Rent Seeking Behavior and Optimal Taxation of Pollution in Shallow Lakes

In this paper we extend earlier work on the economics of shallow lakes by M\"aler, Xepapadeas and de Zeeuw (2003) to the case where two communities have incommensurable preferences about lake eutrophication. In the case of incommensurable preferences interest group behavior arises, we therefore consider the case where society is divided into two interest groups and is thus unable to agree on a single management objective. In particular, the communities that share the use of the lake disagree on the relative importance of the shallow lake acting as a waste sink for phosphorus run-off as opposed to other ecosystem services. A dynamic game in which communities maximize their use of the lake results in a Nash equilibrium where the lake is in a eutrophic state when in fact the Pareto optimum would be for the lake to be in an oligotrophic state. Our paper differs from previous work by considering two communities or interest groups with different preferences for environmental services. The tax that would induce, in a noncooperative context, all of society's members to behave in such a way as to achieve a Pareto optimal outcome is derived under the assumption that a social planner does not favor one community or another. We then ask whether or not such a tax rate would in fact be implemented if each community were able to bear political pressure on the social planner and the social planner were a public representative seeking re-election. In this case both types of communities lobby to have their preferred level of tax applied based on their relative preferences for a clean lake and phosphorus loading. The effects of the lobbying on the application of the optimal tax are investigated numerically for particular values of relative preferences and the relative size of each group. The representative seeking election proposes a different tax rate in order to maximize their probability of electoral success. This problem is solved numerically assuming that the lake is in a eutrophic equilibrium. It is shown that political representatives have an incentive to propose tax rates that are insufficient to achieve a return to an oligotrophic steady-statePollution of shallow lakes; optimal eco-taxation; dynamic rent seeking

The political economy of shallow lakes

Shallow lakes display hysteresis in their response to phosphorous loading. Gradual increases in the nutrient content of the lake can appear to have little effect on the oligotrophic state of the lake until a point at which the lake suddenly flips to a eutrophic state. Ecotaxes on phosphorous loading have been suggested as means to maintain the lake in the socially desirable state - oligotrophic or not - when society can agree on a common welfare function. In this paper, we consider the case where society is divided into two interest groups and is thus unable to agree. In particular, the communities that share the use of the lake disagree on the relative importance of the shallow lake acting as a waste sink for phosphorous run-off as opposed to other ecosystem service. A dynamic game in which communities maximize their use of the lake results in a Nash equilibrium where the lake is in a eutrophic state when in fact the Pareto-optimum would be for the lake to be in an oligotrophic state. The tax that would induce, in a non-cooperative context, all of society's members to behave in such a way as to achieve a Pareto-optimal outcome is derived. Further, both types of communities lobby to have their preferred level of tax applied based on their relative preferences for a clean lake and phosphorous loading. The effects of the lobbying on the application of the optimal tax are investigated for particular values of relative preferences and the relative size of each group.Resource /Energy Economics and Policy,

Numerical Simulation of the Term Structure of Interest Rates Using a Random Yield

In this paper, we simulate the term structure of interest rates, where the yield curve is based on forward rates which are modelled as a random field. Term structure models based on random fields offer an improvement on yield curve models based on stochastic differential equations, because they do not require recalibration. In the literature, results concerning random field models of interest rates have been entirely theoretical and have not discussed the implications for yield curve modelling. The simulation results presented in this paper, to the best of our knowledge, are the first numerical results for random field based interest rates and yield curve models

Walrasian and Marshallian Stability: An Application to the Australian Pig industry

The Global Correspondence Principle of Samuelson states that global comparative static results hold even in the absence of an initial stable equilibrium. This principle has been applied in recent studies of international trade with variable returns to scale to resolve paradoxical results with respect to the Rybczynski and Stolper-Samuelson theorems. Takayama and Ide have shown that the principle may only apply if the initial equilibrium is Marshallian stable. This has implications for economic forecasting, in that forecasts of prices and quantities may only be valid in the presence of Marshallian stability. We estimate a Vector Error correction Model of the Australian pig industry and examine the stability of the model in both the Walrasian and Marshallian sense. We find that prior to the introduction of imports in 1990, the farm gate market was characterised by both Walrasian and Marshallian stability and after 1990 it was unstable in both senses. This suggests that market forecasts since 1990 need to be viewed with more than the usual caution

Rent Seeking Behavior and Optimal Taxation of Pollution in Shallow Lakes

In this paper we extend earlier work on the economics of shallow lakes by M\"aler, Xepapadeas and de Zeeuw (2003) to the case where two communities have incommensurable preferences about lake eutrophication. In the case of incommensurable preferences interest group behavior arises, we therefore consider the case where society is divided into two interest groups and is thus unable to agree on a single management objective. In particular, the communities that share the use of the lake disagree on the relative importance of the shallow lake acting as a waste sink for phosphorus run-off as opposed to other ecosystem services. A dynamic game in which communities maximize their use of the lake results in a Nash equilibrium where the lake is in a eutrophic state when in fact the Pareto optimum would be for the lake to be in an oligotrophic state. Our paper differs from previous work by considering two communities or interest groups with different preferences for environmental services. The tax that would induce, in a noncooperative context, all of society's members to behave in such a way as to achieve a Pareto optimal outcome is derived under the assumption that a social planner does not favor one community or another. We then ask whether or not such a tax rate would in fact be implemented if each community were able to bear political pressure on the social planner and the social planner were a public representative seeking re-election. In this case both types of communities lobby to have their preferred level of tax applied based on their relative preferences for a clean lake and phosphorus loading. The effects of the lobbying on the application of the optimal tax are investigated numerically for particular values of relative preferences and the relative size of each group. The representative seeking election proposes a different tax rate in order to maximize their probability of electoral success. This problem is solved numerically assuming that the lake is in a eutrophic equilibrium. It is shown that political representatives have an incentive to propose tax rates that are insufficient to achieve a return to an oligotrophic steady-stat

Rent Seeking Behavior and Optimal Taxation of Pollution in Shallow Lakes

In this paper we extend earlier work on the economics of shallow lakes by M\"aler, Xepapadeas and de Zeeuw (2003) to the case where two communities have incommensurable preferences about lake eutrophication. In the case of incommensurable preferences interest group behavior arises, we therefore consider the case where society is divided into two interest groups and is thus unable to agree on a single management objective. In particular, the communities that share the use of the lake disagree on the relative importance of the shallow lake acting as a waste sink for phosphorus run-off as opposed to other ecosystem services. A dynamic game in which communities maximize their use of the lake results in a Nash equilibrium where the lake is in a eutrophic state when in fact the Pareto optimum would be for the lake to be in an oligotrophic state. Our paper differs from previous work by considering two communities or interest groups with different preferences for environmental services. The tax that would induce, in a noncooperative context, all of society's members to behave in such a way as to achieve a Pareto optimal outcome is derived under the assumption that a social planner does not favor one community or another. We then ask whether or not such a tax rate would in fact be implemented if each community were able to bear political pressure on the social planner and the social planner were a public representative seeking re-election. In this case both types of communities lobby to have their preferred level of tax applied based on their relative preferences for a clean lake and phosphorus loading. The effects of the lobbying on the application of the optimal tax are investigated numerically for particular values of relative preferences and the relative size of each group. The representative seeking election proposes a different tax rate in order to maximize their probability of electoral success. This problem is solved numerically assuming that the lake is in a eutrophic equilibrium. It is shown that political representatives have an incentive to propose tax rates that are insufficient to achieve a return to an oligotrophic steady-stat

How About Tomorrow? Optimal Procrastination and the Implications for Delay in Submitting to Conferences

In these times of academic stress in which one's time budget is a binding constraint, procrastination and delay may be an optimal response to deadlines imposed by conference organizers. We formulate a model of optimal procrastination using optimal stopping theory. Whilst the date of the conference is known and the "soft" deadline is also known by the authors of the paper, the "hard" deadline for the publication of the conference proceedings and program is only known by the organizers. Organizers possess a lower and upper limit on the numbers of participants determined by their budget and the capacity of the conference venue. The authors wold like to submit papers as late as possible subject to these constraints. The question this paper attempts to address is "What is the optimal period of procrastination for the authors?

Developing a Data Vault

Research data is being generated at an ever-increasing rate. This brings challenges in how to store, analyse, and care for the data. A component of this problem is the stewardship of data and associated files that need a safe and secure home for the medium to long-term. As part of typical suites of Research Data Management services, researchers are provided with large allocations of ‘active data storage’. This is often stored on expensive and fast disks to enable efficient transfer and working with large amounts of data. However, over time this active data store fills up, and researchers need a facility to move older but still valuable data to cheaper storage for long-term care. In addition, research funders are increasingly requiring data to be stored in forms that allow it to be described and retrieved in the future. For data that can’t be shared publicly in an open repository, a closed solution is required that can make use of offline or near-line storage for cost efficiency. This paper describes a solution to these requirements, called the Data Vault.

Different Prey Resources Suggest Little Competition Between Non-Native Frogs and Insectivorous Birds Despite Isotopic Niche Overlap

Non-native amphibians often compete with native amphibians in their introduced range, but their competitive effects on other vertebrates are less well known. The Puerto Rican coqui frog (Eleutherodactylus coqui) has colonized the island of Hawaii, and has been hypothesized to compete with insectivorous birds and bats. To address if the coqui could compete with these vertebrates, we used stable isotope analyses to compare the trophic position and isotopic niche overlap between the coqui, three insectivorous bird species, and the Hawaiian hoary bat. Coquis shared similar trophic position to Hawaii amakihi, Japanese white-eye, and red-billed leiothrix. Coquis were about 3 ‰ less enriched in δ15N than the Hawaiian hoary bat, suggesting the bats feed at a higher trophic level than coquis. Analyses of potential diet sources between coquis and each of the three bird species indicate that there was more dietary overlap between bird species than any of the birds and the coqui. Results suggest that Acari, Amphipoda, and Blattodea made up \u3e90% of coqui diet, while Araneae made up only 2% of coqui diet, but approximately 25% of amakihi and white-eye diet. The three bird species shared similar proportions of Lepidoptera larvae, which were ~25% of their diet. Results suggest that coquis share few food resources with insectivorous birds, but occupy a similar trophic position, which could indicate weak competition. However, resource competition may not be the only way coquis impact insectivorous birds, and future research should examine whether coqui invasions are associated with changes in bird abundance