General Equilibrium Tragedy of the Commons

Many poor economies depend on open access resources for their livelihoods. Households in resource-based economies allocate their time and other factors between resource extraction and other activities. As a result, factors may shift from one sector to another as marginal returns change. This has two important implications. First, it implies potentially strong linkages between resource and non-resource sectors. Second, it means that unmanaged resources cause inefficient allocations of inputs across all sectors, and the effects of resource management spill into other sectors. We construct a local general equilibrium model that accounts for inputs that over-allocate to an open access resource and create a general equilibrium tragedy of the commons. This model describes resource rent dissipation more adequately in economies with mobile factors than a model with slowly dissipating rents. Perfectly mobile factors dissipate rent in every period, but endogenous wages cause labor and capital allocations to change with the resource stock. We use the model to illustrate medium-run impacts of a limit on capital in an artisanal fishery in Honduras. Simulation results reveal that fishery management has economy-wide impacts on prices and wages. Managers in developing countries thus should consider these linkages when implementing policies to conserve fish stocks.     

Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management

This paper evaluates industry-wide economic incentives arising from changes in product prices in an industry exploiting a common renewable resource (tropical tunas) that is regulated via output limits. Changes in prices alter economic incentives by affecting revenues, profits, conservation, and nonmarket public benefits. Economic incentives in industries exploiting common resources have been examined from multiple angles. However, industry level variation in market prices arising from changes in public regulation has not been explored. We analyse the impact on economic incentives due to changes in output limits and market prices through estimation of ex-vessel price and scale flexibilities for imported skipjack and yellowfin in Thailand’s cannery market. The unitary scale flexibility, estimated from the General Synthetic Inverse Demand Systems, indicates no loss in revenue and even potential profit increases resulting from lower harvest levels that could arise from lower catch limits. However, for a revenue neutral or positive outcome to be achieved, the three inter-governmental tuna Regional Fisheries Management Organizations, which manage the majority of the yellowfin and skipjack tuna in the Pacific and Indian Oceans, would have to coordinate multilaterally to set the catch limits for both species.     

Recent developments in the analysis of fires,explosions, and production disruption incidents in chemical plants and oil refineries

Significant changes in computing power, regulatory climate, safety culture and globalization of business ventures have occurred since the original publication of MTI Publication No. 30, Guidelines for Assessing Fire and Explosion Damage. The implications of these changes are reviewed with regard to the work of investigators charged with the analysis of fires, explosions and major production disruption incidents in chemical processing plants and refineries. A review of advances in computer modeling of large-scale energy release events is presented. Storm damage assessment and the analysis of incidents involving sabotage are discussed. © 2009 American Institute of Chemical Engineers Process Saf Prog 2009     

Imitation,Contagion, or Exertion? Using a Tax Reform to Reveal How Colleagues' Sick Leaves Influence Worker Behaviour

We analyse the social interaction effects in sick‐leave behaviour in the workplace, using high‐quality Norwegian matched employer–employee data with detailed individual information on sick leaves during the 2004–2006 period. We find that social interaction effects in sick‐leave behaviour in the workplace do exist, and that the effects are noticeable in size. The strong relationship between the sick‐leave rates among colleagues is not solely the result of contagious diseases, nor is it caused by improved informational quality or by the increased workload for the non‐absent workers. Evidence supports the existence of reciprocal worker behaviour that is unrelated to joint leisure‐seeking activities.     

Planning for capacity expansion: Stochastic process and game-theoretic approaches

Under- and over-capacity design is a major consideration in public infrastructure systems. Traditional engineering economies of scale leading to overdesign errors must be counterbalanced by greater attention to high cost financing. Increased uncertainty in demand forecasting and financial markets make decision tools which incorporate measures of information imperfection more appropriate. These tools, however, do not lead to consistent identification of optimal design levels.     

Japan's peanut import demand: implications for United States exports

Japan's import demand for both raw peanuts and processed peanut products was estimated using the Rotterdam model in order to determine the impact of an increase in the Japanese raw peanut quota on peanut imports from the USA and its competitors. The results indicate that if a larger import budget were allocated to raw peanut imports by Japan, most of the increase would be allocated to imports of Chinese raw peanuts. Furthermore, U.S. exports of peanut products could be affected if Japanese expenditures on peanut product imports change as a result of an increase in the quota for raw peanut imports. Thus, this study concludes that an increase in the Japanese import quota for raw peanuts provides only limited market opportunity for U.S. peanut exports, and China appears to benefit more than the USA from an increase in the Japanese raw peanut import quota. In contrast, the value added trade of peanut products could provide a better market opportunity for the U.S. peanut industry.     

Wage trends and policies in China: dynamics and contradictions

This article considers the central dilemmas of wage policies in state socialist economies. It reviews the pre-1978 Chinese low-wage and high employment policy and details the development of Chinese wage policies during the 1980s. The dynamics and contradictions which have resulted in inflation, declining labour productivity, falling real wages and social tensions are analysed.     

MEASUREMENT OF CAPACITY UTILIZATION FOR REVENUE-MAXIMIZING FIRMS*

A dual measure of capacity utilization is developed for multiproduct, revenue-maximizing firms. Under the assumption of revenue maximization, the sensitivity of CU to a change in an individual product price is shown to be directly related to the product-specific scale elasticity. The results are given a simple graphical interpretation.     

A case of an early 1900s principal-agent relationship in the Mississippi lumber industry

Correspondence for the L. N. Dantzler Lumber Company, dating from 1904, survives in the Lumber Archives of the University of Mississippi. The correspondence is from the personal files of R. Breland, who rose to the position of office manager of the Dantzler Mills. An analysis of the correspondence reveals a unique agency relationship between the Dantzler Lumber Company and Breland. Breland was hired by the Dantzlers as a land agent. At the time, he was also employed by the Finkbine Lumber Company, a competitor of Dantzler's. Breland's behaviour supports the traditional behavioural assumption in agency theory that individuals will maximize their own self-interests with guile. His access to information allowed him to profit at the expense of others. He used his connections in land-related transactions to achieve personal gain.