Polluting production – environmentally sound alternatives; A general model of production externalities

With the determination of principal parameters of producing and pollution abatement technologies, this paper quantifies abatement and external costs at the social optimum and analyses the dynamic relationship between technological development and the above-mentioned costs. With the partial analysis of parameters, the paper presents the impacts on the level of pollution and external costs of extensive and intensive environmental protection, market demand change and product fees, and not environmental protection oriented technological development. Parametrical cost calculation makes the drawing up of two useful rules of thumb possible in connection with the rate of government in-terventions. Also, the paradox of technological development aiming at intensive environmental protection will become apparent.

Assignment Games with Externalities

We examine assignment games, wherematched pairs of firms and workers create some monetary value to distribute among themselves and the agents aim to maximize their payoff. In the majority of this literature, externalities - in the sense that a pair’s value depends on the pairing of the others - have been neglected. However, inmost applications a firm’s success depends on, say, the success of its rivals and suppliers. Thus, it is natural to ask how the classical results on assignment games are affected by the introduction of externalities? The answer is – dramatically. We find that (i) a problem may have no stable outcome, (ii) stable outcomes can be inefficient (not maximize total value), (iii) efficient outcomes can be unstable, and (iv) the set of stable outcomes may not form a lattice. We show that stable outcomes always exist if agents are "pessimistic." This is a knife-edge result: there are problems in which the slightest optimism by a single pair erases all stable outcomes.

Tax incentives applied against externalities: International examples of fat tax and carbon tax

This study assesses the Pigou taxes introduced as a response to negative externalities in practice. The authors analyze the international practice and effectiveness of taxation on food products harmful to health and on carbon emissions harmful to the environment and, in relation to these two types of taxes, the focus is on the opportunities and the factors reducing efficiency.

Platform Competition with Intra-Group Externalities

In this article we analyze asymmetric two-sided markets. Two types of agents are assumed to interact with each other and we assume that agents of one type derive utility from inter-group interactions, while the other type of agents benefit from intra-group rather than from inter-group interactions as it is assumed in the standard symmetric two-sided markets model. First, we consider a monopoly platform, then we analyze competing platforms, both with single-homing and multi-homing abilities.

Állam vagy piac a környezetvédelemben? - A környezetszennyezés-szabályozási mátrix

A piaci kudarcok számos formája ismert a közgazdászok számára, ezek közül a környezetvédelem területén a külső gazdasági hatásokkal (az externáliákkal) kapcsolatosak a legismertebbek. A piaci kudarcok miatt a gazdaság nincs Pareto-optimális helyzetben, azaz egyesek jóléte nem növelhető úgy, hogy eközben mások jóléte ne csökkenjen. Kérdés, hogy ez egy-egy környezetszennyező vállalat vagy iparág esetén azt jelenti-e, hogy a piaci mechanizmust teljesen ki kell iktatnunk a probléma orvoslásakor, vagy azért bizonyos szerepet a piac továbbra is betölthet a nehézség leküzdésében. /===/ Economists are familiar with many forms of market failure, among the best known being the economic externalities in the field of environmental protection. Due to the market failures, the economy is not in a Pareto-optimal situation, in other words, the welfare of some cannot be raised without reducing the welfare of others. The question is whether this means in the case of a polluting firm or industry that the market mechanism has to be excluded when remedying the problem, or whether the market can still play some part in overcoming the difficulties.

Financial Transaction Tax: Small is Beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financialtransaction taxes.

Cost-benefit analysis of climate change – A methodological overview of recent studies

Global warming16 has already begun. Climate change has become a self-propelling and self-reinforcing process as a result of the externality associated with greenhouse- gas (GHG) emissions. Although it is an externality related to humankind, according to a number of unique features we should distinguish it from other externalities. Climate change is a global phenomenon in its causes and consequences. The long-term and persistent impacts of climate change will likely continue over centuries without further anthropogenic mechanism. The preindustrial (equilibrium) level of GHG concentration in the atmosphere cannot be restored since it is irreversible, but if we do not stabilise the actual level of atmospheric concentration, the situation will become much worse than it is now. Assessing the impacts of climate change requires careful considerations because of the pervasive uncertainties and risks associated with it.

Financial transaction tax: Small is beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financial transaction taxes.

„Mennyit ér” a fenntarthatóság? – Esettanulmány az externális hatások mérésére azok internalizálására (What is sustainability worth? – A case study of measuring and internalizing negative environmental effects of logistics operation)

A fenntarthatóság központi kérdés a gazdálkodástudományban, ezen belül a logisztikában, hiszen a környezetre rótt szennyezésben e vállalati működési területnek is jelentős a szerepe. A szerzők dolgozata egy konkrét hazai esettanulmány segítségével vizsgálja a kérdéskört. Azt elemzik, vajon egy, az Európai Unióban is új kamiontípus (az ún. EuroCombi) alkalmazása a logisztikai folyamatokban milyen externális hatásokkal jár. Elemzésükben kísérletet tesznek ezeknek az externális hatásoknak a pénzben kifejezett mérésére. Azért fontos mindez, mert e mérés és számszerűsítés nélkül lehetetlen ezeknek a hatásoknak az internalizálása, vagyis belsővé tétele. Így mérés nélkül sem az érintett vállalatok tulajdonosai, sem azok belső döntéshozói, de a külső szabályozó szereplők sem tudják bevonni e hatásokat gazdasági döntéseikbe. Ez a mérés nem egyszerű feladat, de nem is lehetetlen. Mindenképpen alapját, előfeltételét képezi azonban annak, hogy ilyen jellegű döntéseknél az érintettek a társadalmi, környezeti érdekeket is érvényesíteni tudják. ____ Sustainability is a key issue today both for practitioners and researchers. This is true especially for logisticians. Logistics is a function that has a significant CO2 emission and also destructs transportation infrastructure that burden our environment. The article is focusing on these issues with the help of a Hungarian case study. It analysis the effect of applying a new, long and heavy type of truck, called EuroCombi. It presents a methodology usable for measuring these negative external effects in Forint. Without proper measurement internalization of costs these externalities generate is impossible. As it will be presented in details, such a measurement is although not very easy but achievable.

A tranzakciós költségek és a szabványosítás kapcsolata (Relationship between transaction costs and standardization)

Az elmúlt néhány évtizedben a szabványosítás terén igen komoly változások mentek végbe. Ugrásszerűen megnőtt a szabványok száma, és jelentősen átalakult a szabványosítás folyamata is. Ezzel párhuzamosan a téma gazdasági hatásaival foglalkozó kutatások száma is megsokszorozódott, ami elsősorban a hálózati externáliák irodalmának robbanásszerű gyarapodásának köszönhető. Jelen tanulmány – az elméletek fősodrától eltérően – a tranzakciós költségek elméletében (TKE) helyezi el a szabványosítást. A szabványok és a tranzakciós költségek kapcsolatáról már születtek korábban is tanulmányok, de ezek a szabványoknak a tranzakciós költségekre gyakorolt hatásaira fókuszáltak. A tanulmány ezzel szemben arra helyezi a hangsúlyt, hogy azonosítsa a tranzakciós költségeknek a szabványosításra gyakorolt hatásait. A kutatás célja, hogy olyan elméleti alapot adjon, amelyben a témakör átfogóan elemezhető. A fő kutatási kérdés az, hogy mitől függ az, hogy melyik mechanizmus kereteiben érdemes a szabványosítást lebonyolítani. ________ Significant changes have characterized the last few decades of standardization. The number of standards has dramatically increased and processes of standardization have also changed a lot. At the same time the amount of researches that are concerned with the economic impact of standardization has also multiplied due to the boom in the literature of network externalities. Unlike the mainstream, this paper places standardization in the theory of transaction cost economics. Although there are earlier papers that are concerned with the relationship between standards and transaction costs, these studies focus on the impact of standards on transaction costs. In contrast, this paper lays emphasis on the identification of the impact of transaction costs on standardization. This study aims to provide a theoretical basis for the comprehensive analyses. The main research question: What determines which coordination mechanism is used to evolve a standard?

State subsidy and moral hazard in corporate financing

This paper investigates the impact of state subsidy on the behavior of the entrepreneur under asymmetric information. Several authors formulated concerns about state intervention as it can aggravate moral hazard in corporate financing. In the seminal paper of Holmström and Tirole (1997) a two-player moral hazard model is presented with an entrepreneur initiating a risky scalable project and a private investor (e.g. bank or venture capitalist) providing outside financing. The novelty of our research is that this basic moral hazard model is extended to the case of positive externalities and to three players by introducing the state subsidizing the project. It is shown that in the optimum, state subsidy does not harm, but improves the incentives of the entrepreneur to make efforts for the success of the project; hence in effect state intervention reduces moral hazard. Consequently, state subsidy increases social welfare which is defined as the sum of private and public net benefits. Also, the exact form of the state subsidy (ex-ante/ex-post, conditional/unconditional, refundable/nonrefundable) is irrelevant in respect of the optimal size and the total welfare effect of the project. Moreover, in case of nonrefundable subsidies state does not crowd out private investors; but on the contrary, by providing additional capital it boosts private financing. In case of refundable subsidies some crowding effects may occur depending on the subsidy form and the parameters.