Output, price, and welfare under nonlinear pricing in an imperfectly competitive industry

[full article and abstract in English] The present work analyzes the effects of goods and capital market integration on welfare. In an imperfectly competitive industry with unionized labor, openness to competition via exports, the possibility of holding minority stakes into a rival company and undertaking Greenfield Foreign Direct Investment (FDI) exemplify product and capital market liberalization, respectively. Challenging the “lieu commune” that liberalization a priori improves the social welfare of an economy, making use of a game-theoretic approach, it is shown that a domestic government should design the appropriate interventions in product and capital markets depending on the precise pattern of economic integration.

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Incomplete Environmental Regulation, Imperfect Competition, and Emissions Leakage

American Economic Journal Economic Policy ◽

10.1257/pol.1.2.72 ◽

2009 ◽

Vol 1 (2) ◽

pp. 72-112 ◽

Cited By ~ 51

Author(s):

Meredith L Fowlie

Keyword(s):

Environmental Regulation ◽

Carbon Dioxide Emissions ◽

Imperfect Competition ◽

Electricity Sector ◽

Emissions Reductions ◽

Competitive Industry ◽

Emissions Leakage ◽

Pollution Problem ◽

Imperfectly Competitive ◽

The Cost

Environmental regulation of industrial pollution is often incomplete; regulations apply to only a subset of facilities contributing to a pollution problem. Policymakers are increasingly concerned about the emissions leakage that may occur if unregulated production can be easily substituted for regulated production. This paper analyzes emissions leakage in an incompletely regulated and imperfectly competitive industry. The analytical model is used to simulate outcomes under incomplete, market-based regulation of carbon dioxide emissions in California's electricity sector. Regulation that exempts out-of-state producers achieves approximately one-third of the total emissions reductions achieved under complete regulation at more than twice the cost per ton. (JEL L94, Q53, Q58)

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Cash Ethanol Cross-Hedging Opportunities

Journal of Agricultural and Applied Economics ◽

10.1017/s1074070800028248 ◽

2003 ◽

Vol 35 (3) ◽

pp. 510-516 ◽

Cited By ~ 11

Author(s):

Jason R.V. Franken ◽

Joe L. Parcell

Keyword(s):

New York ◽

Alternative Fuels ◽

Commodity Prices ◽

Minimum Variance ◽

Price Risk ◽

Unleaded Gasoline ◽

Output Price ◽

Competitive Industry ◽

Hedge Ratios ◽

Cross Hedging

Increased use of alternative fuels and low commodity prices have contributed to the recent expansion of the U.S. ethanol industry. As with any competitive industry, some level of output price risk exists in the form of volatility; yet, no actively traded ethanol futures market exists to mitigate output price risk. This study reports estimated minimum variance cross-hedge ratios between Detroit spot cash ethanol and the New York Mercantile Exchange unleaded gasoline futures for 1-, 4-, 8-, 12-, 16-, 20-, 24-, and 28-week hedge horizons. The research suggests that a one-to-one cross-hedge ratio is not appropriate for some horizons.

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