It is believed that the primary economic solution to climate change is an introduction of a carbon pricing system anchored to the social cost of carbon, either as a form of tax or tradable permits. Potentially significant externalities accompanying the introduction of emission-reducing technologies, however, imply that the standard argument does not capture some important aspects for the design...

For shoppers of luxury goods, satisfaction with a purchase might be proportionate to its expense. Suppose, however, that a patient’s perception of medication benefit is similarly governed by its cost: does that make sense? Espay et al., reporting in the current issue of Neurology®, would have us think so. Their research takes the study of placebo effect to a new dimension of inquiry by investig...

In a general discrete-time market model with proportional transaction costs, we derive new expectation representations of the range of arbitrage-free prices of an arbitrary American option. The upper bound of this range is called the upper hedging price, and is the smallest initial wealth needed to construct a self-financing portfolio whose value dominates the option payoff at all times. A surp...

We study the problem of pricing claims written on an over-the-counter energy contract. Because the underlying is illiquid, we work with an indifference pricing framework based on a liquid reference contract. Extending current convenience yield frameworks we propose a two-factor partially observed model for the benchmark asset. Moreover, we incorporate direct modeling of the unhedgeable basis. W...

We propose a new framework for analyzing pricing theory for incomplete markets and contingent claims, using conjugate duality and optimization theory. Various statements in the literature of the fundamental theorem of asset pricing give conditions under which an essentially arbitrage-free market is equivalent to the existence of an equivalent martingale measure, and a formula for the fair price...

in this paper, by using dynamic stochastic general equilibrium, optimal monetary rule derived for central bank of iran. monetary transmission mechanism of the model includes four equations, aggregate demand, aggregate supply, oil price and taylor rule. we have proved that dynamic structure of aggregate demand relation, regarding monetary inflation in iran, is a function of money growth rate. wi...

A recent strategy carried out by the aircraft industry to reduce the total cost of the new generation fighters has consisted in the development of a single airframe with different technical and operational specifications. This strategy has been designed to reduce costs in the Research, Design and Development phase with the ultimate objective of reducing the final unit price per aircraft. This i...

In estimating the cost-effectiveness of diagnostic procedures, it is helpful to treat diagnostic information as a commodity with a unit price. The amount of useful information provided by a test result can be measured in binary units (bits), and the unit price of the information produced by the test result can be expressed in dollars per bit in much the same way that the price of gold is given ...