"      Abstract
Several types of international transactions are examined to assess the relative value of exchanges that are not Pareto-optimal.  Informational asymmetries are frequently present in international trade, providing sound reasons to doubt that Pareto-optimality can always be assumed.  The balance posed by yin and yang provides a better approach.  “Lemons” outcomes can challenge finances and threaten health.  International policies to provide reliable information on price and quality are found to be partly successful.  Notably, in many countries the core market institution, competition policy, is defective or non-existent."

In order to predict which persons approach the task of shopping strategically, we constructed a measure of locus of control focused specifically on consumer behaviors and outcomes. Psychometric evaluations of the 14-item Consumer Locus of Control scale indicated that it was a reliable instrument whose characteristics were replicated in two separate samples. The scale was used to predict shopping behavior ranging from impulsive to strategic. The measure of consumer locus of control was significantly related to consumer behavior, whereas measures of economic and generalized locus of control proved to be unrelated to shopping effort, planning, and product knowledge. The more internal their consumer control beliefs, the more likely were subjects to be planful and purposive in the act of shopping.

In order to predict which persons approach the task of shopping strategically, we constructed a measure of locus of control focused specifically on consumer behaviors and outcomes. Psychometric evaluations of the 14-item Consumer Locus of Control scale indicated that it was a reliable instrument whose characteristics were replicated in two separate samples. The scale was used to predict shopping behavior ranging from impulsive to strategic. The measure of consumer locus of control was significantly related to consumer behavior, whereas measures of economic and generalized locus of control proved to be unrelated to shopping effort, planning, and product knowledge. The more internal their consumer control beliefs, the more likely were subjects to be planful and purposive in the act of shopping.

The quantity of hazardous or ineffective products on national and international markets is higher than can be explained by current theory. Research has shown that “lemons” can indeed occur and it has specified roles for (a) potential future purchases and (b) seller reputation. This paper explores incentives facing sellers of goods containing one or more negative characteristics. The economics of concealment provides the conditions under which some sellers use resources to interfere with quality signals. This allows, at the extreme, a class of product which is a “pure lemon” in that its very existence would not be justified if consumers were fully informed. The paper identifies important variables which have direct policy implications for regulation and for consumer welfare.

Studies have shown that price is very poorly correlated with quality. This paper discusses the methodological criticisms of the earlier work, concluding that the original results remain robust. Examination of 91 sets of Canadian products containing 1020 items reinforces the conclusions of earlier work for the United States and Japan. These international studies contradict the conventional wisdom that price is an adequate signal of quality. We also test the hypotheses that price is a better signal of quality (a) after product tests have been published, and (b) for higher priced items which presumably justify larger investments in “search.” Canadian data do not support either hypothesis. Some theoretical explanations are outlined and a conclusion briefly presents implications for policy. Zahlreiche Untersuchungsergebnisse haben gezeigt, daß Preis und Qualität in einem nur sehr dürftigen Zusammenhang stehen. Diese Befunde sind unter methodischem Gesichtspunkt kritisiert worden, der vorliegende Beitrag versucht jedoch zu zeigen, daß die Befunde robust sind und der Kritik standhalten können. Eine Untersuchung der Autoren anhand von 91 kanadischen Warentests mit 1,020 Artikeln bestätigt darüberhinaus die früheren Ergebnisse aus den Vereinigten Staaten und Japan. Insgesamt widersprechen diese internationalen Untersuchungen der herkömmlichen Ansicht, daß der Preis eines Gutes ein angemessener Qualitätsindikator sei. Darüber hinaus prüft die Studie der Autoren die Hypothese, daß der Preis ein besserer Qualitätsindikator ist, (a) nachdem Warentests durchgeführt und die Ergebnisse publiziert wurden, und (b) wenn es sich um teurere Produkte handelt, die vermutlich einen höheren Suchaufwand rechtfertigen. Beide Hypothesen werden durch kanadische Daten nicht gestützt. Abschließend werden einige verbraucherpolitische Implikationen dieser Befunde behandelt. The authors are grateful to referees for important assistance.

In order to predict which persons approach the task of shopping strategically, we constructed a measure of locus of control focused specifically on consumer behaviors and outcomes. Psychometric evaluations of the 14-item Consumer Locus of Control scale indicated that it was a reliable instrument whose characteristics were replicated in two separate samples. The scale was used to predict shopping behavior ranging from impulsive to strategic. The measure of consumer locus of control was significantly related to consumer behavior, whereas measures of economic and generalized locus of control proved to be unrelated to shopping effort, planning, and product knowledge. The more internal their consumer control beliefs, the more likely were subjects to be planful and purposive in the act of shopping.

How big do banks need to be to gain all the economies of scale? The largest Canadian banks already achieve scale economies and further increases in size can make them "too big to fail." Available evidence indicates normal monopoly risks will be passed on to Canadian firms and consumers if the largest banks merge. Improved service will make Canada's banks world competitive. Despite the banks' enthusiasm for heft to enter the US market, policy measures exist to prevent mergers that are contrary to Canada's public interest.

ON THE a w m "~~ of W. Stanley Jevons' The Theory of Political Economy, it may be profitable to pause for a moment and reconsider his approach to labor theory. Despite its strengths, recent textbooks ignore Jevons' theory while elevating to supremacy indifference curve ana1ysis.l Acknowledging that indifference curve analysis is a fertile and powerful technique, I want to wipe some of the dust off Mr. Jevond writings and point out a few instances where they are still relevant today. Jevons' theory is built upon two major propositions: (1) the familiar law of diminishing marginal utility, and (2) the principle of eventually increasing tediousness of work. The second proposition allows that the cost of getting to work gives the first hour of work some disutility, arguing that

The most direct way in which consumer research can deal with the collection of techniques used for seeking out information and for making choices is by recognizing that, since these techniques give services over time, they are a form of capital. To the extent that time and resources are used in a deliberate manner to create this capital, the process of accumulation can be viewed as investment in consumer search capital (CSK). The paper identifies the conditions under which investment in private CSK and collective CSK can be justified, and examines some of the situations where the insight provided by this approach is especially useful. The consumer association is chosen as one particular form in which collective CSK is embodied in order to illustrate the usefulness of the CSK approach. It was found that such collective CSK can have small but truly significant effects, not only on the pace but also on the character of progress in developing countries, a finding which may be especially significant to those with low incomes. Among the types of activities of consumers' associations might undertake, "framework pressure" (to achieve fairer rules of exchange, among other things) and e x a n t e uses of this collective CSK appear to be superior to other alternatives discussed. It is argued that the method has much potential for examining other forms in which CSK is embodied and that the approach suggests additional hypotheses of research interest.

A tariff is easy to see and therefore relatively easy to place on the agenda for trade negotiation. Non-tariff barriers (NTBs) are often harder to spot and therefore harder to address. But they are no less harmful to consumers. A simple example is a licensing or registration procedure for insurance companies which is put forward "to protect consumers" when the real purpose is to shield local companies from competition. The shape of the package was used to keep foreign margarine from the market in Belgium. Another example is a technical standard specifying the engines or brakes that locomotives must have. Many countries in Europe use this to keep competing units out of the national market. An Italian health standard was used for a time to keep apple vinegar from other countries off the national market. There is no limit to the imaginitive use of NTBs. Each good or service may have several controls, some of which actually serve consumers (by ensuring health, safety or compet...

The documented link between natural resources and civil conflict is not well understood. This paper uses a political economy framework to explore the emergence of resource-based civil conflict driven by group-level discontent. Previous models of resource conflicts are premised on the idea that the desire of enrichment by appropriating resources is the driving force for insurgents. This approach, however, treats the management of the contentious resources as exogenous, while also failing to account for the grassroots dissatisfaction that is often reported to spark and/or sustain rebellions. The proposed theoretical model offers a policy-based alternative: under conditions related to the quality of governance, discontent about resource management can be instrumental in increasing the likelihood of an insurgency. While influential contributions in the literature tell the 'resource abundance implies opportunity, implies greed-based conflict' story, this paper focuses on relative scarcity to justify discontent and prompt a 'grievance-based' rebellion. The resource policy arises endogenously as the corrupt government trades off industry contributions and the cost induced by manifestations of resource-related discontent. Conservation effects of both internal pressure, in the form of civil unrest, and external pressure in the form of international trade and aid measures are analyzed in turn, and regulator corruption is shown to be an important ingredient of conflict. The last part presents some empirical evidence in support of the model's predictions.

Canada has the oldest antidumping regime in the world and has to this day been counted among the main users of the measure. It is an important trade remedy instrument that affects a relatively large proportion of Canadian imports, and that still requires a better understanding of its use and its effects on trade. For example, in 2003 there were 92 measures in place affecting around $1.3 billion worth of Canadian imports. An important question is whether imposing antidumping duties actually protects the domestic industry from the import competition. We analyze the trade effects of antidumping policy in the manufacturing industry in Canada. We also look at the effect of an antidumping action on the level of imports from the countries not named in the investigation in order to analyze the extent of trade diversion. It is possible that imports might be partly diverted away from the alleged source country and to the nonalleged countries, rendering antidumping law ineffective in benefiting the domestic industry. We construct a database using antidumping data for the years 1990-2000, and import data disaggregated at the 10 digit HS level, and we find that Canadian antidumping is an efficient tool for restricting imports from the countries that are 'named' in an investigation or alleged to be dumping. When adopting a relatively coarse classification of named cases into two groups: affirmative (affirmative antidumping decisions and price undertakings) and negative (negative antidumping decisions) we also find some evidence of trade diversion and 'harassment' effects of antidumping.

The key issues on the negotiation table in the agriculture sector are the elimination of export subsidies, a progressive reduction of tariffs and reduction in domestic support. However, it is observed that trade liberalization often involves moving from one set of distortions to another rather than a movement to free trade. More specifically, in the case of trade liberalization in manufacturing, countries have replaced lower tariffs with antidumping duties (ADD). Feinberg and Olson (2005) empirically show that countries that agreed to larger tariff reductions under the Uruguay Round are more likely to use AD statutes to protect their domestic industries. Thus if the use of ADD in agriculture are effective as a trade barrier (that is there is little trade diversion) then negotiators might need to include AD reform along-with lower tariffs in their future negotiations. In this paper we analyze whether imposition of an antidumping duty restrict imports of the named commodity or is the supply of imports deflected from countries named in the petition to countries not named in the antidumping petition? We find that AD duties have had a significant impact on the imports of agricultural commodities from countries named on the petition. However, our results also indicate that there was little trade diversion towards countries not named in the AD petition. It seems that AD is a plausible protectionist policy.

In this paper we compare the use of antidumping (AD) measures in the agriculture sector by Canada and the United States, the two major users of antidumping procedures. 1 We consider both the direct and indirect effects of the AD measure, and consider what factors make an AD measure more or less successful at impeding trade, and when it is more likely to cause trade diversion. Specifically, we ask when the imposition of an antidumping duty restricts imports of the targeted commodity and when is there a deflection in the supply of imports from countries named in the petition to countries not named in the antidumping petition? We compare these results for that of the United States and draw conclusions about the determinants of such differences, like the exchange rate, GDP and distance to partner countries.