We show that once interfamily exchanges are considered, Becker?s rotten kids mechan- ism has some remarkable implications that have gone hitherto unnoticed. Specifically, we establish that Cornes and Silva's (1999) result of e¢fficiency in the contribution game amongst siblings extends to a...

This article examines imperfectly competitive investment in electric power generation in the presence of congestion on the transmission grid. Under simple yet realistic assumptions, it precisely derives the technology mix as a function of the capacity of the transmission interconnection. In...

This article is the first to examine electric power producers' investment decisions when com- petition is imperfect and the transmission grid congested. This analysis yields numerous original insights. First, congestion on the grid is transient, and may disappear when demand is highest. Second,...

What is the best way to reward innovation? While prizes avoid deadweight loss, intellectual property selects high social surplus projects. Optimal innovation policy thus trades off the ex-ante screening benefit and the ex-post distortion. It solves a multidimensional screening problem in the...

The paper analyzes the interaction between a reliable source of electricity production and intermittent sources such as wind or solar power. We first characterize the first-best dispatch and investment in the two types of energy. We put the accent on the availability of the intermittent source...

This paper introduces the concept of the Testing Value into the analysis of environmental decisions under uncertainty and irreversibility. This value emerges in situations where the probability of receiving information concerning future economic benefits and costs of development depends on the...

The advent of "smart meters" will make possible Real Time Pricing of electricity: customers will face and react to wholesale spot prices, thus consumption of electric power will be aligned with its opportunity cost. This article determines the marginal value of a fraction of demand (or a...

The Boston mechanism is criticized for its poor incentive and welfare performance compared with the Gale-Shapley deferred-acceptance mechanism (DA). Using school choice data from Beijing, I investigate parents' behavior under the Boston mechanism, taking into account parents' possible mistakes...

We examine how different welfarist frameworks evaluate the social value of mortality riskreduction. These frameworks include classical, distributively unweighted cost-benefit analysis—i.e., the “value per statistical life” (VSL) approach—and three benchmark social welfare functions...

We show that every (random) assignment/allocation without transfers can be considered as a market outcome with personalized prices and an equal income. One can thus evaluate an assignment by investigating the prices and the induced opportunity sets. When prices are proportional across agents,...