This paper builds a dynamic forward-looking model describing the approximate ten-year cattle cycle. The theoretical model improves on existing models by (1) allowing cow-calf operators to make investment decisions on both the cow and calf margins, (2) formally recognizing the age distribution of the capital stock, and (3) considering a mixed scheme of rational and naive expectations. The model....

We consider a group of mean-variance investors with mimicking desire such that each investor is willing to penalize deviations of his portfolio composition from compositions of other group members. Penalizing norm constraints are already applied for statistical improvement of Markowitz portfolio procedure in order to cope with estimation risk. We relate these penalties to individuals’ wish of s...

We show that incentive efficient allocations in economies with adverse selection and moral hazard can be determined as optimal solutions to a linear programming problem and we use duality theory to obtain a complete characterization of the optima. Our dual analysis identifies welfare effects associated with the incentives of the agents to truthfully reveal their private information. Because the...

In this paper we develop a bioeconomic model of timber harvesting that includes dynamic interactions between mountain pine beetle (MPB) and a lodgepole pine forest with a disaggregated size structure. The model is used to investigate the consequences of alternative public management strategies on forest dynamics in the presence of MPB outbreaks. Management practices similar to those commonly pr...

We characterize the optimal dynamic price policy of a monopolist who faces “viscous” demand for its services. Demand is viscous if it adjusts relatively slowly to price changes. We show that with the optimal policy the monopolist stops short of achieving 100% market penetration, even when all of the consumers have the same long-run willingness to pay for the service. Furthermore, for certain pa...

This paper considers a general class of discounted Markov stochastic games characterized by multidimensional state and action spaces with an order structure, and one-period rewards and state transitions satisfying some complementarity and monotonicity conditions. Existence of pure-strategy Markov (Markov-stationary) equilibria for the …nite (in…nite) horizon game, with nondecreasing –and possib...

We contribute to the understanding of marine reserves and the management of renewable resources with uncertainty. We show that the key benefit of reserves is that they increase resilience, or the speed it takes a population to return to a former state following a negative shock. Resilience can also increase resource rents even with optimal harvesting. We contradict the accepted wisdom that rese...

This paper studies the dynamics of fundamental research. We develop a simple model where researchers allocate their effort between improving existing fields and inventing new ones. A key assumption is that scientists derive utility from recognition from other scientists. We show that the economy can be either in a regime where new fields are constantly invented, and then converges to a steady s...

This paper provides a uni…ed framework to study how capital adjustment costs and uncertainty a¤ect investment dynamics and capital accumulation. It considers an ongoing …rm with stochastic downward sloping demand curve and facing three possible forms of adjustment costs: complete or partial irreversibility, …xed costs of undertaking any investment and the traditional quadratic adjustment costs....

Concern over the distributional effects of policies which induce changes in peer group structure, or ‘associational redistributions’ (Durlauf, 1996c), motivates a substantial body of theoretical and empirical research in economics, sociology, psychology, and education. A growing collection of econometric methods for characterizing the effects of such policies are now available. This chapter sur...