We modify the classic single-period inventory management problem by assuming that the newsvendor is expectation-based loss averse according to Köszegi and Rabin (2006, 2007). Expectation-based loss aversion leads to an endogenous psychological cost of leftovers as well as stockouts. If there...

We modify the classic single-period inventory management problem by assuming that the newsvendor is expectation-based loss averse according to Koszegi and Rabin (2006, 2007). Expectation-based loss aversion leads to an endogenous psychological cost of leftovers as well as stockouts. If there are...

We modify the classic single-period inventory management problem by assuming that the newsvendor is expectation-based loss averse according to Köszegi and Rabin (2006, 2007). Expectation-based loss aversion leads to an endogenous psychological cost of leftovers as well as stockouts. If there...

We modify the classic single-period inventory management problem by assuming that the newsvendor is expectation-based loss averse according to Koszegi and Rabin (2006, 2007). Expectation-based loss aversion leads to an endogenous psychological cost of leftovers as well as stockouts. If there are...

Expectations and riskiness of future earnings are crucial determinants of individuals' intertemporal choices. Yet, the empirical literature lacks reliable measures of the distribution of future income. Lacking direct observability, the latter is usually estimated inferring the mean, the variance...

Production often causes pollution as a by-product. Once pollution problems become too severe, regulation is introduced by political authorities which forces the economy to make a transition to cleaner production processes. We model this transition as a change in general purpose technology (GPT)...

Traditional resource economics has been criticised for assuming too high elasticities of substitution, not observing material balance principles and relying too much on planner solutions to obtain long-term growth. By analysing a multi-sector R&D-based endogenous growth model with exhaustible...

The paper presents a macroeconomic approach to sustainable growth. After clarifying the concept of sustainability, the interdependence between natural resources and accumulated capital stocks such as physical, human, and knowledge capital is discussed. The conditions for the substitution process...

The paper develops the Basic Climate Economic (BCE) model featuring the core elements of climate economics and climate policy. The BCE model incorporates fossil stock depletion, pollution stock accumulation, endogenous growth, and climate-induced capital depreciation. We first use graphical...

We derive the optimal contributions to global climate policy when countries differ with respect to income level and pollution intensity. Countries' growth rates are determined endogenously, and abatement efficiency is improved by technical progress. We show that country heterogeneity has a...