Sarah L. Stafford

An Experimental Analysis of Rent Seeking Under Varying Competitive Conditions

We test several predictions of Gradsteins(1995) rent seeking model using anexperimental design that includes avariable number of participants, costheterogeneity, and an entry fee. Consistentwith theoretical predictions, costheterogeneity and the entry fee decreasethe number of participants. Overall,participation is much lower than predicted. Also consistent with Gradsteins model, wefind that rent seeking expendituresincrease with the number of competitors anddecrease with the addition of an entry fee. Experimental results do not support theprediction that cost heterogeneitygenerally decreases expenditures in rentseeking contests.

Punishment in a Regulatory Setting: Experimental Evidence from the VCM

To analyze the effectiveness of punishment in inducing regulatory compliance, we modify a standard public goods experiment to include a financial penalty for free riding. The design allows us to vary both punishment probability and severity. We introduce the punishment mechanism in both a one-time and a repeated treatment and find that compliance (contributing to the public good) is increasing in expected punishment cost in both treatments. We also find that punishment severity has a larger effect on behavior than punishment probability. In the repeated treatment, we find that past punishment has a negative rather than positive effect on compliance.

Assessing the Effectiveness of State Regulation and Enforcement of Hazardous Waste

This paper assesses the effectiveness of different state hazardous waste regulations and policies in promoting compliance using data for 8000 facilities across the United States. Because data on compliance is available only if a facility is inspected, the analysis uses a censored bivariate probit. Adoption of voluntary pollution prevention programs appears to decrease violations in general while adoption of strict liability and allocating a higher percentage of employees to regional offices appear to decrease Class 1 violations only. Although spending on waste programs also appears to decrease Class 1 violations, spending is positively correlated with the overall probability of violation.

How Green is Your Campus? An Analysis of the Factors that Drive Universities to Embrace Sustainability

I examine the factors that influence the adoption of sustainable practices by institutions of higher education (IHEs) in the U.S. Using data from the Sustainable Endowments Institute, I conduct an ordered probit analysis on 180 IHEs. The results show that size and wealth are significant factors in the adoption of sustainable practices and that stakeholders such as faculty, alumni, and the surrounding community also play an important role. I find no evidence that institutions adopt sustainability to attract students. Also, in contrast to the findings of similar studies on for-profit entities, there is no evidence that regulatory pressures encourage campus sustainability. I also examine the factors that affect the institutions’ decision to sign the Presidents Climate Commitment (PCC), a largely symbolic gesture. The results for the PCC are quite different than those for overall sustainability. Most importantly, neither wealth or size are significant factors in that decision.

Self-Policing in a Targeted Enforcement Regime

This paper adds to the debate over whether self-policing can increase environmental protection by considering an aspect of self-policing that has been ignored in previous models Ð that self-policing may influence future enforcement. The model combines self-policing with targeted enforcement and allows for both deliberate and inadvertent violations. As expected, rewarding self-policers with more lenient future enforcement increases auditing, remediation, and disclosure of inadvertent violations. Self-policing can also serve as a complement to deliberate compliance and can thus further increase environmental performance. However, under reasonable conditions self-policing can be a substitute for deliberate compliance and could therefore be detrimental to environmental protection.

The Campus Parking Game: A Demonstration of Price Discrimination and Efficiency

This article presents a classroom game that allows students to directly experience the welfare improvements that can result from price discrimination. The demonstration uses a very familiar decision-making scenario, campus parking, to introduce the concept of price discrimination as well as reinforce the concepts of opportunity cost, consumer surplus, and search costs. This game can be used in a variety of classes, including principles, intermediate theory, industrial organization, or environmental economics, and can be conducted in a 50-minute class period with follow-up discussion in the next class.

An analysis of methods for identifying social vulnerability to climate change and sea level rise: a case study of Hampton Roads, Virginia

This paper examines methods for quantitatively identifying communities that have high social vulnerability to environmental hazards. We first provide an overview of the existing literature on quantifying social vulnerability. We discuss the strengths and weaknesses of the one of the most common methods, composite indexing using principal component analysis (PCA), in more detail. We present a case study of Hampton Roads, Virginia, that compares PCA-based composite indexing to an alternative method using k-means clustering to identify socially vulnerable communities. We find that PCA-based indexing is particularly sensitive to changes in geographic boundaries and the number of input variables while clustering is less so. However, both methods exhibit the highest levels of consistency when vulnerability is measured by a relatively small number of well-established quantitative indicators. While the cluster method is more intuitive and easier to interpret than composite indexing, it is not well suited for large analyses across a disparate geographic area or where one needs to explicitly rank observations.

Network Externalities and Standardization: A Classroom Demonstration

This paper presents a classroom game that can be used to demonstrate network externalities, standardization, and switching costs. In the basic game, students independently choose a technology whose value depends on the total number of students choosing that technology. In the next round, sequential decision making is allowed that quickly leads to standardization. Introducing imperfect information and switching costs into subsequent rounds can lead to the real-world phenomenon of an inferior technology becoming the standard. This exercise can be used in principles of economics classes to teach these important concepts without requiring mathematical models. In more advanced classes, construction of the mathematical model behind the game may be assigned.

Choosing Winners and Losers in a Classroom Permit Trading Game

This paper presents a classroom game in which students trade pollution permits. By changing the distribution of permits across firms, the game shows students how the allocation of property rights determines the winners and losers in the permit trading system but does not affect the efficiency of the system. This game can be used in a variety of classes, including principles or environmental economics, and can be conducted in a 50-minute class period with follow-up discussion in the next class.

Does Crime Pay? A Classroom Demonstration of Monitoring and Enforcement

This paper presents a classroom game in which students choose whether or not to comply with pollution regulations. By changing the level of monitoring and fines for noncompliance across periods, the game shows students how the probability and severity of enforcement affects incentives for compliance. The game can be adapted for settings other than environmental regulation and can be used in a variety of classes including regulation, law and economics, environmental economics, public economics, or the economics of crime. It can easily be conducted in a fifty-minute class period.