In an integrated economy-ecosystem model humans choose their land use and leave the residual land as habitat for three species forming a food chain. The size of habitat determines the diversity and abundance of species. That biodiversity generates, in turn, a flow of ecosystem services with...

We study how income inequality affects the social value of a dynamic public good, such as natural capital. Our theory shows that both intra- and intertemporal inequality affect the social value of public natural capital. The direction and size of the effects are driven by the degree of...

We reconsider the conventional wisdom that, in the presence of public goods and distortionary taxation, Nash tax rates are inefficiently low due to free riding. We use a model in which the public good is natural resources. Specifically, a general equilibrium model of a world economy, in which...

We study (energy) markets with dirty incumbents and costly entry by clean producers. For intermediate entry costs, the market outcome exhibits inefficient production and inefficient entry. A policy mix of three popular regulatory instruments-taxation on polluters, feed-in tariffs for clean...

We propose the "average approach," where the worth of a coalition is a weighted average of its worth for different partitions of the players' set, as a unifying method to extend values for characteristic function form games. Our method allows us to extend the equal division value, the equal...