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The investigation of the adoption and non-adoption of energy efficiency initiatives using a database of over 100,000 recommendations provided to more than 13,000 small and medium sized manufacturing firms. Even though the average payback across all recommendations is just over one year, many of these profitable opportunities are not implemented. Using a probit instrumental variable model, four biases in the adoption of these recommendations are identified. READ MORE
We examine the role of signaling and of intrinsic benefits in the adoption of the individual elements of the voluntary LEED (Leadership in Energy and Environmental Design) standards for green buildings. We use goodness-of-fit tests on data for all 442 LEED certified buildings and find that neither signaling nor pursuit of intrinsic benefits can independently explain the observed adoption pattern, but that a combination of the two factors can. We relate our findings to some open questions in the literature on diffusion of technology and draw implications for the design and the future development of similar voluntary standards and eco-labels. READ MORE
The number of firms producing influenza vaccine for the U.S. has been declining steadily in the recent past with essentially only two manufacturers supplying the vaccine since 2002. However, economic theory predicts that an oligopolistic market with unregulated but costly entry will experience excess entry and oversupply, not the undersupply observed in the market for influenza vaccine in recent years. In this paper we show how interaction between yield uncertainty in the production process and firms’ strategic behavior can contribute to a high degree of concentration in an industry and a reduction in the industry output and the expected consumer surplus in equilibrium. READ MORE