SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Karp, Larry S.; Zhao, Jinhua.

We provide a unified discussion of the issues that confront negotiators of the next international climate agreement. We offer a novel proposal that entitles countries to discharge their treaty obligations by paying a “fine”. This escape clause provides cost insurance, simplifies the problem of enforcing compliance, and increases incentives to participate in the agreement. We explain why developed country obligations should rely on a cap and trade commitment rather than carbon taxes. A Central Bank maintains stability of carbon prices by defending a price ceiling and floor. An so-called intensity target is not a good alternative to an emissions cap. Modest trade restrictions, consistent with WTO law, will form an important part of the next agreement....

Taxes Versus Quotas for a Stock Pollutant

Palavras-chave: Kyoto protocol; Escape clause; Emissions trade; Taxes versus cap and trade; Price stability; Carbon leakage; Trade restrictions; Differentiated responsibility; Clean development mechanism; Sectoral agreements; Demand and Price Analysis; Environmental Economics and Policy; Research Methods/ Statistical Methods; Resource /Energy Economics and Policy; Q54; Q58; F13.

Ano: 2009

URL: http://purl.umn.edu/51610

Hoel, Michael; Karp, Larry S..

We compare the effects of taxes and quotas for an environmental problem in which the regulator and polluter have asymmetric information about abatement costs, and the environmental damage depends on the stock of pollution. We thus extend, to a dynamic framework, previous studies in which environmental damages depend on the flow of pollution. As with the static analysis, an increase in the slope of the marginal abatement cost curve, or a decrease in the slope of the marginal damage curve, favors taxes. In addition, in the dynamic model, an increase in the discount rate or the stock decay rate favor the use of taxes. Taxes certainly dominate quotas if the length of a period during which decisions are constant is sufficiently small. An empirical illustration...

A Comparison of Tariffs and Quotas in a Strategic Setting

Palavras-chave: Pollution control; Asymmetric information; Taxes and quotas; Stochastic control; Environmental Economics and Policy; H21; Q28.

Ano: 2001

URL: http://purl.umn.edu/25010

We model the situation where two large countries impose either tariffs or quotas and a third large country remains passive. The introduction of the third country overturns results from two-country models. Stable quota equilibria are capable of reproducing the equilibrium price under tariffs, and Nash equilibria with quotas can result in positive amounts of trade. Using a linear partial equilibrium model, we show that world welfare may be higher under Nash quotas than under Nash tariffs. However, simulation results suggest that tariffs are likely to result in higher welfare than quotas.

Discounting and Climate Change Policy

Palavras-chave: Tariffs and quotas; Nash equilibria; International Relations/Trade.

Ano: 1988

URL: http://purl.umn.edu/51250

Karp, Larry S.; Tsur, Yacov.

A constant social discount rate cannot reflect both a reasonable opportunity cost of public funds and an ethically defensible concern for generations in the distant future. We use a model of hyperbolic discounting that achieves both goals. We imbed this discounting model in a simple climate change model to calculate “constant equivalent discount rates” and plausible levels of expenditure to control climate change. We compare these results to discounting assumptions and policy recommendations in the Stern Review on Climate Change

When Promoters Like Scalpers

Palavras-chave: Environmental Economics and Policy.

Ano: 2007

URL: http://purl.umn.edu/7192

If a monopoly supplies a perishable good, such as tickets to a performance, and is unable to price discriminate within a period, the monopoly may benefit from the potential entry of resellers. If the monopoly attempts to intertemporally price discriminate, the equilibrium in the game among buyers is indeterminate when the resellers are not allowed to enter, and the monopoly's problem is not well defined. An arbitrarily small amount of heterogeneity of information among the buyers leads to a unique equilibrium. We show how the potential entry of resellers alters this equilibrium.

Climate Policy When the Distant Future Matters: Catastrophic Events with Hyperbolic Discounting

Palavras-chave: Intertemporal price discrimination; Scalpers; Coordination game; Common knowledge; Demand and Price Analysis; Industrial Organization; L12; D42; D45; D82.

Ano: 2003

URL: http://purl.umn.edu/25087

Karp, Larry S.; Tsur, Yacov.

Low probability catastrophic climate change can have a significant influence on policy under hyperbolic discounting. We compare the set of Markov Perfect Equilibria (MPE) to the optimal policy under time-consistent commitment. For some initial levels of risk there are multiple MPE; these may involve either excessive or insufficient stabilization effort. These results imply that even if the free-rider problem amongst contemporaneous decision-makers were solved, there may remain a coordination problem amongst successive generations of decision-makers. A numerical example shows that under plausible conditions society should respond vigorously to the threat of climate change.

A Proposal for the Design of the Successor to the Kyoto Protocol

Palavras-chave: Abrupt climate change; Event uncertainty; Catastrophic risk; Hyperbolic discounting; Markov Perfect Equilibria; Environmental Economics and Policy; Risk and Uncertainty; C61; C73; D63; D99; Q54.

Ano: 2007

URL: http://purl.umn.edu/7186

Karp, Larry S.; Zhao, Jinhua.

The successor to the Kyoto Protocol should impose national ceilings on rich countries’ greenhouse gas emissions and promote voluntary abatement by developing countries. Our proposal gives signatories the option of exercising an escape clause that relaxes their requirement to abate. This feature helps to solve the participation and compliance problems that have weakened the Protocol. We support the use of carefully circumscribed trade restrictions in order to reduce the real or perceived problem of carbon leakage.

Dynamics and Limited Cooperation In International Environmental Agreements

Palavras-chave: Kyoto protocol; Escape clause; Emissions trade; Clean development mechanism; Environmental Economics and Policy; Resource /Energy Economics and Policy; Q54; Q58; F13.

Ano: 2008

URL: http://purl.umn.edu/42878

Karp, Larry S.; Sacheti, Sandeep.

The amount of cooperation needed to improve the welfare of signatories of International Environmental Agreements (IEAs), in the presence of market imperfections, depends on the characteristics of pollution. In a dynamic model, the conventional wisdom on the effect of free-riding needs to be modified for certain types of pollution problems. For local pollution problems, a sufficient level of free-riding actually promotes signatories' welfare. For global pollution problems, the conventional wisdom is correct insofar as free-riding makes it more difficult to form a successful IEA. However, for some global pollution problems, free-riding may disappear. A static model may overstate or understate the difficulty of forming a successful IEA. The effect of an IEA...

Prospects and Policy for Central and East European Agriculture

Palavras-chave: International Environmental Agreements; Environmental stocks; Dynamics; Free-riding; Environmental Economics and Policy; International Relations/Trade; F12; F42; Q28.

Ano: 1997

URL: http://purl.umn.edu/6212

Karp, Larry S.; Stefanou, Spiro E..

ESTIMATING A MIXED STRATEGY EMPLOYING MAXIMUM ENTROPY

Palavras-chave: Agricultural and Food Policy.

Ano: 1995

URL: http://purl.umn.edu/6179

Golan, Amos; Karp, Larry S.; Perloff, Jeffrey M..

Generalized maximum entropy may be used to estimate mixed strategies subject to restrictions from game theory. This method avoids distributional assumptions and is consistent and efficient. We use this method to estimate the mixed strategies of duopolistic airlines.

PHASING IN AND PHASING OUT PROTECTIONISM WITH COSTLY ADJUSTMENTS OF LABOUR

Palavras-chave: Research Methods/ Statistical Methods.

Ano: 1996

URL: http://purl.umn.edu/25072

Karp, Larry S.; Paul, Thierry.

We study the dynamics of optimal trade policy in a model with costly inter-sectoral adjustment of labour, where migrants pay less than the marginal social cost of migration. If workers have rational expectations, a future tariff has an announcement effect on the current migration decision. If the government is able to commit itself to future policy, the optimal trajectory involves phasing in and then phasing out protection of the dying sector. This contrasts with recommendations of gradual liberalization. Without the ability to make commitments, the equilibrium policy begins with and maintains free trade.

Risk aversion in a dynamic trading game

Palavras-chave: Adjustment costs; Dynamic tariffs; Time inconsistency; Markov perfection; International Relations/Trade.

Ano: 1993

URL: http://purl.umn.edu/51112

The effect of risk aversion on Nash equilibrium trade restrictions is studied using numerical methods. An increase in a nation's level of risk aversion can lead to either an increase or decrease in its equilibrium restriction and either an increase or decrease in its rival's restriction. The linear quadratic dynamic game is generalized to include risk aversion.

Tariffs with dynamic supply response

Palavras-chave: International Relations/Trade; Research Methods/ Statistical Methods; Risk and Uncertainty.

Ano: 1986

URL: http://purl.umn.edu/6096

This paper studies the optimal tariff in a dynamic framework. The effects of the supplier's rationality and of the type of strategy available to the importer are discussed. With rational sellers, the optimal tariff is dynamically inconsistent; the consistent tariff is extremely myopic and may be worse than free trade for the importer. The paper concentrates on the case in which the traded good is a reproducible commodity. This is compared to the situation in which the traded good is a nonrenewable resource. The plausibility of the consistent equilibrium, in the absence of binding commitments, is discussed.

Taxes Versus Quantities for a Stock Pollutant with Endogenous Abatement Costs and Asymmetric Information

Palavras-chave: International Relations/Trade.

Ano: 1985

URL: http://purl.umn.edu/6122

Karp, Larry S.; Zhang, Jiangfeng.

Non-strategic firms with rational expectations make investment and emissions decisions. The investment rule depends on firms’ beliefs about future emissions policies. We compare emissions taxes and quotas when the (strategic) regulator and (nonstrategic) firms have asymmetric information about abatement costs, and all agents use Markov Perfect decision rules. Emissions taxes create a secondary distortion at the investment stage, unless a particular condition holds; emissions quotas do not create a secondary distortion. We solve a linear-quadratic model calibrated to represent the problem of controlling greenhouse gasses. The endogeneity of abatement capital favors taxes, and it increases abatement.

Tipo: Thesis or Dissertation

Palavras-chave: Pollution control; Investment; Asymmetric information; Rational expectations; Choice of instruments; Resource /Energy Economics and Policy; C61; D8; H21; Q28.

Ano: 2008

URL: http://purl.umn.edu/42877

Dynamic hedging with uncertain production

Open-loop and feedback models of dynamic oligopoly

Palavras-chave: Marketing; Risk and Uncertainty.

Ano: 1985

URL: http://purl.umn.edu/6090

The iPhone goes downstream: mandatory universal distribution

Palavras-chave: Industrial Organization; Research Methods/ Statistical Methods.

Ano: 1988

URL: http://purl.umn.edu/6089

CLIMATE POLICY WHEN THE DISTANT FUTURE MATTERS: CATASTROPHIC EVENTS WITH HYPERBOLIC DISCOUNTING

Apple’s original decision to market iPhones using a single downstream vendor prompted calls for mandatory universal distribution (MUD), whereby all downstream vendors would sell the iPhone under the same contract terms. The upstream monopoly may want either one or more downstream vendors, and, in either case, consumer welfare may be higher with either one or more firms. If the income elasticity of demand for the new good is greater than the income elasticity of the existing generic good, the MUD requirements leads to a higher equilibrium price for both the new good and the generic, and therefore lowers consumer welfare.

Tipo: Working Paper

Palavras-chave: Vertical restrictions; Mandatory universal distribution; New product oligopoly; Institutional and Behavioral Economics; L12; L13; L42.

Ano: 2011

URL: http://purl.umn.edu/123636

Karp, Larry S.; Tsur, Yacov.

Low probability catastrophic climate change can have a signifcant influence on policy under hyperbolic discounting. We compare the set of Markov Perfect Equilibria (MPE) to the optimal policy under time-consistent commitment. For some initial levels of risk there are multiple MPE; these may involve either excessive or insufficient stabilization effort. These results imply that even if the free-rider problem amongst contemporaneous decision-makers were solved, there may remain a coordination problem amongst successive generations of decision-makers. A numerical example shows that under plausible conditions society should respond vigorously to the threat of climate change.

Green industrial policy: trade and theory

Palavras-chave: Abrupt climate change; Event uncertainty; Catastrophic risk; Hyperbolic discounting; Markov Perfect Equilibria; Environmental Economics and Policy; C61; C73; D63; D99; Q54.

Ano: 2007

URL: http://purl.umn.edu/7181

Karp, Larry S.; Stevenson, Megan.

This paper studies the reality and the potential for green industrial policy. We provide a summary of the green industrial policies, broadly understood, for five countries. We then consider the relation between green industrial policies and trade disputes, emphasizing the Brazil-US dispute involving ethanol and the broader US-China dispute. The theory of public policy provides many lessons for green industrial policy. We select four of these lessons, involving the Green Paradox, the choice of quantities versus prices with endogenous investment, the coordination issues arising from emissions control, and the ability of green industrial policies to promote cooperation in reducing a global public bad like carbon emissions.

Tipo: Working Paper

Palavras-chave: Green industrial policy; Trade conflicts; Green paradox; Asymmetric information; Coordination games; Participation games; Institutional and Behavioral Economics; Research and Development/Tech Change/Emerging Technologies; F13; F18; H21; H23.

Ano: 2012

URL: http://purl.umn.edu/123637

A dynamic model of oligopoly in the coffee export market

A linear-quadratic, dynamic feedback oligopoly model that nests various market structures is used to estimate the degree of competitiveness and the adjustment paths of the two largest coffee exporters, Brazil and Colombia. Their estimated behavior is relatively competitive. This subgame perfect dynamic model is-compared to a standard static oligopoly model and the open-loop model (the dynamic generalization of the standard static model). Both classical and Bayesian tests of open-loop and feedback dynamic models are reported.