Why do households use alternative consumption practices?

In recent years, the emphasis on economic necessity when explaining engagement in alternative consumption practices (i.e. informal and/or second-hand modes of goods acquisition) has been challenged by an agency-oriented reading that views participation to be more a matter of choice, and more recently by a geographically sensitive approach that ascribes agency to affluent populations and economic necessity to deprived populations. To evaluate critically these contrasting explanations, data collected from 120 face-to-face interviews in the city of Leicester are here reported. The finding is that these previous accounts that reduce consumers participation in alternative consumption practices to the mono-causal explanations of either economic necessity or choice obfuscate how both often coexist in people's explanations for participation, albeit in varying ways in different populations. This paper thus displays the need to reconcile the previous reductive either/or explanations through the use of a both/and approach that recognizes and unpacks how both economic necessity and choice are variously entangled in rationales for participation in alternative consumption practices.     

Petroleum and People

The discovery of oil peaked in the 1960s, meaning that the corresponding peak of production is now imminent. The technical evidence is compelling, but the issue is clouded by denial and obfuscation. Peak oil threatens to be a historic discontinuity as the economic growth of the past Century, which was driven by an abundant supply of cheap oil-based energy, gives way to decline. The population of the world, which grew six-fold in parallel with oil, faces decline, probably accompanied by rising migration pressures. Radical new political structures may be needed in a world facing ever deeper resource and environmental constraints.     

The Distribution of Sums of Certain I.I.D. Pareto Variates

ABSTRACT

Though the Pareto distribution is important to actuaries and economists, an exact expression for the distribution of the sum of n i.i.d. Pareto variates has been difficult to obtain in general. This article considers Pareto random variables with common probability density function (pdf) f(x) = (α/β) (1 + x/β)^α+1 for x > 0, where α = 1,2,… and β > 0 is a scale parameter. To date, explicit expressions are known only for a few special cases: (i) α = 1 and n = 1,2,3; (ii) 0 < α < 1 and n = 1,2,…; and (iii) 1 < α < 2 and n = 1,2,…. New expressions are provided for the more general case where β > 0, and α and n are positive integers. Laplace transforms and generalized exponential integrals are used to derive these expressions, which involve integrals of real valued functions on the positive real line. An important attribute of these expressions is that the integrands involved are non oscillating.     

A Theory of the Firm with Non‐binding Employment Contracts

This paper examines an employment relation in which individual workers enjoy some bargaining power vis‐a‐vis the firm although they are not unionized. The main elements of the situations studied here are that the employment contracts are non‐binding across periods of production and that the firm has opportunities to replace workers. The paper analyzes a dynamic model in which the processes of contracting and recontracting between the firm and its workers are intertwined with the dynamic evolution of the firm's workforce. The analysis of the model is somewhat complicated because the employment level is a nondegenerate state variable that evolves over time and is affected by past decisions. The main analytical results characterize certain important equilibria: the profit maximizing and stationary equilibria. The unique stationary equilibrium is markedly inefficient: it exhibits inefficient over‐employment and the steady state wages coincide with the workers' reservation wage. It confirms earlier results derived by Stole and Zwiebel (1996a, b) in the context of a static model and shows that they are very robust even when the firm has nearly frictionless hiring opportunities. In contrast, in the profit maximizing equilibrium the outcome is nearly efficient and the wage exhibits a mark‐up over the reservation wage.