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approaches to the theorem interpretation generate conflicts in a perception and identification of externalities. It is a solution … theorem statement has been made clearer; we have also put forward a hypothesis on an origin of the externalities and … utility of impure goods depends on the vector of the externalities, which ultimately determines the stratification in a field …
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The Coase Theorem is analyzed in a setting in which pollution damages are a stochastic function of emissions and of natural environmental variability (e.g., weather). When pollution damages are stochastic, emissions create financial risks. Pollution levels allowed under Coasean contracts then in...
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A recent stream of experimental economics literature studies the factors that contribute to the emergence of financial bubbles. We consider a setting where participants sorted according to their degree of risk aversion trade in experimental asset markets. We show that risk sorting is able to...
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