Norimichi Matsueda

Effects of transboundary pollution on the mode of international trade of a polluting good

By analyzing a strategic interaction between environmentally-concerned governments, we examine how the competition mode of international polluting oligopoly is determined. We show that a resulting form of competition depends on the magnitudes of marginal damage costs and cross-border spillover as well as on the degrees of similarities in these environment-related parameters.

Asymmetrical information and delay of a side payment in unidirectional transboundary pollution

It has been argued that unidirectional transboundary pollution can likely be resolved efficiently with the provision of a side payment from a victim especially when the pollution originates from a developing country and is transported to a developed country. However, its offer of a side payment might be delayed intentionally in the presence of asymmetrical information about the damage cost of a polluter because a certain type of polluter might attempt to disguise itself and increase its total payoff. Postponement of a side payment could protect a victim from incurring a potentially greater loss due to this polluter’s deceptive behavior. The realization of such strategic delay may partly explain the infrequency of international side payments.

Contracting-Out of Household Waste Collection Services in Japan

We first report three empirical findings from our survey on the contracting-out of municipal waste collection services in Japan: (1) the rate of contracting-out and the contract price are inversely related, (2) this inverse relationship tapers out as the contracting rate becomes sufficiently high, and the contract price even tends to go up as the contracting rate approaches 100% and (3) there is a significant disparity in the contracting rates between the eastern and western parts of Japan. In order to account for these observations, we then set up a simple analytical model and examine its implications. Also, we discuss the issues that a potential hold-up situation could give rise to when the services are completely contracted out to private firms.

OPTIMAL TERM LENGTH FOR AN OVERCONFIDENT CENTRAL BANKER

This paper discusses the implications of overconfidence when it affects a monetary policy maker. We consider two forms of overconfidence: the illusion of precision and the illusion of control. Incorporating them into a standard New Keynesian framework, we consider the optimal term length of a central banker and examine how it depends on the types and degrees of overconfidence. In particular, we show that the legal mandate should always be lengthened when these two types of biases increase by the same percentage magnitude.

Effects of Transboundary Stock Pollution on the Mode of International Competition

This paper looks into potential determinants of the mode of international competition in a polluting good market by focusing on a strategic interaction between two environmentally concerned governments. From the analysis of our model based on a simple international duopoly model with transboundary stock pollution, we show how the resulting form of international competition depends on the magnitudes of the transboundary impacts of pollutant emissions and the decay rates of pollutant stocks in respective countries.