# Some Examples Illustrating Negative Externality Some examples illustrating negative externality. ```r gemExternality_Negative(...) ``` ## Arguments - `...`: arguments to be passed to the function sdm2. ## Examples ```r #### negative externality of consumption to consumption # Here the distortion means that an agent # will use environmental resources for free. dst.consumer1.distorted <- node_new("util", type = "CD", alpha = 1, beta = c(0.5, 0.5), "lab", "land" ) dst.consumer1 <- node_new("util", type = "CD", alpha = 1, beta = c(0.5, 0.5), "lab", "cc1" ) node_set(dst.consumer1, "cc1", type = "Leontief", a = c(1, 1), "land", "env" ) dst.consumer2 <- node_new( "util", type = "CD", alpha = 1, beta = c(0.4, 0.4, 0.2), "lab", "land", "env" ) ge.externality <- sdm2( A = list(dst.consumer1.distorted, dst.consumer2), B = matrix(0, 3, 2), S0Exg = matrix(c( 50, 0, 0, 50, 0, 0 ), 3, 2, TRUE), names.commodity = c("lab", "land", "env"), names.agent = c("consumer1.distorted", "consumer2"), numeraire = "lab", policy = function(state) { last.D <- state$last.A %*% dg(state$last.z) state$S[3, 2] <- 100 - last.D[2, 1] state } ) ge.externality$p ge.externality$z addmargins(ge.externality$D, 2) addmargins(ge.externality$S, 2) ge <- sdm2( A = list(dst.consumer1, dst.consumer2), B = matrix(0, 3, 2), S0Exg = matrix(c( 50, 0, 0, 50, 13, 87 ), 3, 2, TRUE), names.commodity = c("lab", "land", "env"), names.agent = c("consumer1", "consumer2"), numeraire = "lab" ) ge$p ge$z addmargins(ge$D, 2) addmargins(ge$S, 2) ## A corrective tax is imposed on distorted consumer 1. # 54% of tax revenue is allocated to distorted consumers 1, 46% to consumers 2. dst.consumer1.distorted.taxed <- node_new("util", type = "CD", alpha = 1, beta = c(0.5, 0.5), "lab", "cc1" ) node_set(dst.consumer1.distorted.taxed, "cc1", type = "FIN", rate = c(1, ge$DV[3, 1] / ge$DV[2, 1]), "land", "tax" ) ge.corrective.tax <- sdm2( A = list(dst.consumer1.distorted.taxed, dst.consumer2), B = matrix(0, 4, 2), S0Exg = matrix(c( 50, 0, 0, 50, 0, 0, 54, 46 ), 4, 2, TRUE), names.commodity = c("lab", "land", "env", "tax"), names.agent = c("consumer1.distorted", "consumer2"), numeraire = "lab", policy = function(state) { last.D <- state$last.A %*% dg(state$last.z) state$S[3, 2] <- 100 - last.D[2, 1] state } ) ge.corrective.tax$z addmargins(ge.corrective.tax$D, 2) addmargins(ge.corrective.tax$S, 2) ## negative externality of production to consumption dst.firm1.distorted <- dst.consumer1.distorted dst.firm1 <- dst.consumer1 dst.consumer1.Leontief <- node_new( "util", type = "Leontief", a = 1, "prod1" ) ge.externality <- sdm2( A = list(dst.firm1.distorted, dst.consumer1.Leontief, dst.consumer2), B = diag(c(1, 0, 0), 4, 3), S0Exg = matrix(c( NA, NA, NA, NA, 50, NA, NA, NA, 50, NA, NA, NA ), 4, 3, TRUE), names.commodity = c("prod1", "lab", "land", "env"), names.agent = c("firm1", "consumer1.Leontief", "consumer2"), numeraire = "lab", policy = function(state) { last.D <- state$last.A %*% dg(state$last.z) state$S[4, 3] <- 100 - last.D[3, 1] state } ) ge.externality$p ge.externality$z addmargins(ge.externality$D, 2) addmargins(ge.externality$S, 2) ge <- sdm2( A = list(dst.firm1, dst.consumer1.Leontief, dst.consumer2), B = diag(c(1, 0, 0), 4, 3), S0Exg = matrix(c( NA, NA, NA, NA, 50, NA, NA, NA, 50, NA, 13, 87 ), 4, 3, TRUE), names.commodity = c("prod1", "lab", "land", "env"), names.agent = c("firm1", "consumer1.Leontief", "consumer2"), numeraire = "lab" ) ge$p ge$z addmargins(ge$D, 2) addmargins(ge$S, 2) #### negative externality of consumption to production and consumption dst.firm2 <- dst.consumer2 dst.consumer2.Leontief <- node_new( "util", type = "Leontief", a = 1, "prod2" ) ge.externality <- sdm2( A = list(dst.firm2, dst.consumer1.distorted, dst.consumer2.Leontief), B = diag(c(1, 0, 0), 4, 3), S0Exg = matrix(c( NA, NA, NA, NA, 50, NA, NA, NA, 50, NA, NA, NA ), 4, 3, TRUE), names.commodity = c("prod2", "lab", "land", "env"), names.agent = c("firm2", "consumer1", "consumer2.Leontief"), numeraire = "lab", policy = function(state) { last.D <- state$last.A %*% dg(state$last.z) state$S[4, 3] <- 100 - last.D[3, 2] state } ) ge.externality$p ge.externality$z addmargins(ge.externality$D, 2) addmargins(ge.externality$S, 2) ge <- sdm2( A = list(dst.firm2, dst.consumer1, dst.consumer2.Leontief), B = diag(c(1, 0, 0), 4, 3), S0Exg = matrix(c( NA, NA, NA, NA, 50, NA, NA, NA, 50, NA, 13, 87 ), 4, 3, TRUE), names.commodity = c("prod2", "lab", "land", "env"), names.agent = c("firm2", "consumer1", "consumer2.Leontief"), numeraire = "lab" ) ge$p ge$z addmargins(ge$D, 2) addmargins(ge$S, 2) ## negative externality of production to production and consumption ge.externality <- sdm2( A = list(dst.firm1.distorted, dst.firm2, dst.consumer1.Leontief, dst.consumer2.Leontief), B = diag(c(1, 1, 0, 0), 5, 4), S0Exg = matrix(c( NA, NA, NA, NA, NA, NA, NA, NA, NA, NA, 50, NA, NA, NA, NA, 50, NA, NA, NA, NA ), 5, 4, TRUE), names.commodity = c("prod1", "prod2", "lab", "land", "env"), names.agent = c("firm1", "firm2", "consumer1.Leontief", "consumer2.Leontief"), numeraire = "lab", policy = function(state) { last.D <- state$last.A %*% dg(state$last.z) state$S[5, 4] <- 100 - last.D[4, 1] state } ) ge.externality$p ge.externality$z addmargins(ge.externality$D, 2) addmargins(ge.externality$S, 2) ge <- sdm2( A = list(dst.firm1, dst.firm2, dst.consumer1.Leontief, dst.consumer2.Leontief), B = diag(c(1, 1, 0, 0), 5, 4), S0Exg = matrix(c( NA, NA, NA, NA, NA, NA, NA, NA, NA, NA, 50, NA, NA, NA, NA, 50, NA, NA, 13, 87 ), 5, 4, TRUE), names.commodity = c("prod1", "prod2", "lab", "land", "env"), names.agent = c("firm1", "firm2", "consumer1.Leontief", "consumer2.Leontief"), numeraire = "lab" ) ge$p ge$z addmargins(ge$D, 2) addmargins(ge$S, 2) ## negative externality of consumption to production dst.firm2.distorted <- node_new( "util", type = "CD", alpha = 1, beta = c(0.5, 0.5), "lab", "land" ) ge.externality <- sdm2( A = list(dst.firm2.distorted, dst.consumer1.distorted, dst.consumer2.Leontief), B = diag(c(1, 0, 0)), S0Exg = matrix(c( NA, NA, NA, NA, 50, NA, NA, NA, 50 ), 3, 3, TRUE), names.commodity = c("prod2", "lab", "land"), names.agent = c("firm2.distorted", "consumer1", "consumer2.Leontief"), numeraire = "lab", policy = function(A, state) { last.D <- state$last.A %*% dg(state$last.z) state$S[1, 1] <- (100 - last.D[3, 2])^0.2 * state$S[1, 1]^0.8 state } ) ge.externality$p ge.externality$z addmargins(ge.externality$D, 2) addmargins(ge.externality$S, 2) ```

gemExternality_Negative function