Abstract I analyze optimal natural resource use in an intergenerational model with the risk of a catastrophe. Each generation maximizes a weighted sum of discounted utility (positive) and the probability that a catastrophe will occur at any point in the future (negative). The model generates...

In Hens (1997), a new adjustment process is proposed for a setting with reopening spot and asset markets. He argues by means of an intemporal variant of Scarf's example that this process is more stable than the other processes, although in general it might be more stable or less stable. This...

Abstract: As a result of the recent financial crisis and the ensuing economic recession, fiscal deficits have soared in many OECD countries. As a consequence, government debt has been on the rise again after a period of stable or declining government debt. In this paper we analyze debt...

Abstract: In this note we sketch a dynamic framework within which the discussion on the macro economic effects of climate change take place. The problem setting is characterized by scientific uncertainties about the development of climate, potential large economic losses and human beings having...

Results are reported of a laboratory experiment aimed at examining whether strategic substitutability and strategic complementarity have an impact on the tendency to cooperate in two-player dominancesolvable games with a Pareto-inefficient Nash equilibrium.We find that there is significantly...

We propose a model to reconcile the theory of inter-temporal non-renewable resource depletion with well-known stylized facts concerning the exploitation of exhaustible resources such as oil. Our approach introduces geological constraints into a Hotelling type extraction-exploration model. We...