The Kyoto Protocol assigns limits for the aggregate emissions of six greenhouse gases, but most economic analyses focus on CO2 abatement. What are the potential gains if policy makers exploit the flexibility in a multi-gas abatement strategy? We extend the EDGE model to include sinks and non-CO2 gases and show that a multigas strategy reduces costs by 20-35% in the Western Annex B countries. Ma...

We address one aspect of the treatment of technical change in the environmental economics literature: how technical change impacts the marginal cost of abatement. We review a selection of papers that employ a variety of representations of technical change, and show that these representations have quite different, and sometimes surprising, effects on the marginal costs of pollution reductions. W...

We study the role of consumers’ psychological bargaining costs associated with the decision to bargain in a retail setting. First, we use a simple model to show how a retailer’s optimal pricing strategy (fixed pricing vs. bargaining) varies with consumers’ bargaining costs and the retailer’s marginal costs. We then prove how these fixed bargaining costs can be nonparametrically identified separ...

The United States pulp and paper industry has experienced significant structural changes over the past twenty-five years, including reductions in the number of pulp and paper mills, lower rates of capacity growth, employment cutbacks, and a loss of market share to foreign competitors. These structural shifts portray an industry that increasingly has difficulty adapting to a more competitive env...

This paper analyzes the relationships among investment, , and cash flow in a tractable stochastic model in which marginal  and average  are identically equal. In the special, but widely used, case of quadratic adjustment costs, it derives an expression for  that is in closed form, up to an additive constant. After analyzing the impact of changes in the distribution of the marginal operating...

We estimate the impact of large changes in the relative prices of natural gas and coal from 2005-2011, due primarily to “fracking,” on regional electricity marginal costs and air pollution emissions from electricity producers. We find strong evidence that natural gas is displacing coal as baseload. We estimate marginal emissions over the generation profile for each region in the U.S. using a no...

A model of franchising competition in locationally differentiated products is constructed. A franchisor (upstream firm) collects a marginal transfer fee per unit of output sold by a franchisee (downstream firm). For example, the marginal transfer fee can be realized as a markup on variable inputs supplied by the franchisor. A franchisor also collects a lump-sum rent (commonly called "franchisin...

Nature reserves are often designated ad hoc. Despite increasing conservation efforts, loss of biodiversity is still accelerating. Considering land scarcity and demand for alternative uses, efficiency in conservation strongly correlates with efficiency in land allocation. Systematic conservation planning can effectively prioritize conservation activities. Previous studies minimize opportunity co...

This note shows that a monopolist facing any linear demand system for n goods and no fixed costs will produce positive quantities of all goods as long as demand is positive for all goods when all are sold at marginal cost. This is in contrast with the traditional view that, in general, a multiproduct monopolist does not produce positive quantities of all goods even though there is positive dema...