Should we pay for ecosystem service outputs, inputs or both?

Payments for ecosystem service outputs have recently become a popular policy prescription for a range of agri-environmental schemes. The focus of this paper is on the choice of contract instruments to incentivise the provision of ecosystem service outputs from farms. The farmer is better informed than the regulator in terms of hidden information about costs and hidden-actions relating to effort. The results show that with perfect information, the regulator can contract equivalently on inputs or outputs. With hidden information, input-based contracts are more cost effective at reducing the informational rent related to adverse selection than output-based contracts. Mixed contracts are also cost-effective, especially where one input is not observable. Such contracts allow the regulator to target variables that are “costly-to-fake” as opposed to those prone to moral hazard such as effort. Further results are given for fixed price contracts and input-based contracts with moral hazard. The model is extended to include a discussion of repeated contracting and the scope that exists for the regulator to benefit from information revealed by the initial choice of contract. The models are applied to a case study of contracting with farmers to protect high biodiversity native vegetation that also provides socially-valuable ecosystem services

Multifunctional agriculture: The effect of non-public goods on socially optimal policies

We develop a general framework for multifunctional agriculture, which includes not only public goods but also rural viability as a non-public good item. We contribute to the literaure in two ways. First, we demonstrate how the broader definition of multifunctional agriculture differs from the agri-environmental multifunctionality, and how agri-environmental policy should be reformed to include these aspects. We show that rural viability entails adjusting fertilizer tax and buffer strip subsidy below their first-best Pigouvian levels to reflect the direct and indirect employment effects of agricultural production. Moreover, we show that when non-agricultural land use is present, an additional, non-agricultural instrument is needed to adjust the amount of land allocated to agriculture to its optimal level. In a parametric model calibrated to Finnish agricultural conditions and Finnish valuation of agri-environmental amenities and rural viability, we assess how the socially optimal provision of non-public good multifunctionality relates the socially optimal agri-environmental multifunctionality

Farmers' behavior and the provision of public goods: towards an analytical framework

The new CAP reform aims to stimulate the role of agriculture as provider of public goods. An analytical framework is developed to model farmers’ decision making and to gain insight into farmers’ behavior in response to a number of policy instruments. The framework integrates characteristics of farm, farmer, market, as well as the policy instruments. Theoretical analysis suggests that attitudes, off-farm employment opportunities, non-pecuniary benefits and expectations of future developments can play important roles in farmer’s decision making regarding the provision of public goods. Empirical research is needed to test the hypothesis

New Bounds for the Garden-Hose Model

We show new results about the garden-hose model. Our main results include improved lower bounds based on non-deterministic communication complexity (leading to the previously unknown $\Theta(n)$ bounds for Inner Product mod 2 and Disjointness), as well as an $O(n\cdot \log^3 n)$ upper bound for the Distributed Majority function (previously conjectured to have quadratic complexity). We show an efficient simulation of formulae made of AND, OR, XOR gates in the garden-hose model, which implies that lower bounds on the garden-hose complexity $GH(f)$ of the order $\Omega(n^{2+\epsilon})$ will be hard to obtain for explicit functions. Furthermore we study a time-bounded variant of the model, in which even modest savings in time can lead to exponential lower bounds on the size of garden-hose protocols.Comment: In FSTTCS 201

Optimization of Tree Modes for Parallel Hash Functions: A Case Study

This paper focuses on parallel hash functions based on tree modes of operation for an inner Variable-Input-Length function. This inner function can be either a single-block-length (SBL) and prefix-free MD hash function, or a sponge-based hash function. We discuss the various forms of optimality that can be obtained when designing parallel hash functions based on trees where all leaves have the same depth. The first result is a scheme which optimizes the tree topology in order to decrease the running time. Then, without affecting the optimal running time we show that we can slightly change the corresponding tree topology so as to minimize the number of required processors as well. Consequently, the resulting scheme decreases in the first place the running time and in the second place the number of required processors.Comment: Preprint version. Added citations, IEEE Transactions on Computers, 201

Information Flow for Security in Control Systems

This paper considers the development of information flow analyses to support resilient design and active detection of adversaries in cyber physical systems (CPS). The area of CPS security, though well studied, suffers from fragmentation. In this paper, we consider control systems as an abstraction of CPS. Here, we extend the notion of information flow analysis, a well established set of methods developed in software security, to obtain a unified framework that captures and extends system theoretic results in control system security. In particular, we propose the Kullback Liebler (KL) divergence as a causal measure of information flow, which quantifies the effect of adversarial inputs on sensor outputs. We show that the proposed measure characterizes the resilience of control systems to specific attack strategies by relating the KL divergence to optimal detection techniques. We then relate information flows to stealthy attack scenarios where an adversary can bypass detection. Finally, this article examines active detection mechanisms where a defender intelligently manipulates control inputs or the system itself in order to elicit information flows from an attacker's malicious behavior. In all previous cases, we demonstrate an ability to investigate and extend existing results by utilizing the proposed information flow analyses

On the optimal level of public inputs.

This paper studies the optimal level of public inputs under two different tax settings. With this aim, we adapt the approach by Gronberg and Liu (2001) to the case of productivity-enhancing public spending. We find that it is not analytically clear whether the first-best level of public spending exceeds the second-best level. After taking account the type of public input, a wide numerical simulation has been carried out. We obtain that the second-best level is always below the first-best level but the criterion by Gronberg and Liu has to be qualified.Second best, excess burden, public input.

Diagnosing performance management and performance budgeting systems: A case study of the U.S. Navy

We present here a case study of an organization within the U.S. Navy that created a new organizational construct and performance management system. We explore the issues faced by naval leaders as they attempt to use their performance information to make resource allocation decisions at the sub-organization level, and base budgets at the organization and service (navy) level. We attempt to diagnose many of the practical problems a government organization encounters when implementing a performance management system, to include trying to inform budgets, and make recommendations on actions that would improve the strength of the performance system. We find in the organization a good conceptual framework, organizational enthusiasm, and reasonable attempts to link disparate information systems into a coherent whole. The good intentions are hindered, however, by inadequate accounting systems, a lack of understanding of cost accounting methods, weak use of terminology and longstanding institutional attitudes. This case confirms challenges associated with both performance management systems and performance budgeting found in the literature, and we offer recommendations for public officials considering such endeavors