Incentives to invest and to give access to non-regulated new technologies

We analyze the incentives of a vertically integrated firm, which is a regulated monopolist in the wholesale market and competes with an entrant in the retail market, to invest and to give access to a new wholesale technology. The new technology represents a non-drastic innovation that produces retail services of a higher quality than the old technology, and is left unregulated. We show that for intermediate values of the access price for the old technology, the vertically integrated firm may decide not to invest. When investment occurs, the vertically integrated firm may be induced to give access to the entrant for a low access price for the old technology. Furthermore, when both firms can invest, investment occurs under a larger set of circumstances, and it is the entrant the firm that invests in more cases. We also discuss the implications for the regulation of the old technology.     

Committing to transparency to resist corruption

This paper studies firms' incentives to commit to transparent behavior in a competitive procedure modeled as an asymmetric information beauty contest managed by a corrupt agent. In his evaluation of firms' offers for a public contract the agent has some discretion to favor a firm in exchange for a bribe. While unilateral commitment to transparency is never incentive compatible, under some circumstances a voluntary but conditional commitment mechanism can eliminate corruption. A low quality firm may prefer not to commit only when the agent's discretion is strong and the market's profitability is small. In that situation, the high quality firms commit when commitment decisions are kept secret, but some conditions on firms' beliefs are required when commitment decisions are publicly announced. A mechanism combining both conditionality and a reward (a transparent selection advantage that needs not be large) allows complete elimination of corruption.     

How to talk to multiple audiences

Stochastic fictitious play (SFP) assumes that agents do not try to influence the future play of their current opponents, an assumption that is justified by appeal to a setting with a large population of players who are randomly matched to play the game. However, the dynamics of SFP have only been analyzed in models where all agents in a player role have the same beliefs. We analyze the dynamics of SFP in settings where there is a population of agents who observe only outcomes in their own matches and thus have heterogeneous beliefs. We provide conditions that ensure that the system converges to a state with homogeneous beliefs, and that its asymptotic behavior is the same as with a single representative agent in each player role.     

Bundling agricultural technologies to adapt to climate change

Farmers can respond to climate change by modifying their technologies or management practices, or both. In this paper, we examine the choice of crop, irrigation, and cover as a bundled decision by a farmer. Using discrete choice analysis and a cross section of farms from Israel, we test whether these decisions are sensitive to climate and find that they are. In the case of Israel, the farmers completely substitute capital for climate. Simulating increase in temperature suggests that warming would lead Israeli farmers to shift mainly to orchards under cover and irrigation. But it is likely that bundling adaptations will provide flexibility and sustainability for future farmers in many locations under climate change conditions.     

从按劳分配到按要素贡献分配变迁的理论依据

在收入分配变迁原因的理论依据上,我国存在着从所有制理论和价值理论出发解释收入分配变迁的两种理论,我们分别称之为收入分配变迁的所有制理论和收入分配变迁的价值理论。本文认为,收入分配变迁的所有制理论,只能说明我国收入分配方式和分配理论为什么必须按某一路径变迁,却无法对这种变迁本身做出价值判断,对这一问题的回答必须借助收入分配变迁的价值理论。如果说收入分配变迁的所有制理论旨在探求收入分配方式、收入分配理论变迁的客观必然性的话,收入分配变迁的价值理论则是对这种变迁做出好或坏的评价。收入分配变迁的价值理论和收入分配变迁的所有制理论是从两个不同角度对收入分配进行论述的。     

高碳经济如何向低碳经济转变

近年来,能源短缺和环境污染问题成为全球性焦点问题。尤其是在金融危机之后,各国在应对措施上,以开发清洁能源、新能源和节能减排产业等为基本内容的绿色产业革命正在悄然兴起,展现出向节能低碳经济转变的良好势头。其中,传统经济增长模式如何向低碳经济转移是关键。文章将传统经济模式定义为高碳模式。首先概述高碳经济与低碳经济,对二者的构成指标进行分析;然后对两种经济发展模式进行比较,分别从产业层面、机制层面与社会层面三大方面予以分析,找出二者不同之处;最后对高碳经济向低碳经济转变进行研究,指出应以产业结构转变为先带动其他层面,并提出了相应的措施。     

Why China's approach to institutional change has begun to succeed

In the constantly changing modern economic environment, a country's ability to implement institutional reforms is crucial to maintain economic growth and to promote the welfare of its citizens. Unfortunately, it can be difficult to persuade institutional stakeholders that the change is necessary, and as a result, efforts at institutional change often fail. To avoid situations in which change is sudden and disruptive, China has chosen a more cautious approach of gradual institutional change leading to smooth reform, which Deng Xiaoping referred to as “crossing the river by stepping from stone to stone” — a metaphor that translates into doing a careful experiment before broad application of an approach for which you lack prior experience. This approach allows adaptation to local conditions during subsequent broader adoption of a new approach, and can thereby decrease the risks and costs of adopting a new strategy by first testing the change and then demonstrating the potential benefits to local residents and governments. This innovative approach has been a key component of China's economic reforms since 1978, and the Chinese experience shows how adapting programs to local natural and social conditions can help to motivate change and sustain the implementation of new institutions.     

Whom to send to Doha? The shortsighted ones!

Analyses of the effects of trade policies focus on comparisons of two different steady states, restricting the investigation to the long run. In order to account for the adjustments and to capture the relevant transmission mechanisms of changes in trade costs, such as market size, entry and exit, as well as productivity changes of firms, we base our trade policy analysis on a dynamic new trade theory model. This approach has two advantages. (i) It allows us to take account of the transitional process after a change in tariffs. (ii) It allows us to take account of the shortsightedness of policy makers. We show that Nash-equilibrium tariffs based on a dynamic trade model are lower than Nash-equilibrium tariffs based on a static model. We also show that shortsighted politicians tend to set lower tariffs than politicians with a longer planning horizon.     

How to translate results from auctions to procurements

The translation of statements from auctions to procurements is not always straightforward. We define a duality relationship between them and provide the appropriate transformations needed for establishing it. Additionally, we prove that affiliation is preserved under these transformations and establish the linkage principle for procurements.     

From ability to pay to concepts of equal sacrifice

The ability-to-pay approach to taxation in Mill's tradition is given a rigorous treatment in a social choice theoretic framework. Generalized concepts of equal sacrifice are axiomatized making explicit use of the ability-to-pay principle. Extensive statements on progressivity are derived. However, there is no such axiomatized concept that implies non-excessive progressitivity irrespective of taxpayers' utility function.     

Call to arms: time to fight an epidemic

According to the National Institutes of Health (2008), 108 million Americans are overweight and/or obese. In 1997, the World Health Organization noted that this was a major public health problem and it is no longer just an American problem. Clinically, nurses must find ways to have conversations with clients about weight and healthy lifestyles in ways that do blame the victim. Take a look at the vending machines for patients and their families in waiting rooms. Is there anything in those machines that we could consider healthy? Nurse leaders are in the ideal position to help their organizations consider the development and implementation of a wellness program. Most importantly, we have to start talking about the issue and find ways to develop multi-pronged approaches to confront the obesity epidemic.     

Concordian Economics: Tools to Return Relevance to Economics

With the help of planes and solids, this paper presents an enlargement of the field of observation of economic theory. Through this transformation, the distribution of ownership rights to money and wealth assumes a central position in economic analysis. Thus social relevance is returned to economics. The validity of this operation is confirmed by the return of the millenarian field of economic justice to its traditional function as guidance to economic policy. The paper then presents four sets of economic rights and responsibilities that offer the potential of translating principles of economic justice into the complexities of the modern world.

Vulnerability to spillovers

This paper quantifies the impact of common investors in creating vulnerability through international spillovers in the 1980s, 1990s and 2000s. A spillover is the impact on a country resulting from changes occurring abroad; domestic economy fundamentals are assumed to remain constant. The impact arises from a purely external shock because of changes in linked countries. A vulnerability index proposed by Kelejian and Mukerji (Pap Reg Sci 90(4):693–702, 2011) is used to measure the spillover. This paper proposes a novel method to split the vulnerability into two parts: one arising from international linkages and another from prevailing domestic conditions determining sensitivity to spillovers. Findings suggest a rising vulnerability index over successive decades, chiefly driven by international linkages.     

Rejoinder to Peltzman

Since 2008, the U.S. economy has been mired in the second worst economic crisis in its history. Conceivably, massive government spending could bring the economy out of this slump as massive war spending ultimately ended the Great Depression of the 1930s. However, a far superior strategy exists: guaranteeing employment accompanied by retraining to enable all unemployed workers to become absorbed into the regular work force. Beyond ending the crisis, the superiority of this strategy is that it would institutionalize a procedure for insuring that, in an increasingly technologically dynamic and open economy, workers would possess the necessary skills for available jobs. Guaranteeing employment would also eliminate the ecological costs associated with the need to seek growth to generate employment at practically any cost. Finally, it would establish a new moral social contract, whereby everyone is granted the dignity that accompanies being a productive member of society. Welfare for those able to work could disappear, along with the degradation and humiliation accompanying it.     

Using real-time electricity data to estimate response to time-of-use and flat rates: an application to emissions

Using a generalized McFadden specification, we estimate the determinants of hourly response for the years 2006 through 2010 for all 16 standard retail customers who were on an optional real-time electricity rate offered by Duke Energy as of 2010, and provide a method to estimate how these customers would respond to time-of-use (TOU) and flat rates. We generalize the model to allow for inter-day response, as well as threshold prices, above which individual customer response may increase or decrease. With these inclusions, we find hourly elasticity for the group of customers to be as large as ?0.7, larger than previous studies. We apply the method to examine a recent finding that time-differentiated rates could increase electric utility emissions. However, that result did not differentiate between real-time and TOU rates, and furthermore held energy use constant in comparing flat rates and time-differentiated rates. We perform a case study to examine emissions of SO₂, NOx, Hg, and CO₂ based on predicted energy use changes as well as for an energy-neutral case for real-time, TOU and flat rates. Employing energy use predictions from the model, increased energy use results in increased emissions in almost all cases. For the energy-neutral case, time-differentiated rates increase CO₂ as compared to flat rates, and the TOU rate causes a larger increase than does real-time pricing. But both rates decrease other emissions in the majority of years, particularly SO₂ In addition, time-differentiated rates reduce NOx potency by shifting it to non-daylight hours when conditions for the formation of smog are less favorable. Our application leads to the conclusion that the effect of the rates on emissions must consider total energy use as well as the shift from peak to off-peak. Furthermore, the predictions require consideration of the generating mix at a more detailed level than was contained in previous studies.     

Evaluation of Policy Options to Encourage Welfare to Work

This article compares five alternative policy options with the January 2006 tax and social security system. Each option is designed to cost a similar amount of approximately $5 billion per year to the government at the observed level of labour supply. The five options include reducing the lowest income tax rate, increasing the tax‐free threshold, increasing the low income tax offset, decreasing all taper rates on own and partner's incomes for a number of allowances, and introducing an earned income tax credit. The criteria for comparison are the labour supply responses, the expected budgetary cost to the government after taking into account labour supply responses, the number of winners and losers from the policy change, the effects on the distribution of effective marginal tax rates, and the effects on the number of jobless households. From the results, it is clear that the option to reduce taper rates is dominated by the other options on all criteria. The other four options each have their advantages and disadvantages; no option scores best on all criteria.     

Learning to search

Consumer search behavior in a market characterized by differentiated products is investigated in terms of a psychological reinforcement learning model. It is demonstrated that under these assumptions, consumers will vary in their propensities toward search despite similarities in search costs. There is no ‘equilibrium’ search behavior for an individual household, but there does exist a unique equilibrium distribution of search propensities. Although the behavioral hypothesis which underlies the model is quite different from the usual Bayesian formulations, the mean of the equilibrium distribution has properties which are very similar to those of normative Bayesian search models.     

Attitudes to risk and attitudes to uncertainty: experimental evidence

In a series of experiments the interactions among individual attitudes towards risk and uncertainty, the sign of the outcome domain, and the way uncertainty is represented are tested. This is done in a unified framework, eliciting individual values by means of a second price auction. Results confirm the presence of the well-known fourfold pattern of risk attitude (risk aversion for gains and risk seeking for losses at high probability, and risk seeking for gains and risk aversion for losses at low probability) and show that this pattern can also be extended to uncertainty. In the valuation of losses the modal pattern is decreasing risk and uncertainty aversion as the probability of loss increases, while increasing risk and uncertainty aversion is observed for gains. Moreover, it is found that the size of reaction to uncertainty does not depend on the outcome domain, and that it persists in the face of an incentive-compatible mechanism to elicit preferences.     

“农改超”路在何方

近年来,在中国城市掀起了一股引人注目的农贸市场超市化(农改超)潮流,客观地看待这一现象,"农改超"既有利又有弊。但是,农贸市场是一种低层次的商业形态,它需要向更高层次发展,因而,农贸市场超市化是一个不可逆转的必然趋势。