Birgit Will

Transport, Welfare and Externalities

This book discusses a paradigm shift for dealing with the internalization of external costs in transport. Crucial to the analysis is the insight that the polluters are not the only cost drivers; both pollutees and the state can also contribute to reducing social costs. The authors show that applying the Cheapest Cost Avoider Principle (CCAP) instead of the Polluter Pays Principle (PPP) can lead to substantial welfare improvements.

Fighting Cartels: Some Economics of Council Regulation (EC) 1/2003

This paper investigates the effectiveness of the new Council Regulation (EC) 1/2003 which replaces the mandatory notification and authorization system by a legal exception system. Effectiveness is operationalized via the two subcriteria compliance to Art. 81 EC Treaty and the probabilities of type I and type II errors committed by the European Commission. We identify four different types of Perfect Bayesian Nash Equilibria: fullcompliance, zero-compliance, positive-compliance and full-deterrence. We show that the Commission can, in principle, hit the full-compliance equilibrium, where the cartelizing firms fully obey the requirements of Art 81(3) EC Treaty and both error probabilities are zero.

Replacing the Polluter Pays Principle with the Cheapest Cost Avoider Principle

Contents: 1. Introduction 2. The Pigovian Tradition and the Polluter Pays Principle 3. The Coasian Revolution 4. Reaching Efficiency: Coase versus Pigou 5. Replacing the Polluter Pays Principle with the Cheapest Cost Avoider Principle 6. Beyond Efficiency: Strengths and Weaknesses of the Principles 7. Case Studies 8. The Cheapest Cost Avoider Principle and the European Transport Policy 9. Conclusions References