of this study is to investigate individual preferences and social values towards specific technologies of renewables in lesvos island we apply an open ended contingent valuation survey in order to analyze factors shaping public attitudes towards a portfolio of renewable technologies and estimate the economic welfare willingness to pay of the preferred technologies we argue that such information is relevant for energy policy design and the establishment of effective measures for the promotion of renewable energy sources

cross national price differences for pharmaceuticals how large and why bilateral drug price and quantity indexes based on comprehensive data for seven countries us canada france germany italy japan and the uk refute the conventional wisdom that us drug prices are much higher than elsewhere for laspeyres us weighted indexes previous drug price comparisons are biased by unrepresentative samples and unweighted indexes quasi hedonic regression shows that cross national price differences reflect differences in product characteristics and in their implicit prices which reflect the regulatory regime strict price regulation systematically lowers prices for older molecules and globally diffused molecules generic competition lowers prices in less regulated regimes which also have more price elastic demand

international aspects of merger policy a survey this paper surveys the literature on merger policy in open economies we first adopt a reduced form approach to derive general insights on the scope for conflict between national antitrust authorities and on the gains from international merger policy coordination taking trade costs as given we use standard oligopoly models to derive conditions on market structure under which underenforcement or overenforcement of national merger policies can arise we then study the interactions between merger policy and trade policy and find that trade liberalization often leads to stricter national merger policies we conclude by discussing empirical evidence on conflict between antitrust authorities

wind power implementation the nature of public attitudes equity and fairness instead of backyard motives abstract public attitudes anywhere in europe show moderate to strong support for the implementation of renewable energy nevertheless planning wind power developments appears to be a complicated matter in most countries the problems that have to be dealt with during decision making processes on the siting of wind turbines are usually referred to as mere communication problems however public attitudes towards wind power are fundamentally different from attitudes towards wind farms this gap causes misunderstandings about the nature of public support for renewables in particular where planners easily assume support for renewables can be generated by information campaigns emphasising the environmental benefits whereas opposition to renewable energy schemes can be explained by a selfish not in my backyard attitude both explanations used by planners authorities and unfortunately by many scholars are falsified furthermore policies that still take this common knowledge for granted can have negative consequences for the implementation rates of renewables visual evaluation of the impact of wind power on landscape values is by far the dominant factor in explaining why some are opposed to wind power and others are supporting it moreover feelings about equity and fairness appear the determinants of backyard motives instead of selfishness

public acceptance of biofuels abstract the public acceptance of biofuels in greece is examined in this work the analysis of 571 face to face interviews shows that 90 7 of the respondents believe that climatic changes are related to fossil fuel consumption while only 23 8 know the difference between biodiesel and bioethanol 76 1 believe that energy saving should precede the use of an alternative source of energy only 27 3 believe that priority must be given to biofuels over other renewable energy sources only 49 9 think that the use of biofuels can be an effective solution against climatic changes and 53 9 believe that the use of biofuels can be an effective solution for the energy problem finally 80 9 of the car owners are willing to use biofuels 44 8 are willing to pay the supplementary amount of 0 06 l of the fuel market price while the average amount reported as willing to pay was 0 079 l on top of the fuel market price furthermore eight models correlating the eight main responses with several socioeconomic variables are developed and analyzed those findings heave important policy implications related to the use and promotion of biofuels

price regulation and parallel imports of pharmaceuticals abstract this paper studies the effects of price regulation and parallel imports in the on patent pharmaceutical market in a theory model where the producer price is subject to bargaining between the brand name producer and a distributor we show that the effects of stricter price regulation crucially depend on whether the producer faces competition from parallel imports while parallel imports improve the bargaining position of the distributor price regulation counteracts this effect and may even be profitable for the producer we test the implications of our model on a unique dataset with information on sales and prices at both producer and retail level for 165 substances over 4 years 2004 2007 we show that stricter price regulation reduces competition from parallel imports and has no strictly negative effect on producer profits in the presence absence of parallel imports our results suggest that price regulation might improve static efficiency without being harmful for dynamic efficiency in the presence of parallel imports

pharmaceutical innovation and parallel trade abstract this paper proposes a north south model to study the interaction between price regulation policies and parallel trade with a particular focus on the pharmaceutical sector we show that under parallel trade r d investment can rise only when the south government takes into full account its impact both on investment and on the firm s decision to supply the regulated country this arises because of a complete withdrawal from price regulation when policy choices are endogenized indeed the south wants to achieve this level of full commitment when it is large in size when instead it is smaller in size the south chooses an intermediate form of commitment whereby it anticipates its effect only on local distribution and delivery but not on global r d investment as a response to these credible levels of price control commitments the north reacts by allowing parallel imports from the south

capital income taxation wealth distribution and borrowing constraints the theorem of zero taxation of capital income is reexamined and is shown to hinge critically on the assumptions of a long horizon and perfect markets for the inter temporal allocation of resources the theorem does not hold when borrowing constraints prevent individuals from insuring against idiosyncratic shocks and have a precautionary motive for savings structural assumptions are made such that with no taxation aggregate savings are socially excessive in the long run i e the rate of return is smaller than the discount rate sufficient conditions for a pareto efficient taxation or subsidization of capital in the long run depend on the correlation between individuals consumption and savings a subsidy may be efficient when individuals incomes follow a predictable pattern of life cycles with no negative bequest 2001 elsevier science b v all rights reserved

saving and liquidity constraints this paper is concerned with the theory of saving when consumers are not permitted to borrow and with the ability of such a theory to account for some of the stylized facts of saving behavior the models presented in the paper seem to account for important aspects of reality that are not explained by traditional life cycle models copyright 1991 by the econometric society

strategic pricing of new pharmaceuticals this paper provides empirical evidence on the leading factors affecting the prices of new pharmaceuticals both at introduction and after 4 6 and 8 years most important is the extent of therapeutic advance embodied in a new product for drugs which represent important therapeutic gains launch prices can be two or three times those of existing drugs used for the same purposes while drugs that largely duplicate the actions of currently available products are typically priced at comparable levels in addition the number of branded substitutes has a substantial negative effect on launch prices which reflects the importance of competitive pressures duplicate products thereby play an important economic role in pharmaceutical markets

using contingent valuation to explore willingness to pay for renewable energy a comparison of collective and voluntary payment vehicles abstract this study uses a split sample dichotomous choice contingent valuation survey of 1574 u s residents to explore willingness to pay wtp for renewable energy under collective and voluntary payment vehicles and under government and private provision of the good we also evaluate the impact of participation expectations on stated wtp we find some evidence that when confronted with a collective payment mechanism respondents state a somewhat higher wtp than when voluntary payment mechanisms are used similarly private provision of the good elicits a somewhat higher wtp than does government provision we also find that contingent valuation responses are strongly correlated with expectations for the wtp of others our results shed light on strategic response behavior and the incentive compatibility of different cv designs and offer practical insight into u s household preferences for how to support renewable energy

patents and the global diffusion of new drugs analysis of the timing of launches of 642 new drugs in 76 countries during 1983 2002 shows that patent and price regulation regimes strongly affect how quickly new drugs become commercially available in different countries price regulation delays launch while longer and more extensive patent rights accelerate it health policy institutions and economic and demographic factors that make markets more profitable also speed up diffusion the estimated effects are generally robust to controlling for endogeneity of policy regimes with country fixed effects and instrumental variables the results highlight the important role of policy choices in driving the diffusion of new innovations

on the existence and uniqueness of stationary equilibrium in bewley economies with production abstract i prove existence of stationary recursive competitive equilibrium in bewley economies with production under specifications in which i the utility function is allowed to be unbounded and ii the underlying discrete idiosyncratic productivity process can take any form aside from mild restrictions some of the intermediate results provide theoretical basis for assumptions often made in the quantitative macroeconomics literature by providing an example i illustrate that the equilibrium is not necessarily unique even under typical specifications of the model and discuss the underlying reasons for multiplicity

export diversification and international debt under terms of trade uncertainty abstract this paper proposes an intertemporal approach to export diversification in developing countries facing uncertain terms of trade by incorporating international debt by far the predominant source of ldc external financing today the model provides a richer and more realistic framework than static models with no financial markets or models emphasizing international trade in equities the approach is applied to a small developing country with a comparative advantage in a risky commodity to illustrate explicitly the relation between intertemporal substitution in consumption and diversification in production

arbitrage across borders why itunes gift cards sell above face value on ebay i introduction firms that operate internationally often charge different prices for the same product in different countries these price differences may be due to cost differences exchange rate fluctuations and or price discrimination where firms set prices based on consumers willingness to pay for the product there is an extensive literature on international price differences but nearly all of this research has focused on physical goods where arbitrage the situation where someone buys the product from a low price country and resells it to someone in a high price country tends to be relatively costly because of transaction costs including search costs and transportation costs there have been no empirical papers in the economics literature thus far on the arbitrage of downloadable goods this paper looks at the case of itunes which sells downloadable music videos books ipad and iphone applications and other content worldwide and shows how the sale of itunes gift cards above face value on the auction website ebay is linked to the arbitrage of itunes products itunes which is operated by apple first started selling music downloads in 2003 and by 2008 it was the largest music retailer in the united states and the world 1 people typically purchase products from their own country specific itunes stores but not all content is available in all countries due in part to licensing restrictions and consumer preferences e g itunes does not sell music movies and tv shows in many countries prices also vary across countries as detailed in section iii of this paper one can easily switch to any other country s itunes store with just a few mouse clicks in particular the u s store would seem to be a natural focal point and it tends to have lower prices and a wider selection however in order to actually purchase something from the u s store one needs to have either a u s credit card or a u s itunes gift card available in denominations ranging from 10 to 100 in the primary market through apple and its authorized sellers such as wal mart and best buy as such it can be surmised that some individuals outside the united states may be willing to purchase itunes gift cards on ebay in order to gain access to the u s store it should be noted that itunes terms and conditions specify that the u s store s products are available only to buyers in the united states we can see the evidence for this through the sale of itunes gift cards on ebay nearly 200 itunes gift cards are sold daily on ebay about 10 of all gift cards and more than half of these itunes gift cards sell above face value a phenomenon that is unusual among gift cards after discussing some background information and related literature this paper examines more than 1 300 ebay transactions in february 2011 and finds that itunes gift cards targeted to international buyers which are often sent electronically are more likely to have higher prices controlling for seller reputation shipping charges and other variables this indicates that non u s buyers are willing to pay a premium for the gift cards because they are unable to obtain them otherwise information about the buyers countries allows us to see whether it is the u s store s greater product availability or its lower prices that buyers are interested in this paper addresses an important issue because of the rising popularity of the sales of downloadable content worldwide this market includes music videos books video games and applications the internet has also made it easier for buyers and sellers in different countries to find one another and in the case of digital products exchange goods if arbitrage is widespread firms may decide to either minimize price differences between countries stop selling in low price countries altogether or use the legal system or other methods to prevent arbitrage in terms of the big picture this issue has implications for social welfare copyright enforcement and international trade policies and governments in some countries may also be concerned if their citizens have access to goods that are banned

incomplete markets labor supply and capital accumulation we explore the accumulation of capital in the presence of limited insurance against idiosyncratic shocks borrowing constraints and endogenous labor supply in the exogenous labor supply case e g aiyagari 1994 huggett 1997 the presence of limited insurance increases the demand for savings for precautionary reasons as a consequence capital and output are higher under incomplete markets we show that if labor hours are endogenous labor supply is likely to be lower under incomplete markets because those agents who experience a high shock to productivity are ex post richer and they work fewer hours in some cases this wealth effect can overcome the aggregate precautionary savings and give rise to lower savings and output under incomplete

pricing patent loss and the market for pharmaceuticals dustry the drug price competition and patent term restoration act of 1984 very clearly reflects the determination of policy makers to simultaneously address issues of price control and technical progress the 1984 act increased returns to innovation by extending the period of patent protection to take into account the time between receipt of a patent and food and drug administration fda approval of a drug for sale in the market the 1984 act also reduced the testing requirements for approval of new generic brands of existing chemical entities thus reducing entry barriers in markets where patents have expired the expected outcome from eased entry conditions for generic substitutes was substantially enhanced price competition and lower prices for brand name drugs in fact prices for brand name drugs have tended to increase following entry by generics wagner and duffy 28 examined price changes for top selling generics and name brands they show substantial price increases in brand name prices accompanying large reductions in generic prices as entry of generics occurs grabowski and vernon 9 examined data on 18 major orally administered rug products subject to generic competition between 1983 and 1987 and found that the name brand price increased by an average of 7 one year subsequent to generic entry and 11 two years following generic entry

financial integration and growth in a risky world abstract we revisit the debate on the benefits of financial integration in a two country neoclassical growth model with aggregate uncertainty the framework accounts simultaneously for gains from a more efficient capital allocation and gains from risk sharing together with their interaction global numerical methods allow for meaningful welfare comparisons gains from integration are quantitatively small even for riskier and capital scarce emerging economies these countries import capital for efficiency reasons before exporting it for self insurance leading to capital flows and growth reversals along the transition this opens the door to richer empirical implications than previously considered in the literature

differential pricing parallel trade and the incentive to invest abstract i consider the case for imposing uniform pricing on a monopolist in a setting where markets can be segmented according to differences in marginal costs and or consumer demand i also analyze the ex ante impact on incentives to invest in r d i show how two opposite trade offs arise when differential pricing is demand based uniform pricing has good ex post welfare properties but leads to lower investment ex ante conversely when differential pricing is cost based uniform pricing has bad ex post welfare properties but leads to higher investment ex ante

parallel trade and pharmaceutical prices a game theoretic approach and empirical evidence from the european union this paper studies whether parallel traded products spark price competition in pharmaceutical markets and whether they are any cheaper than locally sourced products we follow a game theoretic approach and employ descriptive statistics and econometric methods to study the effects of parallel trade on competition from a theoretic and empirical perspective the theoretic approach suggests that there is a unique nash equilibrium and the parallel trader sets prices at the same level as the locally sourced product while the price of the latter remains unaffected by parallel trade however there may be deviations from this equilibrium in the presence of particular policies or generic competition in which case the parallel traded product may be priced at lower levels than the locally sourced product empirical analysis confirms the predictions of the theory descriptive statistics show that there is no gap between locally sourced and parallel traded products unless generics or policies encouraging parallel trade are present results of the econometric analysis show that parallel trade does not trigger price competition and that the price of the locally sourced product remains unaffected by parallel trade therefore any savings for health insurance occurring as a result of parallel trade are limited

the impact of parallel imports on investments in cost reducing research and development abstract we develop a two country model of endogenous investment in process innovation by a manufacturer facing competition from parallel imports pi we find that the distortions associated with pi inhibit innovation however the difference between the manufacturer s expected profits under successful and failed innovation is u shaped in the cost of engaging in pi thus the reduction in r d investment depends on both legality of pi and transport costs the reduction in innovation could harm global welfare depending on whether the manufacturer was deterring pi with a high wholesale price if so banning such trade would raise expected welfare

parallel imports and repair services abstract this study explores the welfare effects of parallel imports when the producer may refuse to provide repair services for parallel imported units which reduces the degree of price convergence between countries if the probability of the product s breakdown is endogenously determined by the producer permitting parallel imports could increase the probability because a higher probability leads to a larger price gap as a result it is possible that prices increase and welfare deteriorates in both countries this negative welfare effect is more likely to emerge as the liberalization of trade in goods proceeds the prohibition of service discrimination recovers the positive welfare effect

should the us allow prescription drug reimports from canada as a result of public outrage over lower prescription drug prices in canada congress passed legislation that would allow these drugs to be imported into the us the lower canadian prices reflect price regulation opponents of allowing these imports have argued that the us will import canadian price controls and that profits of pharmaceutical companies will be hurt in this paper a model is developed in which a good sold in the foreign country is subject to a negotiated price which is determined in a nash bargaining game when imports back into the home country are allowed this negotiated price also becomes the domestic price this causes the home firm to make fewer price concession in the nash bargaining game home firm profits are found to rise under the reimport regime for both of the demand functions analyzed in this paper

vertical distribution parallel trade and price divergence in integrated markets we develop a model of vertical pricing in which an original manufacturer sets wholesale prices in two markets that are integrated at the distributor level by parallel imports pi the manufacturing rm needs to set these two prices to balance three competing interests restricting competition in the pi recipient market avoiding resource wastes due to actual trade and reducing the double markup problem in the pi source nation

equilibrium asset prices with undiversifiable labor income risk abstract in a two period lucas tree economy in which ex ante identical but ex post dissimilar agents face undiversifiable labor income risk calibrating a wrong representative agent model results in overstating the equilibrium riskfree rate and in understating the equilibrium equity premium if the utility function exhibits decreasing absolute risk aversion and decreasing absolute prudence these behavioral assumptions provide as a consequence a theoretical rationale for the often advanced conjecture that nontraded risk contributes to the solution of the riskfree rate and equity premium puzzles

consumption liquidity constraints and asset accumulation in the presence of random income fluctuations recent empirical research flavin 1981 hagashi 1982 has rejected the certainty equivalent formulation of permanent income hypothesis hall 1978 these findings are often attributed to households inability to borrow completely against expected future labor income this paper is a theoretical investigation of optimal consumption behavior under risk aversion random income fluctuations and borrowing restrictions our principle objective is to establish the existence and to investigate the properties of the stationary probability distribution which characterizes the asymptotic behavior of consumption under these conditions this abstract was borrowed from another version of this item

public attitudes to biofuel use in aviation evidence from an emerging tourist market abstract aviation generates substantial carbon footprint which is projected to increase due to the continuous growth in international tourism especially in emerging markets this carbon footprint should be mitigated to bring the tourism industry towards its sustainability goals within a portfolio of prospective carbon mitigation measures biofuels represent a technological innovation which holds substantial potential to reduce the carbon significance of aviation the success of technological innovations often depends on public opinion the role of public opinion is particularly relevant in the aviation context where safety considerations of technological innovations may determine consumer choice focusing on poland an emerging tourist market in europe this study explored public opinion on biofuel use in aviation it found that public understanding of the perspectives of aviation biofuel technology including its safety is limited and needs to be reinforced public distrust in the national institutions of power and the industry sector representatives in poland calls for educational and public awareness raising campaigns to be delivered by the third sector organisations

monetized value of the environmental health and resource externalities of soy biodiesel abstract this study monetizes the life cycle environmental damage human health risk and resource depletion externalities associated with the production and use of biodiesel fuels from soybean feedstock applying a framework that couples life cycle damage measurements with social preferences elicited from a conjoint choice experiment allows for comparison of petrodiesel and biodiesel s external damages the results of the study reveal that production and consumption of soybean based biodiesels produce improvements in environmental health and resource impacts of 0 27 per gallon relative to petrodiesel for a 20 blend and 3 14 per gallon for a 100 blend

commodity taxation and parallel imports we examine the interaction between commodity taxes and parallel imports in a two country model with imperfect competition while governments determine non cooperatively their commodity tax rate the volume of parallel imports is determined endogenously by the retailing sector we compare the positive and normative implications of having commodity taxes based on destination or origin principle we show that as the volume of parallel imports increases non cooperative origin taxes converge while destination taxes diverge moreover origin taxes are more similar and lead to higher aggregate welfare levels than destination taxes

compulsory licensing and patent protection a north south perspective in a stylized model involving a developing country called south and a foreign patent holder we analyze whether and how the incidence and social value of compulsory licensing cl depends upon the south s patent protection policy if south is free to deny patent protection cl fails to arise in equilibrium and the option to use it makes both parties worse off if south is obligated to offer patent protection cl can occur and even yield a pareto improvement the ability to control price increases the south s incentive for patent protection as well as the likelihood of cl this article is protected by copyright all rights reserved

household choices in equilibrium this paper is an empirical investigation of equilibrium restrictions on household consumption and male labor supply it exploits a simple factor structure rationalized by two assumptions that household allocations are pareto optimal and that the labor market is competitive the paper estimates household preferences and tests how well this parsimonious factor structure represents panel data on married couples and time series data on asset returns most of the estimates are roughly comparable to those found in previous work no evidence against the simple factor representation is found and the intertemporal capital asset pricing model is not rejected copyright 1990 by the econometric society

duality and liquidity constraints under uncertainty a dual approach to the problem of maximizing lifetime utility subject to liquidity constraints in discrete time leads to a dual dynamic programming formulation which links commodity and asset demand theory under uncertainty with frisch demand theory we establish the existence of a threshold level of wealth that characterizes constrained behavior we explore the power of the dual approach for empirical work

unemployment and liquidity constraints summary we present a dynamic framework for the interaction between borrowing liquidity constraints and deviations of actual hours from desired hours both measured by discrete valued indicators and estimate it as a system of dynamic binary and ordered probit models with panel data from the panel study of income dynamics we analyze a household s propensity to be liquidity constrained by means of a dynamic binary probit model we analyze qualitative aspects of the conditions of employment namely whether the household head is involuntarily overemployed voluntarily employed or involuntarily underemployed or unemployed by means of a dynamic ordered probit model we focus on the possible interaction between the two types of constraints we estimate these models jointly using maximum simulated likelihood where we allow for individual random effects along with an autoregressive process for the general error term in each equation a novel feature of our method is that it allows for the random effects to be correlated with regressors in a time invariant fashion our results provide strong support for the basic theory of constrained behavior and the interaction between liquidity constraints and exogenous constraints on labor supply copyright 2007 john wiley sons ltd

issues of social acceptance on biofuel development alongside with biofuel development social acceptance issues have been underestimated while social acceptance can emerge as powerful barrier for biofuel development this article provides discussion on social acceptance in biofuel context an acceptance framework based on life cycle biofuel production had been referred for a better understanding on social acceptance issues malaysia has been referred for the discussion as the country has faced with acceptance issue in their biofuel program the discussion point out different societal groups will demand specific consideration for either support or oppose biofuel this paper concludes that biofuel development will be constraint if social acceptance issues remain neglect

promotion of biofuel consumption in the transport sector an eu 27 perspective abstract the european union s eu directive 2003 30 ec 1 set an objective of reaching a 5 75 share of renewable energy as a proportion of the total energy consumption of the transport sector by 2010 as all the member states mss of the eu 27 were obliged to comply with this directive different public policy measures were developed and implemented to promote the use of biofuels in transport biofuels being the main renewable energy source res in this sector in this article we review the public measures undertaken in the eu 27 and show how these measures primarily involve tax incentives and biofuel blending mandates on fuel sales all countries with the exception of finland introduced tax incentives of various types to promote the use of biofuels while 18 mss also implemented biofuel blending mandates through the passing of legislation relating to this matter

consumption and portfolio policies with incomplete markets and short sale constraints the infinite dimensional case abstract we employ a martingale approach to study a dynamic consumption portfolio problem in continuous time with incomplete markets and short sale constraints we introduce a notion of minimax local martingale and transform the dynamic problem into a static problem of maximizing expected utility over the consumption bundles that satisfy a single budget constraint formed using that measure we establish the existence of and characterize the minimax local measure provide sufficient conditions for the dynamic consumption portfolio problem to have a solution and relate the optimal policies to the solution of quasi linear partial differential equation

imperfect capital markets in empirical life cycle models abstract in the context of frisch demand functions that have prices and the marginal utility of income as independent variables we show how to incorporate imperfect capital markets into empirical models the analysis is for rational agents in an uncertain world