two remarks on the property rights literature we first point out that the recent property rights literature is based on three assumptions 1 that contracts are always subject to renegotiation 2 that the exercise of a property right confers a private benefit and 3 that parties are risk neutral building on hart moore 1999 we provide conditions under which an optimal contract consists of nothing more than an assignment of property rights we also examine the robustness of some of the literature s standard predictions about asset ownership to the introduction of mechanisms for eliciting parties ex post willingness to pay for the assets such as options or financial markets to illustrate the issue we revisit the hart moore 1990 proposition that joint ownership is suboptimal and argue that ownership by a single party is dominated by joint ownership with put options

long term industrial equilibrium in an itq managed fishery this paper discusses long term equilibrium in a fishery managed by individual transferable quotas rising prices or falling capital costs become capitalized in a higher value of quotas implying higher capital costs for holding quotas this may in fact reduce the size of each firm and lead to more firms existing in long term equilibrium resource rent taxation by letting firms lose a certain share of their quota holdings each year is discussed and shown to be neutral

disentangling effects of policy reform and environmental changes in the norwegian coastal fishery for cod we construct a detailed bioeconomic model of the norwegian coastal cod fishery this fishery has been open access up to the policy change during the cod crisis of 1989 1990 to answer to what extent the subsequent increase in biomass and profits was due to improved management we isolate the effect of environmental variability projecting stock and harvest forward in the counterfactual scenario of no intervention we show that the policy had a small positive impact on biomass but a pronounced positive effect on profit the main drivers of profit gains are increases in productivity and savings in fuel and labor costs jel d23 q22

pollution abatement subsidies and the eco industry this paper considers the combination of pollution taxes and abatement subsidies when some polluting firms procure their abatement goods and services from an oligopolistic eco industry the regulator must here cope with two simultaneous price distortions one that comes from pollution and the other which is caused by the eco industry s market power in this context we show that taxing emissions while subsidizing polluters abatement efforts cannot lead to first best but the opposite occurs provided it is the eco industry s output which is subsidized when public transfers also create distortions welfare can be higher if the regulator uses only an emission tax but subsidizing abatement suppliers while taxing emissions remains optimal when the eco industry is concentrated

pollution policy and trade liberalization of environmental goods during the doha round at the world trade organization reductions in trade barriers on environmental goods eg were put forward as a means of helping developed and developing countries alike deal with current environmental problems we examine the potential effectiveness of such a strategy in a developing country that imports all its consumption of eg from an imperfectly competitive foreign eco industry we point out that trade liberalization of eg might in fact lead to less stringent pollution taxes which can result in an actual rise in pollution levels we then show that the environmental effectiveness objective of this trade reform can be achieved when the regulator uses quantitative abatement standards as an alternative pollution policy instrument however this environmental achievement comes at the expense of social welfare

cooperative investments and the value of contracting recent articles have shown that contracts can support the efficient outcome for bilateral trade even in the face of specific investments and incomplete contracting these studies typically considered selfish investments that benefit the investor e g the seller s investment reduces her production costs the authors find very different results for cooperative investments that directly benefit the investor s partner e g the seller s investment improves the buyer s value of the good most importantly if committing not to renegotiate the contract is impossible then contracting has no value i e the parties cannot do better than to abandon contracting altogether in favor of ex post negotiation

strategic dynamic interaction abstract the motivation for this paper is fishing legislation that divides a fishery into regions each of which is exploited by a single firm as the regions have common borders an analysis based on models with one firm and one region would lead to erroneous results an alternative motivation is the problem of a fishery with several interacting species each exploited by a single firm in this paper we assume that fish move between regions therefore the stock in one region depends not only on previous stock and catch in the region but also on the stock and catch in neighboring regions in the multiple species interpretation these movements correspond to the interactions between species we use a multisectoral differential duopoly model in order to capture the strategic interactions of the firms over time the model is solved for an example in which varying levels of dependence between regions can be compared

efficient and nearly efficient partnerships this paper shows in two ways that the degree to which free riding diminishes the performance of deterministic partnerships may be less than has been generally thought first a necessary and sufficient condition is provided for a partnership to sustain full efficiency it implies that many non trivial partnerships sustain efficiency such as generic ones with finite action spaces and neoclassical ones with leontief technologies second approximate efficiency is shown to be achievable in a large class of partnerships including ones with smooth and monotonic production and disutility functions approximate efficiency is achieved by mixed strategy equilibria one partner takes with small probability an inefficient action the degree to which efficiency is approximated is restricted only by the amount of liability the partners can bear nonetheless their equilibrium payments are not arbitrarily large

optimal allocation of tac and the implications of implementing an itq management system for the north east arctic cod first we study the allocation rule applied to split the norwegian total allowable catch for cod between coastal and trawler vessels second we explore the bioeconomic implications of an itq management system for this fishery a model combining a cannibalistic biomodel with cooperative game theory is developed key results from the study are 1 the current allocation rule acts in opposite fashion to what may be considered bioeconomically optimal and 2 an itq system for this fishery is likely to result in economic losses as the biological advantages of harvesting with the two vessels types may be lost

trade in environmental goods evidences from an analysis using elasticities of trade costs negotiations on the liberalization of environmental goods egs and services within the wto doha round mandated in november 2001 are facing specific challenges conflicting interests and differing perceptions of the benefits of increased trade in egs were reflected in different approaches proposed for determining egs using import data of 34 organisation for economic co operation and development oecd member countries and from a sample of 167 countries from 1995 to 2012 we discuss the trade effect of reducing barriers on egs we analyze the lists of egs proposed by the asia pacific economic cooperation and oecd using a translog gravity model we found that removing tariff barriers for egs will have a modest impact because for the biggest importers and exporters elasticities of trade costs are very low while for most trading relationships they are very high making it difficult for exporters to maintain their markets overall our results suggest that because of their substantial effect on international trade future negotiations on egs should also address the issues of standards and nontariff barriers

environmental taxation and vertical cournot oligopolies how eco industries matter this article specifies what an optimal pollution tax should be when dealing with a vertical cournot oligopoly polluting firms sell final goods to consumers and outsource their abatement activities to an environment industry it is assumed that both markets are imperfectly competitive thus the tax is a single instrument used to regulate three sorts of distortions one negative externality and two restrictions in production consequently the optimal tax rate is the result of a trade off that depends on the firms market power along the vertical structure a detailed analysis of cournot nash equilibria in both markets is also performed in this context the efficiency of abatement activities plays a key role it gives a new understanding to the necessary conditions for the emergence of an eco industrial sector

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

taxes and subsidies for pollution intensive industries as trade policy abstract this paper constructs a model of international oligopoly with negative externalities in production in which optimal environmental policy responses to foreign emission tax and subsidy programs can be calculated it is shown that by granting subsidies for abatement efforts or for a heavily taxed polluting input domestic net welfare is improved by capturing a greater share of the world market since the subsidy programs are supposed to improve the quality of the global environment they can be justified on environmental grounds in addition we show that a pigouvion emission tax restores efficiency in natural resource allocation whereas subsidy programs are in principle used as instruments in imperfectly competitive international markets

robust technology policy against emission leakage the case of upstream subsidies asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage which hampers countries welfare in order to limit leakage governments consider supporting domestic trade exposed firms by subsidizing their investments in abatement technology the suppliers of such technologies tend to be less than perfectly competitive particularly when both emissions regulations and advanced technologies are new in this context of twin market failures we consider the relative effects and desirability of subsidies for abatement technology we find a more robust recommendation for upstream subsidies than for downstream subsidies downstream subsidies tend to increase global abatement technology prices reduce pollution abatement abroad and increase emission leakage on the contrary upstream subsidies reduce abatement technology prices and hence also emissions leakage

complexity and renegotiation a foundation for incomplete contracts the paper considers a hold up model where only one of n future trading opportunities will prove to be efficient and where ex post renegotiation of the ex ante contract cannot be prevented as the environment becomes more complex n the outcome under any message contingent long term contract converges to that of the incomplete contracting model where trade is contractible ex post but not ex ante when trades are costly to describe both ex ante and ex post the incomplete contracting result is extended to a broader class of environments

subgame perfect implementation this paper examines the use of stage mechanisms in implementation problems and provides a partial characterization of the set of subgam e perfect implementable choice rules it is shown that in many economic environments virtually an y choice rule can be implemented to illustrate the power of this approach the paper discusses a number of models in which it is possible to implement the first best although it wouldn t have been possible to do so without using stage mechanisms the diversity of these models suggests that subgame perfect implementation may find wide application copyright 1988 by the econometric society

market power in the eco industry polluters incentives under environmental liability law this paper analyzes the output and abatement choices of perfectly competitive downstream polluters who are subject to environmental liability law and procure abatement from an imperfectly competitive eco industry under strict liability polluting firms choose suboptimal abatement but socially optimal output given abatement under negligence with firm specific abatement standards polluting firms choose suboptimal output but socially optimal abatement given output under negligence with industry wide abatement standards the output and abatement choices of most firms are socially suboptimal second best considerations are offered for each case under strict liability negligence these apply to the level of liability the behavioral standard

when subsidies for pollution abatement increase total emissions in a first best deterministic world it is well known 2 28 30 that a unit tax on emissions equal to marginal damage is an efficient mechanism for internalizing the damages caused by polluting firms a unit subsidy for emissions abated also equal to marginal pollution damage has the same desirable property but only in the short run in the long run such subsidies induce polluting firms to operate at too small a scale and attract an excessive number of new firms to the polluting industry this can have the perverse result that there are more emissions when abatement is subsidized than when it is not nevertheless economists have been reluctant to give up entirely on the subsidy approach recognizing with oates 23 290 that polluters will obviously be far more receptive to measures that assist with the costs of pollution control than to those that place the burden upon themselves it is therefore not surprising that economists have continued to look for and find new justifications for subsidizing pollution control thus mestelman 20 187 argues that the subsidy scheme may be a second best alternative for externality control when the direct taxation alternative is not politically viable mchugh 17 64 shows that subsidies for pollution abatement expenditures can be a useful instrument in the case of cost increasing technological innovations harford 6 demonstrates that subsidies for pollution control inputs may be efficient when enforcement is sufficiently costly harford 7 makes still another argument for subsidies in the case in which the day to day performance of abatement equipment is uncertain but the uncertainty can be reduced by maintenance expenditures finally there are schemes for combining subsidies and taxes 14 26 given the continuing interest in subsidies it is important to examine carefully the disturbing case in which subsidies increase rather than decrease total emissions

pollution regulation and abatement efforts evidence from china abstract this paper empirically tests pollution abatement efforts of chinese industries in response to pollution regulations especially the pollution charge instrument practiced in china for about 20 years the impacts of pollution regulation on abatement expenditures are examined for one thousand large and medium chinese industrial polluters the results show that plant level expenditures on end of pipe wastewater treatment are strongly responsive to the pollution charges the estimated elasticities of operation cost and new investment with respect to pollution price are 65 and 27 respectively other command and control regulatory approaches however are not found to have systematic and significant impacts on abatement expenditures

the mirrlees approach to mechanism design with renegotiation with applications to hold up and risk sharing the paper studies the implementation problem first analyzed by maskin and moore 1999 in which two agents observe an unverifiable state of nature and may renegotiate inefficient outcomes following play of the mechanism we develop a first order approach to characterizing the set of implementable utility mappings in this problem paralleling mirrlees s 1971 first order analysis of standard mechanism design problems we use this characterization to study optimal contracting in hold up and risk sharing models in particular we examine when the contracting parties can optimally restrict attention to simple contracts such as noncontingent contracts and option contracts where only one agent sends a message

technology diffusion with market power in the upstream industry this paper compares taxes and tradable permits when used to regulate a competitive and polluting downstream industry that can purchase an abatement technology from a monopolistic upstream industry second best policies are derived for the full range of the abatement technology s emission intensities and marginal abatement costs the second best permit quantity can be both above or below the socially optimal emission level explicit consideration of the output market provides further insights on how market power distorts the allocation in the downstream industry the ranking between permits and taxes is ambiguous in general but taxes weakly dominate permits if full diffusion is socially optimal in addition it is analysed how a cap on the permit price affects the diffusion of an abatement technology

efficiency in partnerships we provide the necessary and sufficient condition for a partnership to be able to sustain efficiency when the output is stochastic when limited liability is imposed we show that only the level of the average liability of the partnership is important the individual levels of liability are irrelevant however the allocation of the total liability among the partners is crucial when additional conditions such as neutrality or individual rationality are imposed

timing and commitment of environmental policy adoption of new technology and repercussions on r d we investigate the interplay between environmental policy incentives to adoptnew technology and repercussions on r d we study a model where a monopolistic upstream firm engages in r d and sells advanced abatement technology to polluting downstream firms we consider four different timing and commitment regimes of environmental tax and permit policies ex post taxation or issuing permits interim commitment to a tax rate a quota of permits after observing r d success but before adoption and finally two types of ex antecommitment before r d activity one with a unique tax rate quota of permits the other one with a menu of tax rates permit quotas we study the second best tax and permit policies and rank these with respect to welfare in particular we find that commitment to a menu of tax rate dominates all other policy regimes

incomplete contracts specific investments and risk sharing an optimal contract design problem is considered contracts which are incomplete and simple are used to investigate the extent to which constrained revisions can mitigate inefficiencies resulting from contractual incompleteness an optimal contract is characterized in two cases first when a contract is being used to facilitate trade between two risk neutral parties who must make relationship specific investments it is possible to implement the first best by a simple contract second when a contract is being used to share risk it is generally not possible to implement the first best when one party is risk neutral however it is possible to implement the first best by assigning all the ex post decision rights to that party

using history dependence to design a dynamic tradeable quota system under market imperfections a transferable quota system is analysed in a two period model with market power so far the management mechanisms presented in the literature to remedy market power have either not succeeded in securing efficiency in the distribution of quota within and across time periods or have resulted in only one of the two inefficiencies being eliminated in this paper a new mechanism is introduced where allocation of quota is made dependent upon historic quota acquisitions this opens for a trade off between distributional and time efficiency or under specific circumstances securing overall efficiency

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