Economics Commons^™

Trading Carbon Under Uncertainty: How Much Credit Should Be Given For Afforestation?, Ram Ranjan, James Shortle

Ram Ranjan

This paper designs an optimal trading ratio between carbon abatement measures that are certain (such as curtailing carbon emissions) and those that have elements of uncertainty associated with them (such as sequestration through afforestation). Carbon sequestration through afforestation is prone to leak back into the atmosphere through loss of forestry caused by natural disasters or harvesting. When stock of carbon sequestered in plantations is uncertain its value should be discounted compared to measures that have a permanent impact on the atmospheric stock of carbon. An optimal trading mechanism would involve equating the ratio of the marginal costs of the two …

Exit Timing Decisions Under Land Speculation And Resource Scarcity In Agriculture, Ram Ranjan, Sorada Tapsuwan

Ram Ranjan

This paper models the impact of water scarcity in agriculture on the timing of exit decisions for farmers faced with the prospect of declining profitability in agriculture but increasing benefits from land rezoning in the future. The prospects of land rezoning are modeled as a Poisson process. The analysis highlights the role of speculative rewards in making farmers resilient to declining profitability in agriculture and also identifies the circumstances under which water prices may become an ineffective policy tool for allocating water. An empirical application is performed for the case of a drought prone region in Western Australia. Results indicate …

Some Economic Issues In Indian Textile Sector, Badri Narayanan G.

Badri Narayanan G.

No abstract provided.

Solving The Beautiful Mind Coordination Problem, Ted C. Bergstrom

Ted C Bergstrom

There are n boys and m girls. The boys are all expected utility maximizers and agree about the desirability of the prospect of dating each girl. Boys assign utility v_i to a date with girl i, where v_1>v_2>\dots v_n>0 and a utility of 0to having no date. Girls don't care which boy they go out with and they prefer having a date to not having a date. We find the Nash equilibrium strategy for boys.

Masking Identification Of Discrete Choice Models Under Simulation Methods, Lesley Chiou, Joan L. Walker

Lesley Chiou

We present examples based on actual and synthetic datasets to illustrate how simulation methods can mask identification problems in the estimation of discrete choice models such as mixed logit. Simulation methods approximate an integral (without a closed form) by taking draws from the underlying distribution of the random variable of integration. Our examples reveal how a low number of draws can generate estimates that appear identified, but in fact, are either not theoretically identified by the model or not empirically identified by the data. For the particular case of maximum simulated likelihood estimation, we investigate the underlying source of the …

A Dynamic Model Of Sectoral Agglomeration Effects, Nicole Andréa Mathys

Nicole Andréa Mathys

This note derives a theoretical model that justifies the dynamic specification used in empirical works investigating the impact of agglomeration effects on regional industry-specific labour productivity. It extends the seminal multi-regional framework of Ciccone (2002) to allow for sectoral disaggregation and a temporal dimension. As a result, present productivity becomes a function of past productivity and other contemporaneous and lagged control variables.

A Product-Market Theory Of Industry-Specific Training, Hans Gersbach, Armin Schmutzler

Armin Schmutzler

We develop a product market theory that explains why firms provide their workers with skills that are sufficiently general to be potentially useful for competitors. We consider a model where firms first decide whether to invest in industry-specific human capital, then make wage offers for each others' trained employees and finally engage in imperfect product market competition. Equilibria with and without training, and multiple equilibria can emerge. If competition is sufficiently soft, firms may invest in non-specific training if others do the same. Thereby, they avoid having to pay high wages in order to attract trained workers.

The Simple Economics Of Risk-Sharing Agreements Between The Nhs And The Pharmaceutical Industry, Pedro P. Barros

Pedro P Barros

The Janssen-Cilag proposal for a risk-sharing agreement regarding bortezomib received a welcome signal from NICE. The Office of Fair Trading report included risk-sharing agreements as an available tool for the National Health Service. Nonetheless, recent discussions have somewhat neglected the economic fundamentals underlying risk-sharing agreements. We argue here that risk-sharing agreements, although attractive due to the principle of paying by results, also entail risks. Too many patients may be put under treatment even with a low success probability. Prices are likely to be adjusted upward, in anticipation of future risk-sharing agreements between the pharmaceutical company and the third-party payer. An …

An Overview Of Combinatorial Auctions, Peter Cramton, Yoav Shoham, Richard Steinberg

Peter Cramton

No abstract provided.

Why Bayes Rules: A Note On Bayesian Vs. Classical Inference In Regime Switching Models, Dennis L. Gärtner

Dennis L Gärtner

By means of a very simple example, this note illustrates the appeal of using Bayesian rather than classical methods to produce inference on hidden states in models of Markovian regime switching.

Voting, Wealth Heterogeneity, And Endogenous Labor Supply, Chetan Ghate

Chetan Ghate

We examine the link between voting outcomes, wealth heterogeneity, and endogenous labor leisure choice in the majority voting – endogenous growth frameworks of Alesina and Rodrik (1994) and Das and Ghate (2004). We augment these frameworks to incorporate leisure dependent utility and allow households to vote over factor specific income taxes. When agents vote over factor specific taxes, we show that the asymptotic convergence of factor holdings does not imply unanimity over the growth maximizing tax policy in the steady state. Unanimity over growth maximizing policies holds only when agents vote over a general income tax, and when agents vote …

La Política Monetaria Y Su Impacto Sobre Los Retornos Reales Del Mercado Bursátil Chileno, Jorge Muñoz, Claudio Recabal, Andres Acuña

Andrés A. Acuña

Finders Keepers: Forfeiture Laws, Policing, And Local Budgets, Mireille Jacobson

Mireille Jacobson

No abstract provided.

Análisis De La Colusión De Empresas En Un Esquema De Teoría De Juegos: Comentarios Y Reflexiones, Vicente German-Soto, José Luis Escobedo

Vicente German-Soto

Crime Prospects And Prospect Theory, Ram Ranjan

Ram Ranjan

This paper models criminal behavior in a dynamic optimization setting where psychological factors such as subjective risk perception and time preferences play a key role in inducing illegal actions. When psychological perceptions over the actual magnitude of the reward and over the subjective risks of finding a victim or of being caught are dynamic, their influence on crime efforts could vary. Specifically, increasing punishment over rewards, ceteris paribus, deters crime, but increasing punishment and monitoring simultaneously, may encourage crime in the long term. It is also demonstrated that it may not be possible to distinguish between the impacts of hyperbolic …

Comments On The Rggi Market Design, Peter Cramton

Peter Cramton

No abstract provided.

The 700 Mhz Spectrum Auction: An Opportunity To Protect Competition In A Consolidating Industry, Peter Cramton, Andrzej Skrzypacz, Robert Wilson

Peter Cramton

This paper is provided in connection with the 2007 Telecommunications Symposium – Voice, Video and Broadband: The Changing Competitive Landscape and Its Impact on Consumers, sponsored by the Antitrust Division of the U.S. Department of Justice (“the Division”). Our focus is on the state of competition in the wireless sector. Maintaining a competitive wireless sector is particularly critical if, as the Division’s agenda indicates, wireless services are to function as a competitive alternative to wireline technologies. Strengthening competition is especially important now after recent mergers that consolidated the wireless industry into a few dominant firms (two to four depending on …

Presentation On The Arab Economies In A Changing World, Marcus Noland, Howard Pack

Marcus Noland

No abstract provided.

Born (Again) On The First Of July: Another Experiment In Birth Timing, Joshua S. Gans, Andrew Leigh

Joshua S Gans

In an earlier paper (Gans and Leigh, 2006a), we analysed the effect of the introduction of the $3,000 “Baby Bonus” for children born on or after July 1, 2004. We demonstrated that parents behaved strategically in order to receive this benefit, with over 1000 births being “moved” so as to ensure that their parents were eligible for the Baby Bonus. On July 1, 2006, the payment was increased by $834. In this paper, we analyse births in 2006, and find that again, a large number of births were moved. We estimate that over 600 births were moved from June 2006 …

Monetary Darwinism: The Political Economy Of Monetary Relations, Giulio M. Gallarotti

Giulio M Gallarotti

No abstract provided.

La Tragedia De Los Comunes En La Competencia Vertical Entre Jurisdicciones, Martin Enrique Krause

Martin Krause

Los beneficios de la competencia institucional se alcanzan bajo ciertas normas que impiden la violación de derechos y la depredación de los recursos. La competencia horizontal puede tomar la forma de agresión violenta entre jurisdicciones (guerra) o la de cooperación y comercio. Su impacto puede ser “negativo” si substrae recursos de gobiernos benevolentes comprometidos con el bienestar general de la comunidad, pero “positivos” si se los considera como otra forma de controlar el Leviatán. La competencia vertical muestra los mismos controles “positivos” potenciales y la misma necesidad de ciertas reglas para cumplir ese papel. Son similares a la definición estricta …

Widespread Economic Doubts, Julio J. Prado

Julio J Prado

Many people think –perhaps with just reason- that the economy is a boring theoretical science, and that it does not have its feet upon the ground. In order to try to change that perception, we are going to propound for ourselves some day to day questions, to which we can provide an answer (to the extent possible) with a bit of economic “logic”.

Dudas Económicas Existenciales, Julio J. Prado

Julio J Prado

Muchas personas creen -con justa razón quizás- que la economía es una ciencia aburrida, teórica y que no tiene los pies en la tierra. Para tratar de cambiar esa percepción, vamos a plantearnos algunas preguntas del día a día, a las que daremos respuesta (en la medida de lo posible) con algo de “lógica” económica.

Corporate Investment And Analyst Pressure, Sébastien Michenaud

Sébastien Michenaud

Teaching Economics Interactively: A Cannibal's Dinner Party, Ted Bergstrom

Ted C Bergstrom

This paper describes techniques that I use to teach economics principles "interactively". These techniques include classroom experiments and classroom clickers. The paper describes an experiment on market entry and gives examples of applications of classroom clickers. Clicker applications include the collection data about student preferences that can be used to construct demand curves and supply curves. Check on students' knowledge of central concepts. Play interactive games that illustrate economic concepts.

Humans Automatons And Markets, Shyam Sunder

Shyam Sunder

No abstract provided.

New And Dynamic Sectors Of World Trade, Robert C. Shelburne

Robert C. Shelburne

Comments made at a UNCTAD Expert Meeting on New and Dynamic Sectors of World Trade, Geneva, October 2007

A Monetary Policy Framework For Sudan, Warren Coats

Warren Coats

This short overview of the money supply process and the central bank's control of the money supply is tailored to the situation of Southern Sudan, now the independent country of South Sudan.

La Inversión En Argentina: ¿Presente Incierto, Futuro Promisorio?, Martin Enrique Krause, Aldo Abram, Felipe De La Balze, Javier González Fraga, Carlos Rodriguez Braun

Martin Krause

Argentina sufrió la peor crisis de su historia en los años 2001-2002. A partir de entonces ha experimentado una fuerte recuperación, en la que incluso se ha superado el máximo nivel de PBI anterior a la caída, generando un ciclo de cinco años de crecimiento como nunca antes durante todo el siglo XX, con superávit fiscal y, hasta el momento, evitando la volatilidad de la que ha sido aquejada en forma constante. Una economía profundamente deprimida tenía un largo camino por recorrer para acercarse a su frontera de posibilidades de producción, punto que parece haber alcanzado en la mayoría de …

Competencia Institucional Y Control De Los Custodios, Martin Enrique Krause

Martin Krause

Dado el predominio de ideas redistribucionistas y un aparato estatal que se convierte en el centro de ese proceso, no parece, al menos por el momento, haber perspectivas de un retorno al gobierno limitado a las funciones de protección y defensa de los derechos individuales. No obstante, la creciente movilidad de los recursos y el proceso de competencia al que somete a los distintos marcos institucionales puede terminar cumpliendo la función que el modelo liberal clásico original parecería no poder cumplir en estos momentos. La competencia institucional agregaría un elemento más al control de los abusos de poder y, por …