Hirsch (1976) suggested that as consumption grows, an increasing proportion of the benefits people derive from consumption is due to a status effect. Status is a relative concept that cannot be increased on average; thus it may seem reasonable to expect that as consumption grows, the marginal...

In order to analyse the consequences of uncertainty for prices and efficiency in a hydropower system, we apply a two-period model with uncertainty in water inflow. We study three different market structures, perfect competition, monopoly and oligopoly and stress the importance of the shape of...

This paper analyses the effects of so-called "green" tax reforms on a small, open economy producing an imperfect substitute for foreign goods, using an intertemporal general equilibrium model. The labour market is characterised by union wage setting, and a fixed exchange rate implies wage...

This paper analyses the effects of a carbon tax on a small open petroleum producing economy, using an aggregate intertemporal general equilibrium model with differentiated products. The long run effects on welfare and capital accumulation of both a unilateral and an international carbon tax are...

All participants in power exchanges are interested in market responses when electricity prices change because this influences the profitability of actions. Contrary to most econometric work in this field, which uses annual time series or panel data, we exploit high-frequency data from a power...

This note provides a proof on existence and uniqueness of Nash equilibrium in prices in a market where the demand side is characterized by a nested multinomial logit model with multiproduct firm as nest and the supply side consists of oligopolistic price-setting multiproduct firms with each...

The formation of peer groups with social norms for private contributions to a public good is analyzed in an n-player two stage game. First people choose a peer group, then they choose whether to contribute. The first choice is made through a learning process represented by evolutionary dynamics,...

The paper explores how repeated revisions of consumption plans increase long-run utility. If agents value present anticipations of future consumption, some revisions may be viewed as a benign form of self-delusion. We consider a minimal generalization of the Samuelson discounted utility model to...

This paper studies the formation of social norms for considerate smoking behavior. Being considerate gives smokers a higher social approval from non-smokers, but imposes an inconvenience cost. A non-smoker's disapproval of inconsiderate smoking is assumed to be stronger the less used he is to...

This paper develops a theory for probabilistic models for risky choices that can be viewed as an extension of the expected utility theory to account for bounded rationality. One probabilistic version of the Archimedean Axiom and two versions of the Independence Axiom are proposed. In addition,...