This paper generalizes corrective taxation to settings with costly administration and many externalities. If administrative cost varies only with the pollution generating activity, the optimal tax is equal to the externality added to the marginal administrative cost, and the private market fully...

Enrollment in school choice programs is growing, so is overall support for school choice. Many have analyzed what demographic characteristics impact attitudes towards school choice. This paper adds to the literature by exploring the interaction between personal decisions regarding school choice...

We study dynamic moral hazard with symmetric ex ante uncertainty about the difficulty of the job. The principal and agent update their beliefs about the difficulty as they observe output. Effort is private and the principal can only offer spot contracts. The agent has an additional incentive to...

We consider a hybrid model for stocks and interest rates as it is proposed by GDV (Gesamtverband der Deutschen Versicherungswirtschaft) to assign market consistent values to the technical provisions of german life insurance companies. In this model, stock prices are modeled with a Black Scholes...

In this electricity market design paper, we investigate the value of flexibility of conventional power plants in today's electricity markets, and whether the current market conditions suffice for recouping the power plant operator's investments and expenses for enhanced flexibility. We find that...

The lessons I (Gana 2014) have learned from the vivid contrast between the mean and median fair values (Hayden and Platt 2009) of the game (Bernoulli 1738) underlying the St. Petersburg Paradox (SPP) are applied, by implicating the median, to modify two unidimensional poverty indices: the Sen...

In this study we introduce a new stochastic choice rule that categorizes objects in order to simplify the choice procedure. At any given trial, the decision maker deliberately randomizes over mental categories and chooses the best item according to her utility function within the realized...

Variable annuities contain complex guarantees, whose fair market value cannot be calculated in closed form. To value the guarantees, insurance companies rely heavily on Monte Carlo simulation, which is extremely computationally demanding for large portfolios of variable annuity policies....