Despite all of the talk about deregulation' of the electricity sector, a large number of non-market mechanisms have been imposed on emerging competitive wholesale and retail markets. These mechanisms include spot market price caps, operating reserve requirements, non-price rationing protocols,...

This paper presents a theoretical and empirical investigation of tax competition when voters use the tax policy of neighboring jurisdictions as information to evaluate the performance of their incumbent politicians. We show that this has implications both for voter tolerance of high taxes and...

Despite the popularity of price cap regulation in practice, the economic literature provides relatively little guidance on how to determine the X factor, which is the rate at which inflation -adjusted output prices must fall under price cap plans. We review the standard principles that inform...

After many years of an impasse in attempts to introduce Regulatory Impact Assessment to Greece the Greek Prime Minister announced in July of 2006 the introduction of a very ambitious Integrated Impact Assessment on the economy, the society and the environment. The model presented was at the same...

We use a regression discontinuity design to examine students' responses to the negative incentive brought on by being placed on academic probation. Consistent with a model of introducing performance standards in which agents respond differently based on ability, we find that being placed on...

This paper considers the role of incentive based climate adaptation policies. It uses the early literature on pricing and capacity choices under demand uncertainty to describe how revised price structures for the substitutes for climate services can be treated as anticipatory adaptation. In many...

Successful innovation is essential for the survival and growth of organizations but how best to incentivize innovation is poorly understood. We compare how two common incentive schemes affect innovative performance in a field experiment run in partnership with a large life sciences company. We...

Proposals to create a national health care plan such as "Medicare for All" rely heavily on reducing the prices that insurers pay for health care. These changes affect physicians' short-run incentives for care provision and may also change health care providers' incentives to invest in capacity,...

We develop a tractable and flexible stochastic volatility multi-factor model of the term structure of interest rates. It features correlations between innovations to forward rates and volatilities, quasi-analytical prices of zero-coupon bond options and dynamics of the forward rate curve, under...

This paper provides a road map for building a contingent claims theory of limit order markets grounded in a simple observation: limit orders are equivalent to a portfolio of cash-or-nothing and asset-or-nothing digital options on market order flow. However, limit orders are not conventional...