The costs of uncoordinated regulation

Patents encourage firms to undertake research and development by protecting innovator revenues from competition. Controls on pollution of the environment are intended to close the gap between the private and social costs of natural resource use. This paper examines the incentives that are created by the interaction of these two separate pieces of regulation. A model is developed that shows how an incumbent, patent-holding firm can take advantage of environmental regulation to exclude rivals from her market.     

Coalition-proof supply function equilibria in oligopoly

In an industry where firms compete via supply functions, the set of equilibrium outcomes is large. If decreasing supply functions are ruled out, this set is reduced significantly, but remains large. Specifically, the set of prices that can be sustained by supply function equilibria is the interval between the competitive price and the Cournot price. In sharp contrast, when the number of firms is above a threshold we identify (e.g., three if demand is linear), only the Cournot outcome can be sustained by a coalition-proof supply function equilibrium.     

A continuum of commitment

We examine a generic three-stage game for two players with alternating moves, where the first player can choose the level of adjustment cost to be paid in the last period to modify the action she announced in the first period. In the resulting continuum of commitment options, convexifying the choice between first-mover and second-mover advantage in pure strategies, we characterize when an intermediate adjustment-cost level is chosen in equilibrium. We show that the wastefulness of the adjustment cost may be in the players’ best interest, improving both of their individual net payoffs over making any fraction of the adjustment cost a side-payment from the first to the second player.     

China’s welfare gain from involved mega-regional trade agreements

This article draw upon a 29-country numerical general equilibrium model with trade cost and endogenous trade imbalance to simulate China’s welfare gain from negotiating mega-regional trade agreements (mega-RTAs). We introduce elasticity of substitution distributions instead of normally definite values in the model and generate a distribution of impact results ranging among some specific intervals, which injects a new kind of effect presentation style to existing literature. The results of our article reveal that China will gain from all undergoing negotiation mega-RTAs we mentioned in this article, comparatively Regional Comprehensive Economic Partnership will benefit China the most.     

ACE versus CBIT: Which is Better for Investment and Welfare?

This article analyses the switch to an Allowance for CorporateEquity (ACE) or to a Comprehensive Business Income Tax (CBIT)type of tax system starting from the present German tax system.We show that in case an ACE type of reform is financed by anincrease in the VAT and not in the profit tax, it might be preferredto a CBIT even in the context of an open economy. Moreover,the required exogenous increase in the profit tax rate cannotensure revenue neutrality on its own due to the negative generalequilibrium effects it triggers on the whole economy. For aCBIT, the exogenous reduction in the tax rates on corporateand non-corporate profits leads to better results than whenwe allow for an endogenous change in the VAT. The best resultsarise when the CBIT is accompanied by a provision for immediatewrite-off and a lower profit tax or when the ACE with no additionalcapital gains taxation on household side is financed by an increasein the VAT. (JEL-Classification: C68, D58, D92, E62, H25.)     

Imperfect competition and capital accumulation: the role of price normalization

We consider a capital-accumulation model with infinitely lived households and two production sectors. The intermediate-good sector is characterized by perfect competition, a constant-returns-to-scale technology, and production externalities. The final-good sector is a monopoly operating under constant returns to scale. We analyze the general equilibrium in the sense of Gabszewicz and Vial [Journal of Economic Theory (1972) 4: 381–400] for this economy and different price-normalization rules. It is shown that the qualitative behavior of the equilibrium paths depends crucially on the chosen normalization rule. In particular, whether equilibria are monotonic or oscillating and whether indeterminacy occurs or not may depend on the choice of the numeraire.     

Social incidence and economic costs of carbon limits

This paper discusses both distributional and allocational effects of limiting carbon dioxide emissions in a small and open economy. It starts from the assumption that Switzerland attempts to stabilize its greenhouse gas emissions over the next 25 years, and evaluates costs and benefits of the respective reduction program. From a methodological viewpoint, this paper illustrates, how a computable general equilibrium approach can be adopted for identifying economic effects of cutting greenhouse gas emissions on the national level. From a political economy point of view it considers the social incidence of a greenhouse policy. It shows in particular that public acceptance can be increased and economic costs of greenhouse policies can be reduced, if carbon taxes are accompanied by revenue redistribution.     

STRATEGIC BUDGET CONSTRAINTS IN A UNIONIZED MIXED OLIGOPOLY

This paper considers the budget‐constraint problem where the government decides whether or not to impose a budget constraint on the public firm, assuming the public firm is less efficient than private firms. We find that imposing budget constraints on the public firm is the preferred choice because of the welfare‐improving effect. Our model suggests that the wage levels of the public firm can be lower or higher than those of private firms depending upon the degree of inefficiency. These results differ from Ishida and Matsushima's findings that in a unionized mixed duopoly, tight budget constraints can enhance social welfare when the public firm is as efficient as private firms.     

Implications of happiness research for environmental economics

Using happiness data to study economic issues is a burgeoning field in recent economic literature. This paper shows that happiness research has considerable potential for environmental economic analysis. The paper discusses some implications of happiness research for environmental policy analysis, specifically with respect to the level of socially optimal environmental quality. It discusses evidence that consumer choice may be not utility maximizing and systematically distorted away from intrinsically motivated options, especially environment-friendly consumption. Finally, the paper describes how happiness data can be used in a novel approach to the monetary valuation of environmental quality and discusses the associated benefits and problems in relation to conventional methods.     

非完全竞争市场假设在CGE模型中的引入及应用

通过对部门生产函数及相关参数、系数的改造,将非完全竞争市场条件引入CGE模型,并模拟在完全竞争与不完全竞争两个不同市场结构下国际油价上升对我国经济的影响.结果表明,当油品市场设定为不完全竞争时,面对国际油价上升的冲击,GDP下降的程度大于完全竞争的情况.因此随着油品市场逐渐开放,油品市场的产出增加,可以增强我国石油产业和总体经济应对国际油价上升冲击的能力,应继续推动我国石油产业市场自由化的进程.     

More competition to alleviate poverty? A general equilibrium model and an empirical study

In this paper, we theoretically and empirically analyze the impact of competition on poverty. We consider a general equilibrium framework with vertical preferences and compare poverty in a Monopoly setting versus a Duopoly setting considering explicitly the ownership structure. Poverty is measured by the size of the population living below an absolute poverty line. Theoretical results show that the impact of competition on poverty is contingent to the ownership structure, the poverty line and the relative dispersion of the individuals with respect to their intensity of preference for quality and sensitivity to effort: competition can improve or worsen poverty depending on the model's parameters. Empirical findings for the three existing poverty lines ($1.9, $3.2, and $5.5) are consistent to a large extent with our theoretical results.