This paper investigates the optimal taxation path of a non-renewable resource in the presence of an imperfect substitute renewable resource. We present an optimal growth model and characterize the social optimum and the decentralized equilibrium. We show that the economy gradually reduces the share of non-renewable resource and converges to a steady state in which it uses only the renewable res...

The recent literature on congestion pricing with large agents contains a remarkable inconsistency: though agents are large enough to recognize self-imposed congestion and exert market power over prices, they do not take into account the impact of their own actions on the magnitude of congestion tolls. When large agents are confronted with tolls derived under this parametric assumption but under...

We consider the optimality of various institutional arrangements for agencies that conduct macro-prudential regulation and monetary policy. When a central bank is in charge of price and financial stability, a new time inconsistency problem may arise. Ex-ante, the central bank chooses the socially optimal level of inflation. Ex-post, however, the central bank chooses inflation above the social o...

We present a growth model in which investment in physical capital shows positive externalities which build up knowledge capital. A prerequisite for these spillovers to take place is that a country devotes time to education. Externalities associated with investment need education to raise the stock of knowledge capital. Analyzing the competitive economy we demonstrate that the model may explain ...

A premature death unexpectedly brings a life and a career to their end, leading to substantial welfare losses. We study the retirement decision in an economy with risky lifetime, and compare the laissezfaire with egalitarian social optima. We consider two social objectives: (1) the maximin on expected lifetime welfare (ex ante), allowing for a compensation for unequal life expectancies; (2) the...

In today's highly interconnected networks, security of the entities are often interdependent. This means security decisions of the agents are not only influenced by their own costs and constraints, but also are affected by their neighbors’ decisions. Game theory provides a rich set of tools to analyze such influence networks. In the game model, players try to maximize their utilities through se...

We study Network Maximum Congestion Games, a class of network games where players choose a path between two given nodes in order to minimize the congestion of the bottleneck (the most congested link) of their path. For single-commodity games, we provide an algorithm which computes a Pure Nash Equilibrium in polynomial time. If all players have the same weight, the obtained equilibrium has optim...

Social interactions among individuals can cause traits of individuals to depend on genes in other individuals, a phenomenon known as indirect genetic effects (IGE). IGEs profoundly affect response to natural selection and rates of genetic improvement in agriculture. This work identifies optimum experimental designs for estimating IGEs and provides tools for quantifying their magnitude. These fi...

Nonlinear constrained optimal control problems as a rule suffer from the so-called two-norm discrepancy, which in particular says that under stable optimality conditions the objective functionals satisfy a quadratic local growth estimate in terms of the L2 norms but in L∞ neighborhoods of the solution only. Furthermore, in the case of weak local optima with continuous control functions, stabili...

Text clustering is one of the key research areas in data mining. k-medoids algorithm is a classical division algorithm, and can solve the problem of isolated points, But it often converges to local optimum. This article presents a improved social evolutionary programming(K-medoids Social Evolutionary Programming,KSEP). The algorithm is the k-medoids algorithm as the main cognitive reasoning alg...