What floats your boat? Preference revelation from lotteries over complex goods

We examine a type of lottery used to distribute some publicly held resource access rights. The lottery provides participants with the opportunity to choose among a set of simple gambles over multi-attribute goods. Participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning. When lottery winnings are multi-attribute goods, lottery outcomes provide sufficient information to estimate hedonic prices, marginal utility, and marginal rates of substitution among attributes. We develop a model for characterizing preferences from this information set. We apply our model to Idaho?s Four Rivers Whitewater Recreation Lottery, which allows applicants to apply for one permit among a large set of alternative river/day combinations that provide varying river and weather characteristics. This lottery structure shows promise as a foundation for economic experiments for preference revelation.     

Instrument Choice When Regulators and Firms Bargain

We compare outcomes with an emissions tax and an emissions standard when a firm and regulator engage in cooperative bargaining over the stringency of the regulation. Bargaining is motivated by giving the firm a choice of abatement technologies. If the firm's preferred technology differs from the regulator's, the first-best outcome is not an equilibrium of the traditional noncooperative game in which the regulator is a Stackelberg leader. The regulator may therefore choose to offer the firm a more lenient regulation if it agrees to switch technologies. We find that the resulting bargaining outcomes differ for a tax and a standard even though information is symmetric, and we identify conditions under which each instrument yields lower social costs.     

Vegetation cover influence on the morphology and migration patterns of river mouths

The present study focuses on the effects of vegetation cover changes on the dynamic morphology of seven southeastern Mediterranean river mouths. The methodology used comprised monitoring and mapping by GIS techniques, with data derived from historic aerial photographs, which were applied in the investigation of the morphological spatial and temporal migration patterns of the mouths, and subsequent analysis of the vegetation cover changes influencing them. Vegetation cover adjacent to river mouths influences river mouth morphology through five primary mechanisms: a) bank vegetation; b) dune advancement toward the shoreline; c) changes in the beach??s micro-topography; as well as d) long-term continuous channel migration through permanent vegetation patches; and e) channel switching through permanent vegetation patches. The five mechanisms are part of a system of interactions between channel water flow and fluvial processes; coastal sediment transport and coastal processes; and the evolution of plant communities. In the interplay between these factors they all affect and are being affected by one another. In many river mouths artificial channel diversion is often needed due to uncontrolled channel migration. It is demonstrated that vegetation cover can serve as a mean of ??soft?? channel regulation. Therefore, a better understanding of the five influencing mechanisms may aid in controlling and managing river mouth migration patterns. The study contributes to the knowledge about bank vegetation as a tool of ??soft?? channel regulation and thus can contribute to the improvement of coastal zone management.     

Tell the truth or not? The montero mechanism for emissions control at work

We experimentally test the truth-telling mechanism proposed by Montero (2008) for eliciting firms' abatement costs. We compare this mechanism with two well-known alternative allocation mechanisms, free and costly allocation of permits at the Pigouvian price. Controlling for the number of firms and the firms' maximal emissions, we find that, in line with the theoretical predictions, firms over-report their maximal emissions under free allocation of permits and under-report these under costly allocation of permits. Under Montero's mechanism, by contrast, firms almost always report their maximal emissions truthfully. However, in terms of efficiency, the difference between Montero's mechanism and costly allocation disappears with industries including more than one firm.     

The democratic provision of public and private goods from exhaustible resources

The problem of distributing exhaustible natural resources between consumption goods and environmental amenities through a voting process is analyzed. Assuming that individuals are endowed with an equal share of private goods, the method of majority decision does not always achieve a Pareto-optimal distribution. However, by means of side payments, the intensity of preferences is revealed. The voting procedure then leads to a Pareto-optimal solution which is more prone to environmental amenities than the simple method of majority decision.     

Discounting,inequality and economic convergence

The aim of this paper is to examine the impact of inequalities and economic convergence on the efficient discount rate when international credit and risk-sharing markets are inefficient. We consider an economy in which initial consumption levels and growth expectations are heterogeneous. In the benchmark case in which relative inequalities are permanent and relative risk aversion is constant, inequalities do not affect the discount rate. We derive necessary and sufficient conditions under which permanent inequalities reduce the discount rate. We also show that the anticipation of economic convergence raises the efficient discount rate when relative prudence is larger than unity.     

Exvessel Price Determination in the Alaska King Crab Fishery: A Formula Price Contract under Uncertainty?

Commercial fisheries industry structure often suggests exvessel price formation occurs in the context of a competitive harvesting sector and an oligopsonistic processing sector. However, industry conduct leading to a determination of exvessel price can be notably at odds with this inference. This paper presents empirical evidence that the conduct of at least one such fishery, the Alaska king crab industry, may emulate bilateral monopoly. Exvessel price determination is consistent with an implicit formula price contract in which fishers behave as monopolists through bargaining associations, while processors behave as countervailing monopsonists, even in the absence of explicit collusion. Both sectors appear to behave in a manner consistent with joint expected profit maximization, with profit shares apportioned via the implicit formula price contract. This price formation process simplifies empirical analysis of the bilateral monopoly conduct by avoiding complicated game theoretic/bargaining models.     

Interacting Effects of Translocation,Artificial Propagation,and Environmental Conditions on the Marine Survival of Chinook Salmon from the Columbia River,Washington, U.S.A.

Abstract: Captive rearing and translocation are often used concurrently for species conservation, yet the effects of these practices can interact and lead to unintended outcomes that may undermine species’ recovery efforts. Controls in translocation or artificial‐propagation programs are uncommon; thus, there have been few studies on the interacting effects of these actions and environmental conditions on survival. The Columbia River basin, which drains 668,000 km² of the western United States and Canada, has an extensive network of hydroelectric and other dams, which impede and slow migration of anadromous Pacific salmon (Oncorhynchus spp.) and can increase mortality rates. To mitigate for hydrosystem‐induced mortality during juvenile downriver migration, tens of millions of hatchery fish are released each year and a subset of wild‐ and hatchery‐origin juveniles are translocated downstream beyond the hydropower system. We considered how the results of these practices interact with marine environmental conditions to affect the marine survival of Chinook salmon (O. tshawytscha). We analyzed data from more than 1 million individually tagged fish from 1998 through 2006 to evaluate the probability of an individual fish returning as an adult relative to its rearing (hatchery vs. wild) and translocation histories (translocated vs. in‐river migrating fish that traveled downriver through the hydropower system) and a suite of environmental variables. Except during select periods of very low river flow, marine survival of wild translocated fish was approximately two‐thirds less than survival of wild in‐river migrating fish. For hatchery fish, however, survival was roughly two times higher for translocated fish than for in‐river migrants. Competition and predator aggregation negatively affected marine survival, and the magnitude of survival depended on rearing and translocation histories and biological and physical conditions encountered during their first few weeks of residence in the ocean. Our results highlight the importance of considering the interacting effects of translocation, artificial propagation, and environmental variables on the long‐term viability of species.     

Community composition and consumer identity determine the effect of resource species diversity on rates of consumption

The effect of species diversity on ecosystem function is commonly studied within a single trophic level, but less is known about how resource diversity affects species interactions between trophic levels. We conducted a grazing experiment to determine how resource species diversity affects rates of consumption by three species of freshwater zooplankton consumers. We measured the effect of resource diversity on rates of consumption for several resource community compositions. These compositions varied in terms of palatability for the consumers. The effect of resource diversity on consumption rates depended on the diet breadth of the consumer species (from specialist to generalist) and the community composition of resources. Overall, high resource diversity commonly caused a decline in consumption rates of consumers. The most selective grazer showed reduced consumption for nearly all community compositions, whereas the most generalist grazer showed accelerated consumption when all resource species were palatable. Our results demonstrate that resource species diversity can modulate rates of consumption through the action of multiple different mechanisms.     

Bargaining over natural resources: Governments between environmental organizations and extraction firms

We consider the resource-extraction policy of a government that is lobbied by an environmental organization and an extraction firm from foreign countries. To analyze this situation, we propose a sequential Nash bargaining solution: The government bargains with both lobbies simultaneously. Should this trilateral negotiation fail, it chooses one lobby for a bilateral negotiation. The disagreement point then is to bargain with the other lobby. Finally, should this second bilateral negotiation break down, the government chooses the welfare-maximizing policy.As long as cumulative extraction is low, such that stock-dependent extraction costs are also low and extraction profits are high, the environmental organization has a weak bargaining position, but it takes influence to reduce extraction. Once that cumulative extraction has increased so much that extraction profits are below a threshold, the bargaining positions change, and the environmental organization gets compensated by the extraction firm for not letting the trilateral negotiation fail.     

Sources and dynamics of large logs in a temperate floodplain river.

Large logs, important agents of biophysical heterogeneity in temperate floodplain rivers, have been virtually eliminated from modified systems. Our purpose was to quantify the sources and dynamics of large logs (> or = 1 m diameter) in the mainstem of a nearly pristine system: the Queets River, Washington, USA. Erosion of forests by the river supplies 0.40 logs x (100 m)(-1) x yr(-1) to the channel. Most (72%) are new logs entering the river for the first time as the river undercuts mature fluvial terraces dominated by large conifers. Retrospective airphoto analyses demonstrate that, over 63 years, the Queets River recruits 95% of new logs from a riparian corridor extending 265 m laterally on both banks, mostly through channel meandering. However, input rates are patchy, with 10% of the valley length supplying 38% of the new logs. As the river moves laterally, remnant logs are left on channel surfaces that later develop riparian forests and reenter the river when those forests erode. Remnant logs lying on the floodplain forest floor surface or buried in alluvium constitute 21% and 7% of the annual inputs from bank erosion, respectively. We estimate that 50% of logs deposited in the channel in a given year, including those underpinning logjams, are transported downriver within five years. Over the next 55 years, bank erosion reclaims an additional 23%, leaving 27% of the logs stable for > 60 years. Simulations indicate that recurrent transport is common, with half of the large conifers being deposited in > or = 3 locations and transported > or = 1.5 km prior to disintegrating. One in ten logs links distant reaches by occupying > or = 7 locations spanning > or = 12.0 km. Instream supplies are therefore a mixture of new and old logs from nearby and upstream forests, sustained by the recapture and transport of stockpiled remnant logs during periods when new inputs are low. We propose that patchy input rates and the periodic rearrangement of large logs are important drivers of temporal variation in river valley habitats, adding to the spatial complexity created by stable logs. These findings underscore the importance of extensive mature forests and connectivity in temperate floodplain rivers.     

The endowment effect,discounting and the environment

There is a considerable body of evidence showing that our preferences exhibit both reference dependence and loss aversion, a.k.a. the endowment effect. In this paper, we consider the implications of the endowment effect for discounting, with a special focus on discounting future improvements in the environment. We show that the endowment effect modifies the discount rate via (i) an instantaneous endowment effect and (ii) a reference-updating effect. Moreover we show that these two effects often combine to dampen the preference to smooth consumption over time. What this implies for discounting future environmental benefits may then depend critically on whether environmental quality is merely a factor of production of material consumption, or whether it is an amenity. On an increasing path of material consumption, dampened consumption smoothing implies a lower discount rate. But on a declining path of environmental quality and where we derive utility directly from environmental quality, it implies a higher discount rate. On non-monotonic paths, loss aversion specifically can give rise to substantial discontinuities in the discount rate.     

Graduated stringency within collective incentives for group environmental compliance: Building coordination in field-lab experiments with artisanal gold miners in Colombia

Small-scale gold mining is important to rural livelihoods in the developing world but also a source of environmental externalities. Incentives for individual producers are the classic policy response for a socially efficient balance between livelihoods and the environment. Yet monitoring individual miners is ineffective, or it is very costly, especially on frontiers with scattered small-scale miners. We ask whether monitoring at a group level effectively incentivizes cleaner artisanal mining by combining lower-cost external monitoring with local collective action. We employ a mining-framed, threshold-public-goods experiment in Colombia's Pacific region, with 640 participants from frontier mining communities. To study compliance with collective environmental targets, we vary the target stringency, including to compare increases over time in the stringency versus decreases. We find that collective incentives can induce efficient equilibria, with group compliance – and even inefficient overcompliance – despite the existence of equilibria with zero contributions. Yet, for demanding targets in which the reward for compliance barely outweighs the cost, compliance can collapse. Those outcomes improve with past successes for easier targets, however, so our results suggest gain from building coordination via graduated stringency.     

A new meta-analysis on the WTP/WTA disparity

This study reports a new meta-analysis of papers that elicit willingness-to-pay (WTP) and willingness-to-accept compensation (WTA) measures of value for the same good. We investigate the effects of type of good and several survey-design features on the WTP/WTA disparity, measured as the logarithm of the ratio of mean WTA to mean WTP. Confirming Horowitz and McConnell?s (2002) pioneering meta-analysis, we find the disparity is smaller for ordinary private goods than for public and non-market goods, that it is not solely an artifact of using hypothetical transactions or other weak experimental or survey methods, and that it is smaller for studies using student subjects. In addition, we find that the disparity is smaller when subjects have experience valuing the good in real markets or through repeated experimental trials. In contrast to Horowitz and McConnell, we find the disparity is significantly smaller in studies using incentive-compatible elicitation mechanisms. The disparity is smaller in more recent studies, an effect that is attributable only in part to changes in study characteristics.     

A free lunch in the commons

We derive conditions under which raising costs through a regulatory constraint or a fully expropriated tax can increase the profits arising from a common-pool resource. The basic model assumes a fixed number of identical agents with linear costs selling in a single period at an exogenous price. A necessary and sufficient condition for a cost increase to be profitable is that aggregate output from the resource be locally convex in aggregate effort. We also show that cost increases can be profitable even if price is endogenous, agents are heterogeneous, entry is costless, or agents are playing a Markov-perfect equilibrium of a dynamic game. We also discuss more general welfare implications of the result along with its relation to existing results for a Cournot oligopoly.     

On the gains of committing to inefficiency: Corruption,deforestation and low land productivity in Latin America

We present a new explanation and empirical evidence showing that rural subsidies to large farmers tend to be associated with low land productivity and excessive deforestation. We develop a lobbying model where wealthy farmers trade bribes or political contributions to government politicians in exchange for subsidies; farmers are able to tilt the terms of the bargaining game with policy makers in their favor by pre-committing to an inefficient choice of semi-fixed inputs. Government proneness to accept political contributions or bribes and its willingness to provide subsidies cause farmers to adopt inefficient modes of production as a mechanism to capture such subsidies. Our predictions are consistent with stylized facts on land use in Latin America, and suggest that subsidy schemes have been counterproductive—distorting and constraining development, and triggering excessive depletion of natural resources. We validate some of the predictions of the model through econometric analyses using a new data set for nine countries in Latin America.     

Nash Implementation of a Proportional Solution to International Pollution Control Problems

For a very general class of pollution control models involving strictly quasi-concave utility functions over consumption and environmental quality and strictly convex emission abatement cost functions, a proportional cost sharing mechanism is presented inspired by the ratio equilibrium introduced by7. It is shown that the proportional solution yields a cost efficient allocation of abatement efforts and that the resulting utility imputation always lies in the stand alone core of the cost sharing game. In order to decentralize the proportional cost sharing equilibrium, a financial compensation mechanism implementing the proportional solution in complete information Nash equilibrium is presented.     

The role of periodic boundary forcing in plankton pattern formation

We consider one and two-dimensional minimal models in plankton dynamics. The influence of oscillating boundary forcing functions as agents for triggering pattern formation is discussed. In particular it is found that in these conditions population waves arise for one dimensional models, while for two dimensional models, different amplitudes and frequencies in the boundary forcing generate definite patterns, mimicking the boundary term. This happens even though the model we investigate is very simple. The emergence of these features is an interesting metaphor for the fundamental biological problem of how pattern formation processes may be inevitable in natural heterogeneous ecosystems.     

On the gains of committing to inefficiency: Corruption, deforestation and low land productivity in Latin America

We present a new explanation and empirical evidence showing that rural subsidies to large farmers tend to be associated with low land productivity and excessive deforestation. We develop a lobbying model where wealthy farmers trade bribes or political contributions to government politicians in exchange for subsidies; farmers are able to tilt the terms of the bargaining game with policy makers in their favor by pre-committing to an inefficient choice of semi-fixed inputs. Government proneness to accept political contributions or bribes and its willingness to provide subsidies cause farmers to adopt inefficient modes of production as a mechanism to capture such subsidies. Our predictions are consistent with stylized facts on land use in Latin America, and suggest that subsidy schemes have been counterproductive—distorting and constraining development, and triggering excessive depletion of natural resources. We validate some of the predictions of the model through econometric analyses using a new data set for nine countries in Latin America.     

Context-dependent species identity effects within a functional group of filter-feeding bivalves

We asked whether species richness or species identity contributed more to ecosystem function in a trait-based functional group, burrowing, filter-feeding bivalves (freshwater mussels: Unionidae), and whether their importance changed with environmental context and species composition. We conducted a manipulative experiment in a small river examining the effects of mussel assemblages varying from one to eight species on benthic algal standing crop across two sets of environmental conditions: extremely low discharge and high water temperature (summer); and moderate discharge and water temperature (fall). We found strong species identity effects within this guild, with one species (Actinonaias ligamentina) influencing accrual of benthic algae more than other species, but only under summer conditions. We suspect that this effect is due to a combination of the greater biomass of this species and its higher metabolic and excretion rates at warm summer temperatures, resulting in increased nitrogen subsidies to benthic algae. We also found that Actinonaias influenced the condition of other mussel species, likely through higher consumption, interference, or both. This study demonstrates that species within trait-based functional groups do not necessarily have the same effects on ecosystem properties, particularly under different environmental conditions.