We experimentally explore decision-making under uncertainty using a framework that decomposes uncertainty into three distinct layers: (1) physical uncertainty, entailing inherent randomness within a given probability model, (2) model uncertainty, entailing subjective uncertainty about the...

We study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between the agglomeration and dispersion forces, in the form of pollution from stationary forces, environmental policy, production externalities, and commuting costs, determines...

A simplified energy balance climate model is considered with the global mean temperature as the state variable, and an endogenous ice line. The movements of the ice line towards the Poles are associated with damage reservoirs where initial damages are high and then eventually vanish as the ice...

Optimal R&D investment is defined by deep uncertainty that can only partially be addressed through historical data. Thus, expert judgments expressed as subjective probability distributions are seen as an alternative way of assessing the potential of new technologies. In this paper we propose a...

We couple a one-dimensional energy balance climate model with heat transportation across latitudes, with an economic growth model. We derive temperature and damage distributions across locations and optimal taxes on fossil fuels which, in contrast to zero-dimensional Integrated Assessment...