Set-Aside versus Quotas in Contracts for Agro-Environmental Regulation

In this paper, we analyze the simultaneous regulation of several goods produced on agricultural land such as environmental amenities and crops. This analysis is conducted using a general two goods model where all agricultural land is used for production. The regulation authority can regulate these goods either through set aside requirements or production quotas. The paper focuses on information asymmetry about some farm performance index creating adverse selection. When public funds are non costly we show that the net social welfare induced by the two types of contracts are equal. In general we also show that if the goal of the regulation is to decrease the production of the quota good it is better to use the quota contract. On contrary if the regulation aims at increasing the production of the quota good, it is better to use a set aside contract.Political Economy,

Occupation time statistics of the random acceleration model

The random acceleration model is one of the simplest non-Markovian stochastic systems and has been widely studied in connection with applications in physics and mathematics. However, the occupation time and related properties are non-trivial and not yet completely understood. In this paper we consider the occupation time $T_+$ of the one-dimensional random acceleration model on the positive half-axis. We calculate the first two moments of $T_+$ analytically and also study the statistics of $T_+$ with Monte Carlo simulations. One goal of our work was to ascertain whether the occupation time $T_+$ and the time $T_m$ at which the maximum of the process is attained are statistically equivalent. For regular Brownian motion the distributions of $T_+$ and $T_m$ coincide and are given by L\'evy's arcsine law. We show that for randomly accelerated motion the distributions of $T_+$ and $T_m$ are quite similar but not identical. This conclusion follows from the exact results for the moments of the distributions and is also consistent with our Monte Carlo simulations.Comment: 10 pages, 4 figure