The key question in hydropower production is the time pattern of the use of the water in the reservoir. The water used to produce electricity today can alternatively be used tomorrow. The analysis of the operation of hydropower is therefore essentially a dynamic one. The paper introduces some...

I revisit the dominant-firm model and discuss its implicit assumption of a sequential move structure. I argue that a simultaneous move structure is often more reasonable and derive an alternative formulation of the model based on this approach.

The generation of unintended residuals in the production of intended outputs is the key factor behind our serious problems with pollution. The way this joint production is modelled is therefore of crucial importance for our understanding and empirical efforts to change economic activities in...

The perfectly competitive market - a hypothetical situation free of market failure - serves as a benchmark for economic theory, providing the basis for the two fundamental welfare theorems. The radical abstractions of this idea makes it hard to grasp its full implications, however. In this...

Humans are fundamentally social. Social activities require coordination, which may yield multiple equilibria in the form of stable, self-reinforcing patterns of herd behavior. Since environmental impacts can differ substantially between alternative equilibria, such self-reinforcing behaviors...

The generation of unintended residuals when producing intended outputs is the key factor behind our serious problems with pollution. The way this joint production is modelled is therefore of crucial importance for our understanding and empirical efforts to change economic activities in order to...

I demonstrate a straightforward but apparently widely unrecognized implication of the standard requirements for perfect competition: an economy in which consumers can choose to learn is generally not perfectly competitive. In particular, if endogenous welfare relevant learning is feasible, the...

Trade with differentiated goods normally provides a form of insurance against disasters, such as floods and fires, through an increasing relative price of goods from the afflicted country. With open access renewable resources this is reversed. A country hit by a negative shock recovers faster if...

The modelling of the interaction between production activities and the natural environment requires formulating a multioutput production function for intended and unintended outputs. The key feature when modelling joint production of intended outputs and unintended residuals is that the latter...

The bulk of acid depositions, which have harmful effects on the environment, are caused by foreign emissions in many European countries. Therefore, if some countries emit more acids, one cannot be sure that countries that emit less will benefit from reduced acid depositions. However, numerical...