This paper examines pollution regulation in a dynamic setting with complete information. We show that tradeable pollution permits may not achieve the social optimum even when the permit market is perfectly competitive. The reason is that the optimal tradeable permits regulation will typically be...

This paper has three goals. First, we demonstrate that standard arguments and methods from production and duality analysis can be used to provide a comprehensive and general treatment of the value of information for a risk-averse firm with expected-utility (linear-in-probabilities) preferences...

Analysis of the equity premium puzzle has focused on private--sector capital markets. However, the existence of an anomalous equity premium raises important issues in the evaluation of public--sector investment projects. These issues are explored below. We begin by formalizing the argument that...

A decomposition of input adjustments for stochastic technologies is developed and applied to the case of actuarially fair production insurance. The decomposition consists of a pure-risk effect and an expansion effect which are analogous to the Hicks-Allen decomposition familiar from consumer...

Recently, a number of generalizations of the expected utility (EU) model have been proposed. In order to make such generalizations useful, it is necessary that they should yield sharp comparative static results, like those obtained using EU theory. In this article, rank dependent expected...

Intertemporal choice has obvious similarities with choice under uncertainty. However, because of technical difficulties in mapping results between the two domains, theoretical analysis of these topics has proceeded independently. In this article, we show that, using Rank Dependent Expected...

This article is a brief outline of the implications of state-contingent production for the self-insurance problem. A general state-contingent approach to choice and production under uncertainty is presented. Upper and lower bounds for willingness-to-pay for reductions in ambient risk are...

This paper summarizes and synthesizes recent developments in the state-contingent theory of production under uncertainty presented by Chambers and Quiggin (2000) with a particular focus on the case of generalized expected utility preferences. The problem of the risk-averse firm under price and...

Excessive volatility of asset prices like that generated in the 'noise trader' model of De Long et al. is one factor that plausibly might contribute to an explanation of the equity premium. We extend the De Long et al. model to allow for privatization of publicly-owned assets and assess the...

Social democratic governments in Australia and New Zealand adopted policies of radical free-market reform, including financial deregulation, privatization, and public-sector reform in the 1980s. Because of the absence of institutional obstacles to government action, reform was faster and more...