Marginal Curves Research Articles

Price Controls and Consumer Surplus

Price controls lead to misallocation of goods and encourage rent-seeking. The misallocation effect alone is enough to ensure that consumer surplus is always reduced by a price control in an otherwise-competitive market with convex demand if supply is more elastic than demand; or when demand is log-convex (e.g., constant-elasticity) even if supply is inelastic. The same results apply both when rationed goods are allocated by costless lottery among interested consumers, and when costly rent-seeking and/or partial de-control mitigates the allocative inefficiency. The results are best understood using the fact that in any market, consumer surplus equals the area between the demand curve and the industry marginal revenue curve.

Research on International Carbon Emissions Trading and Optimal Exports Scale of China Carbon Emissions

Abstract This paper reviews the researches related to international carbon emission right trading. Based on the analysis of marginal abatement curves theory, it has been demonstrated that the fact that different countries or districts have different marginal abatement costs of carbon emission upon respective abatement promise gives rise to international carbon emission right trading. Furthermore, this paper proposes that developing countries should actively participate in the international carbon emission right trading in order to obtain due market benefits. Then, on the basis of the two-phase model, this essay also discusses the optimal exports scale of carbon emission right and its determinant factors, and evaluates the optimal export quantity of carbon emission right for China at the first phase.

Improved Products at Same Cost, Lower Sales and Lower Welfare

We analyze the effect of product quality on the output of a high-quality dominant firm facing a low-quality competitive fringe. We show that profit maximizing output decreases with product quality when the dominant firm's marginal cost is lower than that of the fringe, is independent of quality when marginal cost is the same for all firms, and is increasing in quality when the dominant firm's costs are higher than those of the fringe. The driving force behind this result is that an increase in product quality does not cause a parallel shift in the dominant firm's residual demand, but rather causes it to pivot. This, in turn, causes the dominant firm's marginal revenue curve to rotate, rather than shift outwards, resulting in inwards movement around the equilibrium output when the dominant firm's marginal cost is lower than the fringe's. Equally strikingly, higher quality at the same marginal cost may result in all consumers being weakly worse off, with some being strictly worse off. Similar results can be obtained without a competitive fringe, but only under some more restrictive conditions.

The modulational instability in deep water under the action of wind and dissipation

The modulational instability of gravity wave trains on the surface of water acted upon by wind and under influence of viscosity is considered. The wind regime is that of validity of Miles' theory and the viscosity is small. By using a perturbed nonlinear Schrödinger equation describing the evolution of a narrow-banded wavepacket under the action of wind and dissipation, the modulational instability of the wave group is shown to depend on both the frequency (or wavenumber) of the carrier wave and the strength of the friction velocity (or the wind speed). For fixed values of the water-surface roughness, the marginal curves separating stable states from unstable states are given. It is found in the low-frequency regime that stronger wind velocities are needed to sustain the modulational instability than for high-frequency water waves. In other words, the critical frequency decreases as the carrier wave age increases. Furthermore, it is shown for a given carrier frequency that a larger friction velocity is needed to sustain modulational instability when the roughness length is increased.

Using black carbon metrics in climate policy

The development of potential metrics for comparing black carbon (BC) to carbon dioxide has been requested within legislation in the United States and has been discussed at the United Nations Framework Convention on Climate Change Conference of the Parties in Poznan: therefore, it is important to further investigate the advantages and drawbacks to using such a metric. For context, we summarize the various proposed CO2 equivalent metrics and the rationales for developing them. We use BC marginal abatement curves to examine the implications of using 100-year global warming potentials to include BC in greenhouse gas (GHG) trading regimes. This idealized study demonstrates the impacts on emissions of CO2, and radiative forcing over time. Finally, we address the drawbacks of trading poorly quantified short-lived emissions with GHGs despite different physical interactions with the climate system. While the case for reducing BC for both health and climate benefits is compelling, there are reasons for limiting the use of BC metrics to illustrative analyses, such as identifying which BC mitigation actions would provide the greatest climate benefits, rather than using these metrics for trading with GHGs. Indeed, market-based mechanisms in general may not be appropriate for BC regulation at this time.

Carbon markets and technological innovation

This paper examines the effects of firm-level innovation in carbon-abatement technologies on optimal cap-and-trade schemes with and without price controls. We characterize optimal cap-and-trade regulation with a price cap and a price floor, and compare it to the special cases of pure taxation and a simple emissions cap. Innovation shifts the tradeoff between price- and quantity-based instruments towards quantity-based emissions trading schemes. More specifically, an increase in innovation effectiveness lowers the optimal emissions cap, and leads to relaxed price controls unless the slope of the marginal environmental damage curve is small. Because of the decrease in the emissions cap, innovation in abatement technologies can lead to a higher expected carbon price, so as to provide sufficient incentives for private R&D investments. The expected carbon price decreases once innovative technologies are widely used.

The Economics of Climate Change: An Examination of the Mckibbin-Wilcoxen Hybrid Proposal for a Carbon Price for Australia

Many countries are contemplating the design of institutions to address ‘the greatest market failure the world has ever seen’.3 In Australia, a carbon trading scheme is being considered, and prominent amongst the proposals being discussed is the ‘McKibbin-Wilcoxen hybrid scheme’ (2007, 2006, 2002).4 We critically examine the literature on this proposal. As a national trading scheme there is much to admire in the institutional arrangements suggested, and this is our most important conclusion. Nevertheless, we do seriously question the theoretical framework advanced to justify the hybrid structure – a framework that is also used in some sections of Stern (2007) and elsewhere. We argue that by justifying their proposals in terms of theories conceived in the 1970s when it was believed that pollution could be contained and its damages quickly ‘cleaned up’, the authors run the risk of confusing or misleading a lay audience by stretching the credibility of benefit-cost analysis, potentially undermining broader support in the process. Rather than having to posit unknowable short and long-run marginal benefits curves, we believe it is more sensible and credible to argue in terms of ‘cost effectiveness analysis’; that is, achieving a long-run national target in the most cost-effective (and painless) way possible. By analogy, we favour taking the ‘Hungarian’ path to economic transition rather than the ‘Russian’ route.

Onset of Rayleigh-Bénard convection in cylindrical containers

We determined the critical Rayleigh numbers Ra{c} for the onset of convection in cylindrical containers with aspect ratios 1 approximately <Gamma [ triple bond] D/L approximately <9 ( D is the diameter and L the height) and the patterns that form just above Ra{c}, both from experiment and by direct numerical simulation (DNS). Results for Ra{c} agree well with the linear stability analysis by Buell and Catton for containers with finite sidewall conductivity. For Gamma<or=1.58+/-0.10 , we found that the patterns correspond to an azimuthal Fourier mode with mode number m=1 , corresponding to a single convection roll. For 1.58 approximately < Gamma approximately <3.26+/-0.02 , the pattern was a concentric roll, corresponding to m=0 . For 3.26<or=Gamma approximately >4, an m=1 mode was found again, but near Gamma=4 either m=1 or m=2 was observed in different runs. These results are consistent with the marginal stability curves calculated by Buell and Catton in the sense that the mode that is the first as a function of Ra to acquire a positive growth rate is the one that is observed. For Gamma approximately >4, the theoretical marginal curves for the four lowest modes lie very close together. There we found patterns near onset that corresponded to various modes, including m=2 and 4. At relatively large Gamma approximately > 6, we observed parallel straight rolls quite close to onset. Our patterns agree with several DNS investigations by others, but at some Gamma values differ from those observed experimentally by Stork and Müller. Some results for the pattern evolution with increasing Ra are reported as well.

Marginal Models for Clustered Time-to-Event Data with Competing Risks Using Pseudovalues

Many time-to-event studies are complicated by the presence of competing risks and by nesting of individuals within a cluster, such as patients in the same center in a multicenter study. Several methods have been proposed for modeling the cumulative incidence function with independent observations. However, when subjects are clustered, one needs to account for the presence of a cluster effect either through frailty modeling of the hazard or subdistribution hazard, or by adjusting for the within-cluster correlation in a marginal model. We propose a method for modeling the marginal cumulative incidence function directly. We compute leave-one-out pseudo-observations from the cumulative incidence function at several time points. These are used in a generalized estimating equation to model the marginal cumulative incidence curve, and obtain consistent estimates of the model parameters. A sandwich variance estimator is derived to adjust for the within-cluster correlation. The method is easy to implement using standard software once the pseudovalues are obtained, and is a generalization of several existing models. Simulation studies show that the method works well to adjust the SE for the within-cluster correlation. We illustrate the method on a dataset looking at outcomes after bone marrow transplantation.

Onset of filtration convection in a vibrating medium: The Brinkman model

The effect of vibrations on the onset of convection in a horizontal fluid saturated porous layer heated either from below or from above is investigated. Vertical vibrations are considered with arbitrary amplitude and frequency. The Brinkman model of flow through porous media is used to describe the non-Darcian effect and the Oberbeck–Boussinesq approximation is invoked. Both continued fraction and Hill’s infinite determinant methods are used to determine the convective threshold for the stress free and rigid boundaries with the aid of Floquet theory. The marginal curves exhibiting synchronous and subharmonic resonant regions of dynamic instability and their critical boundaries are determined. The results obtained for Da=10−1 corresponding to the Brinkman regime is compared with Da=10−4 corresponding to the Darcy regime. It is demonstrated that vibrations can produce a stabilizing or a destabilizing effect depending on their amplitude and frequency for a porous layer heated from below. However in the case of a porous layer heated from above vibrations of increasing amplitude always result in a destabilizing effect irrespective their frequency. It is also shown that an increase in Da/φ, the ratio of Darcy number to porosity restricts competition between the synchronous and subharmonic modes to a lower range of vibrational frequencies. The present study reproduces already established results in the literature as particular cases.

Prices vs. Quantities with Fiscal Cushioning

Regulating international externalities, like climate change, raises various enforcement problems. It is often argued that international price-based regulations (e.g. emission taxes) are more difficult to enforce than quantity-based regulations (e.g. tradable pollution permits). In this paper, we analyze the relative performance of price-based and quantity-based instruments when costs and benefits are uncertain and enforcement of quantity regimes is stricter than that of price regimes. We show that under these conditions, instrument choice solely based on the relative slopes of the marginal curves can yield inefficient results. If policy enforcement differs, rational policy choice should also take into account the level of the marginal benefit curve, as well as institutional parameters. In contrast to earlier analyses on Prices vs. Quantities, we find that the choice of instrument also depends on the variance of the marginal abatement costs. Numerical simulations of our stylized model suggest that, for climate policies, quantity-regulations might well be preferable to price-based approaches after all.

Supply-cost curves for geographically distributed renewable-energy resources

The supply-cost curves of renewable-energy sources are an essential tool to synthesize and analyze large-scale energy-policy scenarios, both in the short and long terms. Here, we suggest and test a parametrization of such curves that allows their representation for modeling purposes with a minimal set of information. In essence, an economic potential is defined based on the mode of the marginal supply-cost curves; and, using this definition, a normalized log-normal distribution function is used to model these curves. The feasibility of this proposal is assessed with data from a GIS-based analysis of solar, wind and biomass technologies in Spain. The best agreement is achieved for solar energy.

Price Controls and Consumer Surplus

Price controls lead to misallocation of goods and encourage rent-seeking. The misallocation effect alone is enough to ensure that consumer surplus is always reduced by a price control in an otherwise-competitive market with convex demand if supply is more elastic than demand; or when demand is log-convex (e.g., constant-elasticity) even if supply is inelastic. The same results apply both when rationed goods are allocated by costless lottery among interested consumers, and when costly rent-seeking and/or partial de control mitigates the allocative inefficiency. The results are best understood using the fact that in any market, consumer surplus equals the area between the demand curve and the industry marginal revenue curve.

Estimating the potential CO2 mitigation from agricultural energy efficiency in the United States

Energy efficiency in agriculture is an underanalyzed aspect of a potential climate change mitigation strategy. According to the Fourth Assessment Report, experts report only medium agreement and medium evidence that energy efficiency can provide substantial reductions (Smith et al. 2007). This paper estimates the CO2 mitigation potential achievable through improvements in energy efficiency in the US agriculture sector. The data are presented in three formats: the cost data or break-even points of each technology, a marginal abatement supply curve expressed in terms of reduction in energy use by fuel category, and a marginal abatement supply curve expressed in terms of CO2 emission reductions by fuel category. The largest sources of energy use in the sector were identified as motors used in irrigation systems or other pumping operations; farm machinery such as tractors used in daily farm operations; and space conditioning, such as HVAC systems for livestock and crop-drying systems.

1110 境界層理論に基づくタコニス振動の数値的臨界曲線の導出(GS-5 流体振動)

1110 境界層理論に基づくタコニス振動の数値的臨界曲線の導出(GS-5 流体振動)

MULTIPLE HYPOTHESIS TESTING AND THE DECLINING‐POPULATION PARADIGM IN STELLER SEA LIONS

We describe a novel spatially and temporally detailed approach for determining the cause or causes of a population decline, using the western Alaskan population of Steller sea lions (Eumetopias jubatus) as an example. Existing methods are mostly based on regression, which limits their utility when there are multiple hypotheses to consider and the data are sparse and noisy. Our likelihood-based approach is unbiased with regard to sample size, and its posterior probability landscape allows for the separate consideration of magnitude and certainty for multiple factors simultaneously. As applied to Steller sea lions, the approach uses a stochastic population model in which the vital rates (fecundity, pup survival, non-pup survival) at a particular rookery in each year are functions of one or more local conditions (total prey availability, species composition of available prey, fisheries activity, predation risk indices). Three vital rates and four scaling functions produce twelve nonexclusive hypotheses, of which we considered 10; we assumed a priori that fecundity would not be affected by fishery activities or predation. The likelihood of all the rookery- and year-specific census data was calculated by averaging across sample paths, using backward iteration and a beta-binomial structure for observation error. We computed the joint maximum likelihood estimates (MLE) of parameters associated with each hypothesis and constructed marginal likelihood curves to examine the support for each effect. We found strong support for a positive effect of total prey availability on pup recruitment, negative effects of prey species composition (pollock fraction) on fecundity and pup survival, and a positive effect of harbor seal density (our inverse proxy for predation risk) on non-pup survival. These results suggest a natural framework for adaptive management; for example, the areas around some of the rookeries could be designated as experimental zones where fishery quotas are contingent upon the results of pre-fishing season survey trawls. We contrast our results with those of previous studies, demonstrating the importance of testing multiple hypotheses simultaneously and quantitatively when investigating the causes of a population decline.

A measurable Lawson criterion and hydro-equivalent curves for inertial confinement fusion

It is shown that the ignition condition (Lawson criterion) for inertial confinement fusion (ICF) can be cast in a form dependent on the only two parameters of the compressed fuel assembly that can be measured with existing techniques: the hot spot ion temperature (Tih) and the total areal density (ρRtot), which includes the cold shell contribution. A marginal ignition curve is derived in the ρRtot, Tih plane and current implosion experiments are compared with the ignition curve. On this plane, hydrodynamic equivalent curves show how a given implosion would perform with respect to the ignition condition when scaled up in the laser-driver energy. For 3&amp;lt;⟨Tih⟩n&amp;lt;6keV, an approximate form of the ignition condition (typical of laser-driven ICF) is ⟨Tih⟩n2.6⋅⟨ρRtot⟩n&amp;gt;50keV2.6⋅g∕cm2, where ⟨ρRtot⟩n and ⟨Tih⟩n are the burn-averaged total areal density and hot spot ion temperature, respectively. Both quantities are calculated without accounting for the alpha-particle energy deposition. Such a criterion can be used to determine how surrogate D2 and subignited DT target implosions perform with respect to the one-dimensional ignition threshold.

SPILLOVER EFFECTS OF ECONOMIC INTEGRATION IN A THREE-COUNTRY MODEL

Using a simple monopoly model, we examine the effects of economic integration. We show that the number of markets and the shapes of marginal revenue curves, are crucial in evaluating economic integration when the marginal cost is not constant. The effects of tariff reductions in a three-country model contrast with those found in a two-country model. Effects also depend on which trade policy the non-member country adopts. When both importing countries simultaneously lower their tariffs, the Metzler paradox may arise.

The Role of Personal Income Tax to Mitigate Widening Income Inequality: the Case of Japan

The Japanese personal income tax system has been designed to mitigate the tax burden by granting generous deductions and by employing a steep marginal tax curve. The failure of it is that the combined burden of tax and social-security contributions of low-income people has not been dealt with. The purposes of this article are twofold: first, to show that the social-security burden is in fact higher than the tax liability for most of the working population, and second, to show that it is possible to mitigate the burden by introducing refundable tax credits. Results of micro-simulation using a survey of household income are presented to show the combined tax and socialsecurity burden of families of various income classes.

Using Non Market Valuation to Inform the Choice Between Permits and Fees in Environmental Regulation

The purpose of this short note is to open an exploration regarding the use of non market valuation to help guide the selection of economically efficient pollution control instruments. As long as non market valuation techniques can correctly estimate the slope of the marginal benefit of abatement curve, this information along with engineering cost estimates of the unit costs or slope of the marginal abatement cost will provide useful information to policy makers in choosing between fees and permits. An illustrative review of the literature suggests that both stated and revealed preference methods have estimated slopes of marginal benefit functions for reducing several pollutants. To investigate the efficiency of permits versus fees, an illustrative review of corresponding marginal abatement costs is also made. For air pollutants affecting visibility, the slope of the marginal benefit curve is far greater than the slope of the marginal abatement costs, suggesting permits as the efficient instrument. For nitrates in groundwater used for drinking, the marginal benefit curve is flatter than the rather steep marginal abatement cost, suggesting fees/taxes would be a more efficient economic instrument. We hope this note stimulates more emphasis in non market valuation on estimating the slope of the marginal benefit function to enhance environmental economists ability to make policy recommendations regarding the choice of pollution instruments for specific pollutants.