The ABC-LCA method for the integration of activity-based costing and life cycle assessment

This article presents an approach to integrating life cycle assessment (LCA) into an activity-based costing (ABC) model to develop a steering system that takes into account both financial costs and associated environmental impacts. By combining the formalism of LCA and ABC matrix calculations, we show how impact assessment results can be affiliated with costs to jointly and simultaneously compute the costs and environmental impacts of products and activities. The conditions of integration are developed following the four-step structure of LCA. The proposal is applied to a simplified case study of the ‘Classic Pen Company.’ The developed ABC-LCA approach paves the way for further test applications, which are considered useful in the context of environmental indicators for strategic steering, communication with customers and forecasting or simulation.     

A game-theoretic analysis of the Waterloo campaign and some comments on the analytic narrative project

The paper has a twofold aim. On the one hand, it provides what appears to be the first game-theoretic modeling of Napoléon’s last campaign, which ended dramatically on June 18, 1815, at Waterloo. It is specifically concerned with the decision Napoléon made on June 17, 1815, to detach part of his army and send it against the Prussians, whom he had defeated, though not destroyed, on June 16 at Ligny. Military strategists and historians agree that this decision was crucial but disagree about whether it was rational. Hypothesizing a zero-sum game between Napoléon and Blücher, and computing its solution, we show that dividing his army could have been a cautious strategy on Napoléon’s part, a conclusion which runs counter to the charges of misjudgment commonly heard since Clausewitz. On the other hand, the paper addresses some methodological issues relative to “analytic narratives”. Some political scientists and economists who are both formally and historically minded have proposed to explain historical events in terms of properly mathematical game-theoretic models. We liken the present study to this “analytic narrative” methodology, which we defend against some of objections that it has aroused. Generalizing beyond the Waterloo case, we argue that military campaigns provide an especially good opportunity for testing this new methodology.     

When Preventing Absenteeism Fuels Long-Sickness Leave: The Case of a Leading Operator for Local Transport Services

We examine the strategy to reduce sickness absences of transit drivers in one of the leading Multinational Operators for Local Transport Services in France. Absenteeism dramatically rose as a result of this strategy. Using observations and interviews at the corporate and field levels, and company data, we disentangle the mechanisms that led to this failure. In a context of strong constraints especially from local communities, the strategy based on underlining the costs of absences pushed local units to change their management practices. They focused on chasing short absences, promoted presenteeism and intensified pressure on workers rather than boosting prevention. Eventually, long-duration sickness leaves massively expanded.     

Algorithmic market making for options

In this article, we tackle the problem of a market maker in charge of a book of options on a single liquid underlying asset. By using an approximation of the portfolio in terms of its vega, we show that the seemingly high-dimensional stochastic optimal control problem of an option market maker is in fact tractable. More precisely, when volatility is modeled using a classical stochastic volatility model—e.g. the Heston model—the problem faced by an option market maker is characterized by a low-dimensional functional equation that can be solved numerically using a Euler scheme along with interpolation techniques, even for large portfolios. In order to illustrate our findings, numerical examples are provided.     

IMMIGRATION AND NATIVE WELFARE*

This article unifies two approaches for identifying the welfare and wage effects of immigration, one emphasizing the immigration surplus, the other stressing a potential welfare loss due to a terms‐of‐trade effect. We decompose the native welfare effect into a standard complementarity effect, augmented by a Stolper–Samuelson effect, and a terms‐of‐trade effect. We illustrate the welfare and wage effects of endogenous goods prices in a stylized‐specific factors model. Finally, we calibrate this model to a generic OECD economy and provide simulation results. The key insight is that endogenous goods prices play a quantitatively important role, sometimes even overturning received results.     

Vertical integration versus vertical separation: An equilibrium model

In this paper, the role of strategic forces in vertical relationships is examined. Using a simple model of differentiated products with symmetric demands and costs, the Perfect equilibrium to a vertical integration-vertical separation game between manufacturers is determined. Given the assumptions of the model, I show that the manufacturer's decision whether to vertically integrate or to remain separate from its retailer depends on the degree of product differentiation. I show that when the products are poor substitutes, the only Perfect equilibrium is vertical integration by both manufacturers. As the products become closer substitutes, an additional Perfect equilibrium appears, both firms vertically separated. For manufacturers, the vertically separated equilibrium always Pareto dominates the vertical integration equilibrium when both equilibria exist.This paper is a revision of Chapter 4 of my Ph.D. dissertation. I wish to thank my Senior Supervisor, Professor Thomas W. Ross, for his many helpful comments. An earlier version of this paper was presented at the Canadian Economic Association meetings in Kingston, June 1991. Helpful comments and suggestions were also received from Keith Acheson, Leigh Anderson, Jeffrey Church, Chantale Lacasse, Frank Mathewson, and Don McFetridge and two anonymous referees. I am responsible for any errors or omissions.     

Removing export-credit subsidies to the Soviet bloc: Who gets hurt and by how much

Estimates of Soviet Bloc import elasticities and of the value of credit subsidies on loans to the bloc in 1981 are used in order to simulate the impact on OECD exports, if these subsidies had been eliminated in that year. The elasticity estimates indicate that price changes have little bearing on hard currency spent on a particular commodity by the Soviet Bloc. If subsidies had been eliminated in 1981, the total decline in OECD exports to the Bloc would have been less than 5%, and for any country, if proportionally distributed among suppliers, no more than 6%, no less than 2%.     

Voluntary contributions to a joint project with asymmetric agents

We revisit Admati and Perry (1991)'s model of voluntary contributions to a joint project. Their main result that equilibrium contributions are small appears not to be robust to the introduction of asymmetries.     

Factor-price equalization under joint and nonjoint production

We investigate how joint production affects the likelihood of factor price equalization (FPE) through trade. Following up on recent contributions by Samuelson (1992) and Jones (1992), we propose to take the relative size of the FPE region of endowment distributions to measure this likelihood, and we show that it mayincrease even if joint production leads to adecrease of the number of basic production processes, and it maydecrease even if the number of basic production processes operated in equilibrium isthe same as under nonjoint production. A 2×2×2 example is analyzed in more detail. Moreover, we show that the argument of Jones (1992) can be reinterpreted in a more applied direction by considering the effects of switching from a regime where only intermediate products are traded to a regime where all products are traded. The paper shows that the likelihood of FPE may decrease by integrating product markets in this way. Still more surprising is the fact that integration may even destroy FPE.     

Wheat markets,food aid and food security in Afghanistan

In Afghanistan, after two decades of civil strife and successive droughts from 1998 to 2002, large inflows of food aid, distributed mainly to returning refugees and through food for work programs, have helped offset production shortfalls of wheat, the country’s major staple. At the same time, private international trade from neighboring countries, especially Pakistan, has also played a major role in augmenting wheat supply and stabilizing prices.