Optimal dynamic environmental policies of a profit maximizing firm

In this paper we study the optimal environmental policy of the firm for different scenarios dependent on (costs of) production technologies, financing costs, and governmental policy. The governmental instruments to be considered are:

Actor-to-actor dissemination of electronic procurement (EP) adoption: an exploration of influencing factors

The merits of electronic procurement (EP) tools have been widely acknowledged. Achieving these benefits remains a challenge, as companies are experiencing difficulties with human adoption during the implementation of such tools. In this article we focus on the intra-organizational spread of EP adoption from one actor to another. Based on exploratory interviews with experts and representatives of large Dutch purchasing organizations, we have identified nine categories of influences on actor-to-actor dissemination: perceived advantage, communication, demonstration, enforcement, training, involvement, risk reduction, reward, and disposition. This study is beneficial to companies engaging in the implementation of EP tools as it provides a portfolio of interventions that can be used to stimulate the spread of adoption. This article addresses a new area in EP research and opens up possibilities for future research in EP implementation.     

An axiomatic theory of heterogeneity and homogeneity

Summary Indices of heterogeneity and homogeneity are used in biology and ecology as well as in other fields of scientific research, e.g. economics, genetics, antropology, sociology. With respect to these indices, reference is made frequently to information theory. In this paper it is shown that especially recent developments in statistical information theory can contribute to the measurement of heterogeneity and homogeneity. They can lead to a more fundamental and unifying approach and bring together both heterogeneity and homogeneity indices in one axiomatically founded theory. Therefore a generalized heterogeneity index is introduced axiomatically. Algebraic, analytic and geometrical properties are investigated. Special attention is paid to the interpretation of these properties and to the choices of the values of the parameters for practical applications. Based on this generalized heterogeneity index, it is possible to given an axiomatic characterization for a class of homogeneity indices. The properties of this class are the reverse of those of the heterogeneity index. Finally, some potential measures for heterogeneity or homogeneity change are discussed.Presently with Delft University of Technology, Department of Electrical Engineering, Information Theory Group, P.O. Box 5031, 2600 GA Delft, The Netherlands.     

Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis

This paper reports the findings of a meta-analysis of 37 papers with 75 results from ultimatum game experiments. We find that on average the proposer offers 40% of the pie to the responder. This share is smaller for larger pie sizes and larger when a strategy method is used or when subjects are inexperienced. On average 16% of the offers is rejected. The rejection rate is lower for larger pie sizes and for larger shares offered. Responders are less willing to accept an offer when the strategy method is employed. As the results come from different countries, meta-analysis provides an alternative way to investigate whether bargaining behavior in ultimatum games differs across countries. We find differences in behavior of responders (and not of proposers) across geographical regions. With one exception, these differences cannot be attributed to various cultural traits on which for instance the cultural classifications of Hofstede (1991) and Inglehart (2000) are based.     

QUANTIFYING ABSOLUTE POVERTY IN THE DEVELOPING WORLD

We estimate that in 1985 about one in five persons in the developing world lived in poverty, judged by the standards of the poorest countries. This rises to one in three at a common, more generous, poverty line. The aggregate consumption short-fall of the poorest fifth is about one half of one percent of world consumption, while that of the poorest third is a further one percent. The shape of the distribution of consumption suggests that aggregate poverty would fall fairly rapidly if moderate growth in average consumption levels can be sustained, and the poor share at least proportionally in that growth. However, it would take only small adverse shifts in the world distribution of consumption to eliminate the gains to the poor from growth.     

Evolution in Games with Endogenous Mistake Probabilities

J. Bergin and B. Lipman (Econometrica64 (1996), 943-956) show that the selection effect from the random mutations in the adaptive population dynamics in M. Kandori, G. Mailath, and R. Rob (Econometrica61 (1993), 29-56) and P. Young (Econometrica61 (1993), 57-84) is due to restrictions on how these mutation rates vary across population states. We here model mutation rates as endogenously determined mistake probabilities, by assuming that players with some effort can control the probability of implementing the intended strategy. This is shown to corroborate the results in Kandori-Mailath-Rob (1993) and, under certain regularity conditions, those in Young (1993). Journal of Economic Literature Classification Number: C72.     

Returns on Investments in Energy-saving Technologies Under Energy Price Uncertainty in Dutch Greenhouse Horticulture

Conventional net presentvalue calculations evaluating the profitabilityof investments in energy-saving technologies inDutch horticultural outlays predict a muchhigher rate of adoption of these technologiesthan is actually observed. This paper tries toexplain this gap by applying a real optionsframework. Hurdle rates for investments in twotypes of energy-saving technology are estimatedusing simulated future revenue streams, givenuncertainty regarding energy prices and energytax policies. Hurdle rates found in this wayare on average about 1.76 times the hurdlerates that result from net present valuecalculations. Furthermore, this paper tests thepredictive value of the theory by estimating alogit model. This model relates the incidenceof having invested in an energy-savingtechnology to the difference between the returnon investment and the hurdle rate. Thepredictive power turns out to be encouraging,as the statistical tests indicate that higherhurdle rates tend to reduce rates of technologyadoption.