This paper deals with the market for SO{sub 2} emission allowances over time and electric utility compliance choices. For currently high emitting plants ( 2.5 lb SO{sub 2}/MMBtu), the 1990 Clean Air Act Amendments (CAAA) provide for about twice as many SO{sub 2} allowances to be issued per year...

The Water Framework Directive (WFD) proscribes specific levels of contaminates present in rivers and lakes in the UK, these contaminants come from a wide range of sources such as food additives present in faeces, agricultural runoff and drinking water additives such as iron dosing. Water...

Extreme market outcomes are often followed by a lack of liquidity and a lack of trade. This market collapse seems particularly acute for markets where traders rely heavily on a specific empirical model such as in derivative markets like the market for mortgage backed securities or credit...

Standard accident models are based on the expected utility framework and represent agents’ beliefs about accident risk with a probability distribution. Consequently, they do not allow for Knightian uncertainty, or ambiguity, with respect to accident risk and cannot accommodate optimism...

Conventional wisdom among environmental economists is that the relative slopes of the marginal social benefit and marginal social cost functions determine whether a price-based or quantity-based environmental regulation leads to higher expected social welfare. We revisit the choice between...

In the framework of Knightian uncertainty more precisely in the model introduced by Epstein and Schneider 3 different questions concerning the aspect of time-consistency, in the sense of m-stability or rectangularity, are studied.The first part describes an alternative description of...

Although the pure economic loss rule has been remarkably durable in the common law, it suffers from a theoretical deficit. The rule has not been properly framed within the broader context of Anglo-American political economy. Any theory must recognize that the rule fundamentally deals with...

I consider continuous time asset pricing models with stochastic differential utilityincorporating decision makers' concern with ambiguity on true probability measure.In order to identify and estimate key parameters in the models, I use a novel econometricmethodology developed recently by Park...

In this dissertation, I propose that, post-action, people tend to be more optimistic about outcomes when their actions were based on malleable (vague) information compared to when their actions were based on unmalleable (precise) information. However, pre-action, no such difference occurs. I...

In two experiments, decision makers chose between risky and ambiguous gambles under conditions of both single (unrepeated) and multiply repeated choices. The gambles were presented either as modified Ellsberg urn choices or as marketing strategy decisions. In both experiments, decision makers...