We address the optimal timing of investment in gas pipelines when the demand for gas is stochastic. We will show that this is a problem that can be solved in theory, but the practical solution depends on functions and parameters that are either subjective or cannot be estimated. We will then...

This paper addresses the timing of optimal investment in LPG pipelines when the goal is to maximize consumer surplus less private cost and social of transporting LPG. The loss of consumer surplus is small. The important elements are the private cost of transporting LPG and the congestion created...

At the present time, solar power is not a competitive fuel for supplying electricity to the grid in the United States. However, an economic model developed by the U.S. National Renewable Energy Laboratory (NREL) forecasts that solar power production costs could drop twenty percent every time...

It has been argued that increased life expectancy raises the rate of return on education, causing a rise in the investment in education followed by an increase in lifetime labor supply. Empirical evidence of these relations is rather weak. Building on a lifecycle model with uncertain longevity,...

Regular annuities provide payment for the duration of an owner's life-time. Period-Certain annuities provide additional payment after death to adesignated beneficiary provided the insured dies within a certain period after annuitization. It has been argued that the bequest option offered by the...

Individuals behave with choice probabilities defined by a multinomial logit (MNL) probability distribution over a finite number of alternatives which includes utilities as parameters. The salient feature of the model is that probabilities depend on the choice-set, or domain. Expanding the...

This paper presents a model in which government may affect outcomes by manipulating individual choice probabilities through the design of the domain of choice or the use of fiscal instruments. Such manipulations are ineffective when individuals are perfectly rational, provided all alternatives...

With varying aptitudes in different occupations,individuals typically maximize income by specializing in one occupation which promises the highest income. Due to numerous labor market imperfections anduncertainties, the choice of best occupation is accomplished with only partial success. We...

This paper extends the standard model of optimum commodity taxation (Ramsey (1927)and Diamond-Mirrlees (1971)) to a competitive economy in which markets are inefficient due to asymmetric information. Insurance markets are prime examples: consumers impose varying costs on suppliers but firms...

When individuals choose from whatever alternatives available to them the one that maximizes their utility then it is always desirable that the government provide them with as many alternatives as possible. Individuals, however, do not always choose what is best for them and their mistakes may be...