We analyze how public debt evolves when successive policymakers have different policy goals and cannot make credible commitments about their future policies. We consider several cases to be able to quantify the effects of imperfect commitment, political disagreement and political turnover. Imperfect commitment drives the long-run level of debt to zero. With political disagreement debt is a size...

The paper analyses the economic payoffs from marine reserves using a stochastic optimal control model. The results show that even if the reserve and harvested populations face the same negative shocks, harvesting is optimal, the population is persistent and with no uncertainty over current stock size, a reserve can increase resource rents. Using actual fishery data we demonstrate that the payof...

One of the most important nutrients we get from animal foods is vitamin B12. The vitamin is also the largest known biomolecule and the only nutrient with a stable carbon-metal bond. One molecule of cobalt lies at the center of each B12 molecule, which has the approximate (and awesome!) chemical formula of C61-64H84-90N14O13-14PCo. Isolated B12 is a crystalline compound with a bright red color, ...

When a firm starts a new monthly customer account, they typically will bill new customers one month from the start of the new account. However, if they have the opportunity to choose the date of the first bill, this results in missing an opportunity for additional profit. This paper calculates the initial billing period that maximizes the net present value to the firm, and calculates the net ga...

The paper studies a repeated contest when contestants are uncertain about their true relative abilities. When ability and effort are complements, a favorable belief about one’s own ability stimulates effort and increases the likelihood of success. Success, in turn, reinforces favorable beliefs. We show that this implies that with positive probability players fail to learn their true relative ab...

This paper studies discounted stochastic games with perfect or imperfect public monitoring and the opportunity to conduct voluntary monetary transfers. We show that for all discount factors every public perfect equilibrium payoff can be implemented with a simple class of equilibria that have a stationary structure on the equilibrium path and optimal penal codes with a stick and carrot structure...

The purpose of this paper is to analyse the impacts of adaptation to a falling health state on the demand for health and medical care. This is done by integrating adaptation processes in the pure consumption model of Grossman. We also modify the model in another direction by introducing an uncertain lifetime. Model simulations show that adaptation affects the health variables by lowering the in...

We present a basic exogenous growth model with two consumption goods that differ as regards their contributions to environmental pollution. Allowing for habit formation of the polluting good, we show under which conditions habit formation raises the consumption of the clean good relative to the dirty one in the competitive economy. Further, we demonstrate when habit formation generates a lower ...

Increased public awareness of resource management issues and new attitudes toward resource conservation have led to great interest in the subject of the apposite use and management of natural and environmental resources in the American West. This paper analyzes this subject from an interdisciplinary ecological-economic perspective. Four salient issues concerning the study of the West’s ecologic...

This paper studies a discrete-time financial model with or without transaction costs, in which only partial information can be observed. Partial information model means that the investors in the market can observe no more information except the stock prices. This model has been investigated in Karatzas and Xue (1991), Lakner (1995, 1998), and Cheng (2004), etc. Applying stochastic filtering the...