Environmental Regulation of Firms that Experience Dynamic Inconsistency

<p>The recent push for environmental regulation has invigorated the discussion of mechanism design and optimal taxation policy. Recent decades have also seen growing interest in behavioural economics and empirically based theory. In this thesis we take a step towards combining the two by asking how a regulator may correct an externality in situations where they have a time consistency problem. Time inconsistency is one of the notable developments of behavioural economics. It posits that an agent’s decisions do not remain consistent over time, which causes a utility loss if the agent cannot commit themselves to a particular course of action and stick to it. The solution to inconsistency problems is to precommit to a course of action and prevent future deviations from it. However, finding a mechanism to enable such precommitment is often problematic. A regulator who maximises welfare can have a time consistency problem because welfare will depend on the decisions of firm and households who may themselves be inconsistent. That inconsistency then propagates to the regulator’s decision and reduces the level of welfare that the regulator can reach. Alternatively, the regulator’s time consistency problem can be caused by non-stationarity in their time preferences. To reach the firstbest outcome the regulator must not only eliminate the environmental externality: they must also overcome their own time inconsistency problem. This thesis draws from the literature on strategic delegation to construct a taxation game in which the regulator can achieve the first best taxation regime without the need for external precommitment devices. We study a dynamic game where the regulator chooses a tax rate and the regulated monopolist chooses their price. We show that the Markov-perfect equilibrium price path of this game will replicate the first best plan. Our results holds for time inconsistency caused by both jump states and quasihyperbolic discounting.</p>

Environmental Regulation of Firms that Experience Dynamic Inconsistency

<p>The recent push for environmental regulation has invigorated the discussion of mechanism design and optimal taxation policy. Recent decades have also seen growing interest in behavioural economics and empirically based theory. In this thesis we take a step towards combining the two by asking how a regulator may correct an externality in situations where they have a time consistency problem. Time inconsistency is one of the notable developments of behavioural economics. It posits that an agent’s decisions do not remain consistent over time, which causes a utility loss if the agent cannot commit themselves to a particular course of action and stick to it. The solution to inconsistency problems is to precommit to a course of action and prevent future deviations from it. However, finding a mechanism to enable such precommitment is often problematic. A regulator who maximises welfare can have a time consistency problem because welfare will depend on the decisions of firm and households who may themselves be inconsistent. That inconsistency then propagates to the regulator’s decision and reduces the level of welfare that the regulator can reach. Alternatively, the regulator’s time consistency problem can be caused by non-stationarity in their time preferences. To reach the firstbest outcome the regulator must not only eliminate the environmental externality: they must also overcome their own time inconsistency problem. This thesis draws from the literature on strategic delegation to construct a taxation game in which the regulator can achieve the first best taxation regime without the need for external precommitment devices. We study a dynamic game where the regulator chooses a tax rate and the regulated monopolist chooses their price. We show that the Markov-perfect equilibrium price path of this game will replicate the first best plan. Our results holds for time inconsistency caused by both jump states and quasihyperbolic discounting.</p>

Dip Degreasing Stage Improvement in Car Body Pretreatment Process by Six Sigma

An automobile company in this research faced the consistency problem from the chemical concentration in degreasing bath which was one of the stages in the pretreatment process. The problem came from the proportion of total alkaline (T.Al) lower than the lower control limit (LCL) which was set at 18.2 points during February – May 2020. This resulted in the low values of Cp and Cpk, i.e. 0.83 and 0.51, respectively. To remedy the problem, Six Sigma (DMAIC) was applied to improve the process stability. The cause and effect matrix was used to analyse the potential causes of problems and prioritise the causes to solve. It was found that four (causes) factors were solved by auto titration and feeding controller installation to reduce variance and increase stability. Another one factor, quality of water, was improved by adding a check item to monitor and collect data during the initial implementation stage. The result after improvement showed that Cp and Cpk were increased to 1.82 and 1.52 in August 2020, respectively.

Formalism and Hilbert’s understanding of consistency problems

Formalism in the philosophy of mathematics has taken a variety of forms and has been advocated for widely divergent reasons. In Sects. 1 and 2, I briefly introduce the major formalist doctrines of the late nineteenth and early twentieth centuries. These are what I call empirico-semantic formalism (advocated by Heine), game formalism (advocated by Thomae) and instrumental formalism (advocated by Hilbert). After describing these views, I note some basic points of similarity and difference between them. In the remainder of the paper, I turn my attention to Hilbert’s instrumental formalism. My primary aim there will be to develop its formalist elements more fully. These are, in the main, (i) its rejection of the axiom-centric focus of traditional model-construction approaches to consistency problems, (ii) its departure from the traditional understanding of the basic nature of proof and (iii) its distinctively descriptive or observational orientation with regard to the consistency problem for arithmetic. More specifically, I will highlight what I see as the salient points of connection between Hilbert’s formalist attitude and his finitist standard for the consistency proof for arithmetic. I will also note what I see as a significant tension between Hilbert’s observational approach to the consistency problem for arithmetic and his expressed hope that his solution of that problem would dispense with certain epistemological concerns regarding arithmetic once and for all.

Has the Pandemic Triggered a ‘Paperdemic’? Towards an Assessment of Diagnostic Indicators for COVID-19

This paper is a preliminary step towards the assessment of an alarming widespread belief that victims of the novel coronavirus SARS-CoV-2 include the quality and accuracy of scientific publications about it. Our initial results suggest that this belief cannot be readily ignored, denied, dismissed or refuted, since some genuine supporting evidence can be forwarded for it. This evidence includes an obvious increase in retractions of papers published about the COVID-19 pandemic plus an extra-ordinary phenomenon of inconsistency that we report herein. In fact, we provide a novel method for validating any purported set of the four most prominent indicators of diagnostic testing (Sensitivity, Specificity, Positive Predictive Value, and Negative Predictive Value), by observing that these indicators constitute three rather than four independent quantities. This observation has virtually been unheard of in the open medical literature, and hence researchers have not taken it into consideration. We define two functions, which serve as consistency criteria, since each of them checks consistency for any set of four numerical values (naturally belonging to the interval [0.0,1.0]) claimed to be the four basic diagnostic indicators. Most of the data we came across in various international journals met our criteria for consistency, but in a few cases, there were obvious unexplained blunders. We explored the same consistency problem for some diagnostic data published in 2020 concerning the ongoing COVID-19 pandemic and observed that the afore-mentioned unexplained blunders tended to be on the rise. A systematic extensive statistical assessment of this resumed tendency is warranted.

Has the Pandemic Triggered a ‘Paperdemic’? Towards an Assessment of Diagnostic Indicators for COVID-19

This paper is a preliminary step towards the assessment of an alarming widespread belief that victims of the novel coronavirus SARS-CoV-2 include the quality and accuracy of scientific publications about it. Our initial results suggest that this belief cannot be readily ignored, denied, dismissed or refuted, since some genuine supporting evidence can be forwarded for it. This evidence includes an obvious increase in retractions of papers published about the COVID-19 pandemic plus an extra-ordinary phenomenon of inconsistency that we report herein. In fact, we provide a novel method for validating any purported set of the four most prominent indicators of diagnostic testing (Sensitivity, Specificity, Positive Predictive Value, and Negative Predictive Value), by observing that these indicators constitute three rather than four independent quantities. This observation has virtually been unheard of in the open medical literature, and hence researchers have not taken it into consideration. We define two functions, which serve as consistency criteria, since each of them checks consistency for any set of four numerical values (naturally belonging to the interval [0.0,1.0]) claimed to be the four basic diagnostic indicators. Most of the data we came across in various international journals met our criteria for consistency, but in a few cases, there were obvious unexplained blunders. We explored the same consistency problem for some diagnostic data published in 2020 concerning the ongoing COVID-19 pandemic and observed that the afore-mentioned unexplained blunders tended to be on the rise. A systematic extensive statistical assessment of this presumed tendency is warranted.