Download or read book Prices Versus Quantities with Policy Updating written by William A. Pizer and published by . This book was released on 2016 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers how policy updates and trading of regulated quantities over time changes the traditional comparative advantage of prices versus quantities. Quantity regulation that can be traded over time leads firms to set current prices equal to expected future prices. A government seeking to maximize net societal benefits can take advantage of this behavior with a sequence of quantity policy updates that achieves the first best in all periods. Under price regulation where current prices remain fixed until future policy changes occur, no such opportunity exists to achieve the first best, and prices are never preferred. However, if we assume policy updates are driven in part by political "noise" rather than maximizing net societal benefits, the result changes and prices can again be preferred. The comparative advantage now depends the relative variance of noise shocks compared to true cost and benefit shocks. This contrasts sharply with the traditional comparative advantage that depends on the relative slopes of marginal costs and benefits. Applied to climate change, we estimate the comparative advantage of intertemporally tradable quantities (over prices) to be $2 billion over five years. This estimate grows if updates occur less frequently or could be made negative by political noise.
Download or read book Prices Versus Quantities written by Shi-Ling Hsu and published by . This book was released on 2018 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Within the world of market mechanisms, two parallel ideas have been formative in the developing discourse on environmental policy: a "price instrument" through a Pigouvian tax, and a "quantity instrument" through a Dalesian emissions trading instrument. Over time, these simple theoretical ideas have developed variants out of political and administrative necessity, which have blurred distinctions and sometimes detracted from the environmental and economic advantages of market mechanisms. That said, a juxtaposition of price instruments with quantity instruments is useful for comparing the administrative and welfare implications. This chapter reviews the relative advantages and disadvantages of price and quantity instruments, with a special concern for climate policy.
Download or read book Prices Versus Quantities with Incomplete Enforcement written by Juan-Pablo Montero and published by . This book was released on 1999 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper extends Weitzman's (1974) "Prices vs. Quantities" to allow for incomplete enforcement. Whether the regulator uses prices (e.g., taxes) or quantities (e.g., tradeable quotas), a first-best design is always inefficient in the presence of incomplete enforcement. A second-best design that incorporates incomplete enforcement, and where cost and benefit curves are known with certainty, can be implemented equally well with either instrument. If benefit and cost curves are uncertain, however, a quantity instrument performs better than a price instrument. In fact, if the slopes of the marginal cost and marginal benefit curves are equal, quantities are always preferred over prices. Results are consistent to alternative enforcement policies.
Download or read book Prices Versus Quantities with Morally Concerned Consumers written by Klaus M. Schmidt and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is widely believed that an environmental tax (price regulation) and cap-and-trade (quantity regulation) are equally efficient in controlling pollution when there is no uncertainty. We show that this is not the case if some consumers (firms, local governments) are morally concerned about pollution and the pollution price is inefficiently low for political reasons. Emissions are lower and material welfare is higher with price regulation. Furthermore, quantity regulation gives rise to dysfunctional incentive and distribution effects. It shifts the burden of adjustment to the poor and discourages voluntary efforts to reduce pollution, while price regulation makes these efforts effective.
Download or read book On the Strategic Importance of Prices Versus Quantities written by James W. Friedman and published by . This book was released on 1986 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices Vs Quantities Vs Tradeable Quantities written by Roberton C. Williams and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices Versus Quantities with Incomplete Enforcement written by and published by . This book was released on 2002 with total page 454 pages. Available in PDF, EPUB and Kindle. Book excerpt: I study whether incomplete enforcement of a regulation has any impact on the choice between price (e.g., taxes) and quantity (e.g., tradeable quotas) instruments. Results indicate that a second-best design accounting for incomplete enforcement can be implemented equally well with either instrument as long as the benefit and cost curves are known with certainty. If these curves are uncertain to the regulator, however, the quantity instrument performs relatively better than the price instrument. The reason is the effective amount of control under the quantity instrument is no longer fixed, which makes this instrument come closer to a non-linear instrument.
Download or read book Prices Vs Quantities Vs Tradable Quantities written by Roberton C. Williams III. and published by . This book was released on 2002 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices Versus Quantities Versus Bankable Quantities written by Harrison Fell and published by . This book was released on 2012 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Quantity-based regulation with banking allows regulated firms to shift obligations across time in response to periods of unexpectedly high or low marginal costs. Despite its wide prevalence in existing and proposed emission trading programs, banking has received limited attention in past welfare analyses of policy choice under uncertainty. We address this gap with a model of banking behavior that captures two key constraints: uncertainty about the future from the firm's perspective and a limit on negative bank values (e.g., borrowing). We show conditions where banking provisions reduce price volatility and lower expected costs compared to quantity policies without banking. For plausible parameter values related to U.S. climate change policy, we find that bankable quantities produce behavior quite similar to price policies for about two decades and, during this period, improve welfare by about a $1 billion per year over fixed quantities.
Download or read book Price versus Quantities versus Indexed Quantities written by Frédéric Branger and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices Vs Quantities with Endogenous Cost Structure written by Halvor Briseid Storrøsten and published by . This book was released on 2014 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices Vs Quantities written by James M.. Malcomson and published by . This book was released on 1978 with total page 5 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices Versus Quantities and Distributional Inefficiency written by J. Bennett and published by . This book was released on 1997 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Prices and Quantities written by Rakesh V. Vohra and published by Cambridge University Press. This book was released on 2020-02-20 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt: Rakesh V. Vohra offers a unique approach to studying and understanding intermediate microeconomics by reversing the conventional order of treatment, starting with topics that are mathematically simpler and progressing to the more complex. The book begins with monopoly, which requires single variable rather than multivariable calculus and allows students to focus clearly on the fundamental trade-off at the heart of economics: margin versus volume. Imperfect competition and the contrast with monopoly follows, introducing the notion of Nash equilibrium. Perfect competition is addressed toward the end of the book, and framed as a model of non-strategic behavior by firms and agents. The last chapter is devoted to externalities, with an emphasis on how one might design competitive markets to price externalities and linking the difficulties to the problem of efficient provision of public goods. Real-life examples engage the reader while encouraging them to think critically about the interplay between model and reality.
Download or read book Prices Vs Quantities Vs Tradable Quantities written by Roberton C. Williams and published by . This book was released on 2002 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper extends Weitzman's (1974) seminal paper comparing price and quantity instruments for regulation to consider a third option: tradable quantity regulations, such as tradable permits. Contrary to what prior work has suggested, fixed quantities may be more efficient than tradable quantities if the regulated goods are not perfect substitutes, even when trading ratios are based on the ratio of expected marginal benefits between goods, not simply one-for-one. Indeed, when benefits are independent across goods, or when the goods are complements, tradable quantities are never the most efficient instrument. This theory is applied to dynamic pollution problems, and suggests that permit banking should be allowed for stock pollutants, but not for flow pollutants. These results indicate that many regulations, including the current sulfur dioxide trading program and proposed greenhouse gas regulations, are inefficient
Download or read book Prices Versus Quantities Reassessed written by Larry S. Karp and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "Prices versus quantities" (Weitzman 1974), a hugely influential paper, is widely cited (and taught) in current debates about the best policy to reduce greenhouse gas emissions. The paper's criterion for ranking policies suggests that technological uncertainty favors taxes over cap and trade. Weitzman models a flow pollutant, but greenhouse gases are persistent. Stock pollutants require a fundamental change in the ranking criterion. Innovations' persistence and their gradual diffusion both favor the use of cap and trade. Numerical results show that the case for cap and trade as a means of reducing greenhouse gas emissions is stronger than widely believed.
Download or read book Beyond prices versus quantities written by Verena Wieneke and published by . This book was released on 1993 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt:
