Oil companies often announce revised estimates of their reserves. This indicates that stock uncertainty is a prevalent feature of natural resource industries. In this paper we consider the multi-deposit case where resource extraction produces information about the size of reserves. We show that...

We derive emission tax rules that take into account (i) the rent-shifting argument, (ii) the need to mitigate transboundary pollution, (iii) correction for restrictive oligopoly output, and (iv) correction for domestic coordination of outputs. We show that trade liberalization does not...

We propose a simple model of a partially integrated industry which explicitly takes into account persistent production cost differences across upstream firms, such as one might observe in natural resource industries. The model allows us to highlight the respective roles of strategic...

We model the non-cooperative choice of levels of inputs whose current usage results in the future decline in their effectiveness. We show that there are multiple equilibria that are Pareto rankable. Compared with the social optimum, lack of cooperation implies excessive use of input, leading to...

We show that in some leader-follower games, a steady-state equilibrium in quantities may exist only with non-stationary shadow prices. We call this type of equilibrium a semi-stationary steady state. Conclusions that are drawn on the assumption that a steady-state equilibrium has stationary...

We show that goal setting influences effort level, and that an appropriately set goal can enhance performance. We derive an inverted U-shaped relationship between the goal and the effort level. We then extend the model to a two-period framework, and demonstrate that the goal level set for period...

We show that the famous neutrality result in the theory of public good contributions (Warr, Kemp, Bergstrom, Blume and Varian) depends crucially on the assumption that agents do not take into account the effect of their public good contribution decisions on the relative price of the private...

We show that when polluting firms are Cournot oligopolists, they may have an incentive to use the market of pollution permits as a means of indirectly coordinating their outputs. If firms are initially identical, trade in pollution permits may result in an asymmetric oligopoly. The case where...

This paper examines the endogenous determination of the choice between an entrepreneur and a pure lender. The model relies on three key factors: risk aversion, wealth distribution, and moral hazard. We show that, under certain assumptions, only agents in the middle range of the wealth...

We characterize optimal firm-specific emission tax rates, and optimal firm-specific emission standards, and provide intuitive explanation on differential treatments. We show that there is a unified framework for deriving firm-specific policy measures. When firms are identical, the optimal policy...