Two Theorems on Generalized Diminishing Returns and their Applications to Economic Analysis*

Under certain weak assumptions such as free disposal and non-satiety, it is shown that the concavity of utility and of technology implies that the maximum value of the set of all attainable programmes is a concave function of the initial capital stocks. For time-independent problems, this implies that along an optimal path, as a capital stock is accumulated, its shadow price falls. The usefulness of the theorems is demonstrated in a number of examples, including Kemp's cake-eating problem and Forster's pollution-control problem.     

Retail growth and consumer changes in a declining urban economy: Antwerp (1650–1750)

This article examines the interplay between retail changes and transformations in the material culture of Antwerp, a provincial town in the southern Netherlands. We argue that major changes in the eighteenth‐century material culture and retail sector were not significantly linked to preconditions of economic growth and urbanization. The Antwerp ‘retail paradox’ is that of a shrinking economic horizon running parallel to material culture and retail transformations, usually connected to expanding urban economies and societies. Changing retail and consumer practices explain the growing and prospering retail sector, rather than a growing economy.     

Rationale for Government Intervention in Canadial Agriculture: A Review of Stabilization Programs

Agricultural commodity stabilization programs are important in Canadian agriculture. In this paper, two forms of commodity stabilization, namely, price/income support programs and supply-restricting marketing boards, are reviewed. The review concludes that there are few economically justifiable reasons for maintaining many stabilization programs and that we should be looking toward alternative means of achieving the relevant social objectives. Les programmes de stabilisation des prix des produits agricoles tiennent une place importante dans ?agriculture canadienne. Dans le présent article, nous examinons deux formes de stabilisation des prix des produits: les programmes de soutien des prix et des revenus et les offices de commercialisation pratiquant la gestion de ?offre. Nous concluons que beaucoup des programmes de stabilisation existants se justifient mal du point de vue économique et que nous devrions chercher ?autres moyens de réaliser nos objectifs sociaux pertinents.     

DYNAMIC INCENTIVE CONTRACTS WITH UNCORRELATED PRIVATE INFORMATION AND HISTORY-DEPENDENT OUTCOMES*

In previous papers on dynamic incentive contracts, the dynamic structure of the principal-agent relationship arises exclusively from the ability of the principal to learn about the hidden information over time. In this paper we deal with a different source of dynamics, which is considered standard in all areas of economics other than the information literature: we study situations where current opportunities depend on past and current actions, notwithstanding any information conveyed by the actions. Standard examples include investment, "Learning by doing", and R&D. In order to focus on this neglected source of dynamics, we restrict our attention to situations involving asymmetric information in each period, but without any intertemporal informational correlation, so that no dynamic effect arises directly from informational asymmetrie. This makes comparisons with static results both easier and more interesting.