OPTIMAL PROVISION OF PUBLIC GOODS. Chapter 7: Public Goods. Optimal Provision of Private Goods

Size: px
Start display at page:

Download "OPTIMAL PROVISION OF PUBLIC GOODS. Chapter 7: Public Goods. Optimal Provision of Private Goods"

Transcription

1 Outlne hapter 7: Publc Goods Optmal provson of publc goods. Under-provson generally characterzes markets wth publc goods absent government nterventon. Prvate sector provson. rowd out Problems OPTIMAL PROVISION OF PUBLI GOODS Pure publc goods have two trats: They are non-rval n consumpton: The margnal cost of another person consumng the good s zero and does not affect your opportunty to consume the good. They are non-excludable: There s no way to deny someone the opportunty to consume the good. Table 1 gves some examples. If a good Ice cream s both s s rval also and because excludable Ths my able Some It s table excludable TV goods shows s non-rval are examples snce mpure because the of publc cable pure my consumpton Table because 1t I s can a of prvate smply t precludes good. not share you publc company goods from my consumpton goods because can mpure smply they of t publc refuse are n no non-rval way goods to hook consumng Yet For Other t example s non-excludable goods ce the cream a same are crowded wth mpure ce you. because cream. sdewalk publc Fnally It The t s dmnshes but Natonal s also they and pure non-excludable up are prvate defense publc the your (to system. some consumpton. goods. s a classc extent) because are both goods only rval clearly way because for very you dffcult they your to consume are enjoyment to rval prohbt but t example. once s s non-rval not to an area It s excludable. and s non-rval protected non-excludable. because everyone my pedestrans reduced make as from excludable. more usng pedestrans ce cream. the sdewalk. also consumpton consumes of that natonal protecton. defense use the same sdewalk. protecton does not dmnsh your consumpton of t. Defnng pure and mpure publc goods Is the good excludable? Yes No Is the good rval n consumpton? Yes Ice cream rowded cty sdewalk No able tv Natonal defense Optmal Provson of Prvate Goods onsder a prvate good lke ce cream. Fgure 1 shows the market for ce cream cones assumng that the alternatve use of the money s buyng cookes at $1 each. Ths makes cookes the numerare good. 1

2 Prce of ce cream $3 $2 Fgure 1 At a Addng prce Ben Addng of has up $3 up Ben s an nether Ben s ndvdual and and person erry s erry s S=SM demands ndvdual ndvdual demands demands at each erry downward-slopng also much has ce ndvdual cream. demand gve prce curve socety s gves for socety s ce demand cream. demand. downward-slopng demand at $3. curve At a prce for ce of Addng $2 cream. Leadng both up people to Ben s a compettve and erry s demand more equlbrum ndvdual ce cream. at demands $2. Ben gve & erry consume socety s dfferent demand There quanttes. at $2. s a market supply curve assocated wth producng ce cream. 0 Q ERRY Q BEN D ERRY Q TOTAL Demand for a prvate good D BEN SMB =D BEN+ERRY Quantty of ce cream Optmal Provson of Prvate Goods In ths fgure as prce adjusted each person changed hs quantty consumed. For a prvate good consumers demand dfferent quanttes at the same market prce. We can also represent ths relatonshp mathematcally. Ben has preferences over cookes () and ce cream (I): UB ( I) As does erry: U ( I) Optmal Provson of Prvate Goods Utlty maxmzaton requres that each of ther ndfference curves s tangent to the budget constrant. Moreover supplers set P=M. For Ben we have: For erry we have: B I B I I MRS B I P M P M = = = I I I MRS I P M P M = = = Optmal Provson of Prvate Goods The prvate market equlbrum n ths case s socally effcent. The MRS for any quantty of ce cream equals the SMB of that quantty the margnal value to socety equals the margnal value to any ndvdual n the perfectly compettve market. 2

3 Optmal Provson of Publc Goods Now consder the tradeoff between a publc good lke mssles and a prvate good lke cookes. Fgure 2 shows the market for mssles assumng that the alternatve use of the money s buyng cookes at $1 each. Prce of mssles $6 $4 $3 $2 $1 0 Fgure 2 Addng Addng up Ben s up Ben s and and erry s erry s wllngness to to pay pay gves for each socety s quantty demand gves socety s for 1 mssle. demand. As does erry. There s a market supply curve Leadng to a compettve Addng assocated up Ben s wth and producng erry s equlbrum at 5 mssles. wllngness Ben & to mssles pay gves socety s Ben has erry a downward consume slopng the same Q. demand Whle Ben s demand for the 5 Dcurve erry s wllngness S=SM ERRY for wllngness mssles. to pay for to pay the th mssle. for the frst frst mssle mssle $2. s $4. Whle Ben s erry s wllngness wllngness to pay for to pay the for the ffth ffth mssle mssle $1. s $2. 1 D BEN Demand for a publc good 5 SMB=D BEN+ERRY Quantty of mssles Optmal Provson of Publc Goods Unlke the case of prvate goods where aggregate demand s found by summng the ndvdual demands horzontally wth publc goods aggregate demand s found by summng vertcally. That s holdng quantty fxed what s each person s wllngness to pay? Optmal Provson of Publc Goods We can also represent ths relatonshp mathematcally. Ben has preferences over cookes () and mssles (M): UB To Ben the margnal mssle s worth B M B B = MRS M U ( M) erry s preferences are To erry the margnal mssle s worth ( M) M = MRS M 3

4 Optmal Provson of Publc Goods The socal margnal beneft (SMB) of the next mssle s the sum of Ben and erry s margnal rates of substtuton: MRS M where represents each person n socety. Effcency requres MRS M M = M M Optmal Provson of Publc Goods That s socal effcency s maxmzed when the margnal costs are set equal to the sum of the margnal rates of substtuton (rather than each ndvdual s MRS). Ths s because the good s non-rval. Snce a unt can be consumed by all consumers socety would lke the producer to take nto account all consumers preferences. PRIVATE PROVISION OF PUBLI GOODS: Prvate-sector Underprovson In general the prvate sector underprovdes publc goods because of the free rder problem. onsder two people Ben and erry and two consumpton goods ce cream and freworks. Set the prces of each good at $1 but freworks are a publc good. Assume that Ben and erry have dentcal preferences. Prvate-sector Underprovson Ben and erry beneft equally from a frework that s provded by ether of them. What matters s the total amount of freworks. Each person chooses combnatons of ce cream and freworks n whch hs own MRS equals the rato of prce. For both Ben and erry they set: MRS = 1 = FI I F Whereas optmal provson requres: MRS FI = 1 4

5 Prvate-sector Underprovson Wth dentcal preferences the optmal condton s: 2 F = 1 whch mples = F I 2 Recall that margnal utltes dmnsh wth ncreasng consumpton of a good. In ths example optmal provson would requre that freworks are consumed untl ther utlty equals half the margnal utlty of ce cream. Thus each ndvdually buys too much ce cream prvately. I The Free Rder Problem n Practce There are some nterestng examples of the freerder problem n practce. Only 7.5% of publc rado lsteners n New York contrbute to the statons that s there s a lot of freerdng. In the Unted Kngdom the BB charges an annual lcensng fee for all televson owners. Many users of fle sharng servces never contrbute uploaded fles; they only download fles. Some of these servces lke Kazaa gve download prorty to those who contrbute. When Is Prvate Provson Lkely to Overcome the Free Rder Problem? Under what crcumstances are prvate market forces lkely to solve the free rder problem? Intense preferences. Altrusm. Utlty from one s own contrbuton to the publc good. Some ndvduals care more than others When some ndvduals have especally hgh demand for a publc good prvate provson may emerge (but not necessarly provde effcently n partcular the publc good s stll lkely to be underprovded). The key ntuton s that the decson to provde a publc good s a functon of the enjoyment that the ndvdual gets from the total amount of the publc good net of cost. If a person gets a lot of enjoyment or has a lot of money he wll choose to purchase more of the publc good even though t benefts others. 5

6 Altrusm and Warm Glow A second reason s that there s evdence that many ndvduals are altrustc carng about the outcomes of others as well as themselves. A thrd reason s that that ndvduals may provde for a publc good s due to warm glow. The warm glow model s a model of publc good provson n whch ndvduals care about both the total amount of the publc good and ther partcular contrbutons as well. For example they may get some psychologcal beneft from knowng they helped a worthy cause. In ths case the publc good becomes more lke a prvate good though t also does not fully solve the underprovson problems. PUBLI PROVISION OF PUBLI GOODS In prncple the government could solve the optmal publc goods provson problem and then ether provde the good drectly or mandate ndvduals to provde the amount. In practce three problems emerge: rowd-out. Measurng costs and benefts. Determnng the publc s preferences. Prvate Responses to Publc Provson: The Problem of rowd-out In some cases the prvate market may already be provdng a socally neffcent level of the prvate good. In ths case publc provson may crowd-out some of the prvate provson as the government provdes more of the publc good the prvate sector provdes less. Prvate Responses to Publc Provson: The Problem of rowd-out For example n the freworks example wth Ben and erry f one assumes: Ben and erry care only about the total number of freworks provded. Government provson wll be fnanced by chargng equal amounts to each of them. And the government provdes no more freworks than were beng provded prvately beforehand. Then each dollar of publc provson wll crowd out prvate provson one-for-one. 6

7 Prvate Responses to Publc Provson: The Problem of rowd-out The full crowd-out n the freworks example s rare though partal crowd-out s much more common and can occur when: People who don t contrbute to the publc good are taxed to fnance ts provson. Or when ndvduals derve utlty from ther ndvdual contrbutons as well as the total amount of the publc good provded. Prvate Responses to Publc Provson: The Problem of rowd-out If noncontrbutors are forced to help pay for the good (but t s stll below the socal optmum) then the contrbutors effectve ncome levels are hgher than before. As a result of ths ncome effect contrbutors buy more f the publc good s a normal good offsettng the crowd-out to some extent. Prvate Responses to Publc Provson: The Problem of rowd-out Alternatvely as dscussed prevously there may not be full crowd-out f an ndvdual cares about hs own contrbutons (the warm glow model). In ths case an ncrease n government contrbutons wll not fully crowd out gvng. Publc Provson of Publc Goods: Measurng the costs and benefts of publc goods Another problem for government provson s measurng costs and benefts of the publc good. Ths entals the feld of cost-beneft analyss dscussed n the next lesson. For example mprovng a hghway nvolves valuatons of commutng tme saved as well reduced traffc fataltes. 7

8 How an We Measure Preferences for the Publc Good? Fnally our model of optmal publc good provson assumes the government knows each person s preferences over publc and prvate goods. In practce ths runs nto problems wth preference revelaton preference knowledge and preference aggregaton. These ssues are addressed n the feld of poltcal economy. Let me work two problems 8

Problem Set 3. a) We are asked how people will react, if the interest rate i on bonds is negative.

Problem Set 3. a) We are asked how people will react, if the interest rate i on bonds is negative. Queston roblem Set 3 a) We are asked how people wll react, f the nterest rate on bonds s negatve. When

More information

Answer: A). There is a flatter IS curve in the high MPC economy. Original LM LM after increase in M. IS curve for low MPC economy

Answer: A). There is a flatter IS curve in the high MPC economy. Original LM LM after increase in M. IS curve for low MPC economy 4.02 Quz Solutons Fall 2004 Multple-Choce Questons (30/00 ponts) Please, crcle the correct answer for each of the followng 0 multple-choce questons. For each queston, only one of the answers s correct.

More information

Chapter 7: Answers to Questions and Problems

Chapter 7: Answers to Questions and Problems 19. Based on the nformaton contaned n Table 7-3 of the text, the food and apparel ndustres are most compettve and therefore probably represent the best match for the expertse of these managers. Chapter

More information

Institute of Informatics, Faculty of Business and Management, Brno University of Technology,Czech Republic

Institute of Informatics, Faculty of Business and Management, Brno University of Technology,Czech Republic Lagrange Multplers as Quanttatve Indcators n Economcs Ivan Mezník Insttute of Informatcs, Faculty of Busness and Management, Brno Unversty of TechnologCzech Republc Abstract The quanttatve role of Lagrange

More information

17 Capital tax competition

17 Capital tax competition 17 Captal tax competton 17.1 Introducton Governments would lke to tax a varety of transactons that ncreasngly appear to be moble across jursdctonal boundares. Ths creates one obvous problem: tax base flght.

More information

Kiel Institute for World Economics Duesternbrooker Weg 120 24105 Kiel (Germany) Kiel Working Paper No. 1119

Kiel Institute for World Economics Duesternbrooker Weg 120 24105 Kiel (Germany) Kiel Working Paper No. 1119 Kel Insttute for World Economcs Duesternbrooker Weg 120 24105 Kel (Germany) Kel Workng Paper No. 1119 Under What Condtons Do Venture Captal Markets Emerge? by Andrea Schertler July 2002 The responsblty

More information

NBER WORKING PAPER SERIES CROWDING OUT AND CROWDING IN OF PRIVATE DONATIONS AND GOVERNMENT GRANTS. Garth Heutel

NBER WORKING PAPER SERIES CROWDING OUT AND CROWDING IN OF PRIVATE DONATIONS AND GOVERNMENT GRANTS. Garth Heutel BER WORKIG PAPER SERIES CROWDIG OUT AD CROWDIG I OF PRIVATE DOATIOS AD GOVERMET GRATS Garth Heutel Workng Paper 15004 http://www.nber.org/papers/w15004 ATIOAL BUREAU OF ECOOMIC RESEARCH 1050 Massachusetts

More information

What should (public) health insurance cover?

What should (public) health insurance cover? Journal of Health Economcs 26 (27) 251 262 What should (publc) health nsurance cover? Mchael Hoel Department of Economcs, Unversty of Oslo, P.O. Box 195 Blndern, N-317 Oslo, Norway Receved 29 Aprl 25;

More information

To manage leave, meeting institutional requirements and treating individual staff members fairly and consistently.

To manage leave, meeting institutional requirements and treating individual staff members fairly and consistently. Corporate Polces & Procedures Human Resources - Document CPP216 Leave Management Frst Produced: Current Verson: Past Revsons: Revew Cycle: Apples From: 09/09/09 26/10/12 09/09/09 3 years Immedately Authorsaton:

More information

SPEE Recommended Evaluation Practice #6 Definition of Decline Curve Parameters Background:

SPEE Recommended Evaluation Practice #6 Definition of Decline Curve Parameters Background: SPEE Recommended Evaluaton Practce #6 efnton of eclne Curve Parameters Background: The producton hstores of ol and gas wells can be analyzed to estmate reserves and future ol and gas producton rates and

More information

Addendum to: Importing Skill-Biased Technology

Addendum to: Importing Skill-Biased Technology Addendum to: Importng Skll-Based Technology Arel Bursten UCLA and NBER Javer Cravno UCLA August 202 Jonathan Vogel Columba and NBER Abstract Ths Addendum derves the results dscussed n secton 3.3 of our

More information

DEFINING %COMPLETE IN MICROSOFT PROJECT

DEFINING %COMPLETE IN MICROSOFT PROJECT CelersSystems DEFINING %COMPLETE IN MICROSOFT PROJECT PREPARED BY James E Aksel, PMP, PMI-SP, MVP For Addtonal Informaton about Earned Value Management Systems and reportng, please contact: CelersSystems,

More information

Abstract. Abstract...1. 1. Introduction... 2 2. Two Models... 2 2.1. Classic Optimal Lot Size (OLS) Model 2 2.2. Monopolistic Competition 3

Abstract. Abstract...1. 1. Introduction... 2 2. Two Models... 2 2.1. Classic Optimal Lot Size (OLS) Model 2 2.2. Monopolistic Competition 3 Optmal Lot Sze, Inventores, Prces and JIT Under Monopolstc Competton * Mchael C. Lovell Wesleyan Unversty, Mddletown, CT Mlovell@Wesleyan.edu May 17, 2000 [Prelmnary Draft] Abstract Ths paper attempts

More information

Financial Mathemetics

Financial Mathemetics Fnancal Mathemetcs 15 Mathematcs Grade 12 Teacher Gude Fnancal Maths Seres Overvew In ths seres we am to show how Mathematcs can be used to support personal fnancal decsons. In ths seres we jon Tebogo,

More information

Mean Molecular Weight

Mean Molecular Weight Mean Molecular Weght The thermodynamc relatons between P, ρ, and T, as well as the calculaton of stellar opacty requres knowledge of the system s mean molecular weght defned as the mass per unt mole of

More information

(SOCIAL) COST-BENEFIT ANALYSIS IN A NUTSHELL

(SOCIAL) COST-BENEFIT ANALYSIS IN A NUTSHELL (SOCIAL) COST-BENEFIT ANALYSIS IN A NUTSHELL RUFUS POLLOCK EMMANUEL COLLEGE, UNIVERSITY OF CAMBRIDGE 1. Introducton Cost-beneft analyss s a process for evaluatng the merts of a partcular project or course

More information

Adverse selection in the annuity market when payoffs vary over the time of retirement

Adverse selection in the annuity market when payoffs vary over the time of retirement Adverse selecton n the annuty market when payoffs vary over the tme of retrement by JOANN K. BRUNNER AND SUSANNE PEC * July 004 Revsed Verson of Workng Paper 0030, Department of Economcs, Unversty of nz.

More information

Adverse selection in the annuity market with sequential and simultaneous insurance demand. Johann K. Brunner and Susanne Pech *) January 2005

Adverse selection in the annuity market with sequential and simultaneous insurance demand. Johann K. Brunner and Susanne Pech *) January 2005 Adverse selecton n the annuty market wth sequental and smultaneous nsurance demand Johann K. Brunner and Susanne Pech *) January 005 Revsed Verson of Workng Paper 004, Department of Economcs, Unversty

More information

PRIVATE SCHOOL CHOICE: THE EFFECTS OF RELIGIOUS AFFILIATION AND PARTICIPATION

PRIVATE SCHOOL CHOICE: THE EFFECTS OF RELIGIOUS AFFILIATION AND PARTICIPATION PRIVATE SCHOOL CHOICE: THE EFFECTS OF RELIIOUS AFFILIATION AND PARTICIPATION Danny Cohen-Zada Department of Economcs, Ben-uron Unversty, Beer-Sheva 84105, Israel Wllam Sander Department of Economcs, DePaul

More information

Chapter 15 Debt and Taxes

Chapter 15 Debt and Taxes hapter 15 Debt and Taxes 15-1. Pelamed Pharmaceutcals has EBIT of $325 mllon n 2006. In addton, Pelamed has nterest expenses of $125 mllon and a corporate tax rate of 40%. a. What s Pelamed s 2006 net

More information

IS-LM Model 1 C' dy = di

IS-LM Model 1 C' dy = di - odel Solow Assumptons - demand rrelevant n long run; assumes economy s operatng at potental GDP; concerned wth growth - Assumptons - supply s rrelevant n short run; assumes economy s operatng below potental

More information

Results from the Dixit/Stiglitz monopolistic competition model

Results from the Dixit/Stiglitz monopolistic competition model Results from the Dxt/Stgltz monopolstc competton model Rchard Foltyn February 4, 2012 Contents 1 Introducton 1 2 Constant elastcty sub-utlty functon 1 2.1 Preferences and demand..............................

More information

Robert Wilson for their comments on the a predecessor version of this paper.

Robert Wilson for their comments on the a predecessor version of this paper. Procurng Unversal Telephone ervce Paul Mlgrom 1 tanford Unversty, August, 1997 Reprnted from 1997 Industry Economcs Conference Proceedngs, AGP Canberra Introducton One of the hallmarks of modern socety

More information

Chapter 15: Debt and Taxes

Chapter 15: Debt and Taxes Chapter 15: Debt and Taxes-1 Chapter 15: Debt and Taxes I. Basc Ideas 1. Corporate Taxes => nterest expense s tax deductble => as debt ncreases, corporate taxes fall => ncentve to fund the frm wth debt

More information

Market Failure An Economic Analysis of its Causes and Consequences. Vani K. Borooah * Professor of Applied Economics University of Ulster

Market Failure An Economic Analysis of its Causes and Consequences. Vani K. Borooah * Professor of Applied Economics University of Ulster Market Falure An Economc Analyss of ts Causes and Consequences Van K. orooah * Professor of Appled Economcs Unversty of Ulster February 2003 * School of Economcs and Poltcs, Unversty of Ulster, Newtownabbey

More information

An Alternative Way to Measure Private Equity Performance

An Alternative Way to Measure Private Equity Performance An Alternatve Way to Measure Prvate Equty Performance Peter Todd Parlux Investment Technology LLC Summary Internal Rate of Return (IRR) s probably the most common way to measure the performance of prvate

More information

Efficient Bandwidth Management in Broadband Wireless Access Systems Using CAC-based Dynamic Pricing

Efficient Bandwidth Management in Broadband Wireless Access Systems Using CAC-based Dynamic Pricing Effcent Bandwdth Management n Broadband Wreless Access Systems Usng CAC-based Dynamc Prcng Bader Al-Manthar, Ndal Nasser 2, Najah Abu Al 3, Hossam Hassanen Telecommuncatons Research Laboratory School of

More information

How To Calculate The Accountng Perod Of Nequalty

How To Calculate The Accountng Perod Of Nequalty Inequalty and The Accountng Perod Quentn Wodon and Shlomo Ytzha World Ban and Hebrew Unversty September Abstract Income nequalty typcally declnes wth the length of tme taen nto account for measurement.

More information

CAUSE-RELATED MARKETING: AN ECONOMIC ANALYSIS*

CAUSE-RELATED MARKETING: AN ECONOMIC ANALYSIS* CAUSE-RELATED MARKETING: AN ECONOMIC ANALYSIS* Leond Polshchuk, Evgeny Frsov Abstract Cause-related marketng s a busness strategy where frms bundle ther products and brands wth contrbutons to desgnated

More information

Game theory in Oligopoly

Game theory in Oligopoly Game theory n Olgopoly Prof. Marx Boopath, Nkolaj Sujen. Abstract The game theory technques are used to fnd the equlbrum of a market. Game theory refers to the ways n whch strategc nteractons among economc

More information

The Complementarities of Competition in Charitable Fundraising

The Complementarities of Competition in Charitable Fundraising The Complementartes of Competton n Chartable Fundrasng Andreas Lange Unversty of Hamburg Department of Economcs Von-Melle-Park 5 D-20146 Hamburg Germany andreas.lange@wso.un-hamburg.de Andrew Stockng Congressonal

More information

Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods

Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods Matchng Grants and Chartable Gvng: Why People Sometmes Provde a Helpng Hand to Fund Envronmental Goods Koj Kotan, Kent D. Messer, and Wllam D. Schulze Matchng grants are a prevalent mechansm for fundng

More information

Section 5.4 Annuities, Present Value, and Amortization

Section 5.4 Annuities, Present Value, and Amortization Secton 5.4 Annutes, Present Value, and Amortzaton Present Value In Secton 5.2, we saw that the present value of A dollars at nterest rate per perod for n perods s the amount that must be deposted today

More information

Modelling the Cocaine and Heroin Markets in the Era of Globalization and Drug Reduction Policies Claudia Costa Storti and Paul De Grauwe

Modelling the Cocaine and Heroin Markets in the Era of Globalization and Drug Reduction Policies Claudia Costa Storti and Paul De Grauwe Modellng the Cocane and Heron Markets n the Era of Globalzaton and Drug Reducton Polces Clauda Costa Stort and Paul De Grauwe Modellng the Cocane and Heron Markets n the Era of Globalzaton and Drug Reducton

More information

Simple Interest Loans (Section 5.1) :

Simple Interest Loans (Section 5.1) : Chapter 5 Fnance The frst part of ths revew wll explan the dfferent nterest and nvestment equatons you learned n secton 5.1 through 5.4 of your textbook and go through several examples. The second part

More information

A Secure Password-Authenticated Key Agreement Using Smart Cards

A Secure Password-Authenticated Key Agreement Using Smart Cards A Secure Password-Authentcated Key Agreement Usng Smart Cards Ka Chan 1, Wen-Chung Kuo 2 and Jn-Chou Cheng 3 1 Department of Computer and Informaton Scence, R.O.C. Mltary Academy, Kaohsung 83059, Tawan,

More information

Evolution of Internet Infrastructure in the 21 st century: The Role of Private Interconnection Agreements

Evolution of Internet Infrastructure in the 21 st century: The Role of Private Interconnection Agreements Evoluton of Internet Infrastructure n the 21 st century: The Role of Prvate Interconnecton Agreements Rajv Dewan*, Marshall Fremer, and Pavan Gundepud {dewan, fremer, gundepudpa}@ssb.rochester.edu Smon

More information

Chapter 11 Practice Problems Answers

Chapter 11 Practice Problems Answers Chapter 11 Practce Problems Answers 1. Would you be more wllng to lend to a frend f she put all of her lfe savngs nto her busness than you would f she had not done so? Why? Ths problem s ntended to make

More information

SUPPLIER FINANCING AND STOCK MANAGEMENT. A JOINT VIEW.

SUPPLIER FINANCING AND STOCK MANAGEMENT. A JOINT VIEW. SUPPLIER FINANCING AND STOCK MANAGEMENT. A JOINT VIEW. Lucía Isabel García Cebrán Departamento de Economía y Dreccón de Empresas Unversdad de Zaragoza Gran Vía, 2 50.005 Zaragoza (Span) Phone: 976-76-10-00

More information

1.1 The University may award Higher Doctorate degrees as specified from time-to-time in UPR AS11 1.

1.1 The University may award Higher Doctorate degrees as specified from time-to-time in UPR AS11 1. HIGHER DOCTORATE DEGREES SUMMARY OF PRINCIPAL CHANGES General changes None Secton 3.2 Refer to text (Amendments to verson 03.0, UPR AS02 are shown n talcs.) 1 INTRODUCTION 1.1 The Unversty may award Hgher

More information

Power-of-Two Policies for Single- Warehouse Multi-Retailer Inventory Systems with Order Frequency Discounts

Power-of-Two Policies for Single- Warehouse Multi-Retailer Inventory Systems with Order Frequency Discounts Power-of-wo Polces for Sngle- Warehouse Mult-Retaler Inventory Systems wth Order Frequency Dscounts José A. Ventura Pennsylvana State Unversty (USA) Yale. Herer echnon Israel Insttute of echnology (Israel)

More information

Using Series to Analyze Financial Situations: Present Value

Using Series to Analyze Financial Situations: Present Value 2.8 Usng Seres to Analyze Fnancal Stuatons: Present Value In the prevous secton, you learned how to calculate the amount, or future value, of an ordnary smple annuty. The amount s the sum of the accumulated

More information

Performance Analysis of Energy Consumption of Smartphone Running Mobile Hotspot Application

Performance Analysis of Energy Consumption of Smartphone Running Mobile Hotspot Application Internatonal Journal of mart Grd and lean Energy Performance Analyss of Energy onsumpton of martphone Runnng Moble Hotspot Applcaton Yun on hung a chool of Electronc Engneerng, oongsl Unversty, 511 angdo-dong,

More information

Supply network formation as a biform game

Supply network formation as a biform game Supply network formaton as a bform game Jean-Claude Hennet*. Sona Mahjoub*,** * LSIS, CNRS-UMR 6168, Unversté Paul Cézanne, Faculté Sant Jérôme, Avenue Escadrlle Normande Némen, 13397 Marselle Cedex 20,

More information

Inventory Aggregation and Discounting

Inventory Aggregation and Discounting Inventory Aggregaton and Dscountng Matchng Supply and Demand utdallas.edu/~metn 1 Outlne Jont fxed costs for multple products Long term quantty dscounts utdallas.edu/~metn Example: Lot Szng wth Multple

More information

1. Measuring association using correlation and regression

1. Measuring association using correlation and regression How to measure assocaton I: Correlaton. 1. Measurng assocaton usng correlaton and regresson We often would lke to know how one varable, such as a mother's weght, s related to another varable, such as a

More information

Section 5.3 Annuities, Future Value, and Sinking Funds

Section 5.3 Annuities, Future Value, and Sinking Funds Secton 5.3 Annutes, Future Value, and Snkng Funds Ordnary Annutes A sequence of equal payments made at equal perods of tme s called an annuty. The tme between payments s the payment perod, and the tme

More information

Valuing Customer Portfolios under Risk-Return-Aspects: A Model-based Approach and its Application in the Financial Services Industry

Valuing Customer Portfolios under Risk-Return-Aspects: A Model-based Approach and its Application in the Financial Services Industry Buhl and Henrch / Valung Customer Portfolos Valung Customer Portfolos under Rsk-Return-Aspects: A Model-based Approach and ts Applcaton n the Fnancal Servces Industry Hans Ulrch Buhl Unversty of Augsburg,

More information

Economic Models for Cloud Service Markets

Economic Models for Cloud Service Markets Economc Models for Cloud Servce Markets Ranjan Pal and Pan Hu 2 Unversty of Southern Calforna, USA, rpal@usc.edu 2 Deutsch Telekom Laboratores, Berln, Germany, pan.hu@telekom.de Abstract. Cloud computng

More information

RESEARCH DISCUSSION PAPER

RESEARCH DISCUSSION PAPER Reserve Bank of Australa RESEARCH DISCUSSION PAPER Competton Between Payment Systems George Gardner and Andrew Stone RDP 2009-02 COMPETITION BETWEEN PAYMENT SYSTEMS George Gardner and Andrew Stone Research

More information

UK Budgetary Systems and New Health-Care Technologies

UK Budgetary Systems and New Health-Care Technologies Blackwell Scence, LtdOxford, UKVHEValue n Health1098-30152003 ISPOR6Supplement 1S64S73Orgnal ArtcleUK Budgetary Systems and TechnologesMcGure Volume 6 Supplement 1 2003 VALUE IN HEALTH UK Budgetary Systems

More information

Activity Scheduling for Cost-Time Investment Optimization in Project Management

Activity Scheduling for Cost-Time Investment Optimization in Project Management PROJECT MANAGEMENT 4 th Internatonal Conference on Industral Engneerng and Industral Management XIV Congreso de Ingenería de Organzacón Donosta- San Sebastán, September 8 th -10 th 010 Actvty Schedulng

More information

Extending Probabilistic Dynamic Epistemic Logic

Extending Probabilistic Dynamic Epistemic Logic Extendng Probablstc Dynamc Epstemc Logc Joshua Sack May 29, 2008 Probablty Space Defnton A probablty space s a tuple (S, A, µ), where 1 S s a set called the sample space. 2 A P(S) s a σ-algebra: a set

More information

Is Thailand s Fiscal System Pro-Poor?: Looking from Income and Expenditure Components. Hyun Hwa Son

Is Thailand s Fiscal System Pro-Poor?: Looking from Income and Expenditure Components. Hyun Hwa Son Is Thaland s Fscal System Pro-Poor?: Loong from Income and Expendture Components Hyun Hwa Son The World Ban 88 H Street, NW Washngton, D.C. 20433, U.S.A. Emal: hson@worldban.org Abstract: Ths paper develops

More information

Quasi-Hyperbolic Discounting and Social Security Systems

Quasi-Hyperbolic Discounting and Social Security Systems Quas-Hyperbolc Dscountng and Socal Securty Systems Mordecha E. Schwarz a and Eytan Sheshnsk b May 22, 26 Abstract Hyperbolc countng has become a common assumpton for modelng bounded ratonalty wth respect

More information

When Talk is Free : The Effect of Tariff Structure on Usage under Two- and Three-Part Tariffs

When Talk is Free : The Effect of Tariff Structure on Usage under Two- and Three-Part Tariffs 0 When Talk s Free : The Effect of Tarff Structure on Usage under Two- and Three-Part Tarffs Eva Ascarza Ana Lambrecht Naufel Vlcassm July 2012 (Forthcomng at Journal of Marketng Research) Eva Ascarza

More information

Tuition Fee Loan application notes

Tuition Fee Loan application notes Tuton Fee Loan applcaton notes for new part-tme EU students 2012/13 About these notes These notes should be read along wth your Tuton Fee Loan applcaton form. The notes are splt nto three parts: Part 1

More information

Pricing Data Center Demand Response

Pricing Data Center Demand Response Prcng Data Center Demand Response Zhenhua Lu, Irs Lu, Steven Low, Adam Werman Calforna Insttute of Technology Pasadena, CA, USA {zlu2,lu,slow,adamw}@caltech.edu ABSTRACT Demand response s crucal for the

More information

Social Exclusion and the Two-Tiered Healthcare System of Brazil 1

Social Exclusion and the Two-Tiered Healthcare System of Brazil 1 Socal Excluson and the Two-Tered Healthcare System of Brazl 1 Densard Alves Unversty of São Paulo Chrstopher Tmmns Yale Unversty Resumo No Brasl exste um sstema de saúde com dos acessos. Aqueles, com recursos,

More information

3. Present value of Annuity Problems

3. Present value of Annuity Problems Mathematcs of Fnance The formulae 1. A = P(1 +.n) smple nterest 2. A = P(1 + ) n compound nterest formula 3. A = P(1-.n) deprecaton straght lne 4. A = P(1 ) n compound decrease dmshng balance 5. P = -

More information

Capacity-building and training

Capacity-building and training 92 Toolkt to Combat Traffckng n Persons Tool 2.14 Capacty-buldng and tranng Overvew Ths tool provdes references to tranng programmes and materals. For more tranng materals, refer also to Tool 9.18. Capacty-buldng

More information

benefit is 2, paid if the policyholder dies within the year, and probability of death within the year is ).

benefit is 2, paid if the policyholder dies within the year, and probability of death within the year is ). REVIEW OF RISK MANAGEMENT CONCEPTS LOSS DISTRIBUTIONS AND INSURANCE Loss and nsurance: When someone s subject to the rsk of ncurrng a fnancal loss, the loss s generally modeled usng a random varable or

More information

Nonprofit organizations are a critical part of society as well as a growing sector of the economy. For funders

Nonprofit organizations are a critical part of society as well as a growing sector of the economy. For funders MANUFACTURING & SERVICE OPERATIONS MANAGEMENT Vol. 13, No. 4, Fall 2011, pp. 471 488 ssn 1523-4614 essn 1526-5498 11 1304 0471 http://dx.do.org/10.1287/msom.1110.0345 2011 INFORMS Effcent Fundng: Audtng

More information

Necessary Of A Retaler-Operator

Necessary Of A Retaler-Operator Decentralzed Inventory Sharng wth Asymmetrc Informaton Xnghao Yan Hu Zhao 1 xyan@vey.uwo.ca zhaoh@purdue.edu Rchard Ivey School of Busness The Unversty of Western Ontaro Krannert School of Management Purdue

More information

The demand for private health care in the UK

The demand for private health care in the UK Journal of Health Economcs 19 2000 855 876 www.elsever.nlrlocatereconbase The demand for prvate health care n the UK Carol Propper ) Department of Economcs, CASE and CEPR, UnÕersty of Brstol, Brstol BS8

More information

Uncrystallised funds pension lump sum payment instruction

Uncrystallised funds pension lump sum payment instruction For customers Uncrystallsed funds penson lump sum payment nstructon Don t complete ths form f your wrapper s derved from a penson credt receved followng a dvorce where your ex spouse or cvl partner had

More information

On the Role of Consumer Expectations in Markets with Network Effects

On the Role of Consumer Expectations in Markets with Network Effects No 13 On the Role of Consumer Expectatons n Markets wth Network Effects Irna Suleymanova, Chrstan Wey November 2010 (frst verson: July 2010) IMPRINT DICE DISCUSSION PAPER Publshed by Henrch Hene Unverstät

More information

How To Compare Frm To An Isac

How To Compare Frm To An Isac Informaton Systems Research Vol. 16, No. 2, June 2005, pp. 186 208 ssn 1047-7047 essn 1526-5536 05 1602 0186 nforms do 10.1287/sre.1050.0053 2005 INFORMS The Economc Incentves for Sharng Securty Informaton

More information

Analysis of Demand for Broadcastingng servces

Analysis of Demand for Broadcastingng servces Analyss of Subscrpton Demand for Pay-TV Manabu Shshkura * Norhro Kasuga ** Ako Tor *** Abstract In ths paper, we wll conduct an analyss from an emprcal perspectve concernng broadcastng demand behavor and

More information

UNDERSTANDING THE POLITICAL ECONOMY OF THE EVOLUTION AND FUTURE OF SINGLE-PAYER PUBLIC HEALTH INSURANCE IN CANADA. J.C.

UNDERSTANDING THE POLITICAL ECONOMY OF THE EVOLUTION AND FUTURE OF SINGLE-PAYER PUBLIC HEALTH INSURANCE IN CANADA. J.C. SPP Techncal Papers The Health Seres February 2010 UNDERSTANDING THE POITICA ECONOMY OF THE EVOUTION AND FUTURE OF SINGE-PAYER PUBIC HEATH INSURANCE IN CANADA J.C. Herbert Emery SUMMARY Surprsngly lttle

More information

Proceedings of the Annual Meeting of the American Statistical Association, August 5-9, 2001

Proceedings of the Annual Meeting of the American Statistical Association, August 5-9, 2001 Proceedngs of the Annual Meetng of the Amercan Statstcal Assocaton, August 5-9, 2001 LIST-ASSISTED SAMPLING: THE EFFECT OF TELEPHONE SYSTEM CHANGES ON DESIGN 1 Clyde Tucker, Bureau of Labor Statstcs James

More information

Analyzing Self-Defense Investments in Internet Security Under Cyber-Insurance Coverage

Analyzing Self-Defense Investments in Internet Security Under Cyber-Insurance Coverage Analyzng Self-Defense Investments n Internet Securty Under Cyber-Insurance Coverage Ranjan Pal Department of Computer Scence Unv. of Southern Calforna Emal: rpal@usc.edu Leana Golubchk Department of Computer

More information

Labor Supply. Where we re going:

Labor Supply. Where we re going: Labor Supply Where we re gong: I m gong to spend about 4 lectures talkng about labor supply. Along the way, I m gong to ntroduce some econometrc ssues and tools that we commonly use. Today s lecture and

More information

Health Insurance and Household Savings

Health Insurance and Household Savings Health Insurance and Household Savngs Mnchung Hsu Job Market Paper Last Updated: November, 2006 Abstract Recent emprcal studes have documented a puzzlng pattern of household savngs n the U.S.: households

More information

Chapter 4 ECONOMIC DISPATCH AND UNIT COMMITMENT

Chapter 4 ECONOMIC DISPATCH AND UNIT COMMITMENT Chapter 4 ECOOMIC DISATCH AD UIT COMMITMET ITRODUCTIO A power system has several power plants. Each power plant has several generatng unts. At any pont of tme, the total load n the system s met by the

More information

Income Distribution, Product Quality, and International Trade

Income Distribution, Product Quality, and International Trade Income Dstrbuton, Product Qualty, and Internatonal Trade Pablo Fajgelbaum Prnceton Unversty Gene M. Grossman Prnceton Unversty June 2009 Elhanan elpman arvard Unversty Abstract We develop a framework for

More information

No 144. Bundling and Joint Marketing by Rival Firms. Thomas D. Jeitschko, Yeonjei Jung, Jaesoo Kim

No 144. Bundling and Joint Marketing by Rival Firms. Thomas D. Jeitschko, Yeonjei Jung, Jaesoo Kim No 144 Bundlng and Jont Marketng by Rval Frms Thomas D. Jetschko, Yeonje Jung, Jaesoo Km May 014 IMPRINT DICE DISCUSSION PAPER Publshed by düsseldorf unversty press (dup) on behalf of Henrch Hene Unverstät

More information

The Economics of Two-sided Markets 2. Platform competition!

The Economics of Two-sided Markets 2. Platform competition! U. Porto Doctoral Programme n Economcs The Economcs of Two-sded Markets 2. Platform competton! Paul Belleflamme, CORE & LSM! Unversté catholque de Louvan! Aprl 10-13, 2012 Learnng objectves At the end

More information

Social Exclusion and the Two-Tiered Healthcare System of Brazil

Social Exclusion and the Two-Tiered Healthcare System of Brazil Inter-Amercan Development Bank Banco Interamercano de Desarrollo Latn Amercan Research Network Red de Centros de Investgacón Research Network Workng paper #R-436 Socal Excluson and the Two-Tered Healthcare

More information

Buy-side Analysts, Sell-side Analysts and Private Information Production Activities

Buy-side Analysts, Sell-side Analysts and Private Information Production Activities Buy-sde Analysts, Sell-sde Analysts and Prvate Informaton Producton Actvtes Glad Lvne London Busness School Regent s Park London NW1 4SA Unted Kngdom Telephone: +44 (0)0 76 5050 Fax: +44 (0)0 774 7875

More information

Module 2 LOSSLESS IMAGE COMPRESSION SYSTEMS. Version 2 ECE IIT, Kharagpur

Module 2 LOSSLESS IMAGE COMPRESSION SYSTEMS. Version 2 ECE IIT, Kharagpur Module LOSSLESS IMAGE COMPRESSION SYSTEMS Lesson 3 Lossless Compresson: Huffman Codng Instructonal Objectves At the end of ths lesson, the students should be able to:. Defne and measure source entropy..

More information

Price Competition in an Oligopoly Market with Multiple IaaS Cloud Providers

Price Competition in an Oligopoly Market with Multiple IaaS Cloud Providers Prce Competton n an Olgopoly Market wth Multple IaaS Cloud Provders Yuan Feng, Baochun L, Bo L Department of Computng, Hong Kong Polytechnc Unversty Department of Electrcal and Computer Engneerng, Unversty

More information

Research Article A Comparative Study of Marketing Channel Multiagent Stackelberg Model Based on Perfect Rationality and Fairness Preference

Research Article A Comparative Study of Marketing Channel Multiagent Stackelberg Model Based on Perfect Rationality and Fairness Preference Hndaw Publshng Corporaton Abstract and Appled Analyss, Artcle ID 57458, 11 pages http://dx.do.org/10.1155/014/57458 Research Artcle A Comparatve Study of Marketng Channel Multagent Stackelberg Model Based

More information

7.5. Present Value of an Annuity. Investigate

7.5. Present Value of an Annuity. Investigate 7.5 Present Value of an Annuty Owen and Anna are approachng retrement and are puttng ther fnances n order. They have worked hard and nvested ther earnngs so that they now have a large amount of money on

More information

ADOPTION OF BIG DATA ANALYTICS IN HEALTHCARE: THE EFFICIENCY AND PRIVACY

ADOPTION OF BIG DATA ANALYTICS IN HEALTHCARE: THE EFFICIENCY AND PRIVACY ADOPTION OF BIG DATA ANALYTICS IN HEALTHCARE: THE EFFICIENCY AND PRIVACY He L, School of Economc Informaton Engneerng, Southwestern Unversty of Fnance and Economcs, Chengdu, Chna, olverlhe@gmalcom Jng

More information

Structural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework

Structural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework Journal of Economcs and Econometrcs Vol. 55, No.2, 202 pp. 78-93 SSN 2032-9652 E-SSN 2032-9660 Structural Estmaton of Varety Gans from Trade ntegraton n a Heterogeneous Frms Framework VCTOR RVAS ABSTRACT

More information

Elements of Advanced International Trade 1

Elements of Advanced International Trade 1 Elements of Advanced Internatonal Trade 1 Treb Allen 2 and Costas Arkolaks 3 January 2015 [New verson: prelmnary] 1 Ths set of notes and the homeworks accomodatng them s a collecton of materal desgned

More information

The circuit shown on Figure 1 is called the common emitter amplifier circuit. The important subsystems of this circuit are:

The circuit shown on Figure 1 is called the common emitter amplifier circuit. The important subsystems of this circuit are: polar Juncton Transstor rcuts Voltage and Power Amplfer rcuts ommon mtter Amplfer The crcut shown on Fgure 1 s called the common emtter amplfer crcut. The mportant subsystems of ths crcut are: 1. The basng

More information

Anna-Maija Juuso. CYBERSECURITY INVESTMENT AND INFORMATION SHARING An Analysis of the Economic Incentives of Private Critical Infrastructure Providers

Anna-Maija Juuso. CYBERSECURITY INVESTMENT AND INFORMATION SHARING An Analysis of the Economic Incentives of Private Critical Infrastructure Providers OULU BUSINESS SCHOOL Anna-Maa Juuso CYBERSECURITY INVESTMENT AND INFORMATION SHARING An Analyss of the Economc Incentves of Prvate Crtcal Infrastructure Provders Master s Thess Department of Economcs May

More information

Intra-year Cash Flow Patterns: A Simple Solution for an Unnecessary Appraisal Error

Intra-year Cash Flow Patterns: A Simple Solution for an Unnecessary Appraisal Error Intra-year Cash Flow Patterns: A Smple Soluton for an Unnecessary Apprasal Error By C. Donald Wggns (Professor of Accountng and Fnance, the Unversty of North Florda), B. Perry Woodsde (Assocate Professor

More information

Depreciation of Business R&D Capital

Depreciation of Business R&D Capital Deprecaton of Busness R&D Captal U.S. Bureau of Economc Analyss Abstract R&D deprecaton rates are crtcal to calculatng the rates of return to R&D nvestments and captal servce costs, whch are mportant for

More information

On the Optimal Control of a Cascade of Hydro-Electric Power Stations

On the Optimal Control of a Cascade of Hydro-Electric Power Stations On the Optmal Control of a Cascade of Hydro-Electrc Power Statons M.C.M. Guedes a, A.F. Rbero a, G.V. Smrnov b and S. Vlela c a Department of Mathematcs, School of Scences, Unversty of Porto, Portugal;

More information

Multiple-Period Attribution: Residuals and Compounding

Multiple-Period Attribution: Residuals and Compounding Multple-Perod Attrbuton: Resduals and Compoundng Our revewer gave these authors full marks for dealng wth an ssue that performance measurers and vendors often regard as propretary nformaton. In 1994, Dens

More information

Allocating Collaborative Profit in Less-than-Truckload Carrier Alliance

Allocating Collaborative Profit in Less-than-Truckload Carrier Alliance J. Servce Scence & Management, 2010, 3: 143-149 do:10.4236/jssm.2010.31018 Publshed Onlne March 2010 (http://www.scrp.org/journal/jssm) 143 Allocatng Collaboratve Proft n Less-than-Truckload Carrer Allance

More information

reduce competition increase market power cost savings economies of scale and scope cost savings Oliver Williamson: the efficiency defense

reduce competition increase market power cost savings economies of scale and scope cost savings Oliver Williamson: the efficiency defense Mergers Why merge? reduce competton ncrease market power cost savngs economes of scale and scope Why allow mergers? cost savngs Olver Wllamson: the effcency defense Merger wthout cost savngs Before merger:

More information

DEFINING AND MEASURING FAIRNESS IN FINANCIAL CONTRIBUTION TO THE HEALTH SYSTEM 1

DEFINING AND MEASURING FAIRNESS IN FINANCIAL CONTRIBUTION TO THE HEALTH SYSTEM 1 DEFINING AND MEASURING FAIRNESS IN FINANCIAL CONTRIBUTION TO THE HEALTH SYSTEM 1 Chrstopher JL Murray Felca Knaul Phlp Musgrove Ke Xu Ke Kawabata GPE Dscusson Paper Seres : No.24 EIP/GPE/FAR World Health

More information

Feature selection for intrusion detection. Slobodan Petrović NISlab, Gjøvik University College

Feature selection for intrusion detection. Slobodan Petrović NISlab, Gjøvik University College Feature selecton for ntruson detecton Slobodan Petrovć NISlab, Gjøvk Unversty College Contents The feature selecton problem Intruson detecton Traffc features relevant for IDS The CFS measure The mrmr measure

More information

Oservce Vs. Sannet - Which One is Better?

Oservce Vs. Sannet - Which One is Better? o rcng n Compettve Telephony Markets Yung-Mng L nsttute of nformaton Management Natonal Chao Tung Unversty, Tawan 886-3-57111 Ext 57414 yml@mal.nctu.edu.tw Shh-Wen Chu nsttute of nformaton Management Natonal

More information

Texas Instruments 30X IIS Calculator

Texas Instruments 30X IIS Calculator Texas Instruments 30X IIS Calculator Keystrokes for the TI-30X IIS are shown for a few topcs n whch keystrokes are unque. Start by readng the Quk Start secton. Then, before begnnng a specfc unt of the

More information

Analysis of Premium Liabilities for Australian Lines of Business

Analysis of Premium Liabilities for Australian Lines of Business Summary of Analyss of Premum Labltes for Australan Lnes of Busness Emly Tao Honours Research Paper, The Unversty of Melbourne Emly Tao Acknowledgements I am grateful to the Australan Prudental Regulaton

More information