Putting free-riding to work: A Partnership Solution to the common-property problem

The common-property problem results in excessive mining, hunting, and extraction of oil and water. The same phenomenon is also responsible for excessive investment in R&D and excessive outlays in rent-seeking contests. We propose a “Partnership Solution” to eliminate or at least mitigate these excesses. Each of N players joins a partnership in the first stage and chooses his effort in the second stage. Under the rules of a partnership, each member must pay his own cost of effort but receives an equal share of the partnership's revenue. The incentive to free-ride created by such partnerships turns out to be beneficial since it naturally offsets the excessive effort inherent in such problems. In our two-stage game, this institutional arrangement can, under specified circumstances, induce the social optimum in a subgame-perfect equilibrium: no one has a unilateral incentive (1) to switch to another partnership (or create a new partnership) in the first stage or (2) to deviate from socially optimal actions in the second stage. The game may have other subgame-perfect equilibria, but the one associated with the “Partnership Solution” is strictly preferred by every player. We also propose a modification of the first stage which generates a unique subgame-perfect equilibrium. Antitrust authorities should recognize that partnerships can have a less benign use. By organizing as competing partnerships, an industry can reduce the “excessive” output of Cournot oligopoly to the monopoly level. Since no partner has any incentive to overproduce in the current period, there is no need to deter cheating with threats of future punishments.     

The resource curse revisited and revised: A tale of paradoxes and red herrings

We critically evaluate the empirical basis for the so-called resource curse and find that, despite the topic's popularity in economics and political science research, this apparent paradox may be a red herring. The most commonly used measure of “resource abundance” can be more usefully interpreted as a proxy for “resource dependence”—endogenous to underlying structural factors. In multiple estimations that combine resource abundance and dependence, institutional, and constitutional variables, we find that (i) resource abundance, constitutions, and institutions determine resource dependence, (ii) resource dependence does not affect growth, and (iii) resource abundance positively affects growth and institutional quality.     

Selecting parameters for calibration via sensitivity analysis: An individual-based model of mosquitofish population dynamics

A stochastic individual-based model (IBM) of mosquitofish population dynamics in experimental ponds was constructed in order to increase, virtually, the number of replicates of control populations in an ecotoxicology trial, and thus to increase the statistical power of the experiments. In this context, great importance had to be paid to model calibration as this conditions the use of the model as a reference for statistical comparisons. Accordingly, model calibration required that both mean behaviour and variability behaviour of the model were in accordance with real data. Currently, identifying parameter values from observed data is still an open issue for IBMs, especially when the parameter space is large. Our model included 41 parameters: 30 driving the model expectancy and 11 driving the model variability. Under these conditions, the use of “Latin hypercube” sampling would most probably have “missed” some important combinations of parameter values. Therefore, complete factorial design was preferred. Unfortunately, due to the constraints of the computational capacity, cost-acceptable “complete designs” were limited to no more than nine parameters, the calibration question becoming a parameter selection question. In this study, successive “complete designs” were conducted with different sets of parameters and different parameter values, in order to progressively narrow the parameter space. For each “complete design”, the selection of a maximum of nine parameters and their respective n values was carefully guided by sensitivity analysis. Sensitivity analysis was decisive in selecting parameters that were both influential and likely to have strong interactions. According to this strategy, the model of mosquitofish population dynamics was calibrated on real data from two different years of experiments, and validated on real data from another independent year. This model includes two categories of agents; fish and their living environment. Fish agents have four main processes: growth, survival, puberty and reproduction. The outputs of the model are the length frequency distribution of the population and the 16 scalar variables describing the fish populations. In this study, the length frequency distribution was parameterized by 10 scalars in order to be able to perform calibration. The recently suggested notion of “probabilistic distribution of the distributions” was also applied to our case study, and was shown to be very promising for comparing length frequency distributions (as such).     

Justifying Sustainability

In the framework of ethical social choice theory, sustainability is justified by efficiency and equity as ethical axioms. These axioms correspond to the Suppes–Sen grading principle. In technologies that are productive in a certain sense, the set of Suppes–Sen maximal utility paths is shown to equal the set of non-decreasing and efficient paths. Since any such path is sustainable, efficiency and equity can thus be used to deem any unsustainable path as ethically unacceptable. This finding is contrasted with results that seem to indicate that an infinite number of generations cannot be treated equally.     

Evolutionary diversity and spatiotemporal dynamics of a spatial game

In this paper, the evolution of cooperation is studied by a spatially structured evolutionary game model in which the players are located on a two-dimensional square lattice. Each player can choose one of the following strategies: “always defect” (ALLD), “tit-for-tat” (TFT), and “always cooperate” (ALLC). Players merely interact with four immediate neighbors at first and adjust strategies according to their rewards. First, the evolutionary dynamics of the three strategies in non-spatial population is investigated, and the results indicate that cooperation is not favored in most settings without spatial structure. Next, an analytical method, which is based on comparing the local payoff structures, is introduced for the spatial game model. Using the conditions derived from the method as criteria, the parameter plane for two major parameters of the spatial game model is divided and nine representative regions are identified. In each parameter region, a distinct spatiotemporal dynamics is characterized. The spatiotemporal dynamics not only verify that the spatial structure promote the evolution of cooperation but also reveal how cooperation is favored. Our results show that spatial structure is the keystone of the evolution of intraspecific diversity.     

3D geometric structures and biological activity: Application to microbial soil organic matter decomposition in pore space

During the past 10 years, soil scientists have started to use 3D Computed Tomography in order to gain a clearer understanding of the geometry of soil structure and its relationships with soil properties. We propose a geometric model for the 3D representation of pore space and a practical method for its computation. Our basic idea consists in representing pore space using a minimal set of maximal balls (Delaunay spheres) recovering the shape skeleton. In this representation, each ball could be considered as a maximal local cavity corresponding to the “intuitive” notion of a pore as described in the literature. The space segmentation induced by the network of balls (pores) was then used to spatialize biological dynamics. Organic matter and microbial decomposers were distributed within the balls (pores). A valuated graph representing the pore network, organic matter and distribution of micro-organisms was then defined. Microbial soil organic matter decomposition was simulated by updating this valuated graph. The method was implemented and tested using real CT images. The model produced realistic simulated results when compared with data in the literature in terms of the water retention curve and carbon mineralization. A decrease in water pressure decreased carbon mineralization, which is also in accordance with findings in the literature. From our results we showed that the influence of water pressure on decomposition is a function of organic matter distribution in the pore space. As far as we know, this is the approach to have linked pore space geometry and biological dynamics in a formal way. Our next goal will be to compare the model with experimental data of decomposition using different soil structures, and to define geometric typologies of pore space shape that can be attached to specific biological and dynamic properties.     

A social benefit-cost analysis of mandatory deposits on beverage containers

This paper presents a social efficiency analysis of mandatory deposits on beverage containers. Five kinds of resource effects are identified, evaluated and added up: (1) litter (both pickup and “eyesore” costs); (2) solid waste collection; (3) container costs; (4) production and distribution costs; and (5) consumer convenience. It is shown that the desirability, on efficiency grounds alone, of mandatory deposits is not indisputable; it depends critically on one's evaluation of (1) the average value of the time it takes consumers to return empty containers and (2) the average value of the “eyesore” benefit of a dramatically reduced (i.e., by around three-fourths) volume of beverage container litter.     

Entitlements, missing markets, and environmental uncertainty: Reply

At one level Dore and Ward seem intent on immunizing received doctrine. They say that I did not prove that rights violated Nozick's principles of justice, and that I did not prove that missing markets were the problem. More telling, they allege I did not prove that my story was better than the particular story favored by Dore and Ward. That is, they argue that : “ … there is an alternative approach, based on the theory of public economics, which is indeed operational.”³ They then use the bulk of their comment to explain and defend this alternative model. They hope to convince the reader that the model of “public economics” survives intact in the face of my alternative model. To the extent that their model allows one to define the problem away, it is not difficult to see why they find it so compelling.More seriously, Dore and Ward fail to make a coherent argument about the concept of rights and duties and the logic of a particular rights structure that happens to prevail. They seem concerned that my article was tampering with some sacred social construct—the status quo rights structure—and that my article threatened the received wisdom of both “public economics” and Paretian-Walrasian bliss. Indeed, theirs seems to be a genuine fear that if economists release their grip on the certitude of received orthodoxy the floodgates will be open to all manner of bumbling regulators seeking to shift rights and wealth positions across generations. My article is apparently threatening because it seems to suggest that the received wisdom may, at times, be misleading.     

An Economic Analysis of the Fisheries Bycatch Problem

Bycatch is the incidental take of a species that has value to some other group. This paper compares open access and individual transferable quota equilibria to the equilibrium in which the joint value of the fisheries is maximized. The open access induced problems can be corrected by an individual transferable quota system only if both the target species and the bycatch species have tradable quotas, and only if the bycatch species does not have existence value. There exists a range of the bycatch-to-target species harvest levels for which the total harvest of each will be exactly taken by a given technology, even under open access. However, there may not even exist a unique open access equilibrium if bycatch is allocated by “rule of capture.” Prohibitions on the sale of bycatch reduce the bycatch level, but they also reduce social welfare.     

Evaluating approaches for scaling-up community-based marine-protected areas into socially equitable and ecologically representative networks

Marine-protected areas (MPAs) are vital to marine conservation, but their coverage and distribution is insufficient to address declines in global biodiversity and fisheries. In response, many countries have committed through the Aichi Target 11 of the Convention on Biological Diversity to conserve 10% of the marine environment through ecologically representative and equitably managed MPAs by 2020. The rush to fulfill this commitment has raised concerns on how increasing MPA coverage will affect other elements of Target 11, including representation and equity. We examined a Philippines case study to assess and compare 3 MPA planning approaches for biodiversity representation and equitable distribution of costs to small-scale fishers. In the opportunistic approach, MPAs were identified and supported by coastal communities. The donor-assisted approach used local knowledge to select MPAs through a national-scale and donor-assisted conservation project. The systematic conservation planning approach identified MPA locations with the spatial prioritization software Marxan with Zones to achieve biodiversity objectives with minimal costs to fishers. We collected spatial data on biodiversity and fisheries features and performed a gap analysis to evaluate MPAs derived from different approaches. We assessed representation based on the proportion of biodiversity features conserved in MPAs and distribution equity by the distribution of opportunity costs (fishing areas lost in MPAs) among fisher stakeholder groups. The opportunistic approach did not ineffectively represent biodiversity and resulted in inequitable costs to fishers. The donor-assisted approach affected fishers disproportionately but provided near-optimal regional representation. Only the systematic approach achieved all representation targets with minimal and equitable costs to fishers. Our results demonstrate the utility of systematic conservation planning to address key elements of Target 11 and highlight opportunities (e.g., integration of local and scientific knowledge can address representation and equity concerns) and pitfalls (e.g., insufficient stakeholder considerations can exacerbate social inequalities) for planning MPAs in similar contexts.     

The effects of larval experience with a complex plant latex on subsequent feeding and oviposition by the cabbage looper moth: Trichoplusia ni (Lepidoptera: Noctuidae)

Summary. Leaf disc choice and oviposition bioassays were used to examine the effects of larval experience with a Hoodia gordonii latex on subsequent behaviors. The latex deterred feeding and oviposition by “naïve” cabbage looper (Trichoplusia ni, Noctuidae) larvae and moths with no previous exposure to the material. “Experienced” insects, reared on a diet with the H. gordonii latex (1000 ppm), exhibited lesser feeding deterrence relative to naïve insects. Experienced female moths actually preferred to lay eggs on treated rather than control leaves. There was no observed transfer of behavioral preferences from experienced parents to their offspring. Our results suggest that moths may be acquiring oviposition preferences from larval feeding experience as described by Hopkins’ host selection principal (HHSP) or through chemical legacy.     

An analysis of joint costs in a managed forest ecosystem

This paper analyzes the tenability of line item budgeting and independently determined output costs for a managed forest ecosystem. The general problem of cost allocation in a joint production system is discussed as one of choosing paths of integration. A production structure is hypothesized for describing a managed forest ecosystem and its characteristics of “jointness” are discussed. Finally, an empirical case example is presented which indicates that cost estimates and associated means of production which result from single output costing procedures and from joint costing procedures may be significantly different in a managed forest ecosystem.     

Saturday effects in tanker oil spills

This paper documents a “Saturday effect” in the timing of tanker oil spills—certain types of spills happen much more frequently on this day than one would expect if the spills were uniformly distributed. The phenomenon is restricted to Europe and North America, and is associated with “vessel guidance” accidents—groundings, collisions, and rammings. Eliminating the Saturday effect would reduce tanker oil spills by around 163,000 gallons per year. Several policy responses are considered, including a Saturday harbor tax. A lower bound for an efficient tax is estimated to be $780 for a 20 million gal cargo.     

Averting expenditure and the cost of pollution

The paper considers the relationship between the willingness to pay for environmental quality and averting expenditures—that is, the costs of measures undertaken in efforts to counteract the consequences of pollution. The models used assume perfect mobility among locations with different levels of environmental quality. The major results are: (1) Averting expenditures are not in general a good measure of willingness to pay; (2) averting expenditures are not always even a lower bound on willingness to pay; (3) even when averting expenditures are a lower bound, the difference between the level of such expenditures and willingness to pay cannot be attributed to the unavertible “aesthetic” consequences of pollution.     

A criterion validity test of the contingent valuation method: comparing hypothetical and actual voting behavior for a public referendum

This study pursues external validation of contingent valuation by comparing survey results with the voting outcome of a Corvallis, Oregon, referendum to fund a riverfront improvement project through increased property taxes. Survey respondents hypothetically make a voting decision—with no financial consequences—on the upcoming referendum. The survey sample consists of respondents verified to have voted in the election. We use available precinct-level election data to compare the proportion of “yes” survey and referendum votes as well as estimate voting models and mean willingness to pay (WTP) based on the two sets of data. We find that survey responses match the actual voting outcome and WTP estimates based on the two are not statistically different. Contrary to similar studies, our statistical results do not depend on re-coding the majority of “undecided” survey responses to “no.” Furthermore, such a re-coding of responses may be inappropriate for our data set.     

Deforestation and Development in a Small Open Economy

Our economy faces world prices and starts with a large endowment of land in forest and a small endowment of land in agriculture. Clearing of forested land yields marketable timber and a unit of land for agriculture. Early, the high price of agricultural land drives the clearing process. Later, the profit from marketing timber from the cleared land drives the process. Dates of “phase transitions” are endogenous. We also set out a submodel of perpetual cyclic clearing and reforesting, and show that it when cyclical harvesting—regrowing is optimal, the extent of clearing can be relatively large.     

Pollution control in a simplified general-equilibrium model with production externalities

Pollution externalities of the producer-producer type are considered in a positive two-sector model with stationary capital and labor. By assumption, output from the polluting sector can be diverted to pollution abatement. Environmental authorities attempt to control the level of pollution to some minimum “acceptable” standard by requiring polluters to depollute through the mechanism of a uniform tax on production. Following discussion of short-run considerations, the stability of the tax-adjustment scheme is examined and the dynamic nature of growth paths in the economy is explored.     

The distributive effects of Public Law 92-500

Title II of the 1972 “Clean Water Act” provided for a potentially massive federal construction grant program for the construction of publicly owned wastewater treatment plants. Part of this subsidy accrues to municipalities and the remainder to industry. The regulations for these federal grants are somewhat perplexing and it is not obvious who will benefit and by how much. The objective of this article is to quantify the subsidies received by municipalities and industry and estimate the effect on the distribution of income under certain assumptions. It is concluded that these federal construction grants are likely to redistribute income from the middle-income classes to primarily the very rich.     

Harvesting in an eight-species ecosystem

The theory for a general equilibrium ecosystem model that can include large number of interacting species is presented. Features include: (1) individual plants and animals are assumed to behave as if they are maximizing their net energy intake, (2) short- and long-run equilibriums are obtained, (3) species’ population adjustments depend on individual net energies. The theory is applied using simulations of an eight-species Alaskan marine ecosystem for which a “natural” equilibrium is calculated. Humans are introduced by adding a regulated open access fishery that harvests one of the species. Fishing impacts the fish population as well as the populations of other species, including Stellar sea lions, an endangered species. The sensitivity of fish and nonfish species populations to harvesting are calculated.