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Purpose – This study investigates the effect of heterogeneity in an environment with a dynamic public bad.

Methodology/approach – Every period agents decide on own level of production that generates private revenue and emissions. Emissions lead to pollution that acts as a public bad and accumulates over time. Our treatment variable is the emission propensity of agents' production technologies. We characterize the Markov perfect equilibrium and social optimum and employ a laboratory experiment to compare the observed behavior to theoretical predictions.

Findings – We find that the observed production levels are between the Markov perfect equilibrium and social optimum. With experience, the strongest adjustment and lowest level of pollution is achieved in the heterogeneous treatment with high average emission propensity. When the costs of climate change are not severe, institutions are most necessary to create incentives for environmentally friendly behavior.

Research limitations/implications – The results of this study apply to the case when heterogeneity is exogenous and the only way to reduce emissions is by reducing production. Natural extensions include the option to invest in clean technologies, the availability of communication, the group size, and endogenously emerging and exogenous regulatory institutions.

Practical implications – Our results suggest that under relatively favorable conditions heterogeneous countries are less likely to achieve sustainability without external enforcement. Under unfavorable conditions the impending common threat of significant damage leads to higher levels of voluntary cooperation.

Originality/value of the chapter – This is the first study to address the practical problem of coordination among technologically diverse countries, and fundamental questions regarding the effect of heterogeneity in environments with a dynamic public bad.

Throughout the 1990s, the supply of new condominiums in Tokyo significantly increased while prices persistently fell. This article investigates whether the market power of condominium developers is a factor in explaining the outcome in this market and whether there is a relationship between production cost trend and the degree of market power that the developers were able to exercise. In order to respond to these questions, we construct and structurally estimate a dynamic durable goods oligopoly model of the condominium market – one incorporating time-variant costs and a secondary market – using a nested GMM procedure. We find that the data provide no evidence that firms in the primary market have substantial market power in this industry. Moreover, the counterfactual experiment provides evidence that inflationary and deflationary expectations on production cost trends have asymmetric effects to the market power of condominium producers. The increase in their markup when cost inflation is anticipated is significantly higher than the decrease in the markup when the same magnitude of cost deflation is anticipated.

We examine the link between oil production and bank deposits in North Dakota’s Bakken oil formation. We find that oil production is positively related to bank deposits, even in the presence of gas production, farm production, the level of interest rates, and the term premium of interest rates. The effect is significant even when we “purge” the effect of the other variables from oil production, which indicates a strong relationship between oil production and bank deposits.

Archaeological evidence from the prehistoric Spondylus industry of coastal Ecuador is analyzed here to clarify how craft production was structured and the role that it played in the rise of social complexity. Many models of social development propose that elite cooption of specialized craft production can be a useful avenue through which aspiring elites can gain differential status. Contrary to the expectations of these models, data from coastal Ecuador indicates that craft production of sumptuary goods was an activity primarily carried out by household units for the benefit of the domestic economy. Increased trafficking with northern Peruvian states at ca. 750 seems to have promoted local social stratification by attracting large numbers of households to the restricted locales where they could exploit these resources, which in turn prompted a strengthening of the kinds of political conditions that facilitate orderly interaction and minimize internal social conflict.

We test the determinacy properties of the standard and financial-sector-augmented Taylor rules in a new Keynesian model with a presence of banking activities. We extend the basic fully rational environment to the setting with heterogeneous expectations. We observe that the benefits from extra financial targeting are limited. Financial targeting, if well designed, can compensate for the improper output-gap targeting through the financial-production channel. The analysis demonstrates however possible threats resulting from the misspecification of the augmented rule. A determinate mix of output-gap and inflation weights can turn indeterminate if compensated by too extreme financial targeting. The results are robust to the presence of heterogeneous expectations.

The core idea behind lean is maximizing customer value and companies’ competitiveness through the streamlining and optimization of its main processes. Lean means creating more value with fewer resources. Thanks to its positive impact on companies’ overall performance, the lean concept is widely adopted across various industries and many organizations. Before being an operational tool, it is a management culture to be disseminated at all levels and applied with patience and conviction. Lean is about continuously improving work processes, purposes, and people. Instead of trying to hold total control of work processes and keep the spotlight, lean management encourages shared responsibility and shared leadership. Lean management was not created in a moment and still is evolving gradually, thanks to the desire of people for continuous improvement.

Over the past decade, biofuels production in the European Union and the United States has boomed – much of this due to government mandates and subsidies. The United States has now surpassed Brazil as the world's leading producer of ethanol. The economic and environmental impact of these biofuel programs has become an important question of public policy. Due to the complex intersectoral linkages between biofuels and crops, livestock as well as energy activities, CGE modeling has become an important tool for their analysis. This chapter reviews recent developments in this area of economic analysis and suggests directions for future research.

This chapter assesses the regional and national approaches to improving food security for rice consumption in West Africa.

Using the Arkansas Global Rice Model and the RICEFLOW frameworks, we examine the consequences of pursuing self-sufficiency in rice. National rice development strategies have been designed to double the 2008 rice production levels by 2018. The Coalition for African Rice Development and the Africa Rice Center have assisted 23 nations in developing national strategies. We evaluate the strategies of 15 nations for rice land expansion and intensification to increase yields for regional self-sufficiency.

West Africa accounts for nearly 25% of global rice imports. The elimination of rice imports reduces global rice prices. Results show that achieving self-sufficiency in West Africa is inefficient at the global level. However, if self-sufficiency makes domestic rice uncompetitive with imported rice, then West African consumers will demand a significant price discount for domestic rice, thus reducing benefits to producers and consumers.

Because of the partial equilibrium nature of this study, the consequences for diversification of West African diets are not explored. Although beyond the scope of this chapter, a coordinated policy sequencing approach toward enhancing productivity and quality of rice production – as well as increasing investment in infrastructure, institutions, and emergency food reserves – should be studied more thoroughly to achieve food and nutritional security for West Africa.