We study the market for emission allowances stipulated in the 1990 Clean Air Act Amendment. We assume that the number of allowances is fixed and that demand is affected by a stochastic parameter that follows a Wiener process ('Brownian motion'). The optimal investment policy for scrubbers is...

System operators in the electricity industry purchase reserve capacity in a procurement auction in which suppliers offer two-part bids, one part for making capacity available and another part for supplying incremental energy when called. Key ingredients of an efficient auction design are the...

Necessary conditions characterizing optimal nonlinear multiproduct tariffs are derived from aggregate data about customers' responses to linear tariffs. These conditions are amenable to numerical solution with standard software by using a discrete formulation of an associated nonlinear...