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This paper develops a set of three models to study the optimal tax-subsidy regime in an economy characterised by two deviations from the perfect competition model — negative externality from pollution by the “dirty” industry, and increasing returns in the “clean” industry. Its main conclusions are: (1) the optimal single pollution tax is higher than the Pigouvian level; (2) a combination of pollution tax and quantity subsidy increases consumer welfare at a lower level of pollution tax; (3) the optimal pollution tax can be further lowered and consumer welfare further increased if the quantity subsidy is supplemented by a lump-sum subsidy. [ABSTRACT FROM AUTHOR]

Network effect is defined as the value that an additional user of a product has on that product's value to others. In an industry exhibiting network effect, firms need to consider the possible role of the network being the establishment of a competitive edge. In this review, our goal is to synthesize the broad literature on network effects, and we put forward the argument that, in practice, network effect has quietly become a key factor in forming a firm's competing strategy. In the presence of positive network effects, consumers' willingness to pay is an increasing function of the network size. [ABSTRACT FROM AUTHOR]

Copyright of Investigación Económica is the property of Universidad Nacional Autonoma de Mexico, Facultad de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Energy futures and the case for renewables and cleantech can be framed in terms of their contribution to mitigation of climate change, as well as cleanliness and absence of carbon emissions. By contrast, energy security is generally discussed in terms of access to fossil fuels. In this paper we make a different case for renewables: we contrast the extraction of energy (fuels), which - in spite of technological change - takes place under diminishing returns, with the harvesting of nature's renewable energy, which takes place in a process utilizing manufactured devices, where manufacturing generates increasing returns and costs decline along steep learning curves. This gives a fresh perspective on both renewables and energy security. We argue that energy choices can be framed as choices in favour of increasing returns (based on manufacturing), vs. choices in favour of diminishing returns activities, which usually involve extraction of fossil fuels. Such a framing does not entail assumptions as to whether the entire energy system can be converted to renewables, but simply as choices made at the margin - whose effects will cumulate over time. Energy security through renewables manufacturing therefore promises to be a fruitful area of futures studies. [ABSTRACT FROM AUTHOR]

Abstract: Many systemic, complex technologies have been suggested to exhibit increasing returns to adoption, whereby the initial increase in adoption leads to increasing experience with the technology, which drives technological improvements and use, subsequently leading to further adoption. In addition, in the systemic context, mimetic behavior may lend support to increasing returns as technology adoption is witnessed among other agents in the systemic context. Finally, inter-dependencies in the systemic context also sensitize the adoption behavior to fundamental changes in technology provisioning, and this may lend support for the increasing returns type of dynamics in adoption. Our empirical study examines the dynamics of organizational technology adoption when technology is provisioned by organizations in another sub-system in a systemic context. We hypothesize that innovation, imitation, and technological change effects are present in creating increasing returns in the systemic context. Our empirical setting considers 24 technologies represented by 2282 data points in the computer industry. Our results provide support for our prediction that imitation effects are present in creating increasing returns to adoption. We further discuss the managerial and research implications of our results. [Copyright &y& Elsevier]

Copyright of Perspectivas is the property of Universidade Estadual Paulista and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Natural resource endowment is a necessary but insufficient condition to explain the formation of a durable mining city. This article focuses on the dynamic and endogenous factors that give rise to increasing returns to scale as a key element in understanding the formation and sustainability of this type of urban agglomeration. It is also necessary to consider historical perspectives to overcome the limitations of location theory and the "new" economic geography. A classification of mining centers is proposed and the mining city of Antofagasta, Chile is analyzed accordingly. The focus is on the period between 1866 and 1878, which saw the consolidation of the path-dependent process that gave rise to one of the leading mining cities in the Americas. [ABSTRACT FROM AUTHOR]

Copyright of Revue d'Economie Politique is the property of Editions Dalloz Sirrey and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

New Industrial Districts is the successful pattern of rural industrialization since the 1970s, which is different from the traditional industrialization for pursuit of scale and scope economies basis of the mass production system but emphasizing the production of flexible and continuous innovation. Thus, the new industrial districts are the innovation of production system and substitute of the mass production system. The rise of new industrial districts have broken down the perspective of "urban-rural dual structure" and rural attached to urban from view of traditional development economics. In fact, the new rural industrialization and rural economic development is not dependent on city, but the endogenous or relatively independent. In the new rural industrialization process of self-organization of the rural economy, the increasing returns and path dependence constitutes a new formation, the characteristics and the intrinsic mechanism. This study is helpful for us to think more deeply China's new rural construction in the related issues. [ABSTRACT FROM AUTHOR]

It is well-known that if the required number of military personnel is large, paying the soldiers their hire may involve very high taxes. While conscription involves the inefficiency and unfairness of violating free choice, it may save significant distortionary costs of taxation. It is not well-known that, even in the absence of these distortionary costs, conscription may reduce the inequity of having very low marginal utilities for soldiers if they are paid enough to attract their voluntary services and very high marginal utilities for civilians if they have to pay very high taxes. Having all citizens serving an equal fraction of time may be inefficient as there are high degrees of increasing returns in military services due to both training costs and learning by doing. Conscription may then increase the expected utilities of all individuals. [ABSTRACT FROM AUTHOR]

Copyright of Policy & Politics is the property of Policy Press and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Ng & Ng (2003) provide a qualified support for Buchanan's (1991, 1994) hypothesis on work ethics by showing that a decrease in preference for leisure (a higher work ethics) by an individual benefits her trading partners by improving the terms of trade of the latter. Moreover, the higher the degree of the economies of specialization, the larger is this beneficial effect. Using a similar model, the present paper shows that a simultaneous artificial decrease in preference for leisure by all individuals decreases intrinsic utility evaluated at the original preference. However, using a more realistic model allowing for both home and firm/market production developed by Ng & Zhang (2005), a stronger support is provided for Buchanan's hypothesis as a shift in preference by everyone from leisure to market goods produced under increasing returns and average-cost pricing increases utility even if evaluated in accordance with the original preference. [ABSTRACT FROM AUTHOR]

The article gives an account of a recent attempt to rebuild economics along the lines of increasing returns. The current orthodoxy is criticised for overemphasizing the role of decreasing returns. For the sake of analytical rigor economists sacrifice a correct picture of the modern world, say the critics. Small events are magnified by the positive feedback. The system is thus set on a path and cannot shake off its history. Path dependent processes are illustrated by the persistence of the QWERTY keyboard. As the world is stuck with this inferior standard, government action is needed to adopt a better alternative. However, the second part of the article offers a successful refutation of the QWERTY story. This particular example of path dependency evolved into an ambitious interdisciplinary project whose aim is to introduce new, visionary approaches into the scientific thinking. The prospects of chaos theory in economics are therefore briefly outlined. [ABSTRACT FROM AUTHOR]

This paper makes use of an agent-based framework to extend traditional models of comparative advantage in international trade, illustrating several cases that make theoretical room for industrial policy and the regulation of trade. Using an agent based implementation of the Hecksher-Ohlin trade model; the paper confirms Samuelson's 2004 result demonstrating that the principle of comparative advantage does not ensure that technological progress in one country benefits its trading partners. It goes on to demonstrate that the presence of increasing returns leads to a situation with multiple equilibria, where free market trading policies can not be relied on to deliver an outcome which is efficient or equitable, with first movers in development enjoying permanent advantage over later developing nations. Finally, the paper examines the impact of relaxation of the Ricardian assumption of capital immobility on the principle of comparative advantage. It finds that the dynamics of factor trade are radically different from the dynamics of trade in goods and that factor mobility converts a regime of comparative advantage into a regime of absolute advantage, thus obviating the reassuring equity results that stem from comparative advantage. [ABSTRACT FROM AUTHOR]