From the viewpoint of the independence axiom of expected utility theory, an interesting empirical dynamic choice problem involves the presence of a “global risk”, that is, a chance of losing everything whichever safe or risky option is chosen. In this experimental study, participants have to...

We analyse how different labour market institutions - employment protection versusflexicurity - affect technology adoption in unionised firms. We consider both trade unions’ incentives to oppose or endorse labour-saving technology, and firms’ incentives to invest in such technology. We find...

There is a well-known debate about the roles of geography versus institutions in explaining the long-term development of countries. These debates have usually been based on cross-country regressions where questions about parameter heterogeneity, unobserved heterogeneity, and endogeneity cannot...

This paper examines how product market competition affects firms’ timing of adopting a new technology as well as whether the market provides sufficient adoption incentives. It shows that adoption dates differ not only among symmetric firms but also among markets with Cournot and Bertrand...

We propose a new methodology exploring Markov perfect equilibrium strategies in differential games with regime switching. Specifically, we develop a general game with two players having two kinds of strategies. Players choose an action that influences the evolution of a state variable, and...

This paper analyzes the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market. Initially, firms can invest both in low-emitting production technologies and trade permits. In the model, technology adoption and...