Implementation of many policies intended to reduce fuels’ contribution to global warming require an estimate of the global warming intensity (GWI) of various fuels. Determining the climate effect of a direct substitution of fuels is not the same as determining the official value of each fuel’s GWI used to implement the policy. Choosing the second, which depends in part on estimates of the first and their intrinsic uncertainty, is a decision that should reflect the shape of the probability distribution of the first and of the cost of error (the difference between the chosen value and the ‘real’ value. Decision analysis helps clarify the difference between these GWI’s, how they relate to each other, and how standard engineering practice like a safety factor applies to the regulator’s decision.

We discuss welfare and various policy interventions for mixed ICT markets where firms use either 'open source' (OS) or 'closed source' (CS) business models. We find that the existence of OS business models improves social welfare compared to all-CS industries by letting firms share costs and avoid duplication. However, code sharing also establishes a de facto quality-cartel that suppresses OS firms' incentives to invest. Competition from CS firms weakens this cartel and improves welfare. That said, market forces alone provide too little CS competition. We find no support for various government interventions based on tax breaks for OS-based firms and pro-OS procurement preferences by government. However, policies that directly target the
supply of OS code have a positive impact.

The Fair Trade (FT) initiative has been hugely popular with coffee consumers around the world, and
yet the creation of durable producer rents is challenging in a competitive market environment. We
model the FT premium actually received by producers and suggest that rents are in fact dissipated,
but that this occurs in ways that are quite obscure to consumers. First, over-certification dilutes the
effective premium even during years in which the nominal FT premium is high. Then, the use of a
quality-invariant FT floor price in the very heterogeneous market for coffee creates a second,
completely unrelated mechanism through which producer benefit is eroded. We use unique data
from a large association of coffee cooperatives in Central America to measure nominal FT
premiums received by member cooperatives, comparing coffee of the exact same quality sold with
and without the FT label. We confirm that nominal premiums are dissipated by over-certification
and unrewarded quality differentials. In effect, FT membership is priced like a put option: producers
are willing to lose a small amount through participation during years in which the market price is
high in order to retain future access to the FT floor price. We conclude by discussing ways in which
the FT mechanism could be adjusted to take advantage of ethical consumers’ willingness to pay in
order to achieve the desired transfers of rents to smallholder producers.

It has been argued that the threat of regulatory intervention affects firm behavior. We investigate the pricing decision of the dominant firm under regulatory threat, considering the probability of intervention as a function of the price. Our focus is on the case where the potential divestiture of the firm serves as a threat of regulatory intervention. Specifically, we compare regulatory threat, which can be regarded as uncertain intervention, with deterministic intervention. It is shown that under certain conditions associated with the marginal expected penalty, regulatory threat induces the firm to lower prices even more than deterministic intervention. Numerical examples illustrate that with relatively small-scale divestiture, the firm’s price under regulatory threat may be lower than that under deterministic intervention within a relatively broad range of regulator’s attitudes toward intervention.

This paper presents a multi-sector model of tradable emission permits, which includes oligopolistic and perfectly competitive industries. The firms in oligopolistic industries are assumed to exercise market power in the tradable permit market as well as in the product market. Specifically, we examine the effects of the initial permit allocation on the equilibrium outcomes, focusing on the interaction among these product and permit markets. It is shown that raising the number of initial permits allocated to one firm in an oligopolistic industry increases the output produced by that…firm. Under certain conditions, raising a “clean” (less-polluting) firm’s share of the initial permits can lead to reductions in both the product and permit prices. We discuss criteria for the socially optimal allocation of initial permits, considering the trade-off between production inefficiency and consumer benefit.

African-American boys have long fared worse in school. This paper documents this achievement gap, then assesses a number of evidence-based strategies that hold promise of bridging that gap. Those strategies range from high-quality early education and skill-building reading programs to mentoring initiatives and interventions that address stereotype vulnerability. Much of the existing research has not isolated the effects on black males, and the paper offers new data that demonstrates those impacts. A sequence of interventions, which begin before kindergarten and continue during college, is recommended.

The number of open source (“OS”) software projects has grown exponentially for at least a decade. Unlike early open source projects, much of this growth has been funded by commercial firms that expect to earn a profit on their investment. Typically, firms do this by selling bundles that contain both OS software and proprietary goods (e.g. cell phones, applications programs) and services (custom software). We present a general two-stage Cournot model in which arbitrary numbers of competing OS and closed source (“CS”) firms decide how much software to create in Stage 1 and how many bundles to supply in Stage 2. We find that the amount of OS software delivered depends on (a) the degree of substitutability between proprietary products, (b) the number of OS and CS firms competing in the market, and (c) the savings available to OS firms from cost-sharing. However, code-sharing also guarantees that no OS firm can offer better software than any other OS firm. This suppresses quality competition between OS firms and restricts their output much as an agreement to suppress competition on quality would.

Competition from CS firms weakens this quality-cartel effect, thus mixed industries often offer higher welfare. We find that Pure-OS (Pure-CS) markets are sometimes stable against CS (OS) entry so that the required OS/CS state never occurs. Even where mixed OS/CS industries do exist, moreover, the proportion of OS firms needed to stabilize the market against entry is almost always much larger than the target ratio required to optimize welfare. We examine various policy options for addressing this imbalance with tax policy, funding of OS development, and procurement preferences. We find that the first-best solution in our model is to tax OS firms and grant tax breaks to CS firms. Conversely, government policies that fund OS development or establish procurement preferences for OS software actually increase the gap between desired and actual OS/CS ratios still further. Despite this, funding OS development can still improve welfare by boosting total (private government) OS investment above the levels that a private cartel would deliver.