This paper examines the operation of an emissions trading scheme (ETS) in a Cournot oligopoly.  We study the impact of the ETS on industry output, price, costs, emissions, and profits.  In particular, we develop formulae for the number of emissions permits that have to be freely allocated to...

Carbon leakage is a major concern for policymakers involved with environmental initiatives such as the European Union's emissions trading scheme and similar cap-and-trade proposals in the United States, Australia, and elsewhere.  This paper provides a framework for understanding the drives...

This paper presents a simple model of risk-averse banks that face uncertainty over funding conditions in the money market.  It shows when increased funding uncertainty causes interest rates on loans and deposits to rise, while bank lending and bank profitability fall.  It also finds that...

The rate of cost pass-through exceeds 50% under strategic delegation of decision-making to managers with sales revenue contracts - regardless of the number of firms in the industry and demand curvature.  This contrasts sharply with profit-maximization, for which cost pass-through can take on...