When Government Misleads US: Sending Misinformation as Protectionist Devices

In this paper, we examine the incentive of the home government to mislead home consumers by sending misinformation. We nd that positive misinformation on home products and negative misinformation on foreign products always increases the prot of the home rm, while when the marginal costs of home and foreign rms are the same, a small amount of positive misinformation decreases the consumer surplus. Moreover, when the home government maximizes home welfare, it chooses to send positive misinformation on the home product and negative misinformation on the foreign product. The stronger is the competition faced by the home rm, the greater is the amount of negative misinformation on the foreign product. By contrast, the optimal amount of misinformation on each product used to maximize world welfare is positive. We also demonstrate that trade liberalization can increases the incentive of the home government to send misinformation.Strategic misleading, misinformation, non-tari trade policies

Strategic Use of Recycled Content Standards under International Duopoly

We examine the strategic use of recycled content standards (RCSs) under international duopoly. RCSs require firms supplying the domestic market to use a certain proportion of recycled materials as inputs. We demonstrate that, when there is no trade in recycled materials, two identical countries both set strategically stricter or more lax RCSs. However, when there is trade in recycled materials, it may be the case that one country sets a stricter RCS while the other sets a more lax RCS. When a world supply constraint on recycled materials is not binding, the main source of the asymmetric distortion in RCSs is a demand effect for recycled materials.recycling, recycled content standard, international trade, strategic trade policy

On Efficiency of Individual Transferable Quotas (ITQs) through Reduction of Vessels

This paper theoretically examines whether an individual transferable quotas (ITQs) regime can achieve the long-run efficiency through the reduction of vessel numbers. Assuming the existence of two types of vessels in terms of their scales, we consider not only quota transactions but also the exit of fishers. Changes in vessel sizes of incumbent fishers are also taken into consideration. We find that when large-scale vessels are more efficient than small-scale vessels, the long-run efficiency is achieved only with an ITQ regime. However, when small-scale vessels are more efficient than large-scale vessels, the long-run efficiency is not achieved; the number of vessels becomes too few compared to when the total harvesting cost is minimized.Efficient fishery, fishery management, individual transferable quotas, quota transaction, vessel scale.

Misleading Advertising in Duopoly

In this paper, we build a model of strategic misleading advertising in duopolistic markets with horizontal product differentiation and advertising externality between firms. We investigate the effects of regulating misinformation on market competition, behavior of firms, and social welfare. We show that the degree of advertising externality and the magnitude of advertising costs are crucial for determining the welfare effects of several regulations, including prohibiting misleading advertising, educating consumers, taxing production, and taxing misleading advertising. We then extend the model by introducing two types of heterogeneities; heterogeneous consumers and heterogeneous production costs between firms.Misleading Advertising, Regulation; Duopoly, Product Differentiation, Advertising Externality

Determinants of Trade in Recyclable Wastes between Developing and Developed Countries

This paper examines the trade volume of recyclable wastes. In particular, we analyze the trade from developed countries to developing countries. The reason is that, when a recycling process is separated from the production process of final goods or/and the consumption process, it would be located in the labor-abundant (i.e., less developed developing) countries. Then, the environmental and health problems might become serious in developing countries. The relationship between the wages and the volume of imports is our focus. We demonstrate that, the higher the wage/per capita income of a developing country, the more recyclable wastes it imports. This implies that there is no evidence for a pollution haven in the sense that the dirty recycling sectors expand in the less developed developing countries more rapidly than the more developed developing countries. Furthermore, we discuss the possibility that the trade restriction for reducing environmental damage is accompanied by a significant loss in efficiency.trade and recycling, recyclable wastes, gravity model

Determinants of Trade in Recyclable Wastes between Developing and Developed Countries

This paper examines the trade volume of recyclable wastes. In particular, we analyze the trade from developed countries to developing countries. The reason is that, when a recycling process is separated from the production process of final goods or/and the consumption process, it would be located in the labor-abundant (i.e., less developed developing) countries. Then, the environmental and health problems might become serious in developing countries. The relationship between the wages and the volume of imports is our focus. We demonstrate that, the higher the wage/per capita income of a developing country, the more recyclable wastes it imports. This implies that there is no evidence for a pollution haven in the sense that the dirty recycling sectors expand in the less developed developing countries more rapidly than the more developed developing countries. Furthermore, we discuss the possibility that the trade restriction for reducing environmental damage is accompanied by a significant loss in efficiency.trade and recycling, recyclable wastes, gravity model

Is the behavior of fishers rational under Individual Transferable Quotas (ITQs) regimes? An Experimental Approach

Marine resource depletion is a critical concern for humankind. Individual Transferable Quota (ITQ) regimes are among the most effective measures to tackle this problem. Employing an experimental approach, this study examines the rationality of fishers under an ITQ regime. In particular, this study focuses on the case where fishers can change their own vessel scales in the beginning of each period in each experiment. We find that the higher the quota price is, the more irrationally fishers behave. Moreover, vessel scales and initial allocations can influence the rationality of fishers.Individual Transferable Quotas (ITQs), experiment, rational behavior

Efficiency of Individual Transferable Quotas (ITQ) Systems and Input and Stock Controls

This paper examines whether or not the number of fishers is optimal under an Individual Transferable Quotas (ITQ) program. We consider two cases on the structure of the quota market: (1) cases in which all fishers are price takers, and (2) cases in which large-scale fishers have market power. When all fishers are price takers in the quota market, the social optimum is likely to be achieved given the total allowable catch (TAC) level. On the other hand, when low-cost fishers have market power in the quota market, the inefficiency may be serious: excess entry of low-cost fishers and insufficient exit of high-cost fishers may take place. Moreover, we demonstrate that vessel controls and stock targeting may work for an ITQ program.

Efficiency of Individual Transferable Quotas (ITQs) when Fishers are able to Choose Vessel Sizes: An experimental approach

Employing an experimental approach, this paper examines whether the efficiency of fishery management can be achieved under Individual Transferable Quotas regimes. We analyze the situation in which subjects can choose from one of two vessel types: large-scale or small-scale. The fixed cost for large-scale vessels is higher than that for their small-scale counterparts, whereas the variable cost for large-scale vessels is lower. We find that the average trading price (ATP) converges to the theoretical equilibrium price (EQP). We also find that vessels are chosen rationally in the sense that, the greater the ATP, minus the EQP in past periods, the less incentive subjects have to invest in large-scale vessels. Moreover, quota prices in the first period could influence both the quota prices and the numbers of both types of vessels in the ensuing periods, and initial allocation could affect the rational choice of vessels.