Francisco Álvarez González

Business telephone traffic demand in Spain: 1980-1991, an econometric approach

In this paper we use a theoretical model for the demand of telecommunication services to derive econometric models of the business demand for telephone traffic in Spain for the period 1980-1991. Using quaterly data, we estimate separate equations for the different types of toll traffic: local, long distance, national and international. We use cointegration techniques to obtain long run and short run equations, both estimated separately in two steps and jointly, in one step. A battery of diagnostics is applied to each of the equations, Price and output elasticies agree with previous findings and could be used for analizing the revenue effects of changes in tariffs and medium term forecasting of traffic and revenues.

Cheating for the common good in a macroeconomic policy game

This paper presents a simple repeated-game model of interaction between an optimizing government and the private sector. Two polar cases are considered: (a) the private sector is represented by a single agent; and (b) there is a continuum of heterogenous atomistic private agents. In both cases, the government starts each repetition by making a non-binding announcement about its future actions. The players have complete and perfect information, with one exception: the private agents do not know whether or not the government will act as announced. Thus, each private agent ieither behaves with probability ði as if it trusted the announcement, or plays with probability 1 . ði as a Stackelberg leader. After observing the reaction of the private sector, the government

Moral hazard and tradeable pollution emission permits

Abstract We consider a market for pollution emission permits in a model in which pollution, generated as by-product of firm’s activity, is determined as the sum of firm-specific random shocks and each firm’s abatement effort. In such a setting, an expected utility maximizing society demands an efficient abatement effort from each firm. We assume that the abatement effort is decided by each firm and is not observed by the environmental regulator. This leads to a moral hazard problem between firms (agents) and the regulator (principal). The regulator assigns contracts to each firm, each contract consisting of an amount of permits and a linear fine for over-polluting firms. We distinguish those policies where the regulator assigns a low number of permits (restrictive policies) and policies where the number of permits to distribute is high (permissive policies). We show that in a context of restrictive policies there exist policies that achieve efficiency and do not need to discriminate in terms of penalties among over-polluting firms when a market for permits is allowed to operate. We also find that the regulator can set up policies with low penalty levels for almost all firms. Finally, we show that in a context of permissive policies, the market leads to the same efficiency-inducing fine scheme than the corresponding one under autarky.