FOI Seminar 6 January 2012

Dale Squires (USA National Oceanic & Atmospheric Administration):

 

Firm Behavior under Quantity Controls: The Theory of Virtual Quantities

(contact: )

 

Friday 6 January 2012, 12.30-13.30 Building A, seminar room 1

Dale Squires has a long list of publications (e.g. in JEEM, AJAE, Jour. of Econometrics, Jour. of law and econ., Land Econ etc). His research focuses on issues of regulation, enforcement and compliance and he has substantial practical experience in this area working for US regulatory authorities.

Abstract:

Virtual quantities provide a positive framework to analyze firm behavior under existing rations, quotas, licenses, and standards, whether fixed by command-and-control regulations or as transferable property rights. Virtual quantities, the dual to virtual prices, allow evaluating: the firm’s ability to evade quantity controls; infer unrationed from rationed production; develop specific reasons for failure of quasi-concavity of production technology with multiple quantity controls and fixed netputs; and develop properties for the elasticity of intensity between variable inputs and quantity controls. Virtual quantities are applied to assess potential firm responses to quantity controls in an industry exploiting a Malaysian common resource.