Among environmental economists instrument choice has tended to come down to the task of ’getting the prices right’. Command-and-control interventions were viewed with suspicion. Recently, behavioral economics has revealed undesired interactions between price regulation and intrinsic motivation. We contribute by experimentally testing direct and persistence effects of taxes and command-and-contr...

This paper investigates the optimal management of a firm faced with a long-term liability that occurs at a random date. Three issues are analysed: the optimal dividend policy; optimal expenditure on safety to delay the occurrence of the liability; and the optimal liquidation date of the firm. An owner faced with dynamic unlimited liability never liquidates and therefore accumulates capital to t...

A firm engaged in activities which are environmentally risky has private information both on its choice of safety care and on the level of its assets. JEL Classification: K13, K32, L51.

Regulation produces enormous benefits and costs, both of which are greatly influenced by myriad exemptions and preferences for small firms that contribute a significant minority of output in many sectors. These firms may generate a disproportionate share of harm due to their being exempt and because exemption induces additional harmful activity to be channeled their way. This article analyzes o...

The social cost of carbon is the expected present value damages from emitting one ton today. We use perturbation theory to derive an approximate tractable expression for this adjusted climatic and economic risk. allow different aversion risk intertemporal fluctuations, skewness dynamics in distributions climate sensitivity damage ratio, correlated shocks. identify prudence, insurance, exposure ...

We synthesize and review retrospective analyses of federal air quality regulations to examine the contributions Clean Air Act (CAA) vast improvements seen since 1970. Geographic heterogeneity in stringency affects emissions, public health, compliance costs, employment. Cap-and-trade has delivered greater emission reductions at lower cost than conventional mandates, yet fallen short textbook ide...

An optimal contract may involve randomization when the agents differ in their attitudes towards risk, so that randomization enables the principal to relax the incentive constraints. The paper provides a necessary and sufficient condition for local random deviations to be welfare improving in a neighborhood of a nonrandom optimum. JEL classification numbers: H21, H23, H26.

This project links administrative census microdata to spatially continuous measures of particulate pollution (PM2.5) first document and then decompose the key drivers convergence in black-white exposure differences. We use quantile regression show that a significant portion Black-White is attributable differential impacts Clean Air Act (CAA) Black White communities. Areas with larger population...

We develop a model of political competition with endogenous turnout and platforms. Parties trade off incentivizing their supporters to vote discouraging the competing party from voting. show that latter objective is particularly pronounced for an edge in race. Thus, increase support may lead adoption policies favoring its opponents so as asymmetrically demobilize them. study implications econom...

When a user shares her data with online platforms, she reveals information about others. In such setting, externalities depress the price of because once user's is leaked by others, has less reason to protect and privacy. These depressed prices lead excessive sharing. We characterize conditions under which shutting down markets improves welfare. Platform competition does not redress problem exc...