Empirical and public choice evidence for hyperbolic social discount rates and the implications for intergenerational discounting

The derivation of the correct discount rate for intergenerational projects in Cost Benefit Analysis is particularly contentious. Public choice has resulted in lower discretionary exponential discount rates for many intergenerational projects in Britain and the USA. This is shown to be strong indirect evidence that the true social discount rate may be a hyperbolic (rather than an exponential) function. There is also empirical evidence for this hypothesis. The hyperbolic nature of discounting is also a standard finding in the behavioural sciences. For intergenerational time frames hyperbolic discount rates should be employed together with exponential discount rates in cost-benefit sensitivity analyses.Sincere thanks to Maureen Cropper and Paul Portney for supplying their survey results and to Elaine Barrow and Phillip Judge for graphics assistance. Two anonymous referees also provided valuable comments.     

THE INTERNATIONAL LICENSING OF BRANDED FOOD PRODUCTS: A GAME-THEORETIC ANALYSIS

The purpose of this paper is to analyse the strategic motivation for food manufacturing firms to license their branded products to overseas firms. Using non-cooperative game theory, product licensing is modelled in the context of a simple market-entry game where licensing enters explicitly as a strategy that can be utilised by both a potential licensor and licensee. On the basis of this framework, possible licensing outcomes are derived that describe different motivations for food product licensing.     

Internet and E-Commerce Adoption by Agricultural Input Firms

By 1999, most agricultural input firms used company Web sites and adopted some type of Internet strategy. However, far fewer engaged in e-commerce with most activity occurring with suppliers (channel partners) rather than with end customers. Firms perceiving greater logistics and inventory management gains were more engaged in e-commerce activity. The ease of information access, more product choices, easier product comparisons, and improved buying convenience were expected to support farmer e-commerce adoption. However, firm managers indicate that a key to expanding farmers' e-commerce activity is the ability to build personal relationships over the Internet that satisfy farmers' service needs.