integrating methods for ecosystem service assessment and valuation mixed methods or mixed messages a mixed method approach was used to assess and value the ecosystem services derived from the dogger bank an extensive shallow sandbank in the southern north sea three parallel studies were undertaken that 1 identified and quantified where possible how indicators for ecosystem service provision may change according to two future scenarios 2 assessed members of the public s willingness to pay for improvements to a small number of ecosystem services as a consequence of a hypothetical management plan and 3 facilitated a process of deliberation that allowed members of the public to explore the uses of the dogger bank and the conflicts and dilemmas involved in its management each of these studies was designed to answer different and specific research questions and therefore contributes different insights about the ecosystem services delivered by the dogger bank this paper explores what can be gained by bringing these findings together post hoc and the extent to which the different methods are complementary findings suggest that mixed method research brings more understanding than can be gained from the individual approaches alone nevertheless the choice of methods used and how these methods are implemented strongly affects the results obtained

deliberative monetary valuation in search of a democratic and value plural approach to environmental policy the use of deliberative methods to assess environmental values in monetary terms has been motivated by the potential for small group discussion to help with preference formation and the inclusion of non economic values in this review two broad approaches are identified preference economisation and preference moralisation the former is analytical concentrates upon issues of poor respondent cognition and produces a narrow conception of value linked to utilitarianism the latter emphasises political legitimacy appeals to community values and tends to privilege arguments made in the public interest both approaches are shown to embrace forms of value convergence which undermine the prospects for value pluralism as a result exclusion and predefinition of values dominates current practice in order to maintain democratic credentials the importance attributed to monetary value needs to be left as an open question to be addressed as part of a process determining an agreement to pay to this end we identify a discourse based approach as a third way consistent with the democratic and value plural potential of deliberative monetary valuation

deliberative monetary valuation dmv issues in combining economic and political processes to value environmental change abstract this paper explores and contrasts the different social processes of valuation now appearing as economic means of valuing the environment monetary valuation via stated preference approaches has been criticised for assuming well formed and informed preferences and excluding a range of sustainability concerns such as rights fairness and equity deliberative monetary valuation dmv in small groups is a novel hybrid of economic and political approaches which raises the prospect of a transformative and moralising experience critics of standard contingent valuation approaches have advocated this as offering a way forward however there has been a lack of clarity as to the means of obtaining values the expected outcomes and their role moving to group settings of deliberation raises concepts of social willingness to pay and accept which are distinct from an aggregate of individual value although this does not seem to have been widely recognised a new classification of values is presented appropriate to the literature trying to merge economic and political processes values associated with the individual may be exchange values charitable contributions or fair prices while social values can be speculative expressive or arbitrated the use of dmv is shown to result in different values due to variations in the institutional setting and process of valuation

rethinking ecosystem services to better address and navigate cultural values ecosystem service approaches have become a prominent basis for planning and management cultural services and non use values are included in all major typologies and present some of the most compelling reasons for conserving ecosystems though many barriers exist to their explicit characterization the values that conform least well to economic assumptions variously lumped together with as cultural services have proven elusive in part because valuation is complicated by the properties of intangibility and incommensurability which has in turn led to their exclusion from economic valuation we argue that the effectiveness of the ecosystem services framework in decision making is thwarted by i conflation of services values and benefits and ii failure to appropriately treat diverse kinds of values we address this challenge by 1 distinguishing eight dimensions of values which have implications for appropriate valuation and decision making 2 demonstrating the interconnected nature of benefits and services and so the ubiquity of intangible values 3 discussing the implications of these propositions for ecosystem services research and 4 outlining briefly a research agenda to enable decision making that is ecologically appropriate and socially just because many ecosystem services co produce cultural benefits full characterization of services must address non material values through methods from diverse social sciences

warrant valuation and exercise strategy abstract this paper demonstrates that warrant valuation and exercise strategy differ fundamentally from call option valuation simultaneous exercise of warrants is shown to be suboptimal and a monopolist owning all warrants can achieve a higher value unless warrants are perfectly divisible no satisfactory equilibrium exists for the valuation and exercise of widely held warrants the problems encountered appear to be quite general and stem from necessary assumptions about future corporate dividend policy and capital structure such assumptions are necessary for any model of corporate security valuation

how deliberation affects stated willingness to pay for mitigation of carbon dioxide emissions an experiment respondents reported willingness to pay wtp for mitigating carbon dioxide emissions after structured group discussion or without this deliberation deliberation did not affect mean or median wtp but it increased the number of issues respondents considered with some issues becoming more frequently considered and others less survey only respondents considered issues relevant for responding to a request for a charitable contribution group mode participants considered issues relevant for a public policy assessment findings suggest that ordinary citizens can offer valid input to environmental policy decisions but that framing effects in ordinary wtp surveys may prevent them from providing such input

warrant exercise and bond conversion in competitive markets abstract we develop a theory of warrants held by competitive warrantholders not constrained to exercise their warrants as one block the theory also applies to convertible bonds held by competitive bondholders not constrained to convert their bonds as one block we prove that the warrant bond price in each of the competitive equilibria is less than or equal to the price in an economy with the block constraint and for at least one competitive equilibrium the warrant bond price equals the warrant bond price in the block constrained economy we illustrate the paths of competitive warrant exercise and bond conversion and conclude that under realistic assumptions they can be long

background inequality and differential participation in deliberative valuation lessons from small group discussions on forest conservation in colombia abstract deliberative monetary valuation dmv methods have been proposed as a more democratic alternative to traditional contingent valuation methods cvm for natural resource decision making these deliberative methods are subject to criticisms one issue of concern is that the socio economic inequalities among members of the deliberative group may severely impede communication and consequently distort deliberative outcomes to examine such possibility we applied the deliberative methodology in a case study of forest conservation in colombia we found that those individuals who assumed social environmental leadership positions tended to dominate group discussion nevertheless the variations in the capacity to engage in group deliberation were better explained by participants personal characteristics than external constraints or group pressure also there was little evidence that leadership and domination in group deliberation significantly influenced participants stated wtp we conclude that dmv is vulnerable to the background inequalities among group members the democratic potential of deliberative methods should be critically examined in terms of the capacity to communicate effectively and equally

a strategic analysis of sinking fund bonds abstract unlike most securities the pricing of sinking fund bonds is influenced by the distribution of ownership which summarizes the extent to which the market is cornered the effect of the distribution of ownership on the pricing of sinking fund bonds is examined by an explicit game in which the price obtained for bonds sold can depend upon the size of the investor s position this framework is used to contrast the valuation of sinking fund bonds with the valuation of amortizing bonds and straight debt we show that it is generally incorrect to view sinking fund bonds as being equivalent to serial bonds

pricing warrants an empirical study of the black scholes model and its alternatives this paper uses a sample of over 25 000 daily warrant prices to empirically investigate potential problems with the commonly used warrant pricing model proposed by black and scholes as an extension of their call option model one problem seems to be especially important the constant variance assumption of the dilution adjusted blackscholes model appears to cause biases in model prices for almost all warrants and over the entire sample period we show that more accurate price forecasts are obtained with a specific form of the constant elasticity of variance model since the derivation of the black scholes model financial economists have speculated on its usefulness for warrant valuation in their pathbreaking paper black and scholes 1973 claim that in many cases their model can be used as an approximation to give an estimate of the warrant value however black and scholes 1973 warn that

discourse based valuation of ecosystem services establishing fair outcomes through group deliberation discourse based methods involving small groups of citizens have yet to be thoroughly engaged in the practice of ecosystem valuation this remains true despite the fact that many ecosystem goods and services such as clean air biodiversity and unpolluted lakes and rivers are considered to be public goods the conventional application of ecosystem valuation relies heavily on methodologies such as contingent valuation in which individuals are asked to express the value they attach to ecosystem goods and services in social isolation the difference between the public nature of ecosystem services and their valuation through individual expression has thus recently led to calls for more deliberative forms of environmental valuation because the allocation of ecosystem services directly affects many people and raises normative questions about social equity it is argued that carefully designed discursive methods will help ensure the achievement of social equity goals in this paper we examine the theoretical and normative assumptions that rest beneath the proposed turn towards discourse based methods and identify procedures for testing their application in the field 2002 elsevier science b v all rights reserved

deliberative monetary valuation dmv and democratic valuation dv a response to bartkowski and lienhoop 2017 abstract bartkowski and lienhoop 2017 comment on the dv approach which i proposed in an earlier issue they conclude that dmv overcomes some flaws of conventional stated preference sp methods addresses many of my concerns and at the same time avoids some of the problems generated by dv several of their comments are debatable a closer look at dmv in comparison with dv and conventional sp methods shows that bartkowski and lienhoop s dmv approach addresses only one out of six major issues with conventional sp methods the lack of opportunities for group discussion my conclusion therefore remains unaffected due to the many technical issues with measuring individual willingness to pay wtp valuations based on majority voting principles are not only more transparent and more democratically legitimate than conventional sp or dmv they may also produce superior proxies for aggregated individual wtp

information revelation through option exercise in many real world situations agents must formulate option exercise strategies with imperfect information in such a setting agents may infer the private signals of other agents through their observed exercise strategies the building of an office building the drilling of an exploratory oil well and the commitment of a pharmaceutical company toward the research of a new drug all convey private information to other market participants this article develops an equilibrium framework for option exercise games with asymmetric private information many interesting aspects of the patterns of equilibrium exercise are analyzed in particular informational cascades where agents ignore their private information and jump on the exercise bandwagon may arise endogenously article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

transferring environmental value estimates issues and alternatives abstract environmental value transfer needs to be understood in the context of scientific information use in general this provides a different perspective upon the reasons why benefit transfer in particular appears so controversial and raises concerns over the limited types of validity testing being undertaken by those supporting such applications as ecosystem services valuation another key issue which we emphasise is the unintentional challenge to standard economic theory raised by the models used to conduct value transfers existing value transfer practice reveals the need for a more inclusive approach if environmental values are to be addressed we argue that there are robust alternative means for including multiple environmental values in decision processes these cannot be dismissed out of hand and analysts should be expanding their understanding of the available approaches which include attitude and norm measures multi criteria analysis and participatory deliberative institutions

integrating non monetary and monetary valuation methods softgis and hedonic pricing abstract in order to address the increasing need for improved linkages between different value perspectives we examine the possibility of integrating two valuation methods the non monetary softgis and monetary hedonic pricing we find them compatible and their output more comprehensive compared to traditional valuation based on one value perspective the public participatory softgis survey delivers information on the perception of urban green spaces which we use as a criterion for dividing green space categories in a hedonic pricing model we find that the perception expressed in the survey is generally consistent with the impact on property prices in the case of formal green spaces however it is inconsistent when it comes to informal ones places identified as lacking well maintained greenery exert a positive influence on property prices while positively evaluated informal green spaces had no impact at all we identify the latter as a typical trade off between different value perspectives informal green spaces are perceived differently following a monetary and a non monetary approach

economic inequality and the value of nature abstract understanding what influences the value of nature is crucial for informing environmental policy from a sustainability perspective economic valuation should not only seek to determine a society s willingness to pay for environmental goods to devise an efficient allocation of scarce resources but should also account for distributional effects to ensure justice yet how economic inequality affects the value of non market environmental goods remains understudied combining recently developed theoretical results with empirical evidence this commentary shows that more equal societies have a higher valuation for environmental public goods and that non market benefits of environmental policy accrue over proportionally to poorer households on this ground we discuss implications for environmental valuation management and policy making and identify a number of fruitful areas for future research we conclude that environmental valuation should explicitly account for economic inequality and that encompassing assessments of the distributional effects of environmental policies must consider the distribution of non market environmental benefits

convertible debt valuation and conversion in complex capital structures abstract the impact of conversion strategies on the value of convertible debt is examined it is shown that for capital structures comprised of multiple classes of convertible debt the optimal conversion policy for a given bond class is affected by the decisions of other bond classes using this optimal conversion strategy closed form solutions for bond prices are derived

valuing the non market benefits of wild goose conservation a comparison of interview and group based approaches wild geese graze on improved pastures and young cereal crops and hence can cause considerable damage to agriculture particularly in areas close to roosting sites this study uses contingent valuation cv to establish whether government compensation payments currently made to farmers represent value for money by estimating the value placed on goose conservation by the general public benefit estimates from a conventional interview approach are compared with a group based approach called the market stall ms this involves two 1 h meetings held 1 week apart and differs from conventional interviews in that participants are given more time to consider their preferences and to discuss their wtp question with other household members we argue that this type of group based approach to environmental valuation offers important advantages over individual interview approaches especially for unfamiliar and or complex environmental goods

bringing stakeholder values into environmental policy choices a community based estuary case study this paper discusses a methodology for joining deliberation and analysis using the case study example of a national estuary program planning effort in tillamook bay or usa we describe the development of a community based evaluation tool that links actions proposed by technical experts e g biologists ecologists engineers to restore functioning of the tillamook bay estuary with the values and concerns expressed by community residents this task required the explicit consideration of trade offs across multiple benefits costs and risks we describe the design and results of an evaluation workbook developed with input from both the epa staff and community residents that provided insight to decision makers by presenting participants with explicit choices across the key dimensions and consequences of proposed actions the final section of the paper discusses the successes and limitations of the project in relation to evaluation needs associated with other environmental policy initiatives 2001 elsevier science b v all rights reserved

clarifying protected and utilitarian values of critical capital abstract sustainable development may be defined as a non declining value of capital stocks social natural built and human over time the ability for substitution between and within each stock over time has been widely debated resulting in the identification and then preservation of critical capital stocks we propose that critical can be defined from two ethical perspectives teleological or consequentialist goal or ends based and deontological moral duty and rule based the consequential ethic ensures critical capitals are utilitarian in value and they generate goods and services for the maintenance of human wellbeing whilst deontologically critical capital depends on culturally and psychologically protected values which may vary locally or at least as for e g biodiversity be open to conflicting opinions this separation in the basis for defining critical capital stocks leads to awareness that some tradeoffs between critical capital stocks may be irreconcilable or likely to lead to outrage a framework is developed to guide practitioners as to how to identify critical capital stocks using both protected and utilitarian values examples show that protected values are likely to be specific to community ethnic religious cultural etc and require different methods for resolving substitutability of capital stocks to achieve sustainable development

capturing the complexity of biodiversity a critical review of economic valuation studies of biological diversity biodiversity is a highly complex and abstract ecological concept even though it is not one physical entity it influences human well being in multiple ways mostly indirectly while considerable research effort has been spent on the economic valuation of biodiversity it remains to be a particularly challenging valuation object valuation practitioners therefore have to use proxies for biodiversity many of which are very simple single species habitats this paper presents a comprehensive and critical review of biodiversity valuation studies with special emphasis on biodiversity valuation in order to depict the state of the art in this research field it develops evaluation criteria so as to identify best practice applications and shows that the field of biodiversity valuation studies is rather heterogeneous regarding both valuation objects and valuation methods on the basis of our evaluation criteria and best practice studies we suggest that to account for the complexity and abstractness of biodiversity multi attribute approaches with encompassing information provision should be used that emphasise the roles biodiversity plays for human well being

the interaction between the financial and investment decisions of the firm the case of issuing warrants in a levered firm abstract in this paper we analyze the value of warrants and stock in a firm that has both equity and debt in its capital structure and assume that the proceeds from exercising the warrants are reinvested in the firm the effect of potential future scale investment on the firm s stock debt and warrants are investigated the warrants in our analysis are european in this framework there are two sources for the nonstationarity of the rate of return on any kind of financial claim the first stems from changes in the firm s capital structure and the second is due to the potential scale increase in the value of the firm should the warrants be exercised the effect of a potential transfer of wealth from equity holders to debt holders at time of exercise is analyzed when warrants are exercised and the proceeds are reinvested in a scale expansion project the probability of default may decrease it follows therefore that ceteris paribus debt is likely to appreciate in value at the expense of equity the method of pricing by arbitrage as proposed by harrison and kreps is used to derive values for claims on the firm problems associated with measuring the volatility of equity are discussed

an institutional analysis of methods for environmental appraisal abstract this paper focuses on a set of issues when choosing between methods for environmental appraisal approaches like cost benefit analysis contingent valuation multicriteria analysis and deliberative methods are based on very different assumptions concerning the characteristics of environmental resources the capacities of the individuals involved and the role the methods play in framing the process the present paper views environmental appraisal methods as institutional structures they are seen as rules concerning a who should participate and in which capacity b what is considered data and which form data should take and c rules about how a conclusion is reached specifically the choice of method defines the logic of the appraisal process and next influences the output while cost benefit analysis is based on the assumption of individual rationality deliberative methods assume that individuals can act according to social rationality the first part of the paper is devoted to clarifying what institutions are and their role in the valuation process second the main features of environmental or ecosystem services and the demands they raise for decision making are described a general framework for evaluating appraisal methods is then developed finally this structure is elaborated in more detail as a basis for deciding over the choices of methods in the case of evaluating ecosystem services a set of unresolved issues are identified especially related to how the choice of appraisal methods themselves should be instituted

agreeing to pay under value disagreement reconceptualizing preference transformation in terms of pluralism with evidence from small group deliberations on climate change abstract plural values contribute to multiple arrays of expressed preferences conventionally preference convergence toward consensus among initially disagreeing decision makers is understood in terms of diminishing value differences a cogent account of consensual decision that respects non diminishing value plurality is lacking instead there is a theoretic expectation for categorical consistency between subjective values and expressed preferences valuing agents in social interaction are expected to indicate identical preference orderings only if they hold correspondingly identical categories of values this expectation precludes meaningful conceptualization of preference convergence under divisive normative dispositions an alternative framework is proposed and illustrated by results from a designed deliberative forum on australia s climate change policy data were analyzed based on q methodology results show that small group deliberations enabled effective communication between distinctive subjective positions and broadened understandings between individuals while a consensual decision gained progress no identified value discourse diminished below a significant degree observed changes in values did not run parallel to the converging preferences suggesting a decline in value preference consistency these changes nonetheless are amenable to the principle of value pluralism an alternative rationality concept is needed to account for this moral ideal within economics

option exercise games an application to the equilibrium investment strategies of firms under the standard real options approach to investment under uncertainty agents formulate optimal exercise strategies in isolation and ignore competitive interactions however in many real world asset markets exercise strategies cannot be determined separately but must be formed as part of a strategic equilibrium this article provides a tractable approach for deriving equilibrium investment strategies in a continuous time cournot nash framework the impact of competition on exercise strategies is dramatic for example while standard real options models emphasize that a valuable option to wait leads firms to invest only at large positive net present values the impact of competition drastically erodes the value of the option to wait and leads to investment at very near the zero net present value threshold copyright 2002 oxford university press

equilibrium and options on real assets in aggregate options on real and financial assets can have very different properties typically the good or service produced by a real asset has a finite elasticity of demand and developers have finite capacities also the supply of options can be limited and developers can be less than perfectly competitive in a subgame perfect nash equilibrium with these properties the optimal exercise policy and resulting values of developed and undeveloped assets are calculated explicitly the novel comparative statics are discussed in detail article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

contingent valuation a new perspective after several decades of academic research on the contingent valuation cv method a consistent behavioral explanation of hypothetical bias is still lacking based on evidence from economics economic psychology and the political sciences i propose an explanation that is based on two simple working hypotheses about respondent behaviour in contingent valuation surveys the first hypothesis is that survey respondents are unable to form consistent preferences about unfamiliar goods unless the choice context offers reliable informative cues that can be rationally exploited in simplified heuristics the second hypothesis is that the probability and impact of strategic responses in dichotomous choice questions about public goods depends on the extent to which the presented hypothetical costs differ from the actual costs the literature on hypothetical bias is revisited in the light of these behavioral hypotheses i find that the hypotheses are generally supported by the empirical data moreover the hypotheses are able to explain several important empirical phenomena that previous research has not been able to explain in particular they solve the puzzle that pre election polls but not cv surveys are able to predict actual referendum outcomes and they explain why income effects on willingness to pay are lower in cv responses than in actual votes if confirmed by further studies the hypotheses will have important implications for future research and practice first the hypothetical costs presented in the dichotomous choice question should to be close enough to the actual costs to be credible to all respondents this can be achieved by specifying the costs as a percentage rather than absolute change in taxes second the respondents should be given the option to answer based on information about the positions of large parties and interest groups with known political orientation rather than based on the raw policy information theory and evidence suggest that this new survey paradigm largely eliminates the fundamental problems of the conventional stated preference methods

aggregation and deliberation in valuing environmental public goods starting from a distinction between kantian principle based and utilitarian preference based approaches in political theory this essay argues that we may understand normative judgments individuals make about policy to express principled views of the public interest or purpose not private preferences about their own consumption opportunities these judgments in other words state opinions about what we ought to do as a society rather than report preferences about what i want as a utility maximizer this essay then argues that contingent valuation can take into account these kinds of judgments which dominate public discourse about the environment only if it moves toward a deliberative discursive jury like research method emphasizing informed discussion leading toward a consensus based on an argument about the public interest

environmental valuation and rationality economic valuation of the envi structuring the empirical model or adding ronment is disputed in part due to the number auxiliary hypotheses the presumption is of anomalies reactions to these anomalies have that consistent preferences are there just included adding new auxiliary hypotheses to the to be uncovered thus errors are mea core model or dismissing the whole undertaking surement this paper takes a third route and uses observa biases to be corrected by retions made in valuation studies to improve choice fined methods mitchell and carson theory the paper covers the information prob 1989 certainly many studies can be critlem the issue of preference formation and under icized for being of low quality still the lines the role of the social sphere in defining what development of concepts like starting becomes individually rational while the findings point bias posit ion bias question ormay not simplify theory they may help us be der bias yea saying protest bids come more realistic and to understand errors pro and part whole bias all seem very ad duced by illegitimate simplifications

protest response and willingness to pay for culturally significant urban trees implications for contingent valuation method the contingent valuation method cvm could assist green space planning management and appreciation by assigning a monetary value to urban trees however the use of cvm is limited by its inherent methodological weaknesses a critical concern is the existence of a large proportion of survey respondents providing zero willingness to pay wtp and that these responses are not amenable to economic theory known as protest responses censoring protest responses from further treatment is a common practice which warrants reconsideration in light of our cvm survey results the survey involved 800 residents requested to state their wtp for preserving the culturally significant stonewall trees in urban hong kong about 28 of respondents returned a zero wtp for all respondents the strength of protest beliefs was assessed and the relationship between protest beliefs and wtp were examined our analysis produced contradictory results some protest items varied negatively with wtp as expected but other items increased with it respondents stated positive wtp harbored latent protest beliefs which are related to non economic preference the findings stand at odds with the assumptions underlying the censoring treatment and raise questions about the validity of wtp estimates these methodological implications should be taken into account in using cvm

measuring impartial preference for biodiversity biodiversity undergoes unprecedented rates of erosion despite the important services it provides this is considered evidence that biodiversity is undervalued biodiversity valuation is accordingly a prominent issue in the literature economic valuations are however largely criticized numerous alternatives have been introduced most of them involve participatory protocols aimed at producing high quality results being time consuming and expensive it is difficult to implement and reproduce them at a large scale we produce an easily reproducible inexpensive survey methodology to measure impartial preference for biodiversity we implement it in switzerland through a mail based survey our result is that biodiversity should be ranked after retirement schemes and public transportation but before relations with foreign countries order and security and culture and leisure in the expanses of the state current expenses therefore substantially underestimate the value that swiss people grant to biodiversity our new method is a viable alternative to standard economic valuation given the impartiality achieved at least in the swiss political context our estimate can be used by decision makers to assess the legitimacy of conservation programs or to gauge public support at a philosophical level our measure is relevant for public policies because it captures the stances that people take when they participate in public decisions

on the design of contingent capital with a market trigger contingent capital cc which intends to internalize the costs of too big to fail in the capital structure of large banks has been under intense debate by policy makers and academics we show that cc with a market trigger in which direct stake holders are unable to choose optimal conversion policies does not lead to a unique competitive equilibrium unless value transfer at conversion is not expected ex ante the no value transfer restriction precludes penalizing bank managers for taking excessive risk multiplicity or absence of an equilibrium introduces the potential for price uncertainty market manipulation inecient capital allocation and frequent conversion errors these results point to the need to explore alternative designs of a prudential capital structure for banks jel classication

robustness of option like warrant valuation abstract this paper presents a methodology for arriving at the unobserved asset value and its volatility of a firm with outstanding warrants this enables us to price warrants correctly and to examine the robustness of option like warrant valuation where the dilution that occurs when warrants are exercised is ignored our analysis helps to justify the frequent simplifying option like warrant valuation furthermore we examine 50 960 daily prices for 37 american type warrants written on 16 german stocks over the period 1979 1990 the empirical results confirm our theoretical analysis there is virtually no dilution related pricing bias of the american constant variance diffusion model with the stock price as the state variable

incentive conflicts bundling claims and the interaction among financial claimants we show that for certain capital structures equity has an incentive to buy out another claim and alter the firm s investment strategy so as to maximize the combined value of equity and the acquired claim this restructuring may reintroduce agency problems into capital structures which appear to avoid agency conflicts by bundling claims it is possible to avoid this agency problem the agency problem is also eliminated by dispersed ownership of the claims in the presence of other claims issued by the firm the projects that maximize the value of equity need not maximize the value of the firm e g myers 1977 an agency problem occurs because the equityholders select projects that are in the interest of equity rather than the firm as a whole for example if the firm comprises equity and bonds then equity would prefer risky projects and may undertake projects that are undesirable from the firm s perspective but desirable from the equity perspective the resulting difference in the claimants preferences among projects could be limited by structuring the financial claims so that the preferences of equityholders among projects are similar to those of the firm as a whole the issuance of separate claims that are individually both more risky and less risky than the equity can control incentive problems for a fixed capitalization without trading see jensen and meckling 1976 and green 1984 green 1984 examines the financing of a new project by a combination of warrants and bonds and shows that if the warrants and bonds correctly balance then the incentives of equity still will be to maximize the value of the firm for this fixed capital structure the incentive conflicts are removed and the optimal strategy for equity coincides with the firm s optimal strategy a time inconsistency problem can arise when an earlier period is added to allow trading among the financial claimants we initially suppose that the capital structure is designed so that without trading equity has an incentive

weak comparability of values as a foundation for ecological economics the main argument of this paper is that weak comparability of values should be seen as one characteristic feature of ecological economics the formal properties of the concepts of strong comparability implying strong or weak commensurability and weak comparability implying incommensurability will be clarified multicriteria evaluation offers the methodological and mathematical tools to operationalize the concept of incommensurability at both macro and micro levels of analysis the concept of incommensurability of values already has a long tradition in economics moreover we will show that analytic philosophy theories of complexity post normal science and the recent theories of rationality lead with different trajectories to a non algorithmic approach which in our view could be implemented by some forms of multicriteria evaluation 1998 elsevier science b v all rights reserved

learning preemption and the degree of rivalry we examine a model in which all firms receive common signals as to the uncertain profitability of an investment whose actual payoffs are split only among those who develop the project earliest the benefit from preempting rivals yields an equilibrium reduction in the amount of learning and earlier development as the number or rivals increases the set of equilibria shrinks as the number of rivals gets large and in the limit only the competitive outcome occurs

incommensurability and monetary valuation at the very heart of environmental cost benefit analysis cba is the claim that benefits and costs can be expressed in terms of money and hence made comparable in particular cba puts all benefits and costs on a cardinal monetary scale it assumes monetary commensurability a significant literature in ethics and political philosophy has arisen which doubts this assumption but has so far had little impact on the theory or practice of cba in light of this the paper assesses the defense of monetary commensurability offered by cost benefit analysts and the wider economics literature

a theoretical approach to deliberative valuation aggregation by mutual consent in deliberative valuation a small group of selected persons explores the values that should guide collective decisions through a process of reasoned discourse proponents argue that deliberative techniques enhance the effectiveness and perceived legitimacy of policy making by facilitating public participation this paper outlines an approach to deliberative valuation that is grounded in democratic theory social psychology and cooperative game theory emphasizing applications to the monetary valuation of environmental services the analysis suggests that deliberative groups that employ consent based choice rules may aggregate individual values in a manner that systematically departs from the additive aggregation procedures of standard cost benefit analysis

five capital impact assessment appraisal framework based on theory of sustainable well being abstract this paper sets out to formulate an appraisal approach in context with sustainable development in conventional project appraisal such as energy undertakings most emphasis is placed on financial flows and rate of return on infrastructure investments although current greenhouse gas emissions are estimated to pose large costs on future generations these emissions are generally not estimated as part of the investment cost other public goods may also be omitted because their value is not recognized we review conventional cost benefit assessment and propose a new broader evaluation this new evaluation approach is based on the theory that five capital value types support long term well being rather than economic growth alone the theory states that humans depend on the size of stocks and flows from natural manufactured human social and financial capital we describe the five capitals to illustrate the value categories and outline an approach to evaluate all these in the context of energy development

beyond rationality towards reasonableness enriching the theoretical foundation of deliberative monetary valuation economic valuation is often deemed an important source of information for land use decisions stated preference sp methods are a particularly potent class of economic valuation methods but they are also particularly controversial in response to accumulating criticism of sp deliberative monetary valuation dmv has been proposed as an alternative approach and has gained considerable attention in recent years however being a combination of elements from two theories neoclassical welfare economics and theory of deliberative democracy it lacks a convincing consistent theoretical foundation in our paper we propose some clarifying adjustments regarding rationality assumptions and aggregation issues by drawing upon the work of amartya sen we find that many of his ideas lead to a harmonisation of dmv s theoretical foundations e g meta rankings of preferences impartial spectator and the plurality of impartial reasons

voluntary conversion of convertible securities and the optimal call strategy abstract we provide an explanation of why convertibles are called long after the conversion value exceeds the call price delaying the call benefits the firm if enough investors are expected to delay their voluntary conversions consistent with this theory we document that a substantial number of investors do not voluntarily convert when the common dividend exceeds the convertible s dividend plus its premium over conversion value we find that firms would not have increased common stock returns by switching to the strategy of calling to force conversion as soon as possible surprisingly we find that convertible preferreds frequently sell below conversion value

the values jury to aid natural resource decisions congressional legislation emphasizes that public resource allocation should reflect the values citizens assign to those resources yet information about assigned values and preferences of members of the public including economic measures of value required by decision makers is often incomplete or unavailable existing sources of information about the public s values for use in resource allocation decisions and damage assessment include existing markets public surveys including contingent valuation and public involvement each of these sources has serious limitations

warrant exercise dividends and reinvestment policy in this paper we examine sequential exercise strategies by warrantholders and the gain from hoarding warrants we analyze several obstacles to acquiring large blocks in order to exploit sequential strategies first we identify several reinvestment policies for which sequential exercise is not advantageous thereby eliminating the gain from hoarding however sequential exercise strategies may be advantageous for monopoly or oligopoly warrantholders even absent dividends because using exercise proceeds to repurchase stock or to expand the firm s scale increases the riskiness of an equity share second oligopoly warrantholders can receive a smaller warrant value than perfectly competitive warrantholders suggesting a potential cost to unsuccessful hoarding

democracy and valuation a reply to schlapfer 2016 abstract this paper is a critical appraisal of schlapfer s 2016 proposal of a democratic valuation dv methodology to value public goods while we appreciate attempts to address the shortcomings of conventional stated preference techniques we have some reservations regarding dv our paper critically reviews the following characteristics of the proposed methodology i referendum format as decision making mechanism ii single dimensionality in the description of the policy issue to be valued and iii preference formation through provision of detailed information finally we calibrate democratic valuation against another alternative to conventional stated preference approaches namely deliberative monetary valuation dmv we argue that dmv addresses many of schlapfer s concerns regarding stated preference techniques and at the same time avoids some of the problems generated by dv

an evaluation of monetary and non monetary techniques for assessing the importance of biodiversity and ecosystem services to people in countries with developing economies abstract biodiversity supports a range of ecosystems services that are of fundamental importance to people in poor countries economic valuation of biodiversity is important for the development of policies that protect biodiversity and alleviate poverty this paper provides an evaluation of monetary and non monetary techniques for assessing the value of biodiversity to people in least developed countries ldcs specifically research questions include 1 to what extent have monetary and non monetary techniques been used to assess the value of biodiversity and ecosystem services in ldcs 2 what are the key methodological practical epistemological and policy challenges to assessing the value of biodiversity and ecosystem services in ldcs 3 how can valuation methods be improved to allow more accurate valuation in ldcs

warrant pricing jump diffusion vs black scholes this paper investigates the warrant pricing abilities of dilution adjusted versions of the black scholes and jump diffusion option pricing models because of the typically long lives of warrants their pricing is hypothesized to benefit from use of the jump diffusion model which relaxes the black scholes restriction against stock price jumps empirical results indicate that while the black scholes model almost uniformly provides more efficient estimates the jump diffusion model generally provides less biased estimates of market value particularly for the valuation of out of the money warrants and warrants on stocks with a history of large and or frequent jumps the jump diffusion model may be preferred

the shallow or the deep ecological economics movement ecological economics and its policy recommendations have become overwhelmed by economic valuation shadow pricing sustainability measures and squeezing nature into the commodity boxes of goods services and capital in order to make it part of mainstream economic financial and banking discourses there are deeper concerns which touch upon the understanding of humanity in its various social psychological political and ethical facets the relationship with nature proposed by the ecological economics movement has the potential to be far reaching however this is not the picture portrayed by surveying the amassed body of articles from this journal or by many of those claiming affiliation a shallow movement allied to a business as usual politics and economy has become dominant and imposes its preoccupation with mainstream economic concepts and values if instead ecological economists choose a path deep into the world of interdisciplinary endeavour they will need to be prepared to transform themselves and society the implications go far beyond the pragmatic use of magic numbers to convince politicians and the public that ecology still has something relevant to say in the 21st century author s abstract

process attributes of goods ethical considerations and implications for animal products abstract conventional wisdom holds that process is irrelevant to the demand function for a good if it cannot be observed in the final good s characteristics organizations promoting trade even promulgate regulations requiring that process information be thrown out as tariffs or barriers to trade it is argued here that even if end products are physically identical process is a relevant dimension of goods that can have a major impact on the demand function particularly process elements related to the ethical dimensions of production implications of process attributes of goods and their information implications are explored particularly regarding animal products and the environment it is concluded that institutional barriers currently provide consumers with insufficient process information for markets to function optimally additional information should be provided to consumers

deliberative monetary valuation and the evidence for a new value theory economists concerned with validity are combining stated preference methods with participatory deliberation to address on going criticism deliberative monetary valuation dmv uses formal methods of deliberation to express values for environmental change in monetary terms however the results have begun to define different realms of value reflecting pluralism in public concern over environmental change reviewing empirical dmv studies evidences a range of issues regarded as external to economics and the validity of its methods issues which are typically kept at arms length by most environmental economists namely multiple values incommensurability and lexicographic preferences social justice fairness and non human values

investment incentives debt and warrants abstract this paper models and characterizes investment incentive problems associated with debt financing the decision problem of residual claimants is explicity formulated and their investment policies are characterized the paper also analyzes the use of conversion features and warrants to control distortionary incentives these claims reverse the convex shape of levered equity over the upper range of the firm s earnings and this mitigates the incentive to take risk it is shown that under certain conditions such claims can be constructed to restore net present value maximizing incentives and simultaneously meet the financing requirements of the firm

adoption externalities as public goods abstract a public good problem arises naturally in situations characterized by positive externalities or negative externalities for positive externalities agents furnish a public good by taking an action similarly for negative externalities agents furnish a public good by not taking an action we examine these externalities in a binary choice problem i e adoption externalities in each case there is a potential role for government intervention even when equilibrium transfers are not allowed since one equilibrium pareto dominates all others we analyze the positive and normative features of equilibria in these models and we explore the possibility of useful government intervention

exploring group dynamics in deliberative choice experiments abstract deliberative monetary valuation has emerged as a promising alternative to conventional stated preference studies of ecosystem services it promises to give respondents a better basis for decision making by exposing them to a more diverse set of knowledge arguments and opinions through group discussion however under certain conditions small groups may fail to effectively pool the individual knowledge of their members this paper examines the impact of the initial distribution of individual preferences in discussion groups on the outcome of deliberative choice experiments drawing on a deliberative monetary valuation study of forest ecosystem services in west saxony germany it is shown that the initial preference distribution in groups influences both the diversity of arguments exchanged during group discussions and respondents consideration of the costs of environmental policies furthermore results indicate that respondents post discussion willingness to pay is affected by the initial preference distribution in groups though these changes were not statistically significant the choice certainty of respondents was found to remain largely unaffected overall the empirical findings of this study provide preliminary evidence about the need to conduct future deliberative monetary valuation studies with groups with heterogeneous initial preferences as this may provide respondents with a more complete set of decision relevant information

influencing the perception of what and who is important in ecological economics abstract in a recent article using citation analysis hoepner et al 2012 make strong claims to have identified the most influential works authors journals and institutions in a hypothetical field they call environmental and ecological economics this paper shows that their work is biased by its framing far from the non subjective approach they claim and highly sensitive to minor data errors more than this the exercise can be seen as another example of how ecological economics is susceptible to suppression by a dominant mainstream economic perspective which attempts to override belittle and dismiss a whole range of alternative thought including that which is heterodox interdisciplinary from the natural sciences and based in the non economic social sciences ecological economics is not the same as agricultural resource or environmental economics and if it were it would be pointless neither can it be understood or treated as a subfield of resource and environmental economics as done by hoepner et al 2012 i argue that the study promotes a limited perspective on social environmental and economic problems that includes an implicit political and ideological framing what is most influential important or high quality in ecological economics is certainly not defined by such work

rationalizability learning and equilibrium in games with strategic complementarities we study a rich class of noncooperative games that includes models of oligopoly competition macroeconomic coordination failures arms races bank runs technology adoption and diffusion r d competition pretrial bargaining coordination in teams and many others for all these games the sets of pure strategy nash equilibria correlated equilibria and rationalizable strategies have identical bounds also for a class of models of dynamic adaptive choice behavior that encompasses both best response dynamics and bayesian learning the players choices lie eventually within the same bounds these bounds are shown to vary monotonically with certain exogenous parameters we study the class of noncooperative supermodular games introduced by topkis 1979 and further analyzed by vives 1985 1989 who also pointed out the importance of these games in industrial economics supermodular games are games in which each player s strategy set is partially ordered the marginal returns to increasing one s strategy rise with increases in the competitors strategies so that the game exhibits strategic complementarity 2 and if a player s strategies are multidimensional marginal returns to any one com ponent of the player s strategy rise with increases in the other components this class turns out to encompass many of the most important economic applications of noncooperative game theory in macroeconomics diamond s 1982 search model and bryant s 1983 1984 rational expectations models can be represented as supermodular games in each of these models more activity by some members of the economy raises the returns to increased levels of activity by others in oligopoly theory some models of bertrand oligopoly with differentiated products qualify as supermodu lar games in these games when a firm s competitors raise their prices the marginal profitability of the firm s own price increase rises a similar structure is present in games of new technology adoption such as those of dybvig and spatt 1983 farrell and saloner 1986 and katz and shapiro 1986 when more users hook into a communication system or more manufacturers adopt an interface standard the marginal return to others of doing the same often rises similarly in some specifications of the bank runs model introduced by diamond and dybvig 1983 when more depositors withdraw their funds from a bank it is more worthwhile for other depositors to do the same in the warrant exercise

preference refinement in deliberative choice experiments for ecosystem service valuation choice experiments have gained considerable popularity in ecosystem service valuation in a one shot survey respondents are faced with a strenuous task asking them to discover and monetize their preferences for often unfamiliar ecosystem services in a previously unknown hypothetical market situation we present a deliberative choice experiment that aims to generate well rationalized value estimates for policy advice two aspects of deliberation discussion and time to reflect are examined in terms of their effect on preference refinement we find more comprehensive choice motives after deliberation as well as indications for preference adjustment and a slight increase in choice certainty jel q51 q57

qualitative valuation of environmental criteria through a group consensus based on stochastic dominance abstract this paper introduces a qualitative valuation method to elicit stakeholders intensities of preferences for a complex environmental issue and multiple social groups environmental valuation studies have shown that in any complex environment with a diversity of environmental services stakeholders have difficulties using a monetary valuation to make trade offs between different environmental services stated preference methods such as the contingent valuation method cvm have been criticised for their individualistic format and assumptions of commensurability between environmental criteria to alleviate both of these criticisms we propose a qualitative valuation method the method contains a discursive step to allow stakeholders to discuss and construct a list of environmental criteria and alternative plans the list of criteria and plans is subsequently used by a group of experts to formulate an impact matrix im which is to be used in the succeeding individualistic steps of the methodology the first individualistic step consists of asking the stakeholders to rank alternative impacts ais in the im for each single criterion the stakeholders are then asked to express intensities of their preferences through pairwise comparisons between the ais of the constructed rank order on each single criterion these intensities are expressed on a qualitative scale subsequently to provide social intensities of preferences a social preference social rank order is first determined for each single criterion we propose to use the median value among the intensities of preferences as the social intensity of preference by assuming interpersonal comparability and taking into account stochastic monotonocity this is a pre processing step which allows us to reach social intensities of preferences in the lar rangeland iran where several social groups have conflicting interests on rangeland services leading to conflicting preferences on environmental criteria

strategic analysis of the competitive exercise of certain financial options abstract warrants and convertible bonds are claims on the firm which change the outstanding number of common stock shares when exercised or converted exercise of such claims in competitive circumstances is modeled here as a noncooperative game played by a continuum of players first equilibria of the game are shown to exist by applying results of schmeidler second the game s equilibria are compared to outcomes that come about when one individual controls the exercise of all the claims but is constrained to exercise them in one block the results are analogues of earlier results by one of the authors on the competitive pricing of such claims

reducing protest responses by deliberative monetary valuation improving the validity of biodiversity valuation this paper focuses on examining the validity of biodiversity valuation methodologies the results of a group deliberation technique deliberative monetary valuation are compared to those derived from a contingent valuation cv survey using the same environmental topic evidence is here presented that dmv can address some of the limitations of cv namely a prevalence for lexicographic preference ordering due to psychological reasons and the lack of a priori or well formed preferences both of these methodological shortcomings can result in protest responses which decrease the external validity of results it is common environmental valuation methodology practice to exclude protest responses from the analysis on the grounds that they are illegitimate choices thus the sample and consequently the environmental valuation analysis may become less representative of the population an advantage of the dmv methodology is that it was found to significantly reduce the rate of protest responses to less than half from 29 to 13 furthermore dmv significantly increased the proportion of positive bids but not the amounts contributed in relation to preference formation issues we suggest rethinking the current practice of the dmv method and propose dedicating the entire initial discussion session to introducing the good outside of a valuation context