Vagueness, credibility, and government policy

A discussion of the reasons why it may be in a government agency's--and society's--best interest to be vague about policy objectives. Using the concept of "cheap talk," the author explains that when an agency faces a trade-off between precise and credible announcements, its best move may be to provide truthful but limited information.Information theory

Manufacturing Wage Dispersion: An End Game Interpretation

macroeconomics, manufacturing, wage dispersion, cyclical swings

Agent-Based Simulations of Blockchain protocols illustrated via Kadena's Chainweb

While many distributed consensus protocols provide robust liveness and consistency guarantees under the presence of malicious actors, quantitative estimates of how economic incentives affect security are few and far between. In this paper, we describe a system for simulating how adversarial agents, both economically rational and Byzantine, interact with a blockchain protocol. This system provides statistical estimates for the economic difficulty of an attack and how the presence of certain actors influences protocol-level statistics, such as the expected time to regain liveness. This simulation system is influenced by the design of algorithmic trading and reinforcement learning systems that use explicit modeling of an agent's reward mechanism to evaluate and optimize a fully autonomous agent. We implement and apply this simulation framework to Kadena's Chainweb, a parallelized Proof-of-Work system, that contains complexity in how miner incentive compliance affects security and censorship resistance. We provide the first formal description of Chainweb that is in the literature and use this formal description to motivate our simulation design. Our simulation results include a phase transition in block height growth rate as a function of shard connectivity and empirical evidence that censorship in Chainweb is too costly for rational miners to engage in. We conclude with an outlook on how simulation can guide and optimize protocol development in a variety of contexts, including Proof-of-Stake parameter optimization and peer-to-peer networking design.Comment: 10 pages, 7 figures, accepted to the IEEE S&B 2019 conferenc

Efficiency Analysis for Peruvian electricity distribution sector: Inefficiency’s explicative factors. A study for 2000 – 2008

"This paper estimates the inefficiency of Peruvian electricity distribution companies to determine if the expected results from the 90’s reform were met. To do this, we used data for 19 distribution companies for the period 2000 – 2008 using a Cost Stochastic Frontier approach and estimating inefficiency in a one-step procedure. The analysis suggests that private utilities are less inefficient than public Utilities because of better management practices. In other words, private management and investments had been favorable in terms of efficiency for the period studied. Also, regulation changes, especially in 2005, have increased distribution costs and geographical characteristics impact negatively on efficiency, especially in public Utilities. This can be explained by the fact that State investment in difficult areas, with public Utilities operating, imposes additional costs (management and operational) that makes them inefficient. Future investigations should focus in a Region Analysis, for the sake of a bigger Panel sample."Distribution sector, Utilities, Inefficiency, Ranking, Stochastic Frontier, Reform

When is a life too costly to save? : evidence from U.S. environmental regulations

Except for two relatively minor statutes, U.S. environmental laws do not permit the balancing of costs and benefits in setting environmental standards. The Clean Air Act, for example, prohibits the Environmental Protection Agency (EPA) from considering costs in setting ambient air quality standards. Similarly, the Clean Water Act does not allow consideration of benefits in setting effluent standards. When the EPA is allowed to balance benefits against costs, it has considerable discretion in defining"balancing."The authors ask two questions: Whether allowed to or not, has the EPA balanced costs and benefits in setting environmental standards? Where has the EPA drawn the line in deciding how much to spend to save a statistical life? Their answers are based on data about the costs and benefits of regulations involving three classes of pollutants: cancer-causing pesticides usedon food crops (1975-89); carcinogenic air pollutants (1975-90); and all uses of asbestos regulated under the Toxic Substances Control Act. The following are their findings. The EPA behaved as though it were balancing costs and benefits in its regulation of pesticides under Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and of asbestos under Toxic Substance Control Act (TSCA), the two so-called balancing statutes. The higher the cost of the ban, the less likely the EPA was to ban the use of these products. The greater the number of lives saved, the more likely the EPA was to ban their use. But the amount the EPA was (implicitly) willing to spend to save a life was high: $52 million to prevent cancer among pesticide applicators, and$49 million to avoid cancer through exposure to asbestos. The value the EPA attached to saving a life was higher for workers than for consumers. The value attached to avoiding a case of cancer through exposure to pesticide resides on food was less than $100,000, in contrast with the$52 million value of preventing cancer among pesticide applicators - perhaps because workers are exposed to higher levels of pollution than consumers. After 1987, when the Natural Resources Defense Council sued the EPA for considering costs in setting emissions standards for vinyl chloride, the EPA considered costs in setting emissions standards only after an acceptable level of risk was achieved. Ironically, before the vinyl chloride decision, the value per cancer case avoided was only $15 million. The amount the EPA was willing to spend to save a life was thus less under the Clean Air Act than under the balancing statutes. But after this decision, the EPA did not consider costs at all if the risk of cancer to the maximally exposed individual was above one in 10,000.Environmental Economics&Policies,Health Monitoring&Evaluation,Economic Theory&Research,Health Economics&Finance,Montreal Protocol

Deciding with long-term environmental impacts: what role for discounting?

The problem of how to discount values in the far future is reviewed, and shown to lead down a blind alley. An alternative is proposed that allows long term consequences to be addressed by decisions using a relatively short term time horizon. A simple model investigating the optimal containment of radioactive waste in a deterministic world is used to show that current generations can indeed cater for the interests of the far future while optimising over the short term; however, this is not always possible. The proposed method seems to address most of the critiques of long term discounting found in the literature.Environmental Economics and Policy, Research Methods/ Statistical Methods,

Energy cooperation in Southern Africa: What role for Norway?

This Working Paper contains a full report from a Seminar on Regional Energy Co-operation, Luanda, 12-14 February 2002. Norwegian involvement in the energy sector in Southern Africa is considerable. Energy is a major area in Norwegian co-operation and includes a number of countries within SADC. There has been rapid change in the sector, which has moved from being an infrastructure sector to a commodity production sector. Also, the ongoing institutional changes in SADC will have an effect on its relation to energy. The donors' role must change accordingly. Important objectives of the seminar were to discuss the changes in the sector in the region and to improve the level of information in order to make better decisions.