This paper considers the extent to which the standard argument, that the disproportionate excess burden of taxation suggests the use of tax-smoothing in the face of future cost increases, is modified by uncertainty regarding the future. The role of uncertainty and risk aversion are examined...

Andreoni and Sprenger (in press) report evidence that distinct utility functions govern choices under certainty and risk. I investigate the robustness of their result to the experimental design. I find that the effect disappears completely when a multiple price list is used instead of a convex...

The paper derives the optimal carbon tax in closed-form from an integrated assessment of climate change. The formula shows how carbon, temperature, and economic dynamics quantify the optimal mitigation effort. The model's descriptive power is comparable to numeric models used in policy advising....

We axiomatize a new class of recursive dynamic models that capture subjective constraints on the amount of information a decision maker can obtain, pay attention to, or absorb, via a Markov Decision Process for Information Choice (MIC). An MIC is a subjective decision process that specifies what...

We establish a class of fully nonlinear conditional expectations. Similarly to the usage of linear expectations when a probabilistic description of uncertainty is present, we observe analogue quantitative and qualitative properties. The type of nonlinearity captures the agents sentiments of...

• This paper broadens the perspective on sustainable distributions by expanding into three dimensions, introducing transitory states as well as all those states existing simultaneously.• Withdrawal rates alone do not tell a complete sustainable distribution story; withdrawal rates are time...

Andreoni and Sprenger (in press) report evidence that distinct utility functions govern choices under certainty and risk. I investigate the robustness of their result to the experimental design. I find that the effect disappears completely when a multiple price list is used instead of a convex...

The paper incorporates qualitative differences of probabilistic beliefs into a rational (or normatively motivated) decision framework. Probabilistic beliefs can range from objective probabilities to pure guesstimates. The decision maker in the present model takes into account his confidence in...

In this paper, we establish an axiomatically founded generalized recursive smooth ambiguity model that allows for a separation among intertemporal substitution, risk aversion, and ambiguity aversion. We axiomatize this model using two approaches: The second-order act approach à la Klibanoff,...

We commonly think of information as an instrument for better decisions, yet evidence suggests that people often decline free information in non-strategic scenarios. This paper provides a theory for how a dynamically-consistent decision maker can be averse to partial information as a consequence...