Strongly stable networks

We analyze the formation of networks among individuals. In particular, we examine the existence of networks that are stable against changes in links by any coalition of individuals. We show that to investigate the existence of such strongly stable networks one can restrict focus on a component-wise egalitarian allocation of value. We show that when such strongly stable networks exist they coincide with the set of efficient networks (those maximizing the total productive value). We show that the existence of strongly stable networks is equivalent to core existence in a derived cooperative game and use that result to characterize the class of value functions for which there exist strongly stable networks via a “top convexity” condition on the value function on networks. We also consider a variation on strong stability where players can make side payments, and examine situations where value functions may be non-anonymous—depending on player labels.     

On structural inelasticity of modal substitution in freight transport

At the European level there is an increasing focus on how freight transport can be moved from trucks on roads to more environmentally friendly modes such as rail and ship. A large proportion of the transport services between OD pairs, however, cannot be substituted since there is only one alternative available. The paper investigates the magnitude of this “structural inelasticity” of modal substitution in freight transport due to a sparser layout of rail and ship-based freight networks compared to road. In the analysis we use a recent Scandinavian freight demand model covering more than 800 zones. We find that the structural inelasticity is very significant - in particular for transportation over less than 500 km. Moreover, the inelasticity varies greatly with commodity groups and between OD pairs, and it depends strongly on the port and rail infrastructure. The results suggest that pure charging instruments (road pricing for trucks) in many regions will have limited mode substitution impacts. However, if combined with structural changes in terms of improved infrastructure for rail and ship, impacts may be greater.     

PROBLEMS OF ADAPTATION OF PASTORAL BUSINESSES IN THE ARID ZONE*

With emphasis upon Central Australia, an assessment is made of the economic problems of pastoral firms in meeting the climatic conditions of the arid zone. Analysis ranges over the responsibility for conservation and drought planning, the inadequacy of a purely physical approach to conservation, the difficulties of station organization and management in the arid zone, the array of possible managerial strategies for meeting these difficulties, and the effect of social institutions on the choices avail. able to management.     

TOWARDS PRACTICAL GUIDELINES FOR MULTIPLE USE MANAGEMENT*

The general acceptance of multiple use as a desirable management goal has not been matched by practical guidelines to implement and achieve that goal. As Pearse [5] rightly noted, the most serious obstacles to applying multiple use principles are usually the lack of appropriate data and lack of established methodology. This study did not face prohibitive problems in valuing extra-market goods, but as with all multiple use studies, it did face the problem of applying the standard economic model of the multi-product firm. It is hoped this particular empirical application of the model contributes generally to the provision of guidelines for multiple use management.