Optimal Allocation of Land for Conservation: A General Equilibrium Analysis

This paper was replaced with a revised version on 7/26/10Conservation, General Equilibrium Modeling, Optimal Land Allocation, Conservation Tax, Environmental Economics and Policy, Land Economics/Use, Q57, C68,

Cryptography from Information Loss

© Marshall Ball, Elette Boyle, Akshay Degwekar, Apoorvaa Deshpande, Alon Rosen, Vinod. Reductions between problems, the mainstay of theoretical computer science, efficiently map an instance of one problem to an instance of another in such a way that solving the latter allows solving the former.1 The subject of this work is “lossy” reductions, where the reduction loses some information about the input instance. We show that such reductions, when they exist, have interesting and powerful consequences for lifting hardness into “useful” hardness, namely cryptography. Our first, conceptual, contribution is a definition of lossy reductions in the language of mutual information. Roughly speaking, our definition says that a reduction C is t-lossy if, for any distribution X over its inputs, the mutual information I(X; C(X)) ≤ t. Our treatment generalizes a variety of seemingly related but distinct notions such as worst-case to average-case reductions, randomized encodings (Ishai and Kushilevitz, FOCS 2000), homomorphic computations (Gentry, STOC 2009), and instance compression (Harnik and Naor, FOCS 2006). We then proceed to show several consequences of lossy reductions: 1. We say that a language L has an f-reduction to a language L0 for a Boolean function f if there is a (randomized) polynomial-time algorithm C that takes an m-tuple of strings X = (x1, . . ., xm), with each xi ∈ {0, 1}n, and outputs a string z such that with high probability, L0(z) = f(L(x1), L(x2), . . ., L(xm)) Suppose a language L has an f-reduction C to L0 that is t-lossy. Our first result is that one-way functions exist if L is worst-case hard and one of the following conditions holds: f is the OR function, t ≤ m/100, and L0 is the same as L f is the Majority function, and t ≤ m/100 f is the OR function, t ≤ O(m log n), and the reduction has no error This improves on the implications that follow from combining (Drucker, FOCS 2012) with (Ostrovsky and Wigderson, ISTCS 1993) that result in auxiliary-input one-way functions. 2. Our second result is about the stronger notion of t-compressing f-reductions – reductions that only output t bits. We show that if there is an average-case hard language L that has a t-compressing Majority reduction to some language for t = m/100, then there exist collision-resistant hash functions. This improves on the result of (Harnik and Naor, STOC 2006), whose starting point is a cryptographic primitive (namely, one-way functions) rather than average-case hardness, and whose assumption is a compressing OR-reduction of SAT (which is now known to be false unless the polynomial hierarchy collapses). Along the way, we define a non-standard one-sided notion of average-case hardness, which is the notion of hardness used in the second result above, that may be of independent interest

Fiscal sustainability in a new Keynesian model

Recent work on optimal monetary and fiscal policy in New Keynesian models suggests that it is optimal to allow steady-state debt to follow a random walk. In this paper we consider the nature of the time inconsistency involved in such a policy and its implication for discretionary policymaking. We show that governments are tempted, given inflationary expectations, to utilize their monetary and fiscal instruments in the initial period to change the ultimate debt burden they need to service. We demonstrate that this temptation is only eliminated if following shocks, the new steady-state debt is equal to the original (efficient) debt level even though there is no explicit debt target in the government's objective function. Analytically and in a series of numerical simulations we show which instrument is used to stabilize the debt depends crucially on the degree of nominal inertia and the size of the debt stock. We also show that the welfare consequences of introducing debt are negligible for precommitment policies, but can be significant for discretionary policy. Finally, we assess the credibility of commitment policy by considering a quasi-commitment policy, which allows for different probabilities of reneging on past promises

Strategic Vertical Pricing in the U.S. Butter Market

This article develops a methodology for empirically analyzing vertically strategic interactions in a multi-level supply channel. The model is used to analyze the vertical channel for U.S. butter manufacturing and retailing. Aggregating products to the firm level and using a nonlinear AIDS demand system under alternative strategic pricing assumptions is estimated using full information maximum likelihood (FIML) for seven geographic markets from 1998-2002. The market demand for butter was found to very price elastic. Furthermore, cross price elasticities between private labels and the two large national brands were also very elastic. The selected market structure was one indicating category profit maximization of national brands (separate from private label) at the retail level, Vertical Nash competition in the vertical channel, and Bretrand competition at the manufacturing level. Our results strongly suggest that the retail market for food products is impacted by the underlying vertical structure. The study provides useful measures of imperfect competition in the retail manufacturing sector.Vertical interaction, market structure, strategic pricing, market power, AIDS model, butter., Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Industrial Organization, L13, L22, L66,

The impact of pillar I support on farm choices: conceptual and methodological challenges

In the near future the CAP will continue to be structured around two pillars. In the first pillar the main instrument for producers’ support is the decoupled Single Farm Payment. In this paper we review the methodological framework for analysing decoupled payments in models of agricultural production. Market and technological uncertainty, credit constraints, farm household choices involving extra-agricultural decisions, policy uncertainty and long-run impact of decoupling on investment and land values are the relevant issues that should be pursued by methodological and empirical analysis. Future research should refine the analysis of decoupled payments, mainly trying to provide results that can be useful for policy simulation, to bridge the gap between analysis at the individual level and sector policy models.decoupled payments, agricultural production models, Common Agricultural Policy, Agricultural and Food Policy, Q12, Q18,