In new new international trade theory, whether firms export or not are determined by their productivity. These models assume that firms enter a market to find their productivity levels revealed to them as in a lottery. In this paper we propose an alternative way to model whether firms export or...

We develop an econometric model for firm exit, using stochastic dynamic programming (SDP) as a starting point. According to SDP, the value of an operating firm can be written as the sum of (i) the net present value of continuing production if the firm is committed to a future exit date, and (ii)...

In this paper we discuss the costate variable in a stochastic optimal control model of a renewable natural resource, which we call a fishery. The role of the costate variable in deterministic control models has been discussed extensively in the literature. See, for example, Lyon (1999), Clark...

In this paper we provide a stochastic dynamic game formulation of the economics of international environmental agreements on the transnational pollution control when the environmental damage arises from stock pollutant that accumulates, for accumulating pollutants such as CO2 in the atmosphere....

We develop an econometric model for firm exit, using stochastic dynamic programming (SDP) as a starting point. According to SDP, the value of an operating firm can be written as the sum of (i) the net present value of continuing production if the firm is committed to a future exit date, and (ii)...

In NSW the Water Management Act (2000) requires water to be specifically allocated for environmental purposes so as to improve river health. Water sharing plans have been developed that establish extractive and environmental shares to river flows. In unregulated river systems this has resulted...

The management of a water reservoir can be improved thanks to the use of stochastic dynamic programming (SDP) to generate management policies which are efficient with respect to the management objectives (flood protection, water supply for irrigation and hydropower generation, respect of minimum...

We construct an endogenous (Bayesian) learning model with fat-tailed uncertainty on the equilibrium climate sensitivity and solve the model with stochastic dynamic programming. In our model a decision maker updates her belief on the climate sensitivity through temperature observations each time...

Both material sourcing and inventory management are important competitiveness factors, and it is a significant challenge to integrate the two areas. In sourcing, combined strategies using long-term contracts and the spot market received increasing attention recently, typically concentrating on...

In many countries current water-pricing policies are dictated by the sole objective of breaking-even in each period. This results in large withdrawals which are not sustainable in the long-run hence not optimal. In this paper I derive the optimal dynamic water resource management policy of a...