When a monopolistic hydro producer interacts with a competitive thermal fringe, the short-run revenue function of the hydro monopolist is non-concave. This implies that even if the demand function is stationary, equilibrium prices may fluctuate through the year. For given capacities, both hydro...

The bulk of acid depositions, which have harmful effects on the environment, are caused by foreign emissions in many European countries. Therefore, if some countries emit more acids, one cannot be sure that countries that emit less will benefit from reduced acid depositions. However, numerical...

“Green” consumers appear to accept individual responsibility for public good provision. The propensity to take such responsibility may depend on beliefs about others’ behavior, even for consumers motivated by internalized moral norms, not by social sanctions. This can produce multiple...

We consider a framework for analyzing panel data characterized by: (i) a system of regressions equations, (ii) random individual heterogeneity in both intercepts and slope coefficients, and (iii) unbalanced panel data, i.e., panel data where the individual time series have unequal length. A...

A Box-Cox structural utility model is estimated on tax evasion survey data and it is shown that this model gives a better representation of individual utility maximizing behavior than a flexible model, represented by a polynomial of degree 3. It is found that an overall wage increase has a...

This paper shows why regressing the realised rates of depreciation within the exchange rate band on a given information set and conditional on (ex-post) actual no-realignment (à la drift adjustment) still encounters a Peso Problem. Such a procedure generally gives inconsistent estimates. The...

Policies to reduce emissions of greenhouse gases such as CO2 will affect the rate and pattern of technological change in alternative energy resources and other production processes. Imperfections in markets for non-polluting technologies imply that a decentralised economy does not deliver a...

Proper consistency is defined by the properties that each player takes all opponent strategies into account (is cautious) and deems one opponent strategy to be infinitely more likely than another if the opponent prefers the one to the other (respects preferences). When there is common certain...