Available methods of valuing environmental changes are often limited in their applicability to current issues such as damage assessment and implementing regulatory controls, or may otherwise not provide reliable readings of community preferences. An alternative is to base decisions on predetermined ® xed schedules of sanctions, restrictions, damage awards, and other allocative guides and incent...

Many disputes between buyers and sellers concern product quality and whether a claim of poor product performance is covered by a warranty issued by the seller. We develop an analytical framework in which average product quality, buyer preferences, production and transaction costs, and the extent to which "true" quality can be observed by buyer and seller interact to determine warranties, produc...

The objective of this note is to analyze some implications of the model of commodity money described in Banerjee and Maskin (1996) which may seem paradoxical. In order to do this, we incorporate a general production cost structure into the model. We focus on two different results. First, the existence of technologies that make counterfeiting a commodity more difficult may exclude it from being ...

We discuss how to measure allocative efficiency without presuming technical efficiency. This is relevant when it is easier to introduce reallocations than improvements of technical efficiency. We compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency. In particular, we develop necessary and sufficient conditions on the technology to e...

Broiler production has great potentials for increasing protein supply in Iran and plays a vital role in economic system of the country. In this study technical, allocative and economic efficiency of broiler production farms in Fars Province was estimated by using Data Envelopment Analysis approach (DEA) method. The results of the study reveal that under constant return to scale (CRS) and variab...

This paper tries to reconcile incentive theory with transaction costs theory. We first discuss the fundamental assumptions underlying the use of the Revelation Principle in the standard mechanism design literature and show how various contractual incompletenesses and externalities induced by transaction costs affect the basic trade-off between allocative efficiency and informational rents highl...

This study measures levels of technical, allocative and economic efficiency in agricultural crop production for Brazil in 1995. A nonparametric frontier model (DEA) under constant returns to scale was used. On average, the results suggest that the sector suffers from moderate technical inefficiency and from strong allocative inefficiency. If full technical efficiency were achieved, the crop pro...

In the course of the liberalization of the European energy markets, the German government opted – diverging from all other European countries – for Negotiated Third-Party Access. In this article we analyze if this institutional regime could theoretically lead to efficient market outcomes. Above that, we empirically review whether certain aspects of the actual implementation, the publication of ...

A perpetual youth overlapping generations model is presented in which the presence of financial frictions can create the crowd-in effect of asset bubbles that promotes capital accumulation. The existence of asset bubbles increases the equilibrium interest rate. Although the increased interest rate excludes less productive agents from production activity, these agents benefit from the liquidity ...

We extend the equivalence between Bayesian and dominant strategy implementation established by Gershkov et al. (Econometrica, 2013) to environments with non-linear utilities satisfying the property of increasing differences over distributions and the convex-valued assumption. The new equivalence result produces novel implications to the literature on the principal-agent problem with allocative ...