In this paper, we focus on the adverse selection issue that prevails when the regulator is not able to observe the type of the abatement costs of the firms. The regulator decides the total level of emission that minimizes the expected social cost of pollution and she sells them to the firms. In...

The aim of this paper is to characterize the one-dimensional stochastic differential equations, for which the eigenfunctions of the infinitesimal generator are polynomials in y. Affine transformations of the Ornstein-Uhlenbeck process, the Cox-Ingersoll-Ross process and the Jacobi process belong...