We study how environmental regulation in the form of a cap on aggregate emissions from a fossil fuel (e.g., coal) interacts with the arrival of a clean substitute (e.g., solar energy). The cost of the substitute is assumed to decrease with cumulative use because of learning-by-doing. We show...

Can nuclear power, which is carbon free, solve the global warming problem? It is a tough sell in the advanced countries, but many new nuclear power plants are under construction in the developing world. We develop an empirical Hotelling model that accounts for the limited stock of uranium,...

The Kyoto Protocol is now a legally binding treaty signed by 141 nations, although not by major polluting nations such as the United States, China and India. Can nuclear power, which is carbon free, save Kyoto and solve the global warming problem? Nuclear energy is a tough sell in the developed...

Environmental agreements such as the Kyoto Protocol aim to stabilize the amount of carbon in the atmosphere, which is mainly caused by the burning of nonrenewable resources such as coal. We characterize the solution to the textbook Hotelling model when there is a ceiling on the stock of...

We model capacity-building investments in a homogeneous product duopoly facing uncertain demand growth. Capacity building is achieved through the addition of production units that are durable and lumpy and whose cost is irreversible. While building their capacity over time, firms compete à la...

We study in this paper how technological flexibility choices and equilibrium configurations depend on industry characteristics (demand function and cost parameters specific to the multiproduct flexible technology and to the product dedicated technologies) and on the observability conditions of...

We study the interactions between debt/equity financing and strategic (duopoly) technological flexibility choices of firms facing costly bankruptcy. We show that a firm's level of debt financing or financial hardship is an important determinant of the level and type of investment it chooses,...