Designing Market Based Instruments: Beyond Round One of the Australian MBI Pilot Program

Most markets have evolved as buyers and sellers constantly search for ways to create value, however this has not occurred naturally in all areas of the economy markets are missing for some goods, including the environment. In such cases, transaction costs linked to property rights, asymmetric and hidden information and packaging problems have often prevented otherwise valuable deals from being negotiated in relation to the environment. However new capabilities and a better knowledge and understanding of the problems at hand now mean that where the objective is clear, and the knowledge, skills and capability exist to understand, model and measure the relevant characteristics of the problem transaction costs are low enough that economists can, in certain cases, design market based instruments that match demand with supply. In general the findings from the National MBI Pilot Program indicate that cap-and-trade systems, auctions and offsets systems can be effective tools to achieve natural resource management. The type of mechanism that is appropriate in a particular circumstance will depend on the transaction costs involved, which are strongly influenced by the features of the problem at hand. Mechanisms therefore require careful design to ensure they are tailored to each particular case.Transaction Costs, Property Rights, Asymmetric and Private Information, Public Goods, Government Policy, Marketing,

On incremental global update support in cooperative database systems

OzGateway is a cooperative database system designed for integrating heterogeneous existing information systems into an interoperable environment. It also aims to provide a gatewway for legacy information system migration. This paper summarises the problems and results of multidatabase transaction management research. In supporting global updates in OzGateway in an evolutionary way, we introduce a classification of multidatabase transactions and discuss the problems in each category. The architecture of OzGateway and the design of the global transaction manager and servers are presented

Object-Oriented Software Representation of Polymer Materials Information in Engineering Design

The software application POISE, Polymer Objects in a Smalltalk™ Environment, integrates knowledge representation, user interfaces, and data management; a system of tools for the materials domain expert involved in design. Engineering design solutions initially build from generalisations. POISE represents multiple levels of generalisations from classifications of polymer information. The class-instance paradigm classifies software objects. An object’s behaviour is an exclusive function of its class. Polymer’s behaviours are a function of multiple orthogonal factors, like chemistry and processing, therefore multiple orthogonal classes must represent polymers. Taxonomy only represents one of these factors. The Enhancer mechanism resolves this conflict between classification and representation. Polymer classification is not well established, with new materials evolving. The software compensates by evolving the classification schema. Guided with a specialised interface tool, the domain expert updates the schema by adding new polymer families and re-classifying existing classes. Through analysing the generalisations in the classification, the domain expert can develop an appropriate classification. This analysis relies on the engineering properties differentiating the principal material qualities. Standard properties do not distinguish specific structural differences in polymer materials, necessitating new properties. Material properties distinguish materials in the domain whereas the classes describe the properties of polymer objects. Domain experts add new properties to the polymer classes to distinguish polymer objects. Properties are independent objects that partially describe the class template; Partial Template Objects. Persistence of personal design information and management of shared data requires dichotomous database management. Shared data requires multi-user access, and consequently transaction management. Transaction management in object-oriented systems often holds resources for a long duration. Transaction declaration hinders transparent access to storage, and corrupts the representation. For single-user design information, transactions are implicit with access. Database proxies provide transparent per-object transaction management to persistent design information. The WorkBase is an object-storage utility that utilises Enhancers as proxies

Catastrophe index-linked securities and reinsurance as substituties

The use of catastrophe bonds (cat bonds) implies the problem of the so called basis risk, resulting from the fact that, in contrast to traditional reinsurance, this kind of coverage cannot be a perfect hedge for the primary’s insured portfolio. On the other hand cat bonds offer some very attractive economic features: Besides their usefulness as a solution to the problems of moral hazard and default risk, an important advantage of cat bonds can be seen in the presumably lower transaction costs compared to (re)insurance products. Insurance coverage usually incurs costs of acquisition, monitoring and loss adjustment, all of which can be reduced by making use of the financial markets. Additionally, cat bonds are only weakly correlated with market risk, implying that in perfect financial markets these securities could be traded at a price including just small risk premiums. Although these aspects have been identified in economic literature, to our knowledge there has been no publication so far that formally addresses the trade-off between basis risk and transaction cost. In this paper, therefore, we introduce a simple model that enables us to analyze cat bonds and reinsurance as substitutional risk management tools in a standard insurance demand theory environment. We concentrate on the problem of basis risk versus transaction cost, and show that the availability of cat bonds affects the structure of optimal reinsurance contract design in an interesting way, as it leads to an increase of indemnity for small losses and a decrease of indemnity for large losses

Determinants of transaction costs in construction projects

Transaction costs occur when a good or service is transferred across a technologically separable interface, and include the costs of drafting, negotiating and enforcing an agreement, and also the costs of governance and bonding to secure commitments. In the complex and high risk environment of a construction project, questionable decisions can be made in the planning and design phase, and disagreements, conflicts, disputes, change orders, and claims can occur in the construction phase. These problems contribute to an increase in transaction costs. Transaction costs at the pre-contract phase of a project are different from the transaction costs at the post-contract phase. However, there is no consensus on a standard definition of transaction costs in construction projects. In this study, a detailed literature review focusing on transaction costs in construction project management is presented. The factors that affect transaction costs are identified and categorized under the headings of the owner’s and contractor’s roles in the transaction, project management efficiency, and the characteristics of the transaction environment

Designing Regional Systems of Biotechnology Regulation A Transaction Cost Approach to Regulatory Governance

Many developing countries are currently in the process of designing regulatory systems that should make it possible to use the potential of genetically modified organisms (GMOs) for agricultural development, while at the same time managing the risks for food safety and the environment that are potentially associated with these technologies. In view of the considerable costs associated with biotechnology regulation and the scarcity of biosafety specialists, there are processes in various regions of the developing world to establish regional systems of biotechnology regulation. So far, there are major knowledge gaps as to how regional systems of biotechnology regulation can be designed to be effective and efficient and to fulfill principles of good governance, such as transparency, voice and accountability, control of corruption, and avoidance of special interest capture. There is a wide variety of possible regional approaches, which differ with regard to the level of centralization, the scope of a regional system, the types of regional institutions and processes, and the types of financing mechanisms. Based on the literature on environmental and fiscal federalism and transaction costs economics, the paper develops a conceptual framework for the assessment of regional systems of biotechnology regulation. The framework specifies design options and assessment criteria, and identifies major trade-offs as well as the factors affecting these trade-offs. The paper takes West Africa as an example to illustrate this framework and refers to the European Union for comparison. The paper concludes that involving regional experts, stakeholders and policy-makers into debates on the design of a regional regulatory system is an important strategy to fill knowledge gaps and arrive at conclusions regarding the trade-offs involved in regional biotechnology regulation. Key words: regional biotechnology regulation; regulatory federalism; transaction cost economics; West Africa; European Unionregional biotechnology regulation, regulatory federalism, transaction cost economics, European Union, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Environmental Economics and Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Relations/Trade, Marketing, Production Economics, Research and Development/Tech Change/Emerging Technologies,

Transaction management in object-oriented data base systems

Object-oriented data bases are fast gaining in popularity, especially with the advent of advanced applications like computer aided design (CAD) and multimedia data bases (MMDB). The modeling techniques required by these applications cannot be met by conventional data base systems. The semantic richness of the object-oriented model facilitates the modeling of advanced data base applications. These applications are characterized by long-duration cooperating transactions. Unlike the conventional data bases, serializability can no linger be the correctness criterion for concurrent transaction execution. A new transaction model for object-oriented data bases is needed. This dissertation describes our research in the area of transaction management for object-oriented data bases. A new transaction model for object-oriented data bases is defined. This model takes into consideration the unique requirements of the advanced applications. Data base consistency is now defined in terms of correctability. Object-oriented Correct Schedules (OOCS) and Object-oriented Correctable Schedules (OOCLS) are defined. This dissertation also describes a new concurrency control protocol that satisfies the correctness criterion for concurrent execution of transactions in an object-oriented data base environment, i.e. it allows only Object-oriented Correctable Schedules. Users of a data base interact with it through means of queries. Queries are then translated into transactions. The data base functionality necessary to support queries is also discussed in this research work

Selective transparency in distributed transaction processing

PhD ThesisObject-oriented programming languages provide a powerful interface for programmers to access the mechanisms necessary for reliable distributed computing. Using inheritance and polymorphism provided by the object model, it is possible to develop a hierarchy of classes to capture the semantics and inter-relationships of various levels of functionality required for distributed transaction processing. Using multiple inheritance, application developers can selectively apply transaction properties to suit the requirements of the application objects. In addition to the specific problems of (distributed) transaction processing in an environment of persistent objects, there is a need for a unified framework, or architecture in which to place this system. To be truly effective, not only the transaction manager, but the entire transaction support environment must be described, designed and implemented in terms of objects. This thesis presents an architecture for reliable distributed processing in which the management of persistence, provision of transaction properties (e.g., concurrency control), and organisation of support services (e.g., RPC) are all gathered into a unified design based on the object model.UK Science and Engineering Council: ESPRIT project