Around 2.5 million people in the UK sustain accidental injuries every year.1 As a result they may lose income or independence, and face lifestyle changes. Fault may rest with the driver of another car, a public authority such as a local authority or hospital, an employer or another individual whose action or inaction was the cause of the accident and the injury sustained. Under UK law the liable party must compensate the injured person for any loss (i.e. the polluter pays).
Far from there having been a recent boom in consumers claiming compensation for injuries, only 31 per cent of accident victims actually claim compensation using legal processes. Indeed the actual number of claims for injuries following accidents has reduced since the new method of funding legal actions in personal injury cases, the ‘‘conditional fee agreement’’, was rolled out, as the table in Appendix 1 shows. Since the abolition of legal aid for personal injury cases in 2000, CABx have handled over 130,000 enquiries relating to personal injury claims.
The overwhelming consensus in the mainstream nutrition community, as well as among vegan health professionals, is that plant foods do not provide vitamin B12. Despite this, some vegan advocates still believe that plant foods provide all the nutrients necessary for optimal health and, therefore, do not address vitamin B12 when promoting the vegan diet. Other vegan advocates acknowledge the need for B12, but only as an afterthought. The result is that many vegans do not eat B12 fortified foods or supplements. Many have developed classic neurological symptoms of a B12 deficiency. In some cases, the symptoms have cleared up after taking B12 supplements, but not everyone has been so lucky.
While many current vegans report feeling better on a vegan diet, the most common complaint I hear from ex-vegans is that they didn’t feel healthy. This seems logical: The people who feel good on the diet stick with it. The people who feel bad, don’t. Could it be that some of the people who go back to eating animal products are feeling the effects of a reduced B12 status? Many vegans would not consider this a possibility, because humans need very little B12 and new vegans usually have a healthy store which can last months or years.
Credit constraints have been known to be a part of corporate reality for decades (Hubbard, 1998, and references therein). Massively reduced access to credit has been a feature of the major financial crisis of recent years. It is also well known that firms are subject to substantial market risk – whether on the demand side or supply side. Incorporating corporate finance aspects into an industrial organization model of the vertical supply chain, we study the interaction between credit constraints and market risk, and their effects on short-run retail pricing, long-run investment, and welfare. We show that credit constraints and market risk impact optimal vertical contracting, creating scope for double marginalization, slotting fees, finance arms, and outsourcing. Further, we identify a new monetary transmission mechanism from interest rates to the real economy which acts via firms which are at risk of becoming credit constrained. Finally, the model gives rise to a novel theory of countervailing power based on credit constraints.
Consider a vertical supply chain consisting of a single upstream firm (“he”) supplying a single downstream firm (“she”), and exposed to demand-side risk. The joint-profit maximizing supply contract would involve per unit input prices at the upstream firm’s marginal cost, irrespective of any demand-side risk. But now suppose the downstream firm has some future investment opportunities. The size of the loan she is able to raise to fund the investment, and therefore the actual investment level, depend on the size of the pledgable assets the firm owns. Under the standard assumption that investment is subject to diminishing marginal returns, we show that the profit maximizing firm becomes endogenously risk averse when accumulating pledgable assets. When pledgable assets are low, the induced investment level is low as well. This implies that the return on a marginal dollar of investment would be high, and so an extra marginal dollar of pledgable assets can be greatly levered through the banking sector.
