We analyze the efficient subsidy for durable good technologies. We theoretically demonstrate that a policymaker faces a tension between intertemporally price discriminating by designing a subsidy that increases over time and taking advantage of future technological progress by designing a...

I show that persistent underconfidence and overconfidence each arise from the combination of Bayesian learning about one's own abilities and rationally choosing to exert more effort when more confident. If an agent believes that greater effort reliably improves outcomes, then the agent learns...

We analyze the efficient subsidy for durable good technologies. We theoretically demonstrate that a policymaker faces a tension between intertemporally price discriminating by designing a subsidy that increases over time and taking advantage of future technological progress by designing a...