1,721,105 research outputs found
Auction Experiments and Simulations of Milk Quota Exchanges
No full textSince 2000 Germany has introduced a fairly unique market mechanism to trade milk quotas between dairy farms. The two major features are: (1) a quasi auctioning system that produces excess demands which are covered by state reserves free of charge and (2) a price band that is used to exclude highest bids. For both features an experimental design is developed to study the impact in reference to a regular seller’s sealed bid double auction. Results show that both treatments lead to significant misallocations. These are due to the direct impact of regulations and due to an imperfect adjustment of bidding functions. The major goal of the market design to reduce quota prices is reached, however, at significant trade losses
Auction Experiments and Simulations of Milk Quota Exchanges
No full textSince 2000 Germany has introduced a fairly unique market mechanism to trade milk quotas between dairy farms. The two major features are: (1) a quasi auctioning system that produces excess demands which are covered by state reserves free of charge and (2) a price band that is used to exclude highest bids. For both features an experimental design is developed to study the impact in reference to a regular seller’s sealed bid double auction. Results show that both treatments lead to significant misallocations. These are due to the direct impact of regulations and due to an imperfect adjustment of bidding functions. The major goal of the market design to reduce quota prices is reached, however, at significant trade losses
Fishing industry borrows from natural capital at high shadow interest rates
No full textFish stocks can be considered as natural capital stocks providing harvestable fish. Fishing at low stock sizes means borrowing from the natural asset. While fishing a particular quantity generates immediate profits and income, an interest rate has to be paid in terms of foregone future fishing income, as the fish stock's reproductive capacity remains low and fishing costs stay high. In this paper we propose to apply the concept of shadowinterest rate to quantify the degree of overfishing. It incorporates the relevant biological and economic information and compares across fish stocks.We calculate the shadow interest rates for 13major European fish stocks and find these rates to range from10% tomore than 200%. The concept of the shadow interest rate can be
used to make the economic consequences of overfishing transparent and to evaluate the profitability of shortterm catch reductions as investments in natural capital stocks
Preissetzung und Interconnektionsvertraege in Netwerkmaerkten
Full text linkEver since the beginning of the nineties, interconnection pricing emerged as a high priority regulatory policy question. As more and more state-owned monopolies were privatized, their essential facility (or simply their network) had to be opened to competition. The most viable practice was call-by-call services in telecommunications markets. Entrants were allowed to buy capacity of the incumbent’s network in order to provide service to customers. Because the incumbent always has an incentive to foreclose the market, these agreements between incumbent and entrant were and still are in the focus of regulatory authorities all over the world.
Although this so-called one-way interconnection model is still valid, competition between fully fledged networks has become of growing importance. Today cable providers are also capable of offering telecommunication services. However they dispose of a mature network and can bypass the former incumbent’s essential facility. Early models of network competition, such as Laffont, Rey, and Tirole (1998a) and Armstrong (1998) highlight the collusive role of interconnection charges in these settings. Hence the regulator is called for. The present thesis looks at instruments that can be used to regulate interconnection markets. It is comprised of three papers on access pricing in one-way as well as in twoway interconnection models. Chapter 2 looks at instruments that can be employed by the regulator, chapters 3 and 4 introduce fully decentralized mechanisms, where the role of the regulator is reduced to a minimum. Chapter 2 introduces a one-way interconnection model with a vertically integrated incumbent and an entrant who uses the incumbent network. Firms produce differentiated services and compete for customers. Traditional literature on interconnection pricing uses primarily per-unit access charges, hence the interconnection payment depends on he overall amount of traffic exchanged. In this paper we present a different approach to pricing interconnection. Because products are differentiated, the demand for end service is directly dependent on both firms’ retail prices. We generalize the access payment function and make it solely dependent on market prices. I show that a per-unit access price is a special case of a contract on both firms’ retail prices. Because such a function uses at east two instruments, we are able to reproduce specific access charge rules. Furthermore, due to the increased number of instruments, the set of possible outcomes is increased compared to a per-unit access charge. By comparing different benchmark cases and computing their respective parameters, we show that they can be used as a preliminary measure of goodness of the access mechanism. Additionally, we show that bill & keep, that is providing access free of charge, yields lower retail prices than regulating a per-unit access charge at cost. Chapter 3 uses the findings of chapter 2 and introduces as particular mechanism based on firms’ retail prices. We use the exact same model of industry structure, i.e. a vertically integrated incumbent and an entrant, that uses network capacity as an essential input. Product market competition is imperfect, i.e. products are differentiated. The access pricing mechanism is fully decentralized, i.e. other than setting up the rules of the game, the regulator does not intervene in the market at all. This is a particular strength of our mechanism, since traditional access pricing rules always require the regulator to dispose of almost full market information1. The access payment mechanism is modeled as a game between the incumbent and the entrant. Each firm determines a parameter in a linear payment function on firms’ downstream retail prices. We show that this results in lower prices and higher welfare than the regulated per-unit access charge approach. Furthermore we present conditions for which the equilibrium in the model coincides with the optimal Ramsey outcome. Chapter 4 draws on the literature pioneered by Laffont, Rey, and Tirole (1998a), Laffont, Rey, and Tirole (1998b) and Armstrong (1998). It uses a two-way interconnection model, with network-based price discrimination, i.e. firms charge different prices for their own and the competitor’s network. The paper of Gans and King (2001) shows, that when firms are able to charge two-part tariffs, a per-unit access charge is used as a collusive device. The optimal equilibrium access charge is below marginal cost, hence customers save on off-net calls. However this is more than offset by an increase in the flat payment and overall welfare is reduced as compared to a regime with access priced at marginal cost Using a consumer’s net-utility function we derive a new retail price mechanism. Instead of competing in flat fees, firms offer net-utility levels. In that case, the monthly payment is derived from the equilibrium net-utility level and the gross utility of making calls to both networks. The paper shows that using such a mechanism eliminates the collusive power of access charge is vanished and overall welfare is increased. Since net-utility is a function of the flat payment, the result is reminiscent of the literature on Bertrand and Cournot Competition with substitutes. We employ a graphical argument used in Cheng (1985) to show that competition in net-utility levels is a dominated strategy. The same is true for price competition when prices are complements
Investigations on the voluntary provision of local and global public goods
Full text linkThis doctoral thesis is based on six chapters and five related but distinct research articles and contributes to the exceedingly growing literature in behavioral environmental economics. Primarily, this thesis aims at designing and testing institutional mechanisms that successfully address social dilemmas at the core of a variety of environmental challenges arising on different scales at the global and local level. After an introductory chapter, Chapter 2 and Chapter 3 address aspects of international climate negotiations to testbed institutions that aim to foster cooperation among sovereign and heterogeneous agents at the global level. Chapter 2 investigates whether groups are able to reach an agreement on how to share the costs of providing a public good. By capturing pre-existing public good provision levels, Chapter 3 gives agents the opportunity to increase contributions to the public good beyond a status-quo, maintain the current level, or even undo pre-existing efforts. Chapter 4 forms the bridge to more localized public good problems. It takes into account that local and global public goods are not necessarily mutually exclusive and investigates whether agents' narrow concerns for local outcomes can harm efficiency at the global level. Chapter 4 and Chapter 5 focus on more localized public good problems by taking into account that local public good problems have authorities with permissions to intervene and regulate de jure, but de facto costly monitoring and sanctioning can preclude the emergence of regulations. Chapter 4 tests the effects of non-enforced extraction limits on extraction behavior in a common-pool resource game. Chapter 5 tests if, how, and why the effect of a contribution rule in a public goods game depends on how the rule has been implemented: whether it was democratically chosen or externally imposed
Über die Anreize umweltpolitischer Instrumente insaubere Technologien zu investieren bei Unsicherheit über denVerfügbarkeitszeitpunkt zukünftiger Technologien
Full text linkDie Arbeit beschäftigt sich mit der Investition in neue, emissionsärmere Technologien, bei dem der Entscheider eine große, langfristige Investition tätigt und den dafür optimalen Zeitpunkt wählt. Dabei wird sowohl der gesamtwirtschaftliche Kontext, also die effiziente Allokation der neuen Technologien, als auch die einzelwirtschaftliche Entscheidung analysiert. Die Bewertung des Projekt hängt dabei zum einen von dem erwarteten Verfügbarkeitszeitpunkt der zukünftigen Technologien, zum anderen aber von der Art und der Stringenz der Regulierung der Emissionen ab.
Es ist unmittelbar klar, dass eine statische Regulierung wie eine langfristig konstante Steuer einen anderen Einfluss auf die optimale Investionsstrategie hat als eine dynamische, wie zum Beispiel eine durch Ausgabe von Zertifikaten. Im ersten Fall würden alle Akteure gleich entscheiden, im zweiten Fall erscheint es intuitiv, dass im Gleichgewicht unterscheidliche Unternehmen unterschiedelich Technologien adoptieren.
Daher ist es klar, dass die Berücksichtigung zukünftiger Verbesserungen der Technologie und der Option, auf diese zu warten, auch eine Auswirkung auf die optimale Umweltpolitik hat. Umgekehrt hat, wie illustriert, die Setzung und Art des Instruments einen Einfluss auf die Bewertung des Investitionsprojekts.
Aber auch die Art des Einflusses auf das Investitionsverhalten ist ex ante nicht klar : Betrachten wir noch einmal eine langfristig konstante Steuer. Deren Erhöhung führt auf der einen Seite ceteris paribus zu höheren Kosten vor dem Zeitpunkt der Investition, auf der anderen Seite aber ceteris paribus auch zu höheren Kosten nach der Investition. Der
erste Effekt induziert einen Anreiz, früher zu investieren, der zweite Effekt hingegen induziert, auf eine bessere Technologie zu warten und später zu investieren. Es stellt sich also die Frage, welcher der beiden Effekte dominiert.
Wenn wir nur zwei neue Technologien unterstellen, vereinfacht
sich die Frage darauf, ob die Firmen in die erste neue
Technologie investieren oder auf die Zweite warten. Sind die
Anreize dynamisch, das heißt, der Preis für Emissionen sinkt, wenn mehr Firmen bereits investiert haben, wie es zum Beispiel bei Zertifikaten der Fall ist, so verändert sich auch der
Optionswert der Entscheidung. Daher stellt sich sowohl die Frage, ob im Gleichgewicht wirklich verschiedene Firmen verschiedene Technologien adoptieren werden, als auch die Frage, ob dies gesamtwirtschaftlich effizient sein kann. Aus Sicht des Staats ist es zudem von Interesse, ob sich die effiziente Allokation wie im Fall einer neuen Technologie, dies wurde 2003 von Requate und Unold gezeigt, durch Anpassung der Instrumente erreichen lässt.
Diese Fragestellungen werden ausführlich analysiert und, soweit dies möglich ist, theoretisch beantwortet
Parallel Trade of Pharmaceuticals. Conflicts in Health Policy Objectives and Regulatory Externalities in the EU Internal Market
Full text linkHealth policy in the EU is characterized by two underlying conflicts: First, government interventions or pharmaceutical parallel trade, i.e. trade outside the manufacturer's authorized distribution channel, may induce a conflict between different health policy objectives such as expenditure reduction and distributive objectives. Second, health policy is in the competence of member states, but the EU internal market may generate externalities of national decisions.
This thesis addresses these conflicts of pharmaceutical regulation within the EU.
Initially, I compare a maximum price system (price cap regulation) and a reference price system (reimbursement limit) with respect to their performance in different health policy objectives. The reference price system reduces public pharmaceutical expenditure to a larger extent, but results in higher financial exposure of patients and lower access to pharmaceuticals.
The subsequent chapters investigate the link between pharmaceutical parallel trade and pharmaceutical regulation.
Chapter 4 illustrates that national decisions on health policy, in particular, changes in coinsurance rates, result in externalities under parallel trade. Parallel trade generates a price-decreasing competition effect in the destination country and a price-increasing double marginalization effect in the source country. An increase of the coinsurance rates in the destination country mitigates the double marginalization effect in the source country. An increase of the coinsurance rate in the source country reinforces the competition effect in the destination country.
A subsequent chapter compares a coinsurance scheme (consumers pay a percentage of the drug price out-of-pocket) and an indemnity insurance scheme (reimbursement is independent of the drug price) with respect to the consequences of parallel trade on health care systems, especially on changes of co-payments and changes of public pharmaceutical expenditure. In the destination country, co-payments for patients decrease to a larger extent under indemnity insurance, reductions of public pharmaceutical expenditure occur only under coinsurance. In the source country, co-payments increase less under coinsurance, health expenditure is reduced more under indemnity insurance.
The last chapter studies the effect of pharmaceutical regulation at the wholesale level, in particular, maximum wholesale margins (restriction of pricing by the intermediary) and mandatory rebates (restriction of the pricing by the manufacturer) on drug prices, quantities, and public pharmaceutical expenditure. Maximum wholesale margins enhance the manufacturer's ability to reduce competition from parallel trade in the destination country by increasing wholesale prices. In a symmetric equilibrium, maximum wholesale margins of both countries party offset each other, mandatory rebates reinforce each other
Umweltpolitik in Offenen Volkswirtschaften
Full text linkThis dissertation deals with two different aspects of environmental policies in a globalized world.
First, the impact of exogenous environmental regulations on a domestic polluting sector´s international competitiveness is investigated. The applied model framework considers the government´s re-election incentives and the
interrelation between environmental- and industrial
policies.
Second, the impact of strategic competition for
internationally mobile capital on the level of environmental
policies in the competing countries is examined. Also here, a second policy instrument, a corporate-profit tax, is available. Furthermore, the adverse welfare effects of a non-cooperative policy choice and different approaches of international cooperation to overcome such suboptimal policy outcome are discussed.
The results of both parts of the analysis suggest that frequently expressed public concerns as well as the predictions of many economic analyses may be too pessimistic. In particular, neither does the imposition of stricter environmental regulations necessarily weaken the
international competitiveness of a domestic polluting sector, nor does competition for foreign investments necessarily lead to an erosion of environmental-policy levels. Finally, even if countries do not achieve agreement on completely cooperative policy-making, partial cooperation in one instrument may serve as a politically feasible means to help them approach the socially optimal welfare level
Experimental Studies of Overconfidence in Financial Markets
Full text linkThis doctoral thesis investigates the influence of overconfidence on the outcomes in experimental asset markets, both on the market and individual levels. Thesis consists of three parts. In the first part an instrument (test) is developed that is later used in economic experiments to measure subjects’ overconfidence. The second part investigates the role of market overconfidence in the occurrence of bubbles in asset prices and the emergence of other stylized facts of financial markets, namely excessive trade and excessive price volatility. In the third part, the influence of overconfidence and risk aversion on financial decision making of economic subjects is analyzed
Incentive mechanisms for a sustainable use system of the montane rain forest in Ethiopia
Full text linkThe dissertation tries to answer three questions: To what extent can forests be relied on to support poverty alleviation in developing countries? Can the use of forests for poverty alleviation be compatible with biodiversity conservation? And if yes - what are optimal incentive mechanisms to achieve these objectives? The case study dealt with is Ethiopia
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