Hans Wiesmeth

The equivalence of core and cost share equilibria in an economy with a public good

Abstract The central result of this paper is a refinement of an equivalence theorem in Mas-Collell, Quart. J. Econ. 94 (1980), 625–641, for the core of a finite economy with a public good. It is shown that an allocation belongs to the core if and only if it is a cost share equilibrium; i.e., is supported by a monotonic cost share system. We also characterize the set of core allocations which can be supported by a linear cost share system. It turns out that the set of linear cost share equilibria, which are in one-to-one correspondence with the Lindahl-Foley equilibria, is determined by uniform upper and lower bounds on the relative marginal rate of substitution for the public good.

Economic Models of NATO

Abstract The seminal work of Olson and Zeckhauser (1966) on the economic theory of alliances, in particular NATO, provides the theoretical background for this paper. After restating their results on alliance allocation behavior in a formal framework, we show that these results may fail in a context with decentralized production of the public defense commodity. Finally, we introduce a simple mechanism, which allows the implementation of an efficient allocation, characterized by proportional burden sharing and cost monotonicity. These results can also be applied to other public goods problems.

How to successfully implement extended producer responsibility: considerations from an economic point of view

This paper investigates the concept of extended producer responsibility (EPR) from an economic point of view. Particular importance will be placed on the concept of ‘economic feasibility’ of an EPR policy, which should guide decision-making in this context. Moreover, the importance of the core EPR principle of ‘integrating signals throughout the product chain’ into the incentive structure will be demonstrated with experiences from Germany. These examples refer to sales packaging consumption, refillable drinks packages and waste electrical and electronic equipment collection. As a general conclusion, the interaction between economic principles and technological development needs to be observed carefully when designing incentive-compatible EPR policies.

Core equivalence with congested public goods

SummaryThis paper examines a model of an infinite production economy with a finite number of types of agents andsemi- public goods, which are subjected to crowding and exclusion. The utility of an agent depends not only on the vector of public commodities produced by the coalition to which she belongs, but also on the mass of agents of her type who are the members of this coalition. The main purpose of the paper is to derive necessary and sufficient conditions on the local degrees of congestion which would guarantee the equivalence between the core and the set of equal treatment Lindahl equilibria. We prove that this equivalence holdsif and only if there are constant returns to group size for each type of agents. It implies that linearity of each agents congestion function with respect to the mass of the agents of her own type is necessary for the core equivalence to hold.

On the theory of cost sharing

This paper investigates efficiency and equitability issues given a cost sharing method ϕ in an economy with a public commodity. We study the concept of a ϕ-cost share equilibrium and examine the set of all equilibrium allocations. Finally, we devise a mechanism to implement ϕ-cost share equilibria as strong equilibria of an associated non-cooperative game.

Contract equilibria in a regulated rental housing market

Abstract Various contractual equilibrium concepts for a regulated rental housing market are studied in this paper. Regulation refers to rental contracts with institutionally prescribed structures and rental prices, a situation common for housing markets with restrictive rental protection legislation. Contracts can then be considered as indivisible commodities with certain unusual characteristics. Existence of equilibria of the various types is shown under rather weak assumptions.

An Economic Analysis of Cooperation in the European Community

The Single European Act (SEA), which came into effect on July 1, 1987, is the first major systematic revision of the European Community (EC) Treaties. It concretizes the EC inherent federal principles and, in certain crucial respects, changes the institutional balance by opening new opportunities for the European Parliament (EP) in the decision-making process. The amendments made to the Rome Treaty were designed to facilitate creation of internal European market by 1992. To ensure a smooth entry into 1992, which is a primary goal of the EC, these amendments were coupled with provisions allowing the implementation of the new decision-making process, so-called cooperation procedure.

Integrated environmental policy: A review of economic analysis

Holistic environmental policies, which emerged from a mere combination of technical activities in waste management some 40 years ago, constitute the most advanced level of environmental policies. These approaches to environmental policy, among them the policies in integrated waste management, attempt to guide economic agents to an environment-friendly behaviour. Nevertheless, current holistic policies in waste management, including policies on one-way drinks containers and waste electrical and electronic equipment, and implementations of extended producer responsibility with further applications to waste electrical and electronic equipment, reveal more or less severe deficiencies – despite some positive examples. This article relates these policy failures, which are not necessarily the result of an insufficient compliance with the regulations, to missing constitutive elements of what is going to be called an ‘integrated environmental policy’. This article therefore investigates – mostly from a practical point of view – constitutive elements, which are necessary for a holistic policy to serve as a well-functioning allocation mechanism. As these constitutive elements result from a careful ‘integration’ of the environmental commodities into the economic allocation problems, we refer to these policies as ‘integrated environmental policies’. The article also discusses and illustrates the main steps of designing such a policy – for waste electrical and electronic equipment and a (possible) ban of Glyphosat in agriculture. As these policies are dependent on economic and political stability with environmental awareness sufficiently developed, the article addresses mostly waste management policies in highly industrialised countries.

Integrated environmental policy: Chemicals and additives in textiles.

http://dx.doi.org/10.1016/j.wasman.2015.10.028 0956-053X/ 2015 Published by Elsevier Ltd. In spite of the favorable outcome achieved at times, currently applied holistic environmental policies, which act as a means of allocating environmental commodities, are characterized by a series of shortcomings. These policy failures, including the semi-legal exportation of waste electronic equipment to developing countries (WEEE legislations), insufficient incentives for ‘‘design for environment” – DfE (Extended Producer Responsibility – EPR policies), crowding-out of refillable drinks containers (packaging directives), and others, do not however necessarily point to an insufficient compliance with enforced regulations. Rather, the regulations concerneddonot assist producers and consumers in fully implementing the policy goals. Missing constitutive elements of an ‘‘integrated environmental policy”, established through a careful integration of environmental commodities into the economic allocation problems, are largely responsible for the abovementioned issues. To demonstrate the relevance of these ‘‘constitutive elements” and to better explain the concept of an ‘‘integrated environmental policy”, the development of a policy relating to the management of hazardous chemicals and textile additives is highly representative. This issue is closely related to recycling activities, which may result in the presence of contaminants in textiles produced from secondary resources (see the EU-project RISKCYCLE: http://www. wadef.com). The aim of the policy is to ‘‘persuade” textile manufacturers and importers of the importance of a ‘‘design for environment”, resulting in the production of a high percentage of textiles free from potentially hazardous substances, which may pose a threat to consumer health and continue to pollute the environment long after the end of the textiles’ lifespan. The following ‘‘constitutive elements” should be taken into consideration.

The state preference approach to general equilibrium in corporate finance

Abstract This paper attempts to implement the state preference approach in a multiperiod exchange economy. The procedure is relevant for a further investigation of various important issues in corporate finance, such as the results of Modigliani and Miller, and the integration of the state preference and the mean-variance approach to asset pricing.