The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief …

impact of uncertainty and real options on the decision of working time, i.e. we examines the determinants of employment and …

We study the importance of uncertainty and public finance to the welfare ranking of three environmental policy … revenues finance public abatement. When the main source of uncertainty is economic, the most efficient recipe is to levy … pollution taxes and use the collected tax revenues to finance public abatement. However, when environmental uncertainty is the …

Motivated by tropical deforestation, we analyze (i) a novel theory of resource extraction, (ii) the optimal … conservation contract, (iii) when the donor prefers contracting with central rather than local governments, and (iv) how the donor …. Consequently, decentralizing authority increases conservation if and only if districts are weak. Contracting with the central …

the conservation value is low, the consumption value high, and the buyer’s protection cost large. The theory explains why …A “conservation good” (such as a tropical forest) is owned by a seller who is tempted to consume (or cut), but a buyer … benefits more from conservation. The seller does conserve if the buyer is expected to buy, but the buyer is unwilling to pay as …

This paper examines the impact of Knightian uncertainty upon optimal climate policy through the prism of a continuous … Knightian uncertainty accelerates climate policy, i.e. policymakers become more reluctant to postpone the timing of climate …