Changes in food provision in Russian households experiencing perestroika

The purpose of this article is to describe how households in Novgorod the Great, Russia, deal with food provision in everyday life. The study focuses on changes experienced in food provision and consumption in Russian society, in order to illustrate how households respond to the transformation towards a market economy. The study reflects women's perspective on food provision. Students from Novgorod the Great visited 105 households and asked the women in the household to answer a questionnaire. Results from the study show that in order to cope with changes in society related to economic reforms, Russian households had changed both their food consumption and food production patterns. There was no big difference between urban and rural households. Nearly all of the households were self‐sufficient in the provision of vegetables and potatoes. Many households had a ‘dacha’ (plot), where they produced most of what they needed. Among the changes experienced during recent years (i.e. during the end of the 1990s), a decade after perestroika was initiated, households mentioned the rise in food prices and the decrease of income. Households reported that they consumed less fruit and/or meat. Some households also mentioned that the quality of nourishment had decreased, thereby indicating lower general quality, lower nutrition value, or less healthy foodstuffs.     

Action Teams That Work

A growing awareness of workplace hazards and identification of airborne contaminants, coupled with a changing safety and health regulatory environment, created an unexpected demand for new and innovative respirators in the early 1980s. 3M's Occupational Health and Environmental Safety Division broke new ground by taking the team concept further than ever before in the company. The division's Action Teams successfully designed, built and introduced products in less than half the time it would have taken previously. Robert Hershock, Charles Cowman and Douglas Peters describe how 3M learned important lessons about team selection, training, performance and motivation, the importance of project sponsors, and the role of middle management.     

Costs and Benefits of Recycling Liquid Board Containers

Recycling of packaging material has become more or less mandatory in many European countries, including Norway. Through so-called voluntary agreements quantitative targets are set for the proportion of total waste to be recycled. At the same time the strategic objective for Norwegian waste policy is that there should be a socio-economic balance between different waste treatment options. On the basis of a cost-benefit analysis it is questioned whether the Norwegian recycling policy for liquid board containers really is cost-effective. The calculations show that the net social costs of the recycling system in 1999 amounted to EUR3.5 million. The high cost is due to the fact that these containers constitute a small fraction of total waste from the household and that it is costly to separate it from other waste. The environmental costs from landfilling or incineration are small compared to the costs of recycling. The best alternative, according to our analysis, is to incinerate the containers with energy recovery.     

Strategic profiles and performance: An empirical test of select key propositions

Competing theories on internal orientation versus external orientation are examined. The relevant theories are amalgamated and condensed into a number of competing propositions that are empirically tested. The findings suggest that the internally oriented businesses as well as the externally oriented businesses underperform the efficient, marketing oriented businesses.     

Two characterizations of the uniform rule for division problems with single-peaked preferences

Summary The uniform rule is considered to be the most important rule for the problem of allocating an amount of a perfectly divisible good between agents who have single-peaked preferences. The uniform rule was studied extensively in the literature and several characterizations were provided. The aim of this paper is to provide two different formulations and corresponding axiomatizations of the uniform rule. These formulations resemble the Nash and the lexicographic egalitarian bargaining solutions; the corresponding axiomatizations are based on axioms of independence of irrelevant alternatives and restricted monotonicity.The authors are grateful to Jeffrey Banks, Steve Ching, Vincent Feltkamp, Bezalel Peleg, Sang-Young Sonn, William Thomson and an anonymous referee for helpful comments.     

Sequential selling mechanisms

Summary In this paper we attempt to formalize the idea that a mechanism that involves multilateral communication between buyers and sellers may be dominated by one that involves simple bilateral communication. To do this we consider the well known problem in which a seller tries to sell a single unit of output to a group ofN buyers who have independently distributed private valuations. Our arguments hinge on two considerations. First, buyers communicate their willingness to negotiate with the seller sequentially, and second, buyers have the option of purchasing the good from some alternative supplier. It is shown that the seller cannot improve upon a procedure in which she offers the good to each buyer in turn at a fixed price. The seller reverts to multilateral communication if possible, only when no buyer is willing to pay the fixed price. In reasonable environments buyers will be too impatient to wait for the outcome of a multilateral negotiation and all communications will be bilateral.In many problems in mechanism design, informed traders have no alternative to participation in the mechanism that is offered by its designer. The best mechanism from the designer's point of view is then the one that is most efficient at extracting informational rents, that is, a simple auction. In a competitive environment it is likely to be costly for buyers to participate in an auction or any other multilateral selling scheme in which the seller must process information from many different buyers because alternative trading opportunities will be disappearing during the time that the seller is collecting this information. Buyers might be willing to participate in an auction, but only if they could be guaranteed that the competition that they face will not eliminate too much of their surplus.At the other extreme to the auction is a simple fixed price selling scheme 1. The seller simply waits until he meets a buyer whose valuation is high enough, given the opportunities that exist in the rest of the market, for him to be willing to pay this price. The seller extracts the minimum of the buyer's informational rents since the price that a buyer pays is independent of his valuation. Yet the seller might like this scheme if adding a second bidder to the process makes it very difficult for him to find a buyer with a valuation high enough to want to participate.In the presence of opportunity costs, the seller faces a trade-off between his ability to extract buyers informational rents and his ability to find buyers who are willing to participate in any competitive process. In practice this trade-off will impose structure on the method that is used to determine a price. In markets where there are auctions, limits are put on buyer participation. In tobacco auctions bids are submitted at a distinct point in time from buyers who are present at that time. In real estate auctions time limits are put on the amount of time the seller will wait before making a decision. These restrictions on participation are presumably endogenously selected by the seller (possibly in competition with other mechanism designers) with this trade-off in mind.On the other hand, markets in which objects appear to trade at a fixed price are rarely so simple. A baker with a fixed supply of fresh bagels is unlikely to collect bids from buyers and award the bagels to the high bidder at the end of the day. Buyers are unlikely to be willing to participate in such a scheme since they can buy fresh bagels from a competitor down the street. Yet despite the fact that bagels sell at a fixed price throughout the day, most bakers are more than willing to let it be known that they will discount price at the end of the day on any bagels that they have not yet sold. Selling used cars presents a similar problem. Each potential buyer for the used car is likely to have inspected a number of alternatives, and is likely to know the prices at which these alternative can be obtained. A seller who suggests that buyers submit a bid, then wait until the seller is sure that no higher offer will be submitted is asking buyers to forgo these alternative opportunities with no gain to themselves. To avoid the rigidity of the pure fixed price scheme most used cars are sold for a fixed price or best offer. These examples suggest that the best selling mechanism may involve a complex interplay between participation and surplus extraction considerations.The purpose of this paper is to provide a simple formalism within which the factors that determine the best contract can be evaluated. We consider the best known environment from the point of view of auction design in which there are a large number of buyers with independent private valuations for a unit of an indivisible commodity that is being sold by a single supplier who acts as the mechanism designer. We modify this standard problem in two critical ways. First, we assume that the seller meets the potential buyers sequentially rather than all at once. Secondly we assume that buyers have a valuable alternative that yields them a sure surplus. This creates a simple bidding cost that is effectively the expected loss in surplus (created by the disappearance of outside alternatives) that the buyer faces during the time that he spends negotiating with the seller.These simple assumptions allow us to calculate the impact of competition and communication costs using completely standard arguments from the mechanism design literature. We are able to show that with these assumptions the seller's expected surplus will be highest if the object is sold according to the following modified fixed price scheme: the seller contacts each of the potential buyers in turn and either offers to negotiate or announces that he no longer wishes to trade. If he offers to negotiate and the buyer agrees, the buyer immediately has the option of trading for sure with the seller at a fixed price set ex ante. If the buyer does not wish to pay this fixed price, he may submit an alternative bid. The seller will then continue to contact new buyers, returning to trade with the buyer only if no buyer wishes to pay the fixed price and no higher bid is submitted.It will be clear that in our environment, both the simple fixed price scheme and the simple auction are feasible. The simple auction prevails when the fixed price is set equal to the maximum possible valuation, while the simple fixed price scheme occurs when the fixed price is set so that buyers are willing to participate if and only if they are willing to pay the fixed price. Our results will show that a simple auction in never optimal for the seller. The seller can always strictly improve his payoff by moving to a scheme in which there is some strictly positive probability that trade will occur at the fixed price. On the other hand, there are reasonable circumstances in which the seller cannot achieve a higher payoff than the one she gets by selling at a fixed price. It is shown that for any positive participation cost, there is a large, but finite, number of potential buyers so that the seller cannot achieve a higher payoff than what she gets by selling at a fixed price. Two simple, but important continuity results are also illustrated. As the cost of participation in the mechanism increases (decreases), the probability with which the seller's unit of output is sold at a fixed price goes to one (zero) in the best modified fixed price mechanism for the seller.Our paper is not the first to generate such a modified fixed price scheme. Both McAfee and McMillan (1988) and Riley and Zeckhauser (1983) come up with similar schemes for the case in which the seller must bear a fixed cost for each new buyer that she contacts. There are two essential differences between our model and theirs. First, as the cost is interpreted as the opportunity cost of participation in the mechanism, it is reasonable to imagine that the seller advertises the mechanism ex ante. Another way of putting this is that the seller pays a fixed rather than a variable cost to communicate the mechanism to buyers. This makes it possible to assume that the mechanism is common knowledge to the seller and all the buyers at the beginning of the communication process. For this reason we can make our case using completely standard arguments. Secondly, the mechanism in the opportunity cost case plays a different allocative role than it does in the case when the seller bears a cost. The mechanism must decide whether buyers should communicate with the seller or pursue their alternative activities, as well as who should trade and at what price. It is this allocative role that makes bilateral communication superior to multilateral communication in a competitive environment. These differences allow us to show, for example, that a simple fixed price scheme is undominated for the seller when the number of buyers is finite. As shown by McAfee and McMillan, this is only possible when the number of potential buyers is infinite when the seller bears the cost of communication.Remarkably, the existence of opportunity costs to buyer participation is not, by itself, sufficient to explain why sellers might prefer bilateral communications mechanisms. Samuelson (1983) and McAfee and McMillan (1987) show that when buyers must pay a fixed cost to submit a bid, which is equivalent to giving up a valuable alternative, a seller cannot expect to earn more than she does in a second price auction (though Samuelson shows that the reserve price may depend on the number of potential buyers). One of the contributions of this paper is to show that the assumption that buyers make their participation decisions simultaneously is critical to this result. Simultaneous entry decisions means that whether or not any particular buyer is assigned to the alternative activity is independent of any other buyer's valuation. With sequential communication the seller is able to relax this constraint. It is precisely the enlargement of the class of feasible mechanism that breaks down the optimality of the simple auction.The second author acknowledges the support of the Social Sciences and Humanities Research Council of Canada and the CRDE at the Université de Montreal.     

Uncertainty and sustainability in the management of rangelands

We analyze a dynamic and stochastic ecological-economic model of grazing management in semi-arid rangelands. The ecosystem is driven by stochastic precipitation. A risk averse farmer chooses a grazing management strategy under uncertainty such as to maximize expected utility from farming income. Grazing management strategies are rules about which share of the rangeland is given rest depending on the actual rainfall in that year. In a first step we determine a myopic farmer's optimal grazing management strategy and show that a risk averse farmer chooses a strategy such as to obtain insurance from the ecosystem: the optimal strategy reduces income variability, but yields less mean income than possible. In a second step we analyze the long-run ecological and economic impact of different strategies. We conclude that a myopic farmer, if he is sufficiently risk averse, will choose a sustainable grazing management strategy, even if he does not take into account long-term ecological and economic benefits of conservative strategies.