We examine how emission taxes should be refunded to firms in order to create optimal incentives to invest in cleaner technologies. Since refunds cannot be made dependent on investments, an alternative way is to give back taxes to firms according to market shares. We show that universally...

The paper analyzes the relationship between CO2 mitigation policy and promotion policies designed to deploy renewable energy sources for electricity production (RES-E). If an emission cap is the only policy target, an optimal mix consisting of high and low carbon use of fossil fuels, deployment...

The idea that environmental trade policy may be used to achieve competitive advantage in international markets has important implications for the way we conceive tree-trade. This paper reconsiders the issue of strategic environmental policy in a model that makes explicit the vertical structure...

Building on the epidemiological SIR model we present an economic model with heterogeneous individuals deriving utility from social contacts creating infection risks. Focusing on social distancing of individuals susceptible to an infection we theoretically analyze the gap between private and...

We characterize 'Games of Altruistic Cooperation' as a class of games in which cooperation leaves the individual and the group of decision-makers worse off than defection, but favors individuals outside the group. An example is climate change mitigation. In this context, we experimentally...

We examine how a shift of bargaining power within households operating in a competitive market environment affects equilibrium allocation and welfare. If price effects are sufficiently small, then typically an individual benefits from an increase of bargaining power, necessarily to the detriment...

In the third decade of the 21st century, digitization, global events, challenges from authoritarian states, and difficulties of particular democracies to function properly confront democracy with a new series of challenges and opportunities that will force it to reinvent itself. The last decades...

We present a model of elections in which interest group donations allow candidates to shift policy positions. We show that if donations were prohibited, then a unique equilibrium regarding the platform choices of candidates would exist. Our game with financing of political campaigns exhibits two...

In this paper we examine the potential of democratic constitutions for the provision of divisible public goods in a large economy. Our main insights are as follows: When aggregate shocks are absent, the combination of the following rules yields first-best allocations: a supermajority rule, equal...

When politicians have lower discount factors than voters, democratic elections cannot sufficiently motivate politicians to undertake long-term socially beneficial projects. When politicians can offer incentive contracts which become effective upon reelection, the hierarchy of contracts and...