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| Karp, Larry S.. |
| The use of a constant discount rate to study long-lived environmental problems such as global warming has two disadvantages: the prescribed policy is sensitive to the discount rate, and with moderate discount rates, large future damages have almost no effect on current decisions. Time-consistent quasi-hyperbolic discounting alleviates both of these modeling problems, and is a plausible description of how people think about the future. We analyze the time-consistent Markov Perfect equilibrium in a general model with a stock pollutant. The solution to the linear-quadratic specialization illustrates the role of hyperbolic discounting in a model of global warming. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Stock pollutant; Hyperbolic discounting; Global warming; Time consistency; Environmental Economics and Policy; D83; L50. |
| Ano: 2004 |
URL: http://purl.umn.edu/25069 |
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| Gervais, Jean-Philippe; Lapan, Harvey E.. |
| This paper investigates the strategic behavior between countries that have purchasing power on the world market for a certain good. Tariffs and quotas are not equivalent protection instruments in this oligopsonistic market. Policy active importers would be better off by colluding and setting their trade instrument cooperatively. In a non-cooperative setting, if production decisions occur before consumption decisions, the ex-ante optimal policy is not time consistent because the ex-post elasticity of the residual foreign export supply curve is lower than the ex-ante elasticity. However, we show that the importers' inability to irrevocably commit to their trade instrument may be welfare superior to the precommitment solution. The negative welfare... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Precommitment; Time consistency; Optimal tariff and quota; Oligopsony; International Relations/Trade; F13; Q17; D4. |
| Ano: 1998 |
URL: http://purl.umn.edu/18239 |
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