Template-Type: ReDIF-Paper 1.0 Number: 2003.1 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.1 Title: Privatization and Financial Market Development: Theoretical Issues Author-Name: Gabriella Chiesa Author-X-Name-First: Gabriella Author-X-Name-Last: Chiesa Author-WorkPlace-Name: University of Bologna, Italy Author-Name: Giovanna Nicodano Author-X-Name-First: Giovanna Author-X-Name-Last: Nicodano Author-WorkPlace-Name: University of Torino, Italy Abstract: Stock market capitalization in developed countries grew while massive privatization plans were in progress. It is however possible that stock market development would have occurred anyway. Below we identify features that are specific to share-issue privatizations (SIPs) and should a priori impact on market liquidity and market size. A positive correlation between such features and market development in a cross section of countries would support the claim that certain types of SIPs contribute to stock market development. Keywords: Privatization, Financial market development Classification-JEL: L33, G14 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.2 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.2 Title: Theory of Privatization in Eastern Europe: Literature Review Author-Name: Ibolya Schindele Author-X-Name-First: Ibolya Author-X-Name-Last: Schindele Author-WorkPlace-Name: Faculty of Economics and Econometrics, Group of Finance and Organization, University of Amsterdam Abstract: This paper discusses the most important theoretical contributions to the literature on privatization, focusing on emerging economies, and gives a summary on recent research concerning the ways privatization might affect the development of securities markets. In addition, the paper provides a number of policy implications, emphasizing the trade-off between privatization and the reduction in social welfare and the possibility that the privatization process itself may have conflicting objectives (creation of incentive mechanisms, fairness, fast privatization). Keywords: Privatization, Emerging economies, Social welfare Classification-JEL: L33, P31 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.3 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.3 Title: Strategic Action in the Liberalised German Electricity Market Author-Name: Wietze Lise Author-X-Name-First: Wietze Author-X-Name-Last: Lise Author-WorkPlace-Name: Institute for Environmental Studies,Vrije Universiteit, Amsterdam, The Netherlands Author-Name: Claudia Kemfert Author-X-Name-First: Claudia Author-X-Name-Last: Kemfert Author-WorkPlace-Name: Scientific Pool of Environmental Economic Disciplines (SPEED) at the Department of Economics I, Oldenburg University, Oldenburg, Germany Author-Name: Richard S.J. Tol Author-X-Name-First: Richard Author-X-Name-Last: S.J. Tol Author-WorkPlace-Name: Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Centre for Marine and Climate Research, Hamburg University, Hamburg, Germany and Center for Integrated Study of the Human Dimensions of Global Change, Carnegie Mellon University, Pittsburgh, PA, USA Abstract: Nowadays, a process can be observed in Germany where electricity producing and trading firms react to the electricity market liberalisation by merging market shares, since the year 2000, which reduces the number of suppliers and influences production and consumer prices. This paper discusses whether the liberalisation process will have positive or negative impacts on the environmental situation and whether this process together with a phase out of nuclear power can guarantee the intended improvement of environmental conditions without governmental regulation in Germany. This is done by modelling different strategic options of energy suppliers and their impacts on the economic and environmental situation in the liberalised German electricity market by a computational game theoretic model. Calculations with this model show that when German firms act strategically (e.g. a change in action of one firm affects the electricity price and, hence, the payoffs of other firms), the environment is better off at the cost of higher electricity prices. This result is robust to perturbations as shows by performing a sensitivity analysis. Keywords: Electricity market liberalisation, game theoretic model, environmental effectiveness Classification-JEL: C7, D2, Q4, R3 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.4 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.4 Title: Environmental Policy and Capital Movements: The Role of Government Commitment Author-Name: Laura Marsiliani Author-X-Name-First: Laura Author-X-Name-Last: Marsiliani Author-WorkPlace-Name: W. Allen Wallis Institute of Political Economy, University of Rochester Author-Name: Thomas I. Renström Author-X-Name-First: Thomas I. Author-X-Name-Last: Renström Author-WorkPlace-Name: W. Allen Wallis Institute of Political Economy, University of Rochester, and CEPR Abstract: This paper explores the relationship between environmental protection and international capital movements, when tax policy is endogenous (through voting). A two-period general equilibrium model of a small open economy is specified to compare the effects of two different constitutions (commitment or no commitment in tax policy), as well as income inequality. Under the commitment regime, the equilibrium is characterised by a lower labour tax, higher environmental tax and less capital moving abroad than in the no-commitment equilibrium. Furthermore, given the degree of commitment, more equal societies are characterised by tougher environmental policy and less capital moving abroad. Keywords: Environmental policy, international capital movements, time consistency, inequality, political economy, human capital Classification-JEL: F20, H21, H23 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.5 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.5 Title: Induced Technological Change under Technology Competition Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: IVM, Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands Abstract: We develop a partial one-sector model with capital, natural resources, and labor as production factors, and endogenous technological change through research. Production exhibits increasing returns to scale. We compare the response of output and resource use to a change in resource prices with and without induced technological change (ITC). It is shown that induced technological change is insignificant in reducing resource use when there is one representative technology and output demand is inelastic to prices. In contrast, substantial gains from ITC appear when we allow for two competing technologies that can be employed for production, while these technologies are good substitutes. Also, in case of two technologies, conditions are specified under which multiple balanced growth paths exist, and it is shown that because of ITC, a temporary resource tax can lock out the economy from a resource intensive path and lock in to a resource extensive path. Keywords: Induced technological change, environmental taxes, partial equilibrium Classification-JEL: H23, O31, O41, Q42, Q43 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.6 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.6 Title: Squeezing the Interest Rate Smoothing Weight with a Hybrid Expectations Model Author-Name: Efrem Castelnuovo Author-X-Name-First: Efrem Author-X-Name-Last: Castelnuovo Author-WorkPlace-Name: Bocconi University Abstract: Successful descriptions of short-term nominal interest rates inertial behavior have frequently been obtained with small scale macro models in which a Central Banker minimizes a loss function embedding an argument labelled as interest rate smoothing. The rationale for this argument is not straightforward. Indeed, there has been a lively debate about it in the literature. In this paper we perform an empirical exercise to evaluate the relationship existing between private sector’s rational expectations and interest rate gradualism. Our findings strongly support rational expectations as an element capable to remarkably reduce the importance of the interest rate smoothing weight in replicating the observed path of the federal funds rate. However, we find a predominance of adaptive expectations in shaping the paths of inflation ad output gap. Our results also suggest that the Fed has followed a ’Strict Inflation Targeting’ strategy under Greenspan’s regime. Keywords: Central Banker, interest rate smoothing, rational expectations, hybrid Phillips curve, hybrid IS curve Classification-JEL: C51, E52 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.7 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.7 Title: The Role of Liability, Regulation and Economic Incentives in Brownfield Remediation and Redevelopment: Evidence from Surveys of Developers Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland and Fondazione Eni Enrico Mattei Author-Name: Alberto Longo Author-X-Name-First: Alberto Author-X-Name-Last: Longo Author-WorkPlace-Name: Università di Venezia Ca’ Foscari and Fondazione Eni Enrico Mattei Author-Name: Stefania Tonin Author-X-Name-First: Stefania Author-X-Name-Last: Tonin Author-WorkPlace-Name: Istituto Universitario di Architettura di Venezia Author-Name: Francesco Trombetta Author-X-Name-First: Francesco Author-X-Name-Last: Trombetta Author-WorkPlace-Name: Istituto Universitario di Architettura di Venezia Author-Name: Margherita Turvani Author-X-Name-First: Margherita Author-X-Name-Last: Turvani Author-WorkPlace-Name: Istituto Universitario di Architettura di Venezia Abstract: We examine different market-based mechanisms and other incentives intended to promote the environmental remediation and reuse of brownfields. Policies that encourage cleanup and re-use of brownfields offer real estate developers reductions in regulatory burden, relief from liability for future cleanups once certain mitigation standards are met, and/or financial support for regeneration of brownfields. We use conjoint choice experiments—a stated preference approach—to assess the responses of real estate developers to different mixes of these incentives. Our survey instrument was administered in person to a sample of developers and real estate professionals randomly intercepted at the Marché International des Professionnels de l’Immobilier (MIPIM) in Cannes, France, in March 2002. Conditional and random-coefficient logit models of the responses to the choice questions indicate that developers find sites with contamination problems less attractive than others, and that they value liability relief. This confirms our expectation that contaminated sites are less desirable because of the associated cleanup costs, but refutes earlier claims that liability does not matter. Our developers are not deterred by prior contamination, once it has been cleaned up, suggesting that “contamination stigma” is not very important, and appreciate fast-track review of development and remediation plans, direct financial incentives, and flexible (negotiable) cleanup standards. Developers with prior experience with contaminated sites are more responsive to the policies than are nexperienced developers, especially for subsidies. Inexperienced developers are more responsive to liability relief and regulatory relief than they are to subsidies. Similar considerations hold true for larger developers. Keywords: Brownfields, contaminated sites, real estate developers, stated preferences, conjoint analysis, liability relief, regulatory relief, subsidies Classification-JEL: Q28, R38 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.8 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.8 Title: Natural Resources: A Blessing or a Curse? Author-Name: Elissaios Papyrakis Author-X-Name-First: Elissaios Author-X-Name-Last: Papyrakis Author-WorkPlace-Name: IVM, Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: IVM, Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands Abstract: We examine empirically the effect of natural resource abundance on economic growth. We find that natural resources have a negative impact on growth when considered in isolation, but a positive impact on growth when including in the analysis other variables such as corruption, investments, openness, terms of trade, and schooling, and treating these variables as independent. However, when we take account of the effect of natural resources on the other variables and furthermore consider the indirect effect on growth, that is, when we examine possible transmission channels, we find a strong negative effect of natural resources on growth. Finally, we calculate the relative importance of each transmission channel. Keywords: Natural Resources, growth, transmission channels Classification-JEL: C21, O13, Q33 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.09 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.09 Title: North-South Climate Change Negotiations: a Sequential Game with Asymmetric Information Author-Name: Alejandro Caparrós Author-X-Name-First: Alejandro Author-X-Name-Last: Caparrós Author-WorkPlace-Name: CNRS-EHESS-CIRED, France Author-Name: Jean-Christophe Pereau Author-X-Name-First: Jean-Christophe Author-X-Name-Last: Pereau Author-WorkPlace-Name: OEP, University of Marne-la-Vallée, France Author-Name: Tarik Tazdaït Author-X-Name-First: Tarik Author-X-Name-Last: Tazdaït Author-WorkPlace-Name: CNRS-EHESS-CIRED, France Abstract: This article determines the conditions under which the Southern countries should act together, or separately, while negotiating with the North about climate change policy and about the conditions for future Southern engagement. The paper models the international negotiations with complete and with asymmetric information in a dynamic framework. Results show that, depending on their characteristics, the different players can obtain benefits delaying the moment of the agreement. Keywords: Bargaining theory, asymmetric information, climate change, international cooperation Classification-JEL: C78, D74, H77 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.10 Title: School Quality and Family Background in Italy Author-Name: Giorgio Brunello Author-X-Name-First: Giorgio Author-X-Name-Last: Brunello Author-WorkPlace-Name: University of Padua, CESifo and IZA Author-Name: Daniele Checchi Author-X-Name-First: Daniele Author-X-Name-Last: Checchi Author-WorkPlace-Name: wTw, University of Milan Abstract: We study if the combined significant reduction in the pupil-teacher ratio and increase in parental education observed in Italy between the end of IIWW and the end of 1980s had a significant impact on the educational attainment and labor market returns of a representative sample of Italians born between 1941 and 1970. We find that the lower pupil-teacher ratio is positively correlated with higher educational attainment, but that the overall improvement of parental education has had an even stronger impact on attainment. We find that the positive impact of better school quality on educational attainment and returns to education has been particularly significant for individuals born in regions and cohorts with poorer family background. Parental education has had asymmetric effects, positive on attainment and negative on school returns. Better school quality also had asymmetric effects on the returns to education, positive for individuals with poor family background and negative for individuals born in regions and cohorts with relatively high parental education. Our evidence suggests that better school quality, measured by a lower pupil-teacher ratio, is a technical substitute to parental education in the production of individual human capital. When school quality and family background are substitutes, an increase of public resources invested in education can be used to reduce the differences induced by parental education. Keywords: Schhol quality, Family Background Classification-JEL: I10, I21 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.11 Title: Learning by Doing vs Learning by Researching in a Model of Climate Change Policy Analysis Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Università di Milano and Fondazione Eni Enrico Mattei Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Università di Padova and Fondazione Eni Enrico Mattei Author-Name: Efrem Castelnuovo Author-X-Name-First: Efrem Author-X-Name-Last: Castelnuovo Author-WorkPlace-Name: Università Bocconi and Fondazione Eni Enrico Mattei Author-Name: Gretel Gambarelli Author-X-Name-First: Gretel Author-X-Name-Last: Gambarelli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Many predictions and conclusions in climate change literature have been made on the basis of theoretical analyses and quantitative models that assume exogenous technological change. One may wonder if those policy prescriptions hold in the more realistic case of endogenously evolving technologies. In previous work we modified a popular integrated assessment model to allow for an explicit role of the stock of knowledge which accumulates through R&D investment. In our formulation knowledge affects the output production technology and the emission-output ratio. In this paper we make progress in our efforts aimed to model the process of technological change. In keeping with recent theories of endogenous growth, we specify two ways in which knowledge accumulates: via a deliberate, optimally selected R&D decision or via experience, giving rise to Learning by Doing. We simulate the model under the two versions of endogenous technical change and look at the dynamics of a number of relevant variables. Keywords: Climate Policy, Environmental Modeling, Integrated Assessment, Technical Change Classification-JEL: H0, H2, H3 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.12 Title: Economic Growth, Innovation, Cultural Diversity. What Are We All Talking About? A Critical Survey of the State-of-the-art Author-Name: Carole Juliette Maignan (ed.) Author-X-Name-First: Carole Juliette Author-X-Name-Last: Maignan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Gianmarco Ottaviano (ed.) Author-X-Name-First: Gianmarco Author-X-Name-Last: Ottaviano Author-WorkPlace-Name: Università di Bologna and Fondazione Eni Enrico Mattei (FEEM) Author-Name: Dino Pinelli (ed.) Author-X-Name-First: Dino Author-X-Name-Last: Pinelli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Abstract: This report constitutes the first deliverable of the project ENGIME – Economic Growth and Innovation in Multicultural Environments, financed by the European Commission – FP5 – Key Action: Improving socio-economic knowledge base. Contract HPSE-CT2001-50007 Keywords: Multiculturalism, Diversity, Economic Growth Classification-JEL: Z10 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.13 Title: Bio-Ecological Diversity vs. Socio-Economic Diversity: A Comparison of Existing Measures Author-Name: Carole Maignan Author-X-Name-First: Carole Author-X-Name-Last: Maignan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Gianmarco Ottaviano Author-X-Name-First: Gianmarco Author-X-Name-Last: Ottaviano Author-WorkPlace-Name: Università di Bologna, CEPR London and Fondazione Eni Enrico Mattei Author-Name: Dino Pinelli Author-X-Name-First: Dino Author-X-Name-Last: Pinelli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Francesco Rullani Author-X-Name-First: Francesco Author-X-Name-Last: Rullani Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: This paper aims to enrich the standard toolbox for measuring diversity in economics. In so doing, we compare the indicators of diversity used by economists with those used by biologists and ecologists. Ecologists and biologists are concerned about biodiversity: the diversity of organisms that inhabit a given area. Concepts of species diversity such as alpha (diversity within community), beta (diversity across communities) and gamma (diversity due to differences among samples when they are combined into a single sample) have been developed (Whittaker, 1960). Biodiversity is more complex than just the species that are present, it includes species richness and species evenness. Those various aspects of diversity are measured by biodiversity indices such as Simpson’s Diversity Indices, Species Richness Index, Shannon Weaver Diversity Indices, Patil and Taillie Index, Modified Hill’s Ratio. In economics, diversity measures are multi-faceted ranging from inequality (Lorenz curve, Gini coefficient, quintile distribution), to polarisation (Esteban and Ray, 1994; Wolfon, 1994, D’Ambrosio (2001)) and heterogeneity (Alesina, Baqir and Hoxby, 2000). We propose an interdisciplinary comparison between indicators. We review their theoretical background and applications. We provide an assessment of their possible use according to their specific properties. Keywords: Diversity, Growth, Knowledge Classification-JEL: C1, Z10 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.14 Title: Theories of Diversity within Organisation Studies: Debates and Future Trajectories Author-Name: Maddy Janssens Author-X-Name-First: Maddy Author-X-Name-Last: Janssens Author-WorkPlace-Name: K.U.Leuven, Organisation Studies, Leuven, Belgium Author-Name: Chris Steyaert Author-X-Name-First: Chris Author-X-Name-Last: Steyaert Author-WorkPlace-Name: University of St Gallen, Chair of Organizational Psychology, St Gallen, Switzerland Abstract: Theories on diversity and diversity management within the field of Organisation Studies started to develop in the 80s, mainly under the influence of managerial reports pointing towards the increasing diversity of the future workforce. The purpose of this paper is to 1) review the existing studies on diversity identifying their main purposes, 2) identify the current debates in the field, and 3) point towards possible future directions. the domain has mainly focused on the consequences of diversity and seems to have neglected theoretical reflections on the notions of ‘diversity,’ ‘difference,’ or the ‘other.’ This need for theorising has been indicated by well-known scholars in the field (e.g. Cox, 1995; Nkomo, 1995; 2000; Nkomo & Cox, 1996), concerned about the continuation of the diversity domain. Within these current debates, the authors identified mainly four issues: a narrow or broad definition of diversity, a stable or dynamic conception of identity, the role of power, and the importance of the socio-historical context. Keywords: Identity, diversity, difference, organization studies Classification-JEL: D20 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.15 Title: Diversity in Entrepreneurship: Ethnic and Female Roles in Urban Economic Life Author-Name: Tuzin Baycan Levent Author-X-Name-First: Tuzin Author-X-Name-Last: Baycan Levent Author-WorkPlace-Name: Department of Spatial Economics, Free University Amsterdam, The Netherlands and Department of Urban and Regional Planning, Istanbul Technical University, Turkey Author-Name: Enno Masurel Author-X-Name-First: Enno Author-X-Name-Last: Masurel Author-WorkPlace-Name: Department of Business Administration, Free University Amsterdam, The Netherlands Author-Name: Peter Nijkamp Author-X-Name-First: Peter Author-X-Name-Last: Nijkamp Author-WorkPlace-Name: Department of Spatial Economics, Free University Amsterdam, The Netherlands Abstract: The aim of this paper is to investigate the phenomenon of ethnic female entrepreneurship in urban economic life. The focus of the research is on the attitude and behaviour of Turkish female entrepreneurs in Amsterdam. The main fascinating question is: Are ethnic female entrepreneurs special ethnic entrepreneurs or special female entrepreneurs? This paper provides an answer to this question on the basis of field surveys. The results of the case study research on Turkish female entrepreneurs in Amsterdam show that the “ethnic female profile” is a “special female profile” and that Turkish female entrepreneurs are “special female entrepreneurs”, particularly in terms of personal and business characteristics, driving forces and motivations. They appear to combine their ethnic opportunities with their personal characteristics (and other opportunities) in the urban market, and to have a successful performance. This is also caused by the fact that they have become service providers not only for their own ethnic groups, but also for other groups in the city.Keywords: Ethnic female entrepreneurship, diversity in entrepreneurship, ethnic female profile, Turkish female entrepreneurs Classification-JEL: M13 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.16 Title: Post-Communist City on its Way from Grey to Colourful: The Case Study from Slovakia Author-Name: Alexandra Bitusikova Author-X-Name-First: Alexandra Author-X-Name-Last: Bitusikova Author-WorkPlace-Name: Matej Bel University, Institute of Social and Cultural Studies, Faculty of Humanities, Slovak Republic Abstract: The paper is a case study of the city of Banska Bystrica in Slovakia in the light of political, socio-economic and cultural changes. It discusses urban diversity and integrity from an anthropological qualitative perspective. On the example of three different historical periods (1918 – 1948: the democratic Czechoslovakia; 1948 – 1989: the communist Czechoslovakia; 1989 up to the present: building new democracy in a new state) the study shows transformations of the city and urban life. The research results show how political systems influence conditions, in which urban diversity and heterogeneity develop. The study demonstrates that diversity can grow and flourish only in democracy, which allows differences and pluralism leading to richer and diversified urban life. Keywords: Urban diversity, post-communist city, democracy, Slovakia Classification-JEL: N30 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.17 Title: A Stage Model of Developing an Inclusive Community Author-Name: Billy E. Vaughn Author-X-Name-First: Billy E. Author-X-Name-Last: Vaughn Author-WorkPlace-Name: Alliant International University, San Diego, USA Author-Name: Katarina Mlekov Author-X-Name-First: Katarina Author-X-Name-Last: Mlekov Author-WorkPlace-Name: Alliant International University & University of Gothenburg, Sweden Abstract: The Community Inclusion model described in this paper characterizes the stages through which a diverse group of people living within the same community develops into an inclusive community. The model is described in terms of its usefulness in the assessment of a community’s current stage of inclusion, and determining the interventions needed to address lack of inclusion. Examples from Sweden (EU) and the United States (USA) will be used to demonstrate how the model works. Particular focus will be on the relationship between stage of inclusion and collective community action for economic development. Keywords: Inclusion, cultural psychology, monocultural, symbolic difference, critical mass Classification-JEL: Z13 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.18 Title: Managing Diversity in a Glocalizing World Author-Name: Selma van Londen Author-X-Name-First: Selma Author-X-Name-Last: van Londen Author-WorkPlace-Name: Utrecht University, The Netherlands Author-Name: Arie de Ruijter Author-X-Name-First: Arie Author-X-Name-Last: de Ruijter Author-WorkPlace-Name: University of Tilburg, The Netherlands Abstract: Our daily lives are governed by products and images originating from all over the world, through the process of globalization. At the same time, however, globalization creates favourable conditions for all forms of particularization, localization and even fragmentation. While individuals and groups acquire mul-tiple identities, the resulting plurality gives rise to conflicts, controversies and variations, but also to attempts to live peacefully together, to co-ordinate activities, and to balance interests. The paper thus suggests (1) a plea for compatibility – instead of commonality - with regard to cultural values and (2) a strong emphasis on the interaction model in decision making, i.e. a model which does not advocate uniformity, but the compatibility of views, and in particular, practices. It concerns the coordination and combination of the proper interests of the various actors who have to depend on one another for the satisfaction of their demands or the realization of their objectives. Keywords: Managing diversity, globalization, localization, glocalization, compatibility, interaction model Classification-JEL: Z10 Creation-Date: 200301 Template-Type: ReDIF-Paper 1.0 Number: 2003.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.19 Title: On the Stability of Hierarchies in Games with Externalities Author-Name: Sergio Currarini Author-X-Name-First: Sergio Author-X-Name-Last: Currarini Author-WorkPlace-Name: University of Venezia, Italy Abstract: We study the group stability of collective decision making when society is organized according to a non directed graph, and groups’ payoff possibilities are given by a partition function. We focus on the stability properties of hierarchical organizations, formally described by minimally connected graphs (or trees). Building on previous works by Greenberg and Weber (1986, 1993) and by Demange (1994, 2001), we restrict the ability of raising objections to proposed payoff imputations to coalitions that are connected in the organization. We show that the stability properties of hierachical organizations, proved in Demange (1994, 2002), extend to partition function games with negative externalities. Under positive externalities, although not ensuring social stability, hierarchies are the “most stable” organizational forms for society. Keywords: Hierarchies, Externalities Classification-JEL: C70 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.20 Title: Monopoly with Resale Author-Name: Giacomo Calzolari Author-X-Name-First: Giacomo Author-X-Name-Last: Calzolari Author-WorkPlace-Name: Department of Economics, University of Bologna, Italy Author-Name: Alessandro Pavan Author-X-Name-First: Alessandro Author-X-Name-Last: Pavan Author-WorkPlace-Name: Department of Economics, Northwestern University, USA Abstract: This paper studies revenue-maximizing mechanisms for a monopolist who expects her buyers to resell in a secondary market. We consider two modes of resale: the first is to a third party who does not participate in the primary market; the second is inter-bidders resale, where the winner in the primary market resells to the losers. We show that resale to third parties is revenue-enhancing for the initial monopolist, whereas inter-bidders resale is revenue-decreasing compared to the case where resale is prohibited. The revenue-maximizing mechanisms in the primary market are obtained by investigating the optimal informational linkage with the secondary market. The results show that to sustain higher resale prices the monopolist may find it optimal (a) to induce stochastic allocations in the primary market, and (b) to design a disclosure policy that optimally controls for the information revealed to the participants in the secondary market. The optimal allocation rule and disclosure policy maximize the expected sum of the bidders’ resale-augmented virtual valuations, taking into account the effect of information disclosure on the price formation process in the secondary market. Keywords: Monopoly, information linkage between primary and secondary markets, optimal auction with resale, resale-augmented virtual valuations Classification-JEL: D44, D82 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.21 Title: Auction Design with Interdependent Valuations: The Generalized Revelation Principle, Efficiency, Full Surplus Extraction and Information Acquisition Author-Name: Claudio Mezzetti Author-X-Name-First: Claudio Author-X-Name-Last: Mezzetti Author-WorkPlace-Name: Department of Economics, University of North Carolina at Chapel Hill and Department of Applied Mathematics, University of Venice Abstract: Agents' valuations are interdependent if they depend on the signals of all agents. Previous literature has claimed that with interdependent valuations and multidimen-sional, but independent, signals, efficient auction design is impossible. This paper shows that, on the contrary, it is always possible to find efficient auction mechanisms. Furthermore, it characterizes the conditions under which it is possible to extract the full surplus from the agents. Finally, it shows that it is also possible to provide agents with the incentives for the efficient, ex-ante acquisition of information. All these results rest on the application of a generalized version of the revelation principle, which requires that the designer uses two reporting stages. Keywords: Auction Design, Interdependent Valuations, Generalized Revelation Principle, Efficiency Classification-JEL: D44 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.22 Title: Tilting the Supply Schedule to Enhance Competition in Uniform-Price Auctions Author-Name: Marco LiCalzi Author-X-Name-First: Marco Author-X-Name-Last: LiCalzi Author-WorkPlace-Name: Department of Applied Mathematics, University of Venice Author-Name: Alessandro Pavan Author-X-Name-First: Alessandro Author-X-Name-Last: Pavan Author-WorkPlace-Name: Department of Economics, Northwestern University Abstract: Uniform-price auctions of a divisible good in fixed supply admit underpricing equilibria, where bidders submit high inframarginal bids to prevent competition on prices. The seller can obstruct this behavior by tilting her supply schedule and making the amount of divisible good on offer change endogenously with its (uniform) price. Precommitting to an increasing supply curve is a strategic instrument to reward aggressive bidding and enhance expected revenue. A fixed supply may not be optimal even when accounting for the cost to the seller of issuing a quantity different from her target supply. Keywords: Uniform-price auction, divisible good, strategic role of the seller, endogenous supply, Treasury and IPO auctions Classification-JEL: D44, E58 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.23 Title: Bidding among Friends and Enemies Author-Name: David Ettinger Author-X-Name-First: David Author-X-Name-Last: Ettinger Author-WorkPlace-Name: C.E.R.A.S.-E.N.P.C., C.N.R.S., France Abstract: We consider an auction setting in which potential buyers, even if they fail to obtain the good, care about the price paid by the winner. We study the impact of these price-externalities on the first-price auction and the second-price auction in a symmetric information framework. First, we consider situations in which bidders care about the price paid independently from the identity of the winner. We prove that the first-price auction is not affected by this kind of price-externalities while the second-price auction is. In broader specifications, we observe though that the first-price auction can be affected by the presence of such price-externalities. In any case, in comparison with the first-price auction, the second-price auction exacerbates the effects of price-externalities whatever their types. Therefore, there is no revenue equivalence between the two auction formats. Keywords: Auctions, revenue, allocation, externalities, toeholds, budget-constraints Classification-JEL: D44, D62, G32 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.24 Title: Auction Design without Commitment Author-Name: Hannu Vartiainen Author-X-Name-First: Hannu Author-X-Name-Last: Vartiainen Author-WorkPlace-Name: Yrjö Jahnsson Foundation and University of Helsinki, Finland Abstract: We study auction design when parties cannot commit themselves to the mechanism. The seller may change the rules of the game and the buyers choose their outside option at all stages. We assume that the seller has a leading role in equilibrium selection at any stage of the game. Stationary equilibria are characterized in the language of vonNeumann-Morgenstern stable sets. This simplifies the analysis remarkably. In the one buyer case, we obtain the Coase conjecture: the buyer obtains all the surplus and efficiency is reached. However, in the multiple buyer case the seller can achieve more: she is able to commit to the English auction. Typically the converse also holds, the English auction is the only stable auction mechanism. Keywords: Auction theory, commitment, stable sets Classification-JEL: C72, D44, D78 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.25 Title: Strategic Behavior and Underpricing in Uniform Price Auctions Author-Name: Matti Keloharju Author-X-Name-First: Matti Author-X-Name-Last: Keloharju Author-WorkPlace-Name: Helsinki School of Economics Author-Name: Kjell G. Nyborg Author-X-Name-First: Kjell G. Author-X-Name-Last: Nyborg Author-WorkPlace-Name: London Business School and CEPR Author-Name: Kristian Rydqvist Author-X-Name-First: Kristian Author-X-Name-Last: Rydqvist Author-WorkPlace-Name: Binghamton University and CEPR Abstract: We study uniform price auctions using a dataset which includes individual bidders' demand schedules in Finnish Treasury auctions during the period 1992-99. Average underpricing amounts to .041% of face value. Theory suggests that underpricing may result from monopsonistic market power. We develop and test robust implications from this theory and ¯nd that it has little support in the data. For example, bidders' individual demand functions do not respond to increased competition in the manner predicted by the theory. We also present evidence that the Finnish Treasury acts strategically, taking into account the fact that the auctions are part of a repeated game between the Treasury and the primary dealers. Empirically, the main driver behind bidder behavior and underpricing is the volatility of bond returns. Since there is no evidence that bidders are risk averse, this suggests that private information and the winner's curse may play an important role in these auctions. Keywords: Multiunit auctions, uniform price auctions, treasury auctions, market power, demand functions, underpricing, supply uncertainty, seller behavior Classification-JEL: D44, G10 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.26 Title: Rationing in IPOs Author-Name: Christine A. Parlour Author-X-Name-First: Christine Author-X-Name-Last: Parlour Author-WorkPlace-Name: GSIA, Carnegie Mellon University Author-Name: Uday Rajan Author-X-Name-First: Uday Author-X-Name-Last: Rajan Author-WorkPlace-Name: GSIA, Carnegie Mellon University Abstract: We provide a model of bookbuilding in IPOs, in which the issuer can choose to ration shares. We consider two allocation rules. Under share dispersion, before informed investors submit their bids, they know that, in the aggregate, winning bidders will receive only a fraction of their demand. We demonstrate that this mitigates the winner’s curse, that is, the incentive of bidders to shade their bids. It leads to more aggressive bidding, to the extent that rationing can be revenue-enhancing. In a parametric example, we characterize bid and revenue functions, and the optimal degree of rationing. We show that, when investors’ information is diffuse, maximal rationing is optimal. Conversely, when their information is concentrated, the seller should not ration shares. We determine the optimal degree of rationing in a class of credible mechanisms. Our model reconciles the documented anomaly that higher bidders in IPOs do not necessarily receive higher allocations. Keywords: IPOs Classification-JEL: D44, G2 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.27 Title: Multiple Unit Auctions and Short Squeezes Author-Name: Kjell G. Nyborg Author-X-Name-First: Kjell G. Author-X-Name-Last: Nyborg Author-WorkPlace-Name: London Business School and CEPR Author-Name: Ilya A. Strebulaev Author-X-Name-First: Ilya A. Author-X-Name-Last: Strebulaev Author-WorkPlace-Name: London Business School Abstract: This paper develops a theory of multiple unit auctions with short squeezes in the post- auction market. This is especially relevant for financial and commodity markets where players may enter the auction with established forward positions. We study how a potential short squeeze impacts on bidders' strategies and auction performance. Conversely, we also study how the design of the auction affects the incidence of short squeezes. In particular, we model both uniform price and discriminatory price auctions in a true multiple unit setting, where bidders can submit multiple bids for multiple units. Our model is cast in what appears to be a common value framework. However, we show that the possibility of a short squeeze introduces different valuations of the to-be-auctioned asset between short and long bidders. Keywords: Multiple unit auction, uniform auction, discriminatory auction, treasury auction, repo auction, short squeeze, market manipulation, market power Classification-JEL: D44, G12, G20, D62 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.28 Title: Taking the Lab to the Field: Experimental Tests of Alternative Mechanisms to Procure Multiple Contracts Author-Name: Anders Lunander Author-X-Name-First: Anders Author-X-Name-Last: Lunander Author-WorkPlace-Name: Swedish National Road and Transport Research Institute and Department of Economics, Örebro University Author-Name: Jan-Eric Nilsson Author-X-Name-First: Jan-Eric Author-X-Name-Last: Nilsson Author-WorkPlace-Name: Swedish National Road and Transport Research Institute and Department of Economics, Dalarna University Abstract: The first part of the paper reports the results from a sequence of laboratory experiments comparing the bidding behavior for multiple contracts in three different sealed bid auction mechanisms; first-price simultaneous, first-price sequential and first-price combinatorial bidding. The design of the experiment is based on experiences from a public procurement auction of road markings in Sweden. Bidders are asymmetric in their cost functions; some exhibit decreasing average costs of winning more than one contract, whereas other bidders have increasing average cost functions. The combinatorial bidding mechanism is demonstrated to be most efficient. The second part of the paper describes how the lab experiment was followed up by a field test of a combinatorial procurement auction of road markings. Keywords: Multiple units, non-constant costs, asymmetric redemption values, alternative procurement mechanisms Classification-JEL: D44, L92 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.29 Title: Use of Long-term Auctions for Network Investment Author-Name: Tanga McDaniel Author-X-Name-First: Tanga Author-X-Name-Last: McDaniel Author-WorkPlace-Name: University of Cambridge, Department of Applied Economics Author-Name: Karsten Neuhoff Author-X-Name-First: Karsten Author-X-Name-Last: Neuhoff Author-WorkPlace-Name: University of Cambridge, Department of Applied Economics Abstract: Short-term auctions for access to entry terminals of the British gas-network appear to successfully allocate scarce resources and capture scarcity rent. Now long-term auctions are being introduced to guide future capacity expansion decisions. In our model the fraction of rights issued in the long-term auction turns out to be a crucial design parameter. Even a “hypothetically” optimal parameter choice can in general only satisfy one of three aims: unbiased provision of capacity, full revelation of private information and minimisation of distortions from network effects. The results suggest that long-term auctions for transmission capacity are not necessarily preferable to regulatory approved capacity expansion. Keywords: Auctions, gas, investment, networks, regulation Classification-JEL: D44, L95, L5, D92 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.30 Title: Auctions with Financial Externalities Author-Name: Emiel Maasland Author-X-Name-First: Emiel Author-X-Name-Last: Maasland Author-WorkPlace-Name: SEOR, Erasmus University, The Netherlands Author-Name: Sander Onderstal Author-X-Name-First: Sander Author-X-Name-Last: Onderstal Author-WorkPlace-Name: CPB Netherlands Bureau for Economic Policy Analysis, The Netherlands Abstract: We study sealed-bid auctions with financial externalities, i.e., auctions in which losers’ utilities depend on how much the winner pays. In the unique symmetric equilibrium of the first-price sealed-bid auction (FPSB), larger financial externalities result in lower bids and in a lower expected revenue. The unique symmetric equilibrium of the second-price sealed-bid auction (SPSB) reveals ambiguous effects. We further show that a resale market does not have an effect on the equilibrium bids and that FPSB yields a lower expected revenue than SPSB. With a reserve price, we find an equilibrium for FPSB that involves pooling at the reserve price. For SPSB we derive a necessary and sufficient condition for the existence of a weakly separating equilibrium, and give an expression for the equilibrium. Keywords: Auctions, financial externalities, reserve price, resale market Classification-JEL: D44 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.31 Title: A Non-cooperative Foundation of Core-Stability in Positive Externality NTU-Coalition Games Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: Department of Economics, University of Hagen Author-Name: Bianca Rundshagen Author-X-Name-First: Bianca Author-X-Name-Last: Rundshagen Author-WorkPlace-Name: Department of Economics, University of Hagen Abstract: We identify the core as an appealing stability concept of cooperative game theory, but argue that the non-cooperative approach has conceptual advantages in the context of economic problems with externalities. Therefore, we derive a non-cooperative foundation of core-stability for positive externality NTU-games. First, in the spirit of Hart/Kurz (1983), we develop a game that we call ?-game and show that strong Nash equilibria coalition structures in this game are identical to ?- and ?-core stable coalition structures. Second, as a by-product of the definition of the ?-game, we develop an extension called an ?-game. Finally, we compare equilibria in the ?- and ?-game with those in the ?- and ?-game of Hart and Kurz (1983). Keywords: Core-stability, non-cooperative game theory, positive externality games Classification-JEL: C72 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.32 Title: Competition and Irreversible Investments under Uncertainty Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Department of Economics, University of Brescia Abstract: This paper examines the effect of competition on the irreversible investment decisions under uncertainty as a generalization of the “real option” approach. We examine this issue with reference to an industry where each firm has only one investment opportunity which is completely irreversible and the product market reveals an inverted U-shape relationship between firm profits and industry size. That is, there are positive externalities for low level of the market size and negative externalities at high level of the market size. In the latter case, which corresponds to the traditional competitive industries, firms invest sequentially as market profitability develops. In the former case, which corresponds to industries in which investments are mutually beneficial, firms invest simultaneously after profitability of the market has developed sufficiently to capture all network benefits and to recover the option value of waiting. Put together, these extensions of the “real option” analysis, with strategic interactions, may help to explain both the cases of rapid and sudden developments such as the recent internet investments and the cases of prolonged start-up problems while waiting for the market to develop as the story of fax machines shows. Keywords: Competition, network effect, real options Classification-JEL: D81, C73, G13, O31 Creation-Date: 200303 Template-Type: ReDIF-Paper 1.0 Number: 2003.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.33 Title: Relative Quotas: Correct Answer to Uncertainty or Case of Regulatory Capture Author-Name: Philippe Quirion Author-X-Name-First: Philippe Author-X-Name-Last: Quirion Author-WorkPlace-Name: CIRED (CNRS/EHESS) Abstract: There is a tendency among policy-makers and industry lobbyists toward "specific", "relative" or "output-based" quotas, i.e., freely distributed to firms proportionally to their output. With a stochastic analytical model, we demonstrate that relative quotas are dominated either by absolute quotas or by price instruments as regards expected social cost. Furthermore, price instruments entail a lower expected compliance cost than relative quotas. Why, then, do industry lobbyists favour quantity instruments over price instruments? A possible explanation is that if the industry anticipates that the State will underestimate output and overestimate the MAC curve slope, it has an interest in defending relative quotas. The problem is that in such a case, both the environmental damage and the social cost are higher with relative quotas than with absolute ones. The choice of relative quotas over price instruments or absolute quotas may thus be a case of regulatory capture, to use Stigler's vocabulary. Keywords: Uncertainty, policy choice, environmental taxes, tradable permits, regulatory capture Classification-JEL: D81, Q25, Q28 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.34 Title: On the Relationship between R&D and Productivity: a Treatment Effect Analysis Author-Name: Giuseppe Medda Author-X-Name-First: Giuseppe Author-X-Name-Last: Medda Author-WorkPlace-Name: University of Cagliari Author-Name: Claudio Piga Author-X-Name-First: Claudio Author-X-Name-Last: Piga Author-WorkPlace-Name: University of Nottingham Business School Author-Name: Donald Siegel Author-X-Name-First: Donald Author-X-Name-Last: Siegel Author-WorkPlace-Name: Department of Economics, Rensselaer Polytechnic Institute, NY Abstract: This study uses firm level data from two detailed surveys of Italian manufacturing firms to study the relationship between R&D expenditures and productivity growth. The analysis considers the different contributions of various forms of R&D (product, process, internal, external in collaboration with universities, research centres and other firms) to Total Factor Productivity (TFP). Thus, this paper answers the call for more research on the links between a firm’s external R&D and its productivity. In the cross-section econometric analysis, we estimate a Treatment Effects model based on the assumption that the decision to carry out R&D is endogenous. We found evidence supporting such a methodological approach. The main restlts reveal a positive and statistically significant relationship between the detailed measures of R&D and TFP. It is noteworthy that among external R&D investments, only expenditures for projects run in collaboration with other firms turn out to be highly significant, while cooperation in R&D with universities does not seem to lead to productivity enhancements. Because of the public good nature of research, firms may resort to do R&D within laboratories run by universities only when the outcome of the research does not have important strategic consequences. Keywords: Total factor productivity, selectivity, manufacturing, firm level Classification-JEL: C21, C80, D24, O30 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.35 Title: Non-convexities in the Adjustment of Different Capital Inputs: A Firm-level Investigation Author-Name: Alessandra Del Boca Author-X-Name-First: Alessandra Author-X-Name-Last: Del Boca Author-WorkPlace-Name: University of Brescia Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: University of Milan Author-Name: Paola Rota Author-X-Name-First: Paola Author-X-Name-Last: Rota Author-WorkPlace-Name: University of Brescia Abstract: Recent developments in investment research have highlighted the importance of non-convexities and irreversibilities in the firms’ adjustment of quasi-fixed inputs. However, aggregation across capital goods may smooth out the discontinuities associated with the adjustment of individual assets. The lack of suitable data is one of the reasons why empirical work has strongly relied on the assumption of capital homogeneity. In this paper we exploit a new data set of 1539 Italian firms which allows us to disaggregate capital and consider separately purchases and sales of assets. We disaggregate between equipment and structures and construct measures of fundamental Q to capture investment opportunities associated with each asset. To uncover the pattern of dynamic adjustment we use non-parametric techniques to relate each individual investment to own fundamental Q. Keywords: Investment, heterogenous capital, non-convexities, fundamental Q, panel data Classification-JEL: D24, G31, C33, C34 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.36 Title: Voluntary Agreements under Endogenous Legislative Threats Author-Name: Matthieu Glachant Author-X-Name-First: Matthieu Author-X-Name-Last: Glachant Author-WorkPlace-Name: CERNA, Ecole des mines de Paris Abstract: The paper analyzes the welfare properties of voluntary agreements (VA) with polluters, when they are obtained under the legislative threat of an alternative stricter policy option. In the model, the threat is an abatement quota. Both the threat and its probability of implementation are endogenous. The latter is the outcome of a rent-seeking contest between a green and a polluter lobby group influencing the legislature. We show that a welfare-improving VA systematically emerges in equilibrium and that it is more efficient than the pollution quota. We also discuss various VA design aspects. Keywords: Environmental policy, voluntary agreements, bargaining, legislatures, rent seeking, rent-seeking contests Classification-JEL: D72, Q28 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.37 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-037.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.37 Title: Postprivatization Corporate Governance: the Role of Ownership Structure and Investor Protection Author-Name: Narjess Boubakri Author-X-Name-First: Narjess Author-X-Name-Last: Boubakri Author-WorkPlace-Name: Hec Montreal, Montreal, Canada Author-Name: Jean-Claude Cosset Author-X-Name-First: Jean-Claude Author-X-Name-Last: Cosset Author-WorkPlace-Name: Université Laval, Quebec, Canada Author-Name: Omrane Guedhami Author-X-Name-First: Omrane Author-X-Name-Last: Guedhami Author-WorkPlace-Name: Université Laval, Quebec, Canada Abstract: We investigate the role of ownership structure and investor protection in postprivatization corporate governance. We find that the government relinquishes control over time, mainly to the benefit of local institutions and foreign investors. We also show that private ownership tends to concentrate over time. In addition to firm-level variables, investor protection, political and social stability explain the cross-firm differences in ownership concentration. We find that the positive effect of ownership concentration on firm performance matters more in countries with weak investor protection and that private domestic ownership leads to higher performance. Keywords: Corporate governance, privatization, performance Classification-JEL: G32, G38 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.38 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-038.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.38 Title: Climate Policy under Technology Spillovers Author-Name: Rolf Golombek Author-X-Name-First: Rolf Author-X-Name-Last: Golombek Author-WorkPlace-Name: Frisch Centre, Oslo, Norway Author-Name: Michael Hoel Author-X-Name-First: Michael Author-X-Name-Last: Hoel Author-WorkPlace-Name: Department of Economics, University of Oslo, Norway Abstract: Technological development is likely to play an important role in curbing growth in greenhouse gas emissions. It is therefore important to incorporate factors influencing technological change in climate policy analyses. This paper studies climate policy when there are technology spillovers between countries, and there is no instrument that (directly) corrects for these externalities. The lack of an appropriate instrument reflects that R&D expenditures in a country are difficult to verify by other countries. We show that without an international agreement, the non-cooperative outcome will have too much emissions and too little R&D expenditures compared with the social optimum. While the non-cooperative equilibrium depends on whether countries use tradable quotas or carbon taxes as their domestic instruments for controlling emissions, all countries are better off in the tax case than in the quota case. Next we study two types of international climate agreements with full participation. One is a Kyoto type of agreement where each country is assigned a specific number of internationally tradable quotas. In the second type of agreement a common carbon tax should be used domestically in all countries. We show that none of the cases satisfy the conditions for the social optimum. Even if the total number of quotas is set so that the quota price is equal to the Pigovian level, R&D investments will be lower than what is socially optimal in the Kyoto case, whereas with a harmonized domestic carbon tax R&D expenditures could even be too high. Finally we examine the case in which there is an incomplete agreement, i.e. some countries have not signed the agreement. We demonstrate that there is virtually no difference between this case and the case of full cooperation. Keywords: Climate policy, international environmental agreements, R&D, technology spillovers Classification-JEL: O30, H23, Q20, Q28, Q48 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.39 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-039.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.39 Title: Transboundary Pollution, R&D Spillovers and International Trade Author-Name: Slim Ben Youssef Author-X-Name-First: Slim Ben Author-X-Name-Last: Youssef Author-WorkPlace-Name: Université de Tunis El Manar, Tunisia Abstract: We consider a symmetric three-stage game played by a pair of regulator-firm hierarchies to capture the scale and technology effects. Each firm produces one good sold on the market. The production process generates pollution characterized by a fixed emission/output ratio, and cross-borders. Firms can invest in R&D in order to lower their emission/output ratio, and this activity is characterized by positive R&D spillovers. We show that R&D spillovers and the competition of firms on the common market help non-cooperating countries to internalize transboundary pollution more efficiently. Consequently, in most cases, when the positive externality increases, the levels of R&D and production increase while pollution decreases, implying an increase of the social welfare. However, in some other cases, pollution under common market increases with the R&D externality implying a decrease of the social welfare. Opening markets to the international trade leads to more investment in R&D and more production. In most cases, pollution under common market is lower than under autarky, implying a greater social welfare. Nevertheless, in some other cases, pollution under common market is higher than under autarky implying that opening markets deteriorates social welfare. Keywords: Transboundary pollution, R&D spillovers, common market, social welfare Classification-JEL: D62, F12, O32 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.40 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-040.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.40 Title: Endogenous Strategic Issue Linkage in International Negotiations Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, CEPS, CEPR, CESifo and Fondazione Eni Enrico Mattei Author-Name: Carmen Marchiori Author-X-Name-First: Carmen Author-X-Name-Last: Marchiori Author-WorkPlace-Name: University College of London and Fondazione Eni Enrico Mattei Abstract: This paper analyses issue linkage as a way to increase co-operation on issues where incentives to free-ride are strong. The goal is to determine under what conditions players prefer to link negotiations on two different issues rather than to negotiate on the two issues separately. Suppose that players are asked to vote on issue linkage before starting negotiations. Under what conditions would they vote in favour of issue linkage? The answer to this question is not trivial. Issue linkage may indeed increase the number of cooperators on the provision of a public good (a typical issue characterised by strong incentives to free-ride). However, at the same time, issue linkage may reduce the number of cooperating players on the other economic issue which is linked to the provision of a public good. Players therefore face a trade-off. This paper analyses this trade-off within a game-theoretic framework and shows under what conditions issue linkage is players’ equilibrium strategy. Keywords: International environmental agreements, coalition formation games, issue linkage Classification-JEL: C70 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.41 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-041.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.41 Title: Abortion and Female Power in the Household Evidence from Labor Supply Author-Name: Sonia Oreffice Author-X-Name-First: Sonia Author-X-Name-Last: Oreffice Author-WorkPlace-Name: The University of Chicago Abstract: Legalization of abortion in the 1970s represents a major cultural change: it gives women a higher degree of freedom to directly control their fertility, allowing them to ultimately decide upon children without man’s consent and to decrease uncertainty in their expected labor market returns. This public policy and its implications on female behavior have been so far analyzed through its direct consequences on fertility and fertility technology, primarily on women actually experiencing an abortion. However, it seems relevant to evaluate its indirect effects on female bargaining power within the household, for all women that face abortion as an actual opportunity, without necessarily experiencing one. I focus on the indirect effect of abortion legalization in the United States on women’s position in the household. My findings suggest that the legalization positively affected female bargaining power. Keywords: Abortion, collective household behavior, labor supply Classification-JEL: D12, J12, J22, K39 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.42 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-042.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.42 Title: On Biology and Technology: The Economics of Managing Biotechnologies Author-Name: Timo Goeschl Author-X-Name-First: Timo Author-X-Name-Last: Goeschl Author-WorkPlace-Name: Department of Land Economy University of Cambridge Author-Name: Timothy Swanson Author-X-Name-First: Timothy Author-X-Name-Last: Swanson Author-WorkPlace-Name: Department of Economics and Faculty of Law, University College London Abstract: This paper considers those sectors of the economy that operate under the same regimes of rewarding private innovators as others, but differ in that they face recurring problems of resistance, as occur in the pharmaceutical and agricultural industries. This recurrence originates in the natural processes of selection and evolution among humanity’s biological competitors. The paper examines the capacity for decentralised patent-based incentive mechanisms to result in socially optimal outcomes in these sectors under scale- and speed-dependent evolution of pathogens. It demonstrates that there is a fundamental incompatibility between the dynamics of the patent system and the dynamics of the resistance problem under both types of evolution. Under scale-dependent evolution, the externalities within a patent-based system indicate that decentralised mechanisms will result in systematic underinvestment in R&D that decreases further with an increasing severity of the resistance problem. Under speed-dependent evolution, a patent-based system will fail to target socially optimal innovation size. The overall conclusion is that patent-based incentive mechanisms are incapable of sustaining society against a background of increasing resistance problems. The paper concludes with appropriate policy implications of these results. Keywords: Biotechnology, R&D, Patents Classification-JEL: Q16 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.43 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-043.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.43 Title: STAR-GARCH Models for Stock Market Interactions in the Pacific Basin Region, Japan and US Author-Name: Giorgio Busetti Author-X-Name-First: Giorgio Author-X-Name-Last: Busetti Author-WorkPlace-Name: Quantitative Methods, Monte Paschi Alternative Investment, Milano, Italy Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: Department of Statistics, University of Milano-Bicocca, Italy and Fondazione Eni Enrico Mattei, Milano, Italy Abstract: We investigate the financial interactions between countries in the Pacific Basin region (Korea, Singapore, Malaysia, Hong Kong and Taiwan), Japan and US. The originality of the paper is the use of STAR-GARCH models, instead of standard correlation-cointegration techniques. For each country in the Pacific Basin region, we find statistically adequate STAR-GARCH models for the series of stock market daily returns, using Nikkei225 and S&P500 as alternative threshold variables. We provide evidence for the leading role of Japan in the period 1988-1990 (pre-Japanese crisis years), whereas our results suggest that the Pacific Basin region countries are more closely linked with the US during the period 1995-1999 (post- Japanese crisis years). Keywords: STAR-GARCH models, stock market integration, Pacific-Basin capital markets, outliers Classification-JEL: C22, C51, C52, F36 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.44 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-044.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.44 Title: The French Tax on Air Pollution: Some Preliminary Results on its Effectiveness Author-Name: Katrin Millock Author-X-Name-First: Katrin Author-X-Name-Last: Millock Author-WorkPlace-Name: CIRED (CNRS-EHESS) Author-Name: Céline Nauges Author-X-Name-First: Céline Author-X-Name-Last: Nauges Author-WorkPlace-Name: LEERNA, INRA-Toulouse Abstract: Empirical evidence evaluating the efficiency of economic instruments is still rare, despite significant theoretical advances over the last decades. The objective of this paper is to evaluate one form of environmental taxation, the French tax on air pollution from 1990-99. While starting out in 1985 as a tax levied only on emissions of sulphur dioxide (SO2 ), the tax base was subsequently extended to encompass also emissions of nitrogen oxides (NOx), hydrochloric acid (HCl), and volatile organic compounds (VOC). The revenues of the French tax on air pollution were earmarked for abatement subsidies and the financing of air quality surveillance systems. Using a plant-level database, we find a negative, significant effect of the tax on emissions of SO2, NOx, and HCl. The abatement elasticity with regard to the tax is quite small, however. Keywords: Environmental tax, emissions regulation, earmarking, air quality Classification-JEL: H00, H23, Q25, Q28 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.45 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-045.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.45 Title: The Political Economy of Privatization Author-Name: Bernardo Bortolotti Author-X-Name-First: Bernardo Author-X-Name-Last: Bortolotti Author-WorkPlace-Name: University of Torino and Fondazione Eni Enrico Mattei Author-Name: Paolo Pinotti Author-X-Name-First: Paolo Author-X-Name-Last: Pinotti Author-WorkPlace-Name: Universitat Pompeu Fabra Abstract: This paper provides an empirical analysis of the role of political institutions in privatization. The empirical testing relies on a new political database with continuous and time-varying measures of the political-institutional setting, and of the partisan orientation of the executive. Using panel data for 21 industrialized countries in the 1977-1999 period, first we show the likelihood and the extent of privatization to be strongly and positively associated with majoritarian political systems. On the contrary, in consensual democracies privatization seems delayed by a “war of attrition” among different political actors. Second, we identify a partisan determinant of the choice of the privatization method. As theory predicts, right wing executives with re-election concerns design privatization to spread share ownership among domestic voters. Keywords: Political institutions, Partisan politics, Privatization Classification-JEL: D72, D78, L33 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.46 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-046.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.46 Title: Burn or Bury? A Social Cost Comparison of Final Waste Disposal Methods Author-Name: Elbert Dijkgraaf Author-X-Name-First: Elbert Author-X-Name-Last: Dijkgraaf Author-WorkPlace-Name: Erasmus University Rotterdam and OCFEB, Rotterdam Author-Name: Herman R.J. Vollebergh Author-X-Name-First: Herman R.J. Author-X-Name-Last: Vollebergh Author-WorkPlace-Name: Erasmus University Rotterdam and OCFEB, Rotterdam Abstract: This paper uses private and environmental cost data for the Netherlands to evaluate the social cost of two final waste disposal methods, landfilling versus incineration using waste-to-energy (WTE) plants. The data only provide some support for the widespread policy preference for incineration over landfilling if the analysis is restricted to environmental costs alone. Private costs, however, are so much higher for incineration, that landfilling is the social cost minimizing option at the margin even in a densely populated country such as the Netherlands. Implications for waste policy are discussed as well. Proper treatment of and energy recovery from landfills seem to be the most important targets for waste policy. WTE plants are a very expensive way to save on climate change emissions. Keywords: Waste policy, Project evaluation, Incineration, Landfilling, Climate change Classification-JEL: H43, L99, Q42 Creation-Date: 200304 Template-Type: ReDIF-Paper 1.0 Number: 2003.47 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-047.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.47 Title: Employment and Innovations in the Environmental Sector: Determinants and Econometrical Results for Germany Author-Name: Jens Horbach Author-X-Name-First: Jens Author-X-Name-Last: Horbach Author-WorkPlace-Name: University of Applied Sciences Anhalt, Germany Abstract: Besides other determinants environmental regulation, institutions like environmental agencies and social customs lead to a demand for environmental goods and services. On the basis of the public choice theory it can be shown that environmental regulation is endogenous and can be influenced by the environmental awareness of voters and interest groups. Following the so-called Porter hypothesis early developed environmental legislation induces environmental innovations and creates first mover advantages connected with a high international competitiveness of the environmental industry. An empirical analysis based on the establishment panel of the Institute for Employment Research (IAB) shows that more than 900,000 persons are employed in the environmental sector in Germany. Following the results of an econometrical analysis of employment perspectives and innovation behaviour integrated environmental technologies will become more relevant whereas employment in “traditional” end-of-pipe fields like the prevention of waste water pollution or air pollution will be reduced. Keywords: Employment, Environmental sector, Innovation behaviour Classification-JEL: Q21, J4, C25 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.48 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-048.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.48 Title: The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing Author-Name: Lori Snyder Author-X-Name-First: Lori Author-X-Name-Last: Snyder Author-WorkPlace-Name: John F. Kennedy School of Government Harvard University Author-Name: Nolan Miller Author-X-Name-First: Nolan Author-X-Name-Last: Miller Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University Author-Name: Robert Stavins Author-X-Name-First: Robert Author-X-Name-Last: Stavins Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University and Resources for the FutureAbstract: Abstract: We use a hazard model to estimate the effect of environmental regulation on the diffusion of membrane cell production technology in the chlorine manufacturing industry. We estimate the effect of regulation on both the adoption of the membrane technology at existing plants and on the exit of existing plants using older technologies. We find that environmental regulation did affect the diffusion of the cleaner technology in the chlorine industry. However, it did so not by encouraging the adoption of membrane cells by existing facilities, but by reducing the demand for chlorine and hence encouraging the shutdown of facilities using the environmentally inferior options. Keywords: Regulation, Technological change, Environment, Hazard model Classification-JEL: Q20, Q28, L50, L65 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.49 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-049.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.49 Title: Private Options to Use Public Goods Exploiting Revealed Preferences to Estimate Environmental Benefits Author-Name: Lori D. Snyder Author-X-Name-First: Lori D. Author-X-Name-Last: Snyder Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University Author-Name: Robert N. Stavins Author-X-Name-First: Robert N. Author-X-Name-Last: Stavins Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University and Resources for the Future Author-Name: Alexander F. Wagner Author-X-Name-First: Alexander F. Author-X-Name-Last: Wagner Author-WorkPlace-Name: Harvard University Abstract: We develop and apply a new method for estimating the economic benefits of an environmental amenity. The method fits within the household production framework (Becker 1965), and is based upon the notion of estimating the derived demand for a privately traded option to utilize a freely-available public good. In particular, the demand for state fishing licenses is used to infer the benefits of recreational fishing. Using panel data on state fishing license sales and prices for the continental United States over a fifteen-year period, combined with data on substitute prices and demographic variables, a license demand function is estimated with instrumental variable procedures to allow for the potential endogeneity of administered prices. The econometric results lead to estimates of the benefits of a fishing license, and subsequently to the expected benefits of a recreational fishing day. In contrast with previous studies, which have utilized travel cost or hypothetical market methods, our approach provides estimates that are directly comparable across geographic areas. Further, our results suggest that the benefits of recreational fishing days are generally less than previously estimated. Keywords: Private Options, Public Goods, Environmental Benefits Classification-JEL: Q26, Q21, Q22, H41 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.50 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-050.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.50 Title: The Minimal Dominant Set is a Non-Empty Core-Extension Author-Name: László Á. Kóczy Author-X-Name-First: László Á. Author-X-Name-Last: Kóczy Author-WorkPlace-Name: Centre for Economic Studies, Faculty of Economics and Applied Economics, Catholic University Leuven Author-Name: Luc Lauwers Author-X-Name-First: Luc Author-X-Name-Last: Lauwers Author-WorkPlace-Name: Centre for Economic Studies, Faculty of Economics and Applied Economics, Catholic University Leuven Abstract: A set of outcomes for a TU-game in characteristic function form is dominant if it is, with respect to an outsider-independent dominance relation, accessible (or admissible) and closed. This outsider-independent dominance relation is restrictive in the sense that a deviating coalition cannot determine the payoffs of those coalitions that are not involved in the deviation. The minimal (for inclusion) dominant set is non-empty and for a game with a non-empty coalition structure core, the minimal dominant set returns this core. Keywords: Core, Non-emptiness, Indirect dominance, Outsider-independence Classification-JEL: C71 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.51 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-051.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.51 Title: Allocation Rules for Network Games Author-Name: Matthew O. Jackson Author-X-Name-First: Matthew O. Author-X-Name-Last: Jackson Author-WorkPlace-Name: California Institute of Technology, USA Abstract: Previous allocation rules for network games, such as the Myerson Value, implicitly or explicitly take the network structure as fixed. In many situations, however, the network structure can be altered by players. This means that the value of alternative network structures (not just sub-networks) can and should influence the allocation of value among players on any given network structure. I present a family of allocation rules that incorporate information about alternative network structures when allocating value. Keywords: Networks, Network Games, Allocation Rules, Cooperative Games Classification-JEL: A14, C71, C72 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.52 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-052.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.52 Title: Farsightedness and Cautiousness in Coalition Formation Author-Name: Ana Mauleon Author-X-Name-First: Ana Author-X-Name-Last: Mauleon Author-WorkPlace-Name: LABORES (URA 362, CNRS), Université Catholique de Lille, France Author-Name: Vincent Vannetelbosch Author-X-Name-First: Vincent Author-X-Name-Last: Vannetelbosch Author-WorkPlace-Name: FNRS, IRES and CORE, Université Catholique de Louvain, Belgium Abstract: We adopt the largest consistent set defined by Chwe [J. of Econ. Theory 63 (1994), 299-235] to predict which coalition structures are possibly stable when players are farsighted. We also introduce a refinement, the largest cautious consistent set, based on the assumption that players are cautious. For games with positive spillovers, many coalition structures may belong to the largest consistent set. The grand coalition, which is the efficient coalition structure, always belongs to the largest consistent set and is the unique one to belong to the largest cautious consistent set. Keywords: Coalition formation, Farsightedness, Cautiousness, Positive spillovers, Largest consistent set Classification-JEL: C70, C71, C72, C78 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.53 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-053.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.53 Title: Building Up Social Capital in a Changing World: A Network Approach Author-Name: Fernando Vega-Redondo Author-X-Name-First: Fernando Author-X-Name-Last: Vega-Redondo Author-WorkPlace-Name: Departamento de Fundamentos del Análisis Económico and Instituto Valenciano de Investigaciones Económicas, Universidad de Alicante, Spain and Departamento de Economía i Empresa, Universitat Pompeu Fabra, Barcelona, Spain Abstract: This paper models the dynamic process through which a large society may succeed in building up its “social capital” by establishing a stable and dense pattern of interaction among its members. In the model, agents interact according to a collection of infinitely repeated Prisoner’s Dilemmas played on the current social network. This network not only specifies the playing partners but, crucially, also determines how relevant strategic information diffuses or new cooperation opportunities are found. Over time, the underlying payoffs randomly change, i.e. display some “volatility”, which leads agents to react by creating new links and removing others. The process is ergodic, so we use numerical simulations to “compute” its long-run invariant behavior and obtain the following conclusions: (a) Only if payoff volatility is not too high can the society sustain a dense social network. (b) The social architecture endogenously responds to increased volatility by becoming more cohesive. (c) Network-based strategic effects are an essential buffer that preclude the abrupt collapse of the social network in the face of growing volatility. These conclusions, largely in tune with those of the social-capital literature, are further studied analytically in a companion paper through the use of mean-field techniques. Keywords: Social Capital, Prisoner's Dilemma, Search, Social Networks, Volatility Classification-JEL: C72, D74, D83 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.54 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-054.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.54 Title: On the Size and Structure of Group Cooperation Author-Name: Matthew Haag Author-X-Name-First: Matthew Author-X-Name-Last: Haag Author-WorkPlace-Name: Department of Economics, University of Warwick Author-Name: Roger Lagunoff Author-X-Name-First: Roger Author-X-Name-Last: Lagunoff Author-WorkPlace-Name: Department of Economics, Georgetown University Abstract: This paper examines characteristics of cooperative behavior in a repeated, n-person, continuous action generalization of a Prisoner’s Dilemma game. When time preferences are heterogeneous and bounded away from one, how “much” cooperation can be achieved by an ongoing group? How does group cooperation vary with the group’s size and structure? For an arbitrary distribution of discount factors, we characterize the maximal average co-operation (MAC) likelihood of this game. The MAC likelihood is the highest average level of cooperation, over all stationary subgame perfect equilibrium paths, that the group can achieve. The MAC likelihood is shown to be increasing in monotone shifts, and decreasing in mean preserving spreads, of the distribution of discount factors. The latter suggests that more heterogeneous groups are less cooperative on average. Finally, we establish weak conditions under which the MAC likelihood exhibits increasing returns to scale when discounting is heterogeneous. That is, larger groups are more cooperative, on average, than smaller ones. By contrast, when the group has a common discount factor, the MAC likelihood is invariant to group size. Keywords: Repeated games, Maximal average Cooperation likelihood, Heterogeneous discount factors, Returns to scale Classification-JEL: C7, D62, D7 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.55 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-055.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.55 Title: Free Trade Networks Author-Name: Taiji Furusawa Author-X-Name-First: Taiji Author-X-Name-Last: Furusawa Author-WorkPlace-Name: International Graduate School of Social Science, Yokohama National University, Japan Author-Name: Hideo Konishi Author-X-Name-First: Hideo Author-X-Name-Last: Konishi Author-WorkPlace-Name: Department of Economics, Boston College, USA Abstract: The paper examines the formation of free trade agreements (FTAs) as a network formation game. We consider a general n-country model in which countries trade differentiated industrial commodities as well as a numeraire good. Countries may be different in the size of the industrial good industry (measure of firms) and the market size (population size). Their incentives to sign an FTA depend on these characteristics of their own countries and those of their partner countries. We show that if all countries are symmetric, a complete global free trade network is pairwise stable and it is the unique stable network if industrial commodities are not highly substitutable. We also compare FTAs and customs unions (CUs) as to which of these two regimes facilitate global trade liberalization, emphasizing the fact that unlike in the case of a CU, each country signing an FTA can have a new FTA with an outside country without consent of other member countries. Keywords: Free trade agreement, Customs union, Global free trade, Theory of network, Pairwise stability Classification-JEL: F12, F13, F15, C71, C78 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.56 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-056.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.56 Title: National Versus International Mergers and Trade Liberalization Author-Name: Halis Murat Yildiz Author-X-Name-First: Halis Murat Author-X-Name-Last: Yildiz Author-WorkPlace-Name: Department of Economics, Southern Methodist University, USA Abstract: This paper uses an endogenous merger formation approach in a concentrated international oligopoly to examine the effects of trade liberalization on the nature of merger incentives (national vs. international). The effects of unilateral trade liberalization on a country’s industry structure are found to be depending on the other country’s trade policy regime. If the other country practices free trade, unilateral liberalization by a country yields international mergers whereas if it practices a restrictive trade policy, national mergers arise. As trade gets bilaterally liberalized, the resulting equilibrium market structure is the one with international mergers. These results fit well with the fact that global trade liberalization has been accompanied by an increase in international merger activity. Among equilibrium market structures, international ones are found to be preferable from a welfare point of view. As a result, social and private incentives become aligned together as trade gets liberalized. Keywords: National Mergers, International Mergers, Trade Liberalization Classification-JEL: L10 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.57 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-057.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.57 Title: An Infinite-Horizon Model of Dynamic Membership of International Environmental Agreements Author-Name: Santiago Rubio Author-X-Name-First: Santiago Author-X-Name-Last: Rubio Author-WorkPlace-Name: University of Valencia Author-Name: Alistair Ulph Author-X-Name-First: Alistair Author-X-Name-Last: Ulph Author-WorkPlace-Name: University of Southampton Abstract: Much of the literature on international environmental agreements uses static models, although most important transboundary pollution problems involve stock pollutants. The few papers that study IEAs using models of stock pollutants do not allow for the possibility that membership of the IEA may change endogenously over time. In this paper we analyse a simple infinite-horizon version of the Barrett (1994) model, in which unit damage costs increase with the stock of pollution, and countries decide each period whether to join an IEA. We show that there exists a steady-state stock of pollution with corresponding steady-state IEA membership, and that if the initial stock of pollution is below (above) steady-state then membership of the IEA declines (rises) as the stock of pollution tends to steady-state. As we increase the parameter linking damage costs to the pollution stock, initial and steady-state membership decline; in the limit, membership is small and constant over time. Keywords: Self-enforcing international environmental agreements, Internal and external stability, Stock pollutant Classification-JEL: F02, F18, Q20 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.58 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-058.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.58 Title: ICT, Clusters and Regional Cohesion: A Summary of Theoretical and Empirical Research Author-Name: Carole Maignan Author-X-Name-First: Carole Author-X-Name-Last: Maignan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Dino Pinelli Author-X-Name-First: Dino Author-X-Name-Last: Pinelli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Fondazione Eni Enrico Mattei Author-X-Name-First: Gianmarco I.P. Author-X-Name-Last: Ottaviano Author-WorkPlace-Name: University of Bologna,Fondazione Eni Enrico Mattei and CEPR Author-Name: Gianmarco I.P. Ottaviano Abstract: The question of the spatial impacts of the Information and Communication Technology (ICT) has animated the intellectual and policy debate for a long time. At the beginning of the 1990s the rise of the Internet brought a new surge of debate: it was argued that the Internet would free the economy from the constraints of geography (Cairncross, 1997) bringing about a more even economic landscape. This contrasts sharply with the popular view of, for example, Silicon Valley, a congested area where world-class ICT and high-tech industries cluster together. In theory, geographical agglomeration of economic activities results as an equilibrium solution of a tension between centripetal and centrifugal forces. The paper discusses how the use of ICT may alter the balance between centripetal and centrifugal forces and therefore the final equilibrium solution. It shows that, from a theoretical point of view, there are many counterbalancing effects and not unique answer. The question is therefore down to empirical research. Available empirical evidences are then reported and discussed. Finally, the implications for European policies are drawn. Keywords: ICT, Clusters, Regional Cohesion Classification-JEL: O30, O40 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.59 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-059.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.59 Title: Special Interests and Technological Change Author-Name: Giorgio Bellettini Author-X-Name-First: Giorgio Author-X-Name-Last: Bellettini Author-WorkPlace-Name: University of Bologna Author-Name: Gianmarco I.P. Ottaviano Author-X-Name-First: Gianmarco I.P. Author-X-Name-Last: Ottaviano Author-WorkPlace-Name: University of Bologna and CEPR Abstract: We study an OLG economy where productivity growth comes from two alternative sources: process innovation and learning-by-doing. There is a trade-off between the two in so far as frequent technological updates reduce the scope for learning on existing technologies. A conflict is shown to arise between the young and the old, because the former favor innovation while the latter prefer learning. We model the interaction between overlapping generations and policy makers as a dynamic common agency problem, where competing generations invest a certain amount of resources to lobby either for the maintenance of the current technology or the adoption of a new one. By focusing on truthful Markov perfect equilibria, we characterize the political equilibrium and show its dependence on the underlying demographic, technological and preference parameters. Keywords: Technological change, Technology option, Pressure goups, Dynamic common agency Classification-JEL: C72, C73, D72, O38, O41 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.60 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-060.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.60 Title: The Double Dividend Hypothesis of Environmental Taxes: A Survey Author-Name: Ronnie Schöb Author-X-Name-First: Ronnie Author-X-Name-Last: Schöb Author-WorkPlace-Name: Otto-von-Guericke-University Magdeburg and CESifo, Munich Abstract: This survey reviews the recent literature on the double-dividend hypothesis of environmental taxes and discusses some extensions of the standard model such as the distributional consequences and the importance of the non-separability assumption between consumption goods and environmental quality for the optimal design of environmental policies. Turning to a model with imperfect labour markets we then show under which circumstances environmental taxes on polluting inputs in production and on polluting consumption goods can reap a second dividend in the form of an employment dividend and discuss the welfare implications. Finally, we turn to international aspects of environmental taxation. When environmental problems are tied to the use of exhaustible resources, resource-consuming countries can appropriate resource rents at the cost of resource-owning countries by levying environmental taxes strategically. Keywords: Environmental taxation, Double-dividend hypothesis, Full-employment models, Unemployment models, International coordination Classification-JEL: H21, H23, J50, Q30 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.61 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-061.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.61 Title: Stability of Climate Coalitions in a Cartel Formation Game Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: Department of Economics, Hagen University, Germany Author-Name: Ekko van Ierland Author-X-Name-First: Ekko Author-X-Name-Last: van Ierland Author-WorkPlace-Name: Wageningen University, Department of Social Sciences, The Netherlands Abstract: We empirically test stability of climate change coalitions with the STAbility of Coalitions model (STACO). The model comprises twelve world regions and captures important dynamic aspects of the climate change problem. We apply the stability concept of internal and external stability to a cartel formation game. It is shown that only if benefits from global abatement are sufficiently high, stable coalitions emerge, though they only marginally improve upon the Nash equilibrium. We explain this phenomenon by analyzing the individual incentive structure of all regions and relate our results to the predictions of theory. Keywords: International environmental agreements, Kyoto-Protocol, Cartel formation game, Non-cooperative game theory Classification-JEL: C72, H41, Q25 Creation-Date: 200306 Template-Type: ReDIF-Paper 1.0 Number: 2003.62 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-062.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.62 Title: How the Rules of Coalition Formation Affect Stability of International Environmental Agreements Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: Department of Economics, Hagen University, Germany Author-Name: Bianca Rundshagen Author-X-Name-First: Bianca Author-X-Name-Last: Rundshagen Author-WorkPlace-Name: Department of Economics, Hagen University, Germany Abstract: This paper compares stability of international environmental agreements for six different rules of coalition formation under very general conditions (any type of heterogeneity between countries). The rules can be interpreted as different institutional settings in which treaty formations take place and/or different designs of agreements. We consider open and restricted open membership game as well as four exclusive membership games with different degrees of unanimity required to form coalitions. From a policy perspective, counterintuitively, it turns out that stability is higher under exclusive than under open membership and stability increases with the degree of unanimity. We discuss the policy implications of our result for future treaty-making. Keywords: Non-cooperative game theory, Rules of coalition formation, Stability Classification-JEL: C72, H41, Q20 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.63 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-063.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.63 Title: Taxing Land Rent in an Open Economy Author-Name: Alberto Petrucci Author-X-Name-First: Alberto Author-X-Name-Last: Petrucci Author-WorkPlace-Name: Università del Molise and LUISS G. Carli Abstract: This paper analyzes the effects of a land rent tax on capital formation and foreign investment in a life-cycle small open economy with endogenous labor-leisure choices. Differently from the previous literature, the consequences of land taxation critically depend on how the tax proceeds are used by the government. A land tax depresses capital formation, crowds out foreign investment and pulls up national wealth and consumption when consumers are lump-sum compensated for the tax. If the proceeds from taxation were used for financing un-productive government expenditure, land taxation would be neutral in its effects on capital stock, nonhuman wealth and labor. When the tax proceeds are used to reduce labor taxes, the land tax exerts ambiguous effects on capital stock and manhours, and spurs nonhuman wealth accumulation. Keywords: Land Taxation, Labor Supply, Capital Accumulation, Overlapping-generations Classification-JEL: E21, E62, H22 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.64 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-064.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.64 Title: Thirteen Plus One: A Comparison of Global Climate Policy Architectures Author-Name: Joseph E. Aldy Author-X-Name-First: Joseph E. Author-X-Name-Last: Aldy Author-WorkPlace-Name: Department of Economics, Harvard University Author-Name: Scott Barrett Author-X-Name-First: Scott Author-X-Name-Last: Barrett Author-WorkPlace-Name: Paul H. Nitze School of Advanced International Studies, Johns Hopkins University Author-Name: Robert N. Stavins Author-X-Name-First: Robert N. Author-X-Name-Last: Stavins Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University and Resources for the Future Abstract: We critically review the Kyoto Protocol and thirteen alternative policy architectures for addressing the threat of global climate change. We employ six criteria to evaluate the policy proposals: environmental outcome, dynamic efficiency, cost effectiveness, equity, flexibility in the presence of new information, and incentives for participation and compliance. The Kyoto Protocol does not fare well on a number of criteria, but none of the alternative proposals fare well along all six dimensions. We identify several major themes among the alternative proposals: Kyoto is “too little, too fast”; developing countries should play a more substantial role and receive incentives to participate; implementation should focus on market-based approaches, especially those with price mechanisms; and participation and compliance incentives are inadequately addressed by most proposals. Our investigation reveals tensions among several of the evaluative criteria, such as between environmental outcome and efficiency, and between cost-effectiveness and incentives for participation and compliance. Keywords: Policy architecture, Kyoto Protocol, Efficiency, Cost effectiveness, Equity, Participation, Compliance Classification-JEL: Q2, Q3, Q4 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.65 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-065.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.65 Title: The Beginning of Organic Fish Farming in Italy Author-Name: Edi Defrancesco Author-X-Name-First: Edi Author-X-Name-Last: Defrancesco Author-WorkPlace-Name: TeSAF Department, University of Padova, Italy Abstract: Italian demand for organic products is rapidly increasing, yet there is currently no supply of certified organic marine-fish. Moreover, over recent years marine fish farm profitability has been reduced because of competition from imported products. A pilot project was carried out in order to: a) define standards for organic marine fish farming; b) evaluate production costs in four farms, experimenting semi-extensive organic fish farming under proposed standards (seabream, Sparus aurata and seabass, Dicentrarchus labrax); c) estimate the potential demand for certified organic marine fish and consumer willingness to pay in order to figure out the profitability of a product differentiation strategy. This paper shows the economic results for production costs at the farm level and potential demand. The latter has been estimated using survey-data of 6,877 consumers by means of a questionnaire-interview carried out during an experimental organic marine fish promotion sale. Results show that organic marine fish farming could be a good market opportunity for some Italian fish farmers by improving consumer information on organic products, adopting a supply concentration strategy at the farm level and carefully managing semi-extensive-farming set up by proposed regulations. Keywords: Organic fish farming, Product differentiation, Organic fish demand Classification-JEL: D12, D24 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.66 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-066.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.66 Title: Price Competition and Product Differentiation when Consumers Care for the Environment Author-Name: Klaus Conrad Author-X-Name-First: Klaus Author-X-Name-Last: Conrad Author-WorkPlace-Name: University of Mannheim, Germany Abstract: Increasing environmental awareness may affect the pleasure of consuming a good for which an environmental friendly substitute is available. When deciding to buy differentiated products, a compromise is sometimes made between preferred characteristics of the good and its environmental properties. In this paper we investigate the market implication of product differentiation when customers are concerned about environmental aspects of the good. We use the spatial duopoly model to determine how environmental concern affects prices, product characteristics and market shares of the competing firms. Our analysis is based on a two-stage game where at the first stage each firm chooses the characteristic of its product. At the second stage each firm chooses its price. The unique equilibrium prices and market shares are affected by consumer awareness of the environment and by the higher costs for producing those goods. As for the Nash equilibria in the characteristics we find three equilibria depending on the parameter constellation. In order to find out whether the market functions in an optimal way we determined the choice of environmental characteristics by a welfare maximizing authority. The result of this analysis is that characteristics differ under private decision making and social one. It can be shown, however, that it is possible to choose environmental policy instruments in order to stimulate private firms to produce the social optimal qualities. Keywords: Price competition, Quality competition, Environmental awareness, Environmentally friendly products Classification-JEL: L11, Q38, H23 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.67 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-067.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.67 Title: Monetary Value Assessment of Clam Fishing Management Practices in the Venice Lagoon: Results from a Stated Choice Exercise Author-Name: Paulo A.L.D. Nunes Author-X-Name-First: Paulo A.L.D. Author-X-Name-Last: Nunes Author-WorkPlace-Name: Ca' Foscari University Venice, Fondazione Eni Enrico Mattei and Free University Amsterdam Author-Name: Luca Rossetto Author-X-Name-First: Luca Author-X-Name-Last: Rossetto Author-WorkPlace-Name: University of Padova Author-Name: Arianne de Blaeij Author-X-Name-First: Arianne Author-X-Name-Last: de Blaeij Author-WorkPlace-Name: Free University Amsterdam Abstract: This article focuses on the economic valuation of alternative clam management practices in the Venice Lagoon. The proposed valuation method is characterized by the design of a survey questionnaire next to the fishermen population. In each questionnaire two fishing alternatives are described. The respondent is asked to choose one of them. This valuation method, referred in the article as conjoint valuation, gives sufficient flexibility to set, alter, and combine different management practices. Furthermore, this approach presents an important advantage to the well-known contingent valuation method since it makes the monetary valuation of each management attribute possible. Estimation results of the random utility model show that fishermen’s willingness to pay for a larger clam fishing area is approximately 568 € per year. In addition, an individual fisherman would be willing to pay 1,005 € for a change from today’s fishing situation practice towards a fishing practice exclusively based on vibrant rake system. If we take into account the interaction between fishing management attributes and fishermen characteristics, we can see that the valuation of each management practice differs substantially across the two populations. We can observe that the population of fishermen that operate in the cooperative regime presents not only a higher monetary valuation for an increase in the dimension of the fishing concession, which is now valued at 811 €, but also a stronger willingness to pay for a change from today’s fishing situation towards a fishing practice exclusively based on vibrant rake system, which is now estimated at 2,456 €. Finally, the adoption of a clam fish management practice in Venice Lagoon that is exclusively based on the use of manual rakes, which is associated to the lowest damage to the Lagoon ecosystem, will represent a welfare loss of 5,904 € per fisherman per year. Combining this value with the total number of fishermen currently operating in the Lagoon of Venice, the welfare loss associated with the adoption of such clam management policy that is exclusively based on the use of manual rakes amounts to 11.8 € million per year. This figure can be regarded as an upper bound to the cost of implementation of a clam fishing system anchored in the use of manual, ecosystem friendly rakes. Keywords: Exotic marine species, Fishing rakes, Manila clam, Fishing effort, Open access, Welfare damages, Policy guidance, Permit price Classification-JEL: C25, C29, D62, H41, Q20, Q25, Q30 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.68 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-068.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.68 Title: Open Trade with the U.S. without Compromising Canada’s Ability to Comply with its Kyoto Target Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: Research Program, East-West Center, Honolulu, USA, Centre for Environment and Development, Chinese Academy of Social Sciences, Beijing, and China Centre for Regional Economic Research, Peking University, Beijing, China Abstract: There are no other two countries in the world that trade as much between themselves as do Canada and the U.S.. It should thus come as no surprise that the U.S. deviation from international obligations makes Canadian industries’ competitiveness (trade) concerns become even more rigorous. Against this background, this paper aims to address competitiveness concerns brought about by the different level playing field where Canadian industries face mandatory emissions constraints but U.S. industries’ emissions are uncapped. To that end, the paper has addressed: 1) ways to deal with increased emissions in Canada as a result of increasing energy exports to the U.S.; 2) treatment of Canadian subsidiaries of U.S. multinationals in initially allocating Canada’s assigned amount; 3) transferring Kyoto permits to non-Annex B Parties and transferring credits generated by non-Kyoto Parties to Kyoto Parties; 4) whether the U.S. bears any economic costs even when it faces no mandatory emissions targets during the first commitment period and why does Canada like to bear additional costs, if any, relative to the U.S. and the EU.? and 5) what other measures might Canada take to further mitigate its trade concerns, in addition to taking advantage of the opportunities offered by the Kyoto flexibility mechanisms? If Canada and other like-minded countries invoke trade measures (to meet their Kyoto targets) against another WTO member but non-Kyoto Party like the U.S, would these measures be upheld if challenged by the U.S. under WTO? In so doing, attention is paid to the trade effects of the proposed measures to ensure their close consistency with the WTO rules, thus maximizing the WTO’s contributions to sustainable development. It should be pointed out that although this study focuses on the U.S. and Canada, the results are of high policy relevance to Japan and the EU as well. The latter also have to address the similar issues facing Canada, although to a lesser extent. Keywords: Clean energy exports, Emissions trading, Competitiveness concerns, Border tax adjustments, WTO, Kyoto Protocol Classification-JEL: F18, Q28, Q48, Q43 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.69 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-069.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.69 Title: Lorenzo Market between Diversity and Mutation Author-Name: David Frantz Author-X-Name-First: David Author-X-Name-Last: Frantz Author-WorkPlace-Name: Centre de Recherche sur les Espaces et les Sociétés (CRESO), M.R.S.H., Université de Caen, France Abstract: The aim of this paper is to investigate the relationship between the diversity of groups of workers and the local division of labour in the San Lorenzo Market, Florence, Italy. This empirical research may help distinguish the demographic, migratory and occupational patterns of the workers in accordance with their national origin. It shows that geographical origin is the key to the differences, specialisations and oppositions between the Florentines and the various groups of migrants on the one hand, and between these immigrant groups on the other hand. It shows too the mutation made by the conflict between global dynamics and a local labour market. Keywords: San Lorenzo Market, Immigrant workers, Diversity, Local division of labour, Migratory trajectories Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.70 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-070.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.70 Title: Mapping Diversity in Social History Author-Name: Ercole Sori Author-X-Name-First: Ercole Author-X-Name-Last: Sori Author-WorkPlace-Name: University of Ancona, Italy Abstract: The paper is an overview of diversity in history, starting as far back as the societies in classical Ancient Europe and traditional non-European societies, where differentiation was basically between the enslaved and free population and the out-of-caste in India. With the end of slavery the European feudal society adopted a functionalist tripartition based on priests, warriors and peasants. The analysis continues in pre-industrial Europe (1500-1800), where in many cities class struggle was represented by the conflicts between crafts and between cities, with some participation of the élites. In 17th century England only one class existed, and class struggle was the struggle inside one class. Other considerations on the stratification of pre-industrial society are related to classes inferred from empirical subjectivity, social hierarchy and horizontal and vertical solidarity. In industrial society, the paper discusses the Marxian, Weberian and Marshall models and the syncretism between status and class. The second part of the paper is devoted to diversity outside formal society with the definitions of the processes that generate the marginalization of people and social groups, while the third part of the paper concerns the urban milieu and social integration/differentiation. Considerations are made on urban topography (e.g. ghettos, “miracle courts”, etc.) and on the relationship between topographic position within the urban tissue and positioning in the social pyramid. Finally, the last part of the paper is an excursus on the historiographic assumptions and policies toward diversity and marginality. Keywords: Diversity, Marginalization, Social history, Social integration, Social Differentiation Classification-JEL: N30 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.71 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-071.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.71 Title: What is Specific about Art/Cultural Projects? Author-Name: Ljiljana Deru Simic Author-X-Name-First: Ljiljana Author-X-Name-Last: Deru Simic Author-WorkPlace-Name: ORACLE, The Network of European Cultural Managers, Brussels, Belgium Abstract: The present issue focuses on the contribution made by art/cultural initiatives to the development of multiple identity in some of the European cities having in mind the subjectivity of the artists and plurality of the surrounding cultures. The art/cultural projects (AES- Russia, Europe Art Train – Holland, Life Station – Austria and some others) with intercultural dimension have a special character to offer because: they are dealing with meaning, and enable dialogue between people in different social groups. The examples will be taken from different European countries, which aim to reinterpret the reality of life, to show, answer, and question its contradictions. The attention will be focused on their political, educational and aesthetic contribution to the community construction having in mind their desire for new intercultural policy and practices. Every artist crosses borders daily but those who choose to cross cultural borders (language, expression, music, tradition) enter into a fertile, but dangerous field. Artists do not aim specifically to produce multicultural work but since they are living in specific time, and since art is rooted in real life, the realities of everyday life are transposed into their work. This paper is fundamentally interested in the role that art projects can play in a modern society and promotes the initiative that links an artistic dimension to a form of interactive social urban situation. All projects are representing ‘laboratories’ that use public spaces. It is more than obvious that the social and the economic fields are not separated from the cultural one beside the tendency that is putting them in opposition as artists and the world rather than artists in the world. In the last two decades, the world of the arts has economised rapidly. Increasingly, artists have turned the economy into a subject of their own work. Art/cultural projects engage people’s creativity, and so lead to problem-solving. They encourage questioning, and the imagination of possible future actions. They offer self-expression, which is an essential characteristic of the active citizen. Some experiences from the art/cultural field are shifting attention towards the people themselves: their imagination, motivation, demands, fantasies and only then the city is becoming a cultural product, a community construction. Keywords: Intercultural actions, Policy agenda, Art/cultural projects, Networking aspects Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.72 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-072.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.72 Title: The Role of the City in Fostering Intergroup Communication in a Multicultural Environment: Saint-Petersburg’s Case Author-Name: Natalya V. Taranova Author-X-Name-First: Natalya V. Author-X-Name-Last: Taranova Author-WorkPlace-Name: Saint Petersburg State University, School of International Relations, Saint Petersburg, Russia Abstract: In this paper two aspects of the issue will be discussed. First, there is the role of authorities, NGOs in forming the multicultural environment in the city with cultural diversity. Second, the city as social context, the images and myths of the city determine discourse on multiculturalism and influence the cross-cultural communication in the city. After describing historically shaped images of the city, employment of city’s myths and symbols in discourse and policy of multiculturalism, and role of city’s institutions in fostering inter-group communication, this paper will discuss the inclusive culture of the city, shaped by the networking interaction, which blurs the distinction between «insiders» and «outsiders». Here the trends of (post)modern inter/trans-national relations will be extrapolated on the trans-cultural interaction in the multicultural city, taking into consideration that network interactions build up not between the territories, but in the space, where logic of borders overcomes. Keywords: Multicultural, Identity, Image, Myth, Discourse, We-groups, Inclusive networks, Inclusive culture, Transnational interaction, Transnational civil society Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.73 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-073.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.73 Title: The City as an Arena for the Expression of Multiple Identities in the Age of Globalisation and Migration Author-Name: Kristine Crane Author-X-Name-First: Kristine Author-X-Name-Last: Crane Author-WorkPlace-Name: Psychoanalytic Institute for Social Research, Rome, Italy Abstract: This paper discusses the concept of toleration as it has been manifested in modern society through two contrasting processes—the prevalence of group identity, and the prevalence of identity defined according to citizenship and individual rights. Referring primarily to the work of political theorist Michael Walzer, the paper describes the historical development of toleration in the U.S., insofar as it is an immigrant nation which has passed through several phases of intolerance and toleration that continue to characterise the dynamics of American society, particularly in the city. Special reference is made to the city of Chicago, the largest city in the Midwest, where immigrants from all over settled, establishing ethnic neighbourhoods. Globalisation and migration have made diversity a defining feature of contemporary society, and cities in particular. The multiplication of identities is being experienced on an individual level as well, giving rise to the recognition of the increasingly ‘hybrid’ nature of social and personal identification. The paper concludes by calling into question the implications of this post-modern model on the conceptualisation of toleration as well as its manifestations. Keywords: Toleration, Multiculturalism, Migration, Cultural pluralism, Ethnic self-assertion Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.74 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-074.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.74 Title: Glocal Dialogue Transformation through Transcultural Communication Author-Name: Kazuma Matoba Author-X-Name-First: Kazuma Author-X-Name-Last: Matoba Author-WorkPlace-Name: Universität Witten/Herdecke, Germany Abstract: This paper addresses the role of dialogical communication in acculturation efforts within organizations and regions, especially during periods of transition, mergers, technological innovations, and globalization. This optimal communication mode can be achieved through a “dialogue process” proposed by David Bohm and developed by Peter Sense at MIT, Boston. The “dialogue process”, as an integral part of intercultural communication training, aims at promoting dialogue competence for intercultural communication in which man can learn how to better deal with their own stereotypes of other cultures and eventually acquire a generally de-stereotyping style of communication. It has tried out in a small city in Germany, since April 2002. About 25 citizens of the city are taking part in this dialogue process. The empirical part of this study tries to describe the socio-psychological transformation of the dialogue-group. Keywords: Dialogical communication, Transcultural communication, Acculturation process, Sociopsychological transformation Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.75 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-075.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.75 Title: Immigrants’ Entrepreneurial Opportunities: The Case of the Chinese in Portugal Author-Name: Catarina Reis Oliveira Author-X-Name-First: Catarina Author-X-Name-Last: Reis Oliveira Author-WorkPlace-Name: SociNova New University of Lisbon, Portugal Abstract: Why do some foreign nationalities seem to have entrepreneurial initiatives and others don’t? Why do certain foreign communities tend to build an ethnic economy, and others melt in the economy of the reception country? The analysis made so far of the modes of incorporation of the different Chinese immigrant communities in Portugal allowed to evidence that, unlike what some authors defend, it is not only the cultural factors that channel immigrants into certain segments of the labour market. Several structural factors associated to these immigrants’ arrival should be considered: the immigration policy of the host society; the reasons that generated the migratory flow; the existence of a co-ethnic community in the country and its economic incorporation; the operation of social networks; the possibility to acquire capital among the community (informal resources); and the potential market of the host society. Furthermore, in Portugal, as in Southern Europe, the informal economy can be an opportunity to self-employment - not so easy in North European countries where institutional control is stronger and competition is higher. Keywords: Immigrants, Entrepreneurship, Structural opportunities, Ethnic resources Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.76 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-076.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.76 Title: The Diversity of Diversity: Implications of the Form and Process of Localised Urban Systems Author-Name: Sandra Wallman Author-X-Name-First: Sandra Author-X-Name-Last: Wallman Author-WorkPlace-Name: Department of Anthropology, University College London, U.K. Abstract: This paper summarises research into localised urban systems which accounts for variations in styles of diversity within multi-cultural cities. New work builds on previous studies in London and Turin. The first produced an ideal type model of open:closed urban systems and evidence that the former have better capacity to incorporate incomers. The second revealed the need to adapt the model to account also for the process of diversity. This third phase combines ethnography with computer simulations to reveal emergent properties as well as present styles of urban systems, and to rank the variables driving change. The outcome will be a typology for users dealing with migrant settlement and urban regeneration. Keywords: Typology of urban systems, Diversity, Relatedness, Process models, Ideal types Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.77 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-077.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.77 Title: A Biologist’s View of Individual Cultural Identity for the Study of Cities Author-Name: Richard Pearce Author-X-Name-First: Richard Author-X-Name-Last: Pearce Author-WorkPlace-Name: Department of Education, University of Bath, U.K. Abstract: The behaviour of urban populations is compared with the systems directing behaviour in individuals. This is both a metaphor and a mechanistic parallel. The biological model draws upon recent developments in brain research and psychological and cultural anthropology. The development and operation of the personal value-system are seen as constituting Identity in an individual, and Culture in a community. A mechanism is proposed by which social attachments between individuals lead to the adoption of new values into the system. The ability to differentiate own group from other is seen as intrinsic and socially necessary, made peaceful by specific values and adversarial by others. Identity development is such a complex process that it cannot be predicted in detail, but explicated in retrospect. A model may be useful in understanding conflicts of values, and how some are modifiable and others not. Keywords: Identity, Cultural meaning system, Values, Attachment, Social identity theory Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.78 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-078.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.78 Title: Communication Across Cultures: From Cultural Awareness to Reconciliation of the Dilemmas Author-Name: Vincent Merck Author-X-Name-First: Vincent Author-X-Name-Last: Merck Author-WorkPlace-Name: Eindhoven University of Technology, Eindhoven, the Netherlands Abstract: In this globalising world there is a growing need for understanding different types and forms of interaction between people in intercultural environments, i.e. working places, cities, etc. This implies that people refer more and more to various communication models and practices to fully master communication across cultures. These models ultimately lead to applying best practices in intercultural communication. One of the most popular models in the one developed by Trompenaars & Hampden-Turner. In this paper we first review the concept of culture related to this model. Second, we present the 7 dimensions of the model. Finally, we review the reconciliation theory as presented by Hampden-Turner & Trompenaars. Keywords: Intercultural communication, Reconciliation model, Dilemmas, Intercultural context Classification-JEL: Z10 Creation-Date: 200307 Template-Type: ReDIF-Paper 1.0 Number: 2003.79 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-079.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.79 Title: Child Labor and Resistance to Change Author-Name: Giorgio Bellettini Author-X-Name-First: Giorgio Author-X-Name-Last: Bellettini Author-WorkPlace-Name: University of Bologna Author-Name: Carlotta Berti Ceroni Author-X-Name-First: Carlotta Author-X-Name-Last: Berti Ceroni Author-WorkPlace-Name: University of Bologna Author-Name: Gianmarco I.P. Ottaviano Author-X-Name-First: Gianmarco I.P. Author-X-Name-Last: Ottaviano Author-WorkPlace-Name: University of Bologna and CEPR Abstract: We study the interactions between technological innovation, investment in human capital and child labor. In our setting new technologies require new skills and new skills can be developed only through schooling. In a two-stage game, first firms decide on innovation, then households decide on education. In equilibrium the presence of inefficient child labor depends on parameters related to technology, parents’ altruism and the diffusion of firm property. When child labor exists, it is due to either firms reluctance to innovate or households’ unwillingness to educate or both. The optimal policy to eliminate child labor depends crucially on its underlying cause. We show that, in some cases, compulsory schooling laws or a ban on child labor are welfare reducing, while a subsidy to innovation is the right tool to eliminate child labor and increase welfare. Keywords: Child labor, Innovation Classification-JEL: J24, O31 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.80 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-080.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.80 Title: Investment Size and Firm’s Value Under Profit Sharing Regulation Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Economics Department, University of Brescia Author-Name: Paolo M. Panteghini Author-X-Name-First: Paolo M. Author-X-Name-Last: Panteghini Author-WorkPlace-Name: Economics Department, University of Brescia Author-Name: Carlo Scarpa Author-X-Name-First: Carlo Author-X-Name-Last: Scarpa Author-WorkPlace-Name: Economics Department, University of Brescia Abstract: In this article we analyse the effects of different regulatory schemes (price cap and profit sharing) on a firm’s investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a firm’s start-up decision relative to a pure price cap scheme. Unless the threshold after which profit sharing intervenes is very high, however, introducing a profit sharing element delays further investments: this decreases the present value of total investment. We also evaluate the reduction in the firm’s value due to profit sharing, linking this reduction to the option value of future investments. Keywords: Regulation, Investment, Profit sharing, Real options, RPI-x Classification-JEL: L51, D81, D92, G31 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.81 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-081.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.81 Title: Oil and Product Price Dynamics in International Petroleum Markets Author-Name: Alessandro Lanza Author-X-Name-First: Alessandro Author-X-Name-Last: Lanza Author-WorkPlace-Name: Eni S.p.A., Roma, Fondazione Eni Enrico Mattei, Milano and CRENoS, Cagliari, Italy Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: Department of Statistics, University of Milano-Bicocca, Italy and Fondazione Eni Enrico Mattei, Milano, Italy Author-Name: Massimo Giovannini Author-X-Name-First: Massimo Author-X-Name-Last: Giovannini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Milano, Italy Abstract: In this paper we investigate crude oil and products price dynamics. We present a comparison among ten price series of crude oils and fourteen price series of petroleum products, considering four distinct market areas (Mediterranean, North Western Europe, Latin America and North America) over the period 1994-2002. We provide first a complete analysis of crude oil and product price dynamics using cointegration and error correction models. Subsequently we use the error correction specification to predict crude oil prices over the horizon January 2002-June 2002.The main findings of the paper can be summarized as follows: a) differences in quality are crucial to understand the behaviour of crudes; b) prices of crude oils whose physical characteristics are more similar to the marker show the following regularities: b1) they converge more rapidly to the long-run equilibrium; b2) there is an almost monotonic relation between Mean Absolute Percentage Error values and crude quality, measured by API° gravity and sulphur concentration; c) the price of the marker is the driving variable of the crude price also in the short-run, irrespective of the specific geographical area and the quality of the crude under analysis. Keywords: Oil prices, Product prices, Error correction models, Forecasting Classification-JEL: C22, D40, E32 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.82 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-082.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.82 Title: Pollution Abatement Investment When Firms Lobby Against Environmental Regulation Author-Name: Y. Hossein Farzin Author-X-Name-First: Y. Hossein Author-X-Name-Last: Farzin Author-WorkPlace-Name: Department of Agricultural and Resource Economics, University of California Author-Name: Jinhua Zhao Author-X-Name-First: Jinhua Author-X-Name-Last: Zhao Author-WorkPlace-Name: Department of Economics, Iowa State University Abstract: In this paper, we study a firm’s optimal lobby behavior and its effect on investment in pollution abatement capital. We develop a dynamic framework where a representative firm can invest in both abatement and lobby capital in response to a possible future increase in pollution tax. We show that when the firm lobbies against the scale of the tax increase at a predetermined date, it should act like an occasional lobbyer by investing a lump-sum (optimal) amount in the lobby capital only at that date. But, to delay the new tax, it should act like a habitual lobbyer by investing continuously and at increasing rates over an optimal time period. We show that lobby expenditure crowds out investment in abatement capital and that this effect is stronger the more efficient is the lobbying activity. Further, we show that while uncertainty about the magnitude of the tax reduces the firm’s incentive to lobby, uncertainty about the timing of the new tax increases it. Keywords: Pollution Abatement, Environmental Regulation Classification-JEL: H32, D81, D92, Q28 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.83 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-083.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.83 Title: Is the Discount Rate Relevant in Explaining the Environmental Kuznets Curve? Author-Name: Giuseppe Di Vita Author-X-Name-First: Giuseppe Author-X-Name-Last: Di Vita Author-WorkPlace-Name: Faculty of Law, University of Catania, Italy Abstract: In this paper we use Pindyck’s model (2002) to show that the discount rate may play an important role in explaining for the income-pollution pattern observed in the real world. Low levels of income involve high values of discount rate, that are obstacles to the adoption of a pollution abatement policy. Only when the discount rate falls, as a consequence of growth, will it be possible to implement measures for emissions reduction. Thus we are able to derive an inverse U-shaped income-pollution pattern, making use of an argument that has never yet been introduced in the economic debate on this issue. Keywords: Discount rate, Environmental Kuznets Curve, Income, Stock pollutants Classification-JEL: Q2, D61 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.84 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-084.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.84 Title: Induced Technological Change Under Carbon Taxes Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: Institute for Environmental Studies, Faculty of Earth and Life Sciences, Vrije Universiteit, Amsterdam, the Netherlands Author-Name: Wietze Lise Author-X-Name-First: Wietze Author-X-Name-Last: Lise Author-WorkPlace-Name: Institute for Environmental Studies, Faculty of Earth and Life Sciences, Vrije Universiteit, Amsterdam, the Netherlands Abstract: We develop an economic partial equilibrium model for energy supply and demand with capital and labor as production factors, and endogenous technological change through learning by research and learning by doing. Our model reproduces the learning curve typical for (bottom-up) energy system models. The model also produces an endogenous S-curved transition from fossil fuel energy sources to carbon-free energy sources over the coming two centuries. We use the model to study changes in fossil fuel and carbon-free energy use and carbon dioxide emissions induced by carbon taxes. It is shown that induced technological change accelerates the substitution of carbon-free energy for fossil fuels substantially, and can increase by factor 5 the cumulative emission reductions achieved through a carbon tax over the period 2000-2100. Keywords: Induced technological change, Environmental taxes, Partial equilibrium, Learning by doing Classification-JEL: H23, O31, O41, Q42, Q43 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.85 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-085.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.85 Title: How Fast are the Tourism Countries Growing? The cross-country evidence Author-Name: Rinaldo Brau Author-X-Name-First: Rinaldo Author-X-Name-Last: Brau Author-WorkPlace-Name: Università di Cagliari and CRENoS Author-Name: Alessandro Lanza Author-X-Name-First: Alessandro Author-X-Name-Last: Lanza Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CRENoS Author-Name: Francesco Pigliaru Author-X-Name-First: Francesco Author-X-Name-Last: Pigliaru Author-WorkPlace-Name: Università di Cagliari and CRENoS Abstract: Specializing in tourism is an option available to a number of less developed countries and regions. But is it a good option? To answer this question, we have compared the relative growth performance of 14 “tourism countries” within a sample of 143 countries, observed during the period 1980-95. Using standard OLS cross-country growth regressions, we have documented that the tourism countries grow significantly faster than all the other sub-groups considered in our analysis (OECD, Oil, LDC, Small). Moreover, we have shown that the reason why they are growing faster is neither that they are poorer than the average; nor that they have particularly high saving/investment propensities; nor that they are very open to trade. In other words, the positive performance of the tourism countries is not significantly accounted for by the traditional growth factors of the Mankiw, Romer and Weil type of models. Tourism specialization appears to be an independent determinant. A corollary of our findings is that the role played by the tourism sector should not be ignored by the debate about whether smallness is harmful for growth (e.g. Easterly and Kraay (2000), who conclude that there is no growth disadvantage in smallness). Half of the thirty countries classified as microstates in this literature are heavily dependent on tourism. Once this distinction is adopted, it is easy to see that the small tourism countries perform much better than the remaining small countries. In our findings, smallness per se can be bad for growth, while the opposite is true when smallness goes together with a specialization in tourism. Keywords: Economic growth, Convergence, Tourism specialization, Sustainable development Classification-JEL: O11, O41, O57, Q01 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.86 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-086.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.86 Title: The ICT Revolution: Opportunities and Risks for the Mezzogiorno Author-Name: Elena Bellini Author-X-Name-First: Elena Author-X-Name-Last: Bellini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Gianmarco I.P. Ottaviano Author-X-Name-First: Gianmarco I.P. Author-X-Name-Last: Ottaviano Author-WorkPlace-Name: Università degli Studi di Bologna, Fondazione Eni Enrico Mattei and CEPR Author-Name: Dino Pinelli Author-X-Name-First: Dino Author-X-Name-Last: Pinelli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: The question of the spatial impacts of Information and Communication Technology (ICT) has animated intellectual and policy debate for a long time. At the beginning of the 1990s the advent of the Internet brought a new surge of debate: it was argued that the Internet would free the economy from the constraints of geography (Cairncross, 1997), bringing about a more even economic landscape. New opportunities seemed to arise for the poor regions in peripheral areas such as the Italian Mezzogiorno. However, this contrasts sharply with the popular view of, for example, Silicon Valley, a congested area where world-class ICT and high-tech industries cluster together. In theory, geographical agglomeration of economic activities results as an equilibrium solution of a tension between centripetal and centrifugal forces. ICT has the potential to alter the balance between centripetal and centrifugal forces and therefore the final equilibrium solution. Literature shows that, from a theoretical point of view, there are a number of counterbalancing effects rather than a one directional trend. The question therefore begs empirical research. This paper investigates the effect of the ICT revolution on industrial locational patterns across Italian provinces. It shows that the increasing use of ICT in the economy may indeed lead to greater dispersion of economic activity, i.e. less regional disparities. On the other hand, there is evidence that the parallel shift towards more knowledge- and skill-intensive activities might counterbalance this dispersion effect. Keywords: ICT, Regional cohesion, Convergence Classification-JEL: R0, O3 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.87 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-087.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.87 Title: Sustainability and Substitution of Exhaustible Natural Resources. How resource prices affect long-term R&D investments Author-Name: Lucas Bretschger Author-X-Name-First: Lucas Author-X-Name-Last: Bretschger Author-WorkPlace-Name: WIF – Institute of Economic Research, ETH-Zentrum, Zurich, Switzerland Author-Name: Sjak Smulders Author-X-Name-First: Sjak Author-X-Name-Last: Smulders Author-WorkPlace-Name: Department of Economics, Tilburg University, The Netherlands Abstract: Traditional resource economics has been criticised for assuming too high elasticities of substitution, not observing material balance principles and relying too much on planner solutions to obtain long-term growth. By analysing a multi-sector R&D-based endogenous growth model with exhaustible natural resources, labour, knowledge, and physical capital as inputs, the present paper addresses this critique. We study transitional dynamics and the long-term growth path and identify conditions under which firms keep spending on research and development. We demonstrate that long-run growth can be sustained under free market conditions even when elasticities of substitution between capital and resources are low and the supply of physical capital is limited, which seems to be crucial for today’s sustainability debate. Keywords: Growth, Non-renewable resources, Substitution, Investment incentives, Endogenous technological change, Sustainability Classification-JEL: Q20, Q30, O41, O33 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.88 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-088.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.88 Title: New Roads to International Environmental Agreements: The Case of Global Warming Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: Department of Economics, University of Hagen, Germany Author-Name: Johan Eyckmans Author-X-Name-First: Johan Author-X-Name-Last: Eyckmans Author-WorkPlace-Name: K.U. Leuven, Centrum voor Economische Studiën, Leuven, Belgium Abstract: We analyze with an integrated assessment model of climate change the formation of interna-tional environmental agreements (IEAs) by applying the widely used concept of inter-nal & external stability and several modifications of it. We relax the assumptions of a single agreement and open membership rule. It turns out that regional agreements are superior to a single agreement and exclusive is superior to open membership in welfare and ecological terms. Moreover, we show the importance of transfers for successful treaty-making. We relate our results to the design of current and past IEAs as well as to other issues of international policy coordination. Keywords: Design of climate treaty protocol, Coalition formation, Non-cooperative game theory Classification-JEL: C68, C72, H41, Q25 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.89 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-089.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.89 Title: Economic Development and Environmental Protection Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Università di Milano and Fondazione Eni Enrico Mattei Abstract: There is a long-standing debate on the relationship between economic development and environmental quality. From a sustainable development viewpoint there has been a growing concern that the economic expansion of the world economy will cause irreparable damage to our planet. In the last few years several studies have appeared dealing with the relationship between the scale of economic activity and the level of pollution. In particular, if we concentrate on local pollutants several empirical studies have identified a bell shaped curve linking pollution to per capita GDP (in the case of global pollutants like CO2 the evidence is less clear-cut). This behaviour implies that, starting from low per capita income levels, per capita emissions or concentrations tend to increase but at a slower pace. After a certain level of income (which typically differs across pollutants) – the “turning point” – pollution starts to decline as income further increases. In analogy with the historic relationship between income distribution and income growth, the inverted-U relationship between per capita income and pollution has been termed “Environmental Kuznets Curve”. The purpose of this chapter is not to provide an overview the literature: there are several survey papers around doing precisely that. We instead reconsider the explanations that have been put forth for its inverted-U pattern. We look at the literature from this perspective. In addition, without resorting to any econometric estimation, we consider whether simple data analysis can help to shed some light on the motives that can rationalize the Environmental Kuznets Curve. Keywords: Climate Policy, Environmental Modeling, Integrated Assessment, Technical Change Classification-JEL: H0, H2, H3 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.90 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-090.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.90 Title: Environment and Economic Growth: Is Technical Change the Key to Decoupling? Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Università di Milano and Fondazione Eni Enrico Mattei Abstract: The relationship between economic growth and pollution is very complex, depending upon a host of different factors. Thus the study of this phenomenon represents a challenging endeavor. While most economics papers begin with theory and support that theory with econometric evidence, the literature on Environmental Kuznets Curves has proceeded in the opposite direction: first developing an empirical observation about the world, and then attempting to supply appropriate theories. A number of papers have aimed at providing the theoretical underpinnings to the Environmental Kuznets Curve. Prominent here is the class of optimal growth models. These are usually studied from the point of view of the analytical conditions that must hold in order to obtain an inverted-U functional relationship between pollution and growth. These models are however seldom confronted with the data. In this paper we take one popular optimal growth model designed for climate change policy analysis and carry out a few simulation exercises with the purpose of characterizing the relationship between economic growth and emissions. In particular, we try to assess the relative contribution of the ingredients of the well-known decomposition of the environment-growth relationship put forth by Grossman (1995): according to it, the presumed inverted-U pattern results from the joint effect of scale, composition, and technology components. We do this focusing on the developed regions of the world and on a global pollutant, CO2 emissions. Keywords: Climate Policy, Environmental Modeling, Integrated Assessment, Technical Change Classification-JEL: H0, H2, H3 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.91 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-091.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.91 Title: Climate Policy and Economic Growth in Developing Countries Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Università di Milano and Fondazione Eni Enrico Mattei Abstract: Although developing countries face a drastic increase in their greenhouse gas emissions, mitigation actions against climate change do not rank high among their priorities. The obvious reason lies in the necessity for them to continue the development process, which is characterised by pressing needs other than emission control. For developing countries the real problem is thus not emissions but economic growth. Therefore the key question is whether or not the Kyoto Protocol provides an opportunity for growth and thus for their economic development. The only way to accelerate the participation of developing countries in climate agreements - and therefore to come closer to the goal of a global climate control - is to design strategies which enable their economic development. The dilemma of reducing emissions on a global scale while ensuring growth in the poorer regions can only be solved if there are possibilities embedded in the agreements which can contribute to the sustainable development of those regions. As a consequence, greater emphasis must be placed on the economic development dimension of the Kyoto Protocol as far as the impact on developing countries is concerned. Keywords: Climate Policy, Environmental Modeling, Integrated Assessment, Technical Change Classification-JEL: H0, H2, H3 Creation-Date: 200309 Template-Type: ReDIF-Paper 1.0 Number: 2003.92 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-092.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.92 Title: The Influence of Climate Change Considerations on Energy Policy: The Case of Russia Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: FEEM and University of Bath Author-Name: Alexander Golub Author-X-Name-First: Alexander Author-X-Name-Last: Golub Author-WorkPlace-Name: Environmental Defense Author-Name: E. Strukova Author-X-Name-First: E. Author-X-Name-Last: Strukova Author-WorkPlace-Name: Environmental Defense Abstract: To those working on climate change it is obvious that energy policy should be influenced by climate change considerations. The question that this paper seeks to answer is, to what extent do they influence policy and what contribution can a careful analysis of the costs and benefits of climate change options have on the formulation of that policy. We seek to understand this by looking in some detail at energy policy formulation in Russia. To do so it is necessary to look at the whole set of issues that determine energy policy. These include energy security, macroeconomic and uncertainty factors, local environmental issues and social issues. The analysis has been carried out for a specific case – that of the RF, where energy policy is currently under formulation to 2010. Two options have been looked at: a “High Coal” option, where there would be a substantial change in fuel mix away from gas to coal; and a “High Gas” option where the current fuel mix is retained and the increase in demand is met from all sources in proportion to current use. The analysis shows that, at international prices for fuels, the “High Coal” option is attractive. However, when we include the potential decline of price for natural gas in the European market, the relative preference for this option drops dramatically but it still remains the preferred option. When, account is also taken of the carbon benefits of the High Gas option, using plausible values for carbon, the attraction of the High Coal option is further reduced but not altered. When finally account is taken of the health associated with the lower use of coal in the High Gas option, the preference can be reversed but it requires a critical value for the health benefits. This critical value – at around $3,000 for a life year lost -- is plausible for the RF, if anything the actual value is probably higher. What the analysis shows is the need for a careful evaluation of the different factors determining energy policy. Among these is climate change. It is not the critical factor but it can be an important one. Perhaps more important are the environmental benefits that go with the lower carbon High Gas options. Keywords: Climate policy, Russia, Ancillary benefits Classification-JEL: H41, Q28, Q32, D62, J60 Creation-Date: 200310 Template-Type: ReDIF-Paper 1.0 Number: 2003.93 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-093.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.93 Title: Socially Responsible Investment in General Equilibrium Author-Name: Andrea Beltratti Author-X-Name-First: Andrea Author-X-Name-Last: Beltratti Author-WorkPlace-Name: Bocconi University Abstract: Socially responsible investment in analyzed in a general equilibrium context. This is important in order to understand the ultimate consequences of SRI on the decisions of economic agents. Building on models by Brock (1982) and Merton (1987), SRI is modelled as the choice to voluntarily give up investment in stocks and bonds issues by a firm producing an externality. The model is used to analyze the utility costs of SRI to the responsible investor and the impact on the price of the stock issued by the firm which is responsible for the externality. The results shed light on the factors which may magnify or reduce the impact of SRI, among which are crucial the wealth commended in relative terms by the responsible agents and the diversification possibilities offered by the firms which are excluded from the investment opportunity set. A set of firms targeted by SRI may be seriously affected by SRI only if the responsible investors command a large portion of overall wealth; moreover the same firms are more likely to be hit by SRI behavior if they do not represent important diversification instruments. Firms with unique characteristics from the point of view of overall diversification are less likely to be the target of SRI. Keywords: General equilibrium, Redistributive effects, Public goods Classification-JEL: D50, H23, H41 Creation-Date: 200310 Template-Type: ReDIF-Paper 1.0 Number: 2003.94 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-094.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.94 Title: The ?-Core and Coalition Formation Author-Name: Parkash Chander Author-X-Name-First: Parkash Author-X-Name-Last: Chander Author-WorkPlace-Name: National University of Singapore Abstract: This paper reinterprets the ? -core (Chander and Tulkens (1995, 1997)) and justifies it as well as its prediction that the efficient coalition structure is stable in terms of the coalition formation theory. It is assumed that coalitions can freely merge or break apart, are farsighted (that is, it is the final and not the immediate payoffs that matter to the coalitions) and a coalition may deviate if and only if it stands to gain from it. It is then shown that subsequent to a deviation by a coalition, the nonmembers will have incentives to break apart into singletons, as is assumed in the definition of the ? - characteristic function, and that the grand coalition is the only stable coalition structure. Keywords: Core, Characteristic function, Strategic games, Coalition formation Classification-JEL: C71, C72, D62 Creation-Date: 200310 Template-Type: ReDIF-Paper 1.0 Number: 2003.95 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-095.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.95 Title: Modelling the Load Curve of Aggregate Electricity Consumption Using Principal Components Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: Department of Statistics, University of Milano-Bicocca and Fondazione Eni Enrico Mattei, Milano, Italy Author-Name: Angelo Marzullo Author-X-Name-First: Angelo Author-X-Name-Last: Marzullo Author-WorkPlace-Name: Enifin, Eni S.p.A., Milano, Italy Abstract: Since oil is a non-renewable resource with a high environmental impact, and its most common use is to produce combustibles for electricity, reliable methods for modelling electricity consumption can contribute to a more rational employment of this hydrocarbon fuel. In this paper we apply the Principal Components (PC) method to modelling the load curves of Italy, France and Greece on hourly data of aggregate electricity consumption. The empirical results obtained with the PC approach are compared with those produced by the Fourier and constrained smoothing spline estimators. The PC method represents a much simpler and attractive alternative to modelling electricity consumption since it is extremely easy to compute, it significantly reduces the number of variables to be considered, and generally increases the accuracy of electricity consumption forecasts. As an additional advantage, the PC method is able to accommodate relevant exogenous variables such as daily temperature and environmental factors, and it is extremely versatile in computing out-of-sample forecasts. Keywords: Electricity, Load curves, Principal components, Fourier estimator, Constrained smoothing estimator, Temperature, Non-renewable resources, Hydrocarbon fuels, Environment Classification-JEL: C51, C53, Q30, Q40 Creation-Date: 200310 Template-Type: ReDIF-Paper 1.0 Number: 2003.96 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-096.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.96 Title: Long-run Models of Oil Stock Prices Author-Name: Alessandro Lanza Author-X-Name-First: Alessandro Author-X-Name-Last: Lanza Author-WorkPlace-Name: Eni S.p.A., Roma, Fondazione Eni Enrico Mattei, Milano and CRENoS, Cagliari, Italy Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: Department of Statistics, University of Milano-Bicocca and Fondazione Eni Enrico Mattei, Milano, Italy Author-Name: Margherita Grasso Author-X-Name-First: Margherita Author-X-Name-Last: Grasso Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Milano, Italy Author-Name: Massimo Giovannini Author-X-Name-First: Massimo Author-X-Name-Last: Giovannini Author-WorkPlace-Name: Department of Economics, Boston College, USA and Fondazione Eni Enrico Mattei, Milano, Italy Abstract: The identification of the forces that drive oil stock prices is extremely important given the size of the Oil&Gas industry and its links with the energy sector and the environment. In the next decade oil companies will have to deal with international policies to contrast climate change. This issue is likely to affect companies’ shareholder values. In this paper we focus on the long-run financial determinants of the stock prices of six major oil companies (Bp, Chevron-Texaco, Eni, Exxon-Mobil, Royal Dutch Shell, Total-Fina-Elf) using multivariate cointegration techniques and vector error correction models. Weekly oil stock prices are analyzed together with the relevant stock market indexes, exchange rates, spot and future oil prices over the period January 1998- April 2003. The empirical results confirm the statistical significance of the major financial variables in explaining the long-run dynamics of oil companies’ stock values. Keywords: Cointegration, Vector error correction models, Oil companies, Oil stock prices, Hydrocarbon fuels, Energy, Non-renewable resources, Environment Classification-JEL: C32, L71, Q30, Q40 Creation-Date: 200310 Template-Type: ReDIF-Paper 1.0 Number: 2003.97 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-097.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.97 Title: Forming Stable Coalitions: The Process Matters Author-Name: Steven J. Brams Author-X-Name-First: Steven J. Author-X-Name-Last: Brams Author-WorkPlace-Name: Department of Politics, New York University, U.S.A. Author-Name: Michael A. Jones Author-X-Name-First: Michael A. Author-X-Name-Last: Jones Author-WorkPlace-Name: Department of Mathematical Sciences, Montclair State University, U.S.A. Author-Name: D.Marc Kilgour Author-X-Name-First: D.Marc Author-X-Name-Last: Kilgour Author-WorkPlace-Name: Department of Mathematics, Wilfrid Laurier University, Canada Abstract: Players are assumed to rank each other as coalition partners. Two processes of coalition formation are defined and illustrated: i) Fallback (FB): Players seek coalition partners by descending lower and lower in their preference rankings until some majority coalition, all of whose members consider each other mutually acceptable, forms. ii) Build-up (BU):Same descent as FB, except only majorities whose members rank each other highest form coalitions. BU coalitions are stable in the sense that no member would prefer to be in another coalition, whereas FB coalitions, whose members need not rank each other highest, may not be stable. BU coalitions are bimodally distributed in a random society, with peaks around simple majority and unanimity the distributions of majorities in the US Supreme Count and in the US House of Representatives follow this pattern. The dynamics of real-life coalition-formation processes are illustrated by two Supreme Court cases. Keywords: Coalition dynamics, Fallback bargaining, Manipulability, Legislatures, US Supreme Court Classification-JEL: D72, C78 Creation-Date: 200310 Template-Type: ReDIF-Paper 1.0 Number: 2003.98 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-098.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.98 Title: Anti-Racist Policies in France. From Ideological and Historical Schemes to Socio-Political Realities Author-Name: Marie-Cecile Naves Author-X-Name-First: Marie-Cecile Author-X-Name-Last: Naves Author-WorkPlace-Name: the Interdisciplinary Centre for Comparative Research in the Social Sciences (ICCR), Paris Author-Name: John Crowley Author-X-Name-First: John Author-X-Name-Last: Crowley Author-WorkPlace-Name: the Interdisciplinary Centre for Comparative Research in the Social Sciences (ICCR), Paris Abstract: In France, since the 1980s, imaginaries derived from decolonization have played a major role in the elaboration of anti-racist policies. Simultaneously, because of the universalistic conception of the French Republic, the use of ethnic categories has been taboo and systematically replaced, in political schemes, by socio-economic criteria. Multiculturalism, in the Anglo-Saxon meaning, has therefore not been a traditional political analysis framework. Nevertheless, since the 1990s, the French model of integration, which was based on the individual, has been more and more accused of giving way to inequalities and racism. For ten years, the rise of the concept of the «ethnicization» of cultural groups in public debate has thus inspired political demands that require concrete answers, notably against urban violence and education. Keywords: Anti-racist policies, French model of integration, Multiculturalism, Ethnicization, Urban violence, Education Classification-JEL: Z10 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.99 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-099.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.99 Title: Cultural Rights and Civic Virtue Author-Name: Richard Thompson Ford Author-X-Name-First: Richard Author-X-Name-Last: Thompson Ford Author-WorkPlace-Name: Stanford Law School,Stanford California, USA Abstract: This paper addresses the potential tension between two broadly stated policy objectives: the preservation of distinctive cultural traditions, often through the mechanism of formal legal rights, and the fostering of civic virtue, a sense of local community and the advancement of common civic enterprises. Many political liberals argued that liberal societies have an obligation to accommodate the cultural traditions of various sub groups through legal rights and a redistribution of social resources. The “right to cultural difference” is now widely (if not universally) understood to be a basic human right, on par with rights to religious liberty and racial equality. Other theorists writing in the liberal, civic republican, and urban sociology traditions expounded on the necessity of civic virtue, community and common enterprises initiated and executed at the local or municipal level of government or private association. These theorists argued that common projects, shared norms and social trust are indispensable elements of effective democratic government and are necessary to the altruism and public spiritedness that in turn secure social justice. These two policy goals therefore may at times be in conflict. This conflict is especially severe in larger culturally diverse cities, where social trust and civic virtue are most needed and often in shortest supply. Policies designed to counter cosmopolitan alienation and anomie by fostering civic virtue, social trust and common social norms will inevitably conflict with the cultural traditions and sub group identification of some minority groups. The paper argues that such conflicts are often best confronted on the field of political debate and policy analysis, not in the language of civil rights. Rights discourse, with its inherent absolutism, is ill suited to the type of subtle tradeoffs that these conflicts often entail. Keywords: Law, Rights, Multiculturalism Classification-JEL: Z10 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.100 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-100.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.100 Title: Cultural Diversity and Conflict in Multicultural Cities Author-Name: Alaknanda Patel Author-X-Name-First: Alaknanda Author-X-Name-Last: Patel Author-WorkPlace-Name: University of Barola, India Abstract: India has been known as the land of many cultures. Gujarat, an Indian state, has reflected this special aspect for over a millennium. In addition to the people of different religious faith like Hindu, Muslim, Jain, Christian and Zorastrian, various caste groups within the Hindus and migrant workers ensured a diversity of culture and lifestyle. This is especially true in the city of Baroda. This paper studies the dynamics of their coexistence. Gujarat, till about two years ago, was an economically vibrant state with Baroda as its pride. Employment opportunities attracted fresh migration to the city. Despite sporadic troubles among different religious groups there was at least a veneer of calm in Baroda. But early in 2002, violence of an unbelievabld dimension broke out between Hindus and Muslims. This was not a conflict arising out of migration of outsiders but among people of the same soil and similar background, between Hindus and Muslims. With this background the critical factor in spreading the violence was economic. Encroachments on each other’s economic turf were unavoidable which in turn became a new source of conflict. There never is a set formula about the relationship between cultural diversity and conflict. Diverse cultures merge into the mainstream partly to avoid conflicts as in the case of tribals whereas in the case of the two major protagonists, Hindus and Muslims, conflict leads to greater attention to difference. In periods of extreme tension in this relationship, economic hardships, spatial pressures, competition for limited resources can lead to conflicts of catastrophic proportions. Keywords: India, Migration, Cultural diversity, Coexistence dynamics, Conflict, Economic distress Classification-JEL: Z10 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.101 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-101.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.101 Title: The Struggle of Becoming Established in a Deprived Inner-City Neighbourhood Author-Name: David May Author-X-Name-First: David Author-X-Name-Last: May Author-WorkPlace-Name: Aalborg University, Aalborg Abstract: The theory of established-outsider figurations developed by Norbert Elias is a use-ful tool for examining deprived neighbourhoods. The case of this paper is Dort-mund Nordstadt in Germany, an old inner-city neighbourhood which from its early days has housed the newly arrived immigrants. Elias claims that the social cohesion of the established together with the stigmatisation of the outsiders lead to status and power differentials that exclude the outsiders. In Nordstadt, three lev-els of established-outsider relations overlap and affect each other. On the first, the societal level, the Germans stand opposite to the immigrants. On the second, the city level, Nordstadt is put into the outsider position. Furthermore, the spatial hierarchy is linked with the first level of established-outsider relations as Nord-stadt is a traditional immigrant neighbourhood. On the third, the neighbourhood level, the other established-outsider relations are in part reproduced and in part changed by recent developments. Keywords: Deprived neighbourhoods, Immigration, Integration, Established, Outsider, Elias Classification-JEL: Z10 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.102 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-102.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.102 Title: Municipal Reform on the Island of Montreal: Tensions Between Two Majority Groups in a Multicultural City Author-Name: Sébastien Arcand Author-X-Name-First: Sébastien Author-X-Name-Last: Arcand Author-WorkPlace-Name: Centre d’études ethniques, University of Montréal Author-Name: Danielle Juteau Author-X-Name-First: Danielle Author-X-Name-Last: Juteau Author-WorkPlace-Name: Centre d’études ethniques, University of Montréal Author-Name: Sirma Bilge Author-X-Name-First: Sirma Author-X-Name-Last: Bilge Author-WorkPlace-Name: Centre d’études ethniques, University of Montréal Author-Name: Francine Lemire Author-X-Name-First: Francine Author-X-Name-Last: Lemire Author-WorkPlace-Name: Centre d’études ethniques, University of Montréal Abstract: For several years now, many cities across the world have undergone, for administrative and political reasons, mergers that have considerably reduced the number of municipalities on a given territory. This tendency affects various urban contexts, as evidenced by recent mergers in Toronto, Ottawa and Halifax (Canada), Baltimore (United States), and in other countries such as Scotland, Australia and England. Quebec has not escaped this trend, and since January 1st 2002, six major urban areas were created. While mergers now constitute a familiar occurrence, the processes they entail differ considerably from site to site, questioning existing power structures, administrative procedures, and modes of belonging. In Quebec, the case of Montreal stands out, because of its strategic economic position, and also because of the historical and often conflictual relations between its diverse ethnic and linguistic collectivities. This paper examines how the merger of twenty-nine municipalities on the island of Montreal into a single city now composed of twenty-seven boroughs, modifies the relations between the two dominant majorities and, more specifically, the capacity of English Canadians to control their institutions and daily affairs. Does this transformation, which involves the disappearance of municipalities, some of which were governed by English Canadians and other Anglophones, follow the trend observed in Quebec since the sixties, involving a loss in the latter’s institutional completeness, organizational capacity, and spheres of autonomy? Keywords: Municipal Reform, Conflict, Tension, Multiculturalism Classification-JEL: Z10 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.103 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-103.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.103 Title: China and the Evolution of the Present Climate Regime Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, Fondazione Eni Enrico Mattei, CEPR, CESifo and CEPS Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: The recent events that followed the US decision not to comply with the Kyoto Protocol seem to drastically undermine the effectiveness of the Protocol in controlling GHG emissions. Therefore, it is important to explore whether there are economic factors and policy strategies that might help the US to modify its current policy and move back to the Kyoto-Bonn agreement. For example, can an increased participation of developing countries induce the US to effectively participate in the effort to reduce GHG emissions? Is a single emission trading market the appropriate policy framework to increase participation in the Kyoto-Bonn agreement? This paper addresses the above questions by analysing whether the participation of China in the cooperative effort to control GHG emissions can provide adequate incentives for the US to move back to the Kyoto process and eventually ratify the Kyoto Protocol. This paper analyses three different climate regimes in which China could be involved and assesses the participation incentives for the major world countries and regions in these three regimes. Keywords: Agreements, Climate, Incentives, Negotiations, Policy Classification-JEL: C72, H23, Q25, Q28 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.104 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-104.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.104 Title: Emissions Trading Regimes and Incentives to Participate in International Climate Agreements Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, Fondazione Eni Enrico Mattei, CEPR, CESifo and CEPS Abstract: This paper analyses whether different emissions trading regimes provide different incentives to participate in a cooperative climate agreement. Different incentive structures are discussed for those countries, namely the US, Russia and China, that are most important in the climate negotiation process. Our analysis confirms the conjecture that, by appropriately designing the emission trading regime, it is possible to enhance the incentives to participate in a climate agreement. Therefore, participation and optimal policy should be jointly analysed. Moreover, our results show that the US, Russia and China have different most preferred climate coalitions and therefore adopt conflicting negotiation strategies. Keywords: Agreements, Climate, Incentives, Negotiations, Policy Classification-JEL: C72, H23, Q25, Q28 Creation-Date: 200311 Template-Type: ReDIF-Paper 1.0 Number: 2003.105 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-105.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.105 Title: Ancillary Benefits of Climate Policy Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: FEEM, ECSSD, The World Bank Group, Washington D.C., USA Author-Name: Dirk T.G. Rübbelke Author-X-Name-First: Dirk T.G. Author-X-Name-Last: Rübbelke Author-WorkPlace-Name: Department of Economics, Chemnitz University of Technology Chemnitz, Germany Abstract: The benefits of climate policy normally consist exclusively of the reduced impacts of climate change, i.e., the policy’s primary aim. Our analysis of benefits of climate policy suggests, however, that researchers and policymakers should also take account of ancillary benefits, e.g., in the shape of improved air quality induced by climate protection measures. A consideration of both, primary and ancillary benefits, has a positive influence on global climate protection efforts, e.g., because the regional impact of ancillary effects attenuates easy-riding motives of countries with respect to their provision of climate protection. In this article, we analyze the nature of ancillary benefits, present an overview of European assessment studies and explain possible methods to estimate ancillary benefits. Main differences between primary and ancillary benefits are pointed out. Furthermore, we stress the major influences of ancillary benefits on climate policy. Finally, we present one of the first models integrating primary and ancillary benefits. By this model quantitative results are calculated with respect to ancillary benefits in the UK considering different green-house gas (GHG) control levels. It is observed that the ancillary benefits could cover about 4 percent of the full GHG reduction cost. Keywords: Climate Policy, Ancillary Benefits, Pollution Control Classification-JEL: H41, Q28 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.106 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-106.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.106 Title: Management Challenges for Multiple-Species Boreal Forests Author-Name: Anne Sophie Crépin Author-X-Name-First: Anne Sophie Author-X-Name-Last: Crépin Author-WorkPlace-Name: the Beijer Institute, the International Institute of Ecological Economics and University of Stockholm, Sweden Abstract: Recent research in natural sciences shows that boreal forests' dynamics are much more complex than what many models traditionally used in forestry economics reflect. This essay analyses some challenges of accounting for such complexity. When forest owners continuously harvest several species, more than one harvesting strategy can be optimal. Which one it is depends on the forest's initial state. For some initial states, two different strategies may yield the same welfare. If whole stand harvesting of one tree species is preferred, the optimal period between each harvesting occasions depends on other species' dynamics. Keywords: Multiple Steady States, Forestry, Non-Convexities, Moose Classification-JEL: Q23, Q26, Q29 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.107 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-107.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.107 Title: Threshold Effects in Coral Reef Fisheries Author-Name: Anne Sophie Crépin Author-X-Name-First: Anne Sophie Author-X-Name-Last: Crépin Author-WorkPlace-Name: the Beijer Institute, the International Institute of Ecological Economics and University of Stockholm, Sweden Abstract: Coral reefs may naturally flip between coral-dominated and algae-dominated states, when species' stocks trespass some threshold levels. This essay uses a stylized model of a coral reef to show how fishing may induce flips towards more algae-dominated states. Threshold effects have consequences for fisheries management, which are analyzed for open access fisheries and sole ownership. Keywords: Multiple Steady States, Fisheries, Threshold Effects, Coral Reefs, Skiba Points Classification-JEL: Q22, Q29 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.108 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-108.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.108 Title: Estimating the Value of Oil Capital in a Small Open Economy: the Venezuela’s Example Author-Name: Sara Aniyar Author-X-Name-First: Sara Author-X-Name-Last: Aniyar Author-WorkPlace-Name: University of Zulia, Venezuela and the Beijer International Institute of Ecological Economics, Sweden Abstract: The paper focuses in the calculation of the oil capital value in a small open economy depending on oil rents. The Venezuelan case is used as an example. In valuing the oil capital, two issues are recalled and discussed: how should the exploration costs and the capital gains be treated? It is shown that the estimations vary significantly depending on which set of assumptions are made about the way to account for them and the assumptions made about how the economy functions. It is argued that during the studied period the value of the Venezuelan stock of oil capital has increased, and it has done so faster than the population. Keywords: Venezuela, Oil Capital, Capital Gains, Exploration Costs, Property Rights Classification-JEL: D23 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.109 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-109.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.109 Title: Evaluating Projects and Assessing Sustainable Development in Imperfect Economies Author-Name: Kenneth Arrow Author-X-Name-First: Kenneth Author-X-Name-Last: Arrow Author-WorkPlace-Name: Research Initiative on the Environment, the Economy, and Sustainable Welfare, Stanford University, Stanford Author-Name: Partha Dasgupta Author-X-Name-First: Partha Author-X-Name-Last: Dasgupta Author-WorkPlace-Name: Faculty of Economics of Cambridge and St. John’s College, Cambridge Author-Name: Karl-Göran Mäler Author-X-Name-First: Karl-Göran Author-X-Name-Last: Mäler Author-WorkPlace-Name: Beijer International Institute of Ecological Economics, Stockholm Abstract: We are interested in three related questions: (1) How should accounting prices be estimated? (2) How should we evaluate policy change in an imperfect economy? (3) How can we check whether intergenerational well-being will be sustained along a projected economic programme? We do not presume that the economy is convex, nor do we assume that the government optimizes on behalf of its citizens. We show that the same set of accounting prices should be used both for policy evaluation and for assessing whether or not intergenerational welfare along a given economic path will be sustained. We also show that a comprehensive measure of wealth, computed in terms of the accounting prices, can be used as an index for problems (2) and (3) above. The remainder of the paper is concerned with rules for estimating the accounting prices of several specific environmental natural resources, transacted in a few well known economic institutions. Keywords: Sustainable development, Imperfect economies Classification-JEL: D6, D9, E2, O2, O4, Q2, Q3 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.110 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-110.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.110 Title: Instabilities and Robust Control in Fisheries Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: University of Crete, Department of Economics Author-Name: Catarina Roseta-Palma Author-X-Name-First: Catarina Author-X-Name-Last: Roseta-Palma Author-WorkPlace-Name: Dep. Economia and Dinâmia - ISCTE, Lisboa Abstract: Demand and supply analysis in fisheries often indicates the presence of instabilities and multiple equilibria, both in open access conditions and in the socially optimal solution. The associated management problems are further intensified by uncertainty on the evolution of the resource stock or on demand conditions. In this paper the fishery management problem is handled using robust optimal control, where the objective is to choose a harvesting rule that will work, in the sense of preventing instabilities and overfishing, under a range of admissible specifications for the stock recruitment equation. The paper derives robust harvesting rules, leading to a unique equilibrium, which could be used to design policy instruments such as robust quota systems. Keywords: Fishery Management, Multiple Equilibria, Instabilities, Robust Control, Robust Harvesting Rules Classification-JEL: Q22, D81 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.111 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-111.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.111 Title: Conservation and Optimal Use of Rangelands Author-Name: Charles Perrings Author-X-Name-First: Charles Author-X-Name-Last: Perrings Author-WorkPlace-Name: Environment Department, University of York Author-Name: Brian Walker Author-X-Name-First: Brian Author-X-Name-Last: Walker Author-WorkPlace-Name: Division of Wildlife and Ecology, CSIRO Abstract: In previous papers we have considered the optimal mix of biodiversity in semi-arid rangelands, focusing on the steady state. This paper addresses the question of conservation in the optimal use of rangelands. That is, it considers the optimal trajectory of biodiversity change. There are two issues involved in the question of timing. One is the uncertainty associated with the fact that many changes in the flora and fauna of rangelands are 'event-driven'. They depend on stochastic parameters taking particular values before a change of state can occur. A second issue relates to the lag structure of changes. In a system that involves a mix of fast and slow variables, in which the approach to the optimum is not 'most rapid', the optimal trajectory may require the system to remain in an apparently stable intermediate equilibrium for some time before it converges to the optimum state. The paper discusses the role of conservation in the optimal use of rangeland resources. Keywords: Biodiversity, Rangelands Classification-JEL: Q24 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.112 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-112.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.112 Title: Globalisation, Population and Ecology Author-Name: Jack Goody Author-X-Name-First: Jack Author-X-Name-Last: Goody Author-WorkPlace-Name: Cambridge University, UK Abstract: This paper deals with some variables that are not generally included as economic or market variables in order to show how these affect the question of population growth, which is after all the core of resource allocation. It shows that population growth may also depend on better medical treatments, higher productivity, less local violence and the decline of customary restraints (i.e. social and family pressures), and not only on the evaluation of the benefits and losses of having more children in relation to limited property resources. On the other hand, as far as demographic transition is concerned, there is one essential factor that affects family size throughout the world. This is education. School has decreased mortality by the emphasis on personal and household hygiene. It has then decreased fertility by the increased costs of bringing up children in a school situation, i.e. demographic transition is set in progress without urbanization, industrialization and scarcely without modernization, except for the school itself. Education, as we know it, preceded industrialization and intrusive urbanization in Europe too. It was not until very late (1870) that attempts at introducing compulsory education were made, and it was mass schooling that made a marked difference. Widespread education may also accomplish the control on fertility, i.e. later marriage. Education promotes consumerism and when there is a large gap between achievement in the economic and educational domains, major difficulties arise. Despite earlier hopes the economy has not expanded pari passu with education. There is a gap between the literates and the number of jobs. This discrepancy has produced a floating population of the young who are a threat to political stability. The other outlet is migration overseas. For good or for bad the globalisation of education releases a potent force in the globalisation of the family. Keywords: Globalisation, Population, Ecology Classification-JEL: D1, J1 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.113 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-113.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.113 Title: Endogenous Minimum Participation in International Environmental Treaties Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, CEPR, CEPS, CESifo and Fondazione Eni Enrico Mattei Author-Name: Carmen Marchiori Author-X-Name-First: Carmen Author-X-Name-Last: Marchiori Author-WorkPlace-Name: University College London and Fondazione Eni Enrico Mattei Author-Name: Sonia Oreffice Author-X-Name-First: Sonia Author-X-Name-Last: Oreffice Author-WorkPlace-Name: University of Chicago and Fondazione Eni Enrico Mattei Abstract: Many international treaties come into force only after a minimum number of countries have signed and ratified the treaty. Why do countries agree to introduce a minimum participation constraint among the rules characterising an international treaty? This question is particularly relevant in the case of environmental treaties dealing with global commons, where free-riding incentives are strong. Is a minimum participation rule a way to offset these free-riding incentives? Why do countries that know they have an incentive to free-ride accept to “tie their hands” through the introduction of a minimum participation constraint? This paper addresses the above questions by analysing a three-stage non-cooperative coalition formation game. In the first stage, countries set the minimum coalition size that is necessary for the treaty to come into force. In the second stage, countries decide whether to sign the treaty. In the third stage, the equilibrium values of the decision variables are set. At the equilibrium, both the minimum participation constraint and the number of signatories – the coalition size – are determined. This paper shows that a non-trivial partial coalition, sustained by a binding minimum participation constraint, forms at the equilibrium. This paper thus explains why in international negotiations all countries often agree on a minimum participation rule even when some of them do not intend to sign the treaty. The paper also analyses the optimal size of the minimum participation constraint. Keywords: Agreements, Climate, Negotiations, Policy, Incentives Classification-JEL: H0, H4 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.114 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-114.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.114 Title: Decentralised Job Matching Author-Name: Guillaume Haeringer Author-X-Name-First: Guillaume Author-X-Name-Last: Haeringer Author-WorkPlace-Name: Departament d’Economia i d’Història Econòmica, Universitat Autònoma de Barcelona Author-Name: Myrna Wooders Author-X-Name-First: Myrna Author-X-Name-Last: Wooders Author-WorkPlace-Name: Department of Economics, Warwick University Abstract: This paper studies a decentralised job market model where firms (academic departments) propose sequentially a (unique) position to some workers (Ph.D. candidates). Successful candidates then decide whether to accept the offers, and departments whose positions remain unfilled propose to other candidates. We distinguish between several cases, depending on whether agents’ actions are simultaneous and/or irreversible (if a worker accepts an offer he is immediately matched, and both the worker and the firm to which she is matched go out of the market). For all these cases, we provide a complete characterization of the Nash equilibrium outcomes and the Subgame Perfect equilibria. While the set of Nash equilibria outcomes contain all individually rational matchings, it turns out that in most cases considered all subgame perfect equilibria yield a unique outcome, the worker-optimal matching. Keywords: Two-sided matching, Job market, Subgame perfect equilibrium, irreversibilities Classification-JEL: C78, C62, J41 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.115 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-115.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.115 Title: Credible Group Stability in Multi-Partner Matching Problems Author-Name: Hideo Konishi Author-X-Name-First: Hideo Author-X-Name-Last: Konishi Author-WorkPlace-Name: Department of Economics, Boston College Author-Name: M. Utku Ünver Author-X-Name-First: M. Utku Author-X-Name-Last: Ünver Author-WorkPlace-Name: Department of Economics, Koç University Abstract: It is known that in two-sided many-to-many matching markets, pair-wise stability is not logically related with the (weak) core, unlike in many-to-one matching markets (Blair, 1988). In this paper, we seek a theoretical foundation for pairwise stability when group deviations are allowed. Group deviations are defined in graphs on the set of agents. We introduce executable group deviations in order to discuss the credibility of group deviations and to defined credibly group stable matchings. We show, under responsive preferences, that credible group stability is equivalent to pairwise stability in the multi-partner matching problem that includes two-sided matching problems as special cases. Under the same preference restriction, we also show the equivalence between the set of pairwise stable matchings and the set of matchings generated by coalition-proof Nash equilibria of an appropriately defined strategic form game. However, under a weaker preference restriction, substitutability, these equivalences no longer hold, since pairwise stable matchings may be strictly Pareto-ordered, unlike under responsiveness. Keywords: Multi-partner matching problem, Pairwise stable matching network, Credible group deviation Classification-JEL: C71, C72, C78, J41 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.116 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-116.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.116 Title: Stable Matchings for the Room-mates Problem Author-Name: Somdeb Lahiri Author-X-Name-First: Somdeb Author-X-Name-Last: Lahiri Author-WorkPlace-Name: School of Economic and Business Sciences, University of Witwatersrand at Johannesburg Abstract: We show that, given two matchings for a room-mates problem of which say the second is stable, and given a non-empty subset of agents S if (a) no agent in S prefers the first matching to the second, and (b) no agent in S and his room-mate in S under the second matching prefer each other to their respective room-mates in the first matching, then no room-mate of an agent in S prefers the second matching to the first. This result is a strengthening of a result originally due to Knuth (1976). In a paper by Sasaki and Toda (1992) it is shown that if a marriage problem has more than one stable matchings, then given any one stable matching, it is possible to add agents and thereby obtain exactly one stable matching, whose restriction over the original set of agents, coincides with the given stable matching. We are able to extend this result here to the domain of room-mates problems. We also extend a result due to Roth and Sotomayor (1990) originally established for two-sided matching problems in the following manner: If in a room-mates problem, the number of agents increases, then given any stable matching for the old problem and any stable matching for the new one, there is at least one agent who is acceptable to this new agent who prefers the new matching to the old one and his room-mate under the new matching prefers the old matching to the new one. Sasaki and Toda (1992) shows that the solution correspondence which selects the set of all stable matchings, satisfies Pareto Optimality, Anonymity, Consistency and Converse Consistency on the domain of marriage problems. We show here that if a solution correspondence satisfying Consistency and Converse Consistency agrees with the solution correspondence comprising stable matchings for all room-mates problems involving four or fewer agents, then it must agree with the solution correspondence comprising stable matchings for all room-mates problems. Keywords: Stable matchings, Room-mate problem Classification-JEL: C71, C78 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.117 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-117.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.117 Title: Stable Matchings for a Generalised Marriage Problem Author-Name: Somdeb Lahiri Author-X-Name-First: Somdeb Author-X-Name-Last: Lahiri Author-WorkPlace-Name: School of Economic and Business Sciences, University of Witwatersrand at Johannesburg Abstract: We show that a simple generalisation of the Deferred Acceptance Procedure with men proposing due to Gale and Shapley (1962) yields outcomes for a generalised marriage problem, which are necessarily stable. We also show that any outcome of this procedure is Weakly Pareto Optimal for Men, i.e. there is no other outcome which all men prefer to an outcome of this procedure. In a final concluding section of this paper, we consider the problem of choosing a set of multi-party contracts, where each coalition of agents has a non-empty finite set of feasible contracts to choose from. We call such problems, generalised contract choice problems. The model we propose is a generalisation of the model due to Shapley and Scarf (1974) called the housing market. We are able to show with the help of a three agent example, that there exists a generalised contract choice problem, which does not admit any stable outcome. Keywords: Stable outcomes, Matchings, pay-offs, Generalised marriage problem, Contract choice problem Classification-JEL: C71, C78 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.118 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-118.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.118 Title: Transboundary Fisheries Management under Implementation Uncertainty Author-Name: Marita Laukkanen Author-X-Name-First: Marita Author-X-Name-Last: Laukkanen Author-WorkPlace-Name: MTT Economic Research Abstract: This paper examines how non-binding co-operative agreements on marine fisheries management can be sustained when management plans in participating countries are implemented with error. The effects of implementation uncertainty on voluntary co-operation are compared to those of recruitment uncertainty. A self-enforcing co-operative solution can only be sustained when uncertainty is not too pronounced. Even when a co-operative agreement can be achieved, frequent phases of reversion to non-co-operative harvest levels are needed to support the agreement. The implications of recruitment uncertainty for implicit co-operation are less detrimental than those of implementation uncertainty. Keywords: Fisheries management, Transboundary fisheries, Non-cooperative games, Implementation uncertainty Classification-JEL: Q22, C72 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.119 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-119.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.119 Title: Social Conformity and Bounded Rationality in Arbitrary Games with Incomplete Information: Some First Results Author-Name: Edward Cartwright Author-X-Name-First: Edward Author-X-Name-Last: Cartwright Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Author-Name: Myrna Wooders Author-X-Name-First: Myrna Author-X-Name-Last: Wooders Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Abstract: In has been frequently observed, in both economics and psychology, that individuals tend to conform to the choices of other individuals with whom thy identify. Can such conformity be consistent with self-interested behaviour? To address this question we use the framework of games with incomplete information. For a given game we first put a lower bound on e so that there exists a Nash e-equilibrium in pure strategies consistent with conformity. We also introduce a new concept of conformity that allows players to conform and yet perform different actions. This is achieved by the endogenous assignment of roles to players and by allowing actions to be conditional on roles. We conclude by relating our research to some experimental literature. Keywords: Social Conformity, Bounded Rationality, Arbitrary Games Classification-JEL: C70 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.120 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-120.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.120 Title: Dynamic Price Competition with Price Adjustment Costs and Product Differentiation Author-Name: Gianluigi Vernasca Author-X-Name-First: Gianluigi Author-X-Name-Last: Vernasca Author-WorkPlace-Name: Department of Economics, University of Warwick Abstract: We study a discrete time dynamic game of price competition with spatially differentiated products and price adjustment costs. We characterise the Markov perfect and the open-loop equilibrium of our game. We find that in the steady state Markov perfect equilibrium, given the presence of adjustment costs, equilibrium prices are always higher than prices at the repeated static Nash solution, even though, adjustment costs are not paid in steady state. This is due to intertemporal strategic complementarity in the strategies of the firms and from the fact that the cost of adjusting prices adds credibility to high price equilibrium strategies. On the other hand, the stationary open-loop equilibrium coincides always with the static solution. Furthermore, in contrast to continuous time games, we show that the stationary Markov perfect equilibrium converges to the static Nash equilibrium when adjustment costs tend to zero. Moreover, we obtain the same convergence result when adjustment costs tend to infinity. Keywords: Price adjustment costs, Difference game, Markov perfect equilibrium, Open-loop equilibrium Classification-JEL: C72, C73, L13 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.121 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-121.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.121 Title: Social Conformity in Games with Many Players Author-Name: Myrna Wooders Author-X-Name-First: Myrna Author-X-Name-Last: Wooders Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Author-Name: Edward Cartwright Author-X-Name-First: Edward Author-X-Name-Last: Cartwright Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Author-Name: Reinhard Selten Author-X-Name-First: Reinhard Author-X-Name-Last: Selten Author-WorkPlace-Name: Department of Economics, University of Bonn, Germany Abstract: In the literature of psychology and economics it is frequently observed that individuals tend to imitate similar individuals. A fundamental question is whether the outcome of such imitation can be consistent with self-interested behaviour. We propose that this consistency requires the existence of a Nash equilibrium that induces a partition of the player set into relatively few groups of similar individuals playing the same or similar strategies. In this paper we define and characterise a family of games admitting existence of approximated Nash equilibria in pure strategies that induce partition of the player sets with the desired properties. We also introduce the Conley-Wooders concept of 'crowding types' into our description players and distinguish between the crowding type of a player - those characteristics of a player that have direct effects on others - and his tastes, taken to directly affect only that player. With this assumption of 'within crowding type anonymity' and a 'convexity of taste-types' assumption we show that the number of groups can be uniformly bounded. Keywords: Social Conformity, Nash Equilibrium Classification-JEL: C70 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.122 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-122.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.122 Title: On Equilibrium in Pure Strategies in Games with Many Players Author-Name: Edward Cartwright Author-X-Name-First: Edward Author-X-Name-Last: Cartwright Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Author-Name: Myrna Wooders Author-X-Name-First: Myrna Author-X-Name-Last: Wooders Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Abstract: Motivated by issues of imitation, learning and evolution, we introduce a framework of non-co-operative games, allowing both countable sets of pure actions and player types and player types and demonstrate that for all games with sufficiently many players, every mixed strategy Nash equilibrium can be used to construct a Nash e-equilibrium in pure strategies that is 'e-equivalent'. Our framework introduces and exploits a distinction between crowding attributes of players (their external effects on others) and their taste attributes (their payoff functions and any other attributes that are not directly relevant to other players). The set of crowding attributes is assumed to be compact; this is not required, however, for taste attributes. We stress that for studying issues such as conformity, the case of a finite set of types and actions, while illuminating, cannot yield completely satisfactory results. Our main theorems are based on a new mathematical result, in the spirit of the Shapley-Folkman Theorem but applicable to a countable (not necessarily finite dimensional) strategy space. Keywords: Equilibrium, Pure Strategies, Non-cooperative Games Classification-JEL: C72 Creation-Date: 200312 Template-Type: ReDIF-Paper 1.0 Number: 2003.123 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2003-123.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2003.123 Title: Conformity and Bounded Rationality in Games with Many Players Author-Name: Edward Cartwright Author-X-Name-First: Edward Author-X-Name-Last: Cartwright Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Author-Name: Myrna Wooders Author-X-Name-First: Myrna Author-X-Name-Last: Wooders Author-WorkPlace-Name: Department of Economics, University of Warwick, UK Abstract: Interpret a set of players all playing the same pure strategy and all with similar attributes as a society. Is it consistent with self interested behaviour for a population to organise itself into a relatively small number of societies? In a companion paper we characterised how large e must be, in terms of parameters describing individual games, for an equilibrium to exhibit conformity in pure strategies. In this paper we provide a wide class of games where such conformity is boundedly rational, that is, where can be chosen to be small. Keywords: Conformity, Bounded Rationality Classification-JEL: C70 Creation-Date: 200312