This paper discusses theories that can explain the zig-zags of oil prices in general and in particular the recent jump. More precisely, the following explanations are discussed: Homo oeconomicus (pure profit maximization if demand is dynamic and convex), price reaction function (price increases...

This paper investigates consumers' decisions about a (single and lumpy) conservation project accounting for uncertainty and expectations (rational versus myopic). Rational expectations take into account that the profitability of individual conservation measures will affect fuel prices (here set...

This paper explores the conjecture whether the Leviathan motive of politicians--to tax for the purpose of raising revenues rather than for benevolent, Pigovian motives--helps to overcome the inefficiency of international pollution spillovers such as in the cases of acid rain and global warming....

The politicians' reactions to changing circumstances appear often sluggish. The decisions about the construction of a nuclear reprocessing plant at Wackersdorf, Germany, provide a recent example. Reprivatization of the company led to an immediate cancellation of the project due to its lack of...

This paper considers regulating a vertically integrated utility under asymmetric information about efficiency gains due to integration. The benchmark case--benevolent regulation--implies a divestiture of a technically efficient integration, unless the cost savings due to integrating are...