This paper studies irreversible investment decisions of a risl neutral regulated firm which has costs of production and of investment known with certainty and constant over time, but subject to uncertainty on exogenous shocks to demand. These shocks follow a geometric Brownian motion. No...

We show that whether observing technological choices made by the competitors is possible or not has significant impact on the equilibrium technological configurations. Depending upon the industry characteristics, the strategic value of technological flexibility may be either positive or...

This paper makes some steps toward a formal political economy of environmental policy. Economists' quasi-unanimous preferences for sophisticated incentive regulation is reconsidered.

The paper considers parametric and nonparametric estimation of the distribution function F. Issues of particular interest are the identification properties of this model and, in the nonparametric case, the speed of convergence of the estimator F. The latter depends upon the properties of the...

This paper analyzes the relationship between a central banker and his partisan political principals. Incentive contracts for central bankers are not designed by social planners but by partisan political principals who obey to their own incentives.

We modify a standard Baron-Myerson model by assuming that, instead of knowing the cost of nature, the agent has to incur a cost 'g' to learn it.Under these conditions, the principal will offer contracts that, dependingon the value of 'g', try to induce the agent to gather or not to gather...

We analyze risk sensitive incentive compatible deposit insurance in the presence of private information when the market value of deposit insurance can be determined using Merton's (1977, 3-11) formula.

We study the efficient mechanism for downsizing the public sector focusing on adverse selection in productive efficiency. Each agent is assumed to have two type-dependent reservation utilities: the status quo utility in the public sector before downsizing and the utility that he expects to...