Chao, Hung-Po; Wilson, Robert - In: Journal of Regulatory Economics 5 (1993) 3, pp. 233-49
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...