Dynamic demand and noncompetitive pricing strategies

This paper studies optimal noncompetitive pricing strategies when the evolution of demand is the result of intertemporal considerations. Two different hypotheses of price expectations (myopia and perfect foresight) are treated. The major implication is that the slight modification from an instantaneous to a very fast consumer reaction may completely modify a monopolist's price strategy. More precisely, the price strategy should be volatile if the equilibrium demand is convex, independent whether the consumers act myopically or employ rational expectations. On the other hand, asynchronous dynamics (e.g., due to competitive fringe supply or different segments of demand) cannot explain even damped price oscillations. The equilibrium price strategy of the noncompetitive supplier exceeds the static rule if consumers employ myopic expectations; rational expectations may lead to prices above or below the static rule depending on the rate of discount.I am grateful for the helpful and elaborate comments from three anonymous referees.     

The sky is the limit? The determinants and constraints of European airports commercial revenues

This study investigates the determinants of commercial and retail airport revenues from real estate operations. Aviation revenues per passenger are mainly determined by the national income per capita in the area where the airport is located, the percentage of leisure travelers and the size of the airport. Main drivers of commercial revenues per passenger include the number of passengers passing through the airport, the ratio of commercial to total revenues, national income, the share of domestic and leisure travelers and the number of flights. These results are in line with previous findings of a negative influence of business travelers on commercial revenues per passenger. We also find that a large amount of retail space per passenger is generally associated with lower commercial revenues per square meter confirming decreasing marginal revenue effects. Real estate revenues per passenger are positively associated with national income per capita at airport location, share of intra-EU passengers and percent delayed flights.     

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“Wilderness” – A designation for Central European landscapes?

The concept of “wilderness” has been intensively discussed as an approach for nature protection in Central Europe among managers of protected areas, decision makers, natural and social scientists. This paper discusses the various attempts for physical definitions for Central Europe. It examines, if “wilderness” a suitable expression for communicating different types of places designated “wilderness”, especially in the context of rising awareness and acceptance in all parts of society of the demands of the national strategies for protecting biodiversity. Literature surveys were carried out in order to find expert quotes on the physical definitions, spatial characteristics, and attributes of “wilderness”. For the analytical perception of the general public, a survey using opinion polls among visitors in the Müritz National Park in north-eastern Germany was carried out. A quantitative approach was chosen, and interviewees were selected on an objective, systematic basis. The paper demonstrates, that the wilderness discussion among experts in Central Europe lacks a common physical and spatial definition. It can be shown that there are strong ethical and religious, educational and cultural motifs in the demand for wilderness. For a broad range of laypersons interviewed in Müritz National Park, “wilderness” seems to be a suitable, positive label for wetlands, shorelines, large forests and remote mountain areas. Important key factors, aside from natural features, are few human traces, little infrastructure and few persons using an area, so that visitors experience a feeling of solitude.     

Urban economics and development

China’s policy of opening the door to foreign business has sometimes aroused excessive expectations. Both in China and abroad, overoptimism has now been replaced by a more realistic appraisal of what can be achieved in economic terms. Nonetheless, Deng Xiaoping’s aim of quadrupling industrial and agricultural output¹ by the year 2000 is still being pursued. Urban regions have been allocated a key role in this as the powerhouse of development. In the light of regional economic analyses,²this article examines whether the intended economic reforms go far enough to enable the conurbations to perform this function.     

Local compensation payments for agri-environmental externalities: a panel data analysis of bargaining outcomes

We analyse local compensation payments made to farmers for providinglandscape amenities in Alpine tourist communities. These paymentsresult from political bargaining at the municipal level. Paneldata estimation shows that the probability of introducing compensationpayments depends positively on the benefits of landscape amenities.Although no impact of service provision cost is found, transactioncosts at different levels of the bargaining process reduce theprobability of payments. Compensation payments mainly occurin communities where the provision of agricultural landscapeservices is perceived as relatively low and the diversity ofthe countryside seems to be endangered. We argue that municipalcompensation payments are an important supplement to nationaland European Union policy measures in support of less-favouredareas.     

The possibility of judgment aggregation on agendas with subjunctive implications

The new field of judgment aggregation aims to find collective judgments on logically interconnected propositions. Recent impossibility results establish limitations on the possibility to vote independently on the propositions. I show that, fortunately, the impossibility results do not apply to a wide class of realistic agendas once propositions like “if a then b” are adequately modelled, namely as subjunctive implications rather than material implications. For these agendas, consistent and complete collective judgments can be reached through appropriate quota rules (which decide propositions using acceptance thresholds). I characterise the class of these quota rules. I also prove an abstract result that characterises consistent aggregation for arbitrary agendas in a general logic.     

On optimal growth when there are many goods and factors

This paper summarizes some findings with respect to optimal growth when saving and the state of the arts are endogenous, natural resources shrink, and the numbers of goods and basic factors are possibly large. Outcomes of some numerical experiments are reported. The dynamic-programming algorithm is used for time-optimization and linear programming for instantaneous optimization. Progress can plausibly balance out depletion, without the help of capital accumulation. Many goods can produce a multiplicity of maximal extreme points in solution space, from which the productioin-possibility frontier becomes a multiple-dimensional hyperplane, moving outward over time.Presidential Address presented at the Forty-Third International Atlantic Economic Conference, London, England, March 11–18, 1997.     

Rural development and financial markets in Romania

In the transition from a centrally planned to a market-oriented economy, such as in Romania, the domestic financial market plays two important roles. First, the financial market itself must be fundamentally restructured. Second, its efficient functioning is a crucial precondition for economic transformation. In transition economies, however, financial market institutions tend to concentrate their services on urban or larger rural enterprises. So far, small rural enterprises, even those with profitable investment plans, often do not have access to the financial market. This paper briefly characterizes the key issues of agricultural production units and their institutional environment and analyzes the depth and the efficiency of rural finance and its effect on Romania's rural economic transformation. It concludes with policy and institutional recommendations to strengthen rural finance.