Published in Finance and Stochastics (Volume 22).
Under non-exponential discounting, we develop a dynamic theory for stopping problems in continuous time. Our framework covers discount functions that induce decreasing impatience. Due to the inherent time inconsistency, we look for equilibrium stopping policies, formulated as fixed points of an operator. Under appropriate conditions, fixed-point iterations converge to equilibrium stopping policies.
This iterative approach corresponds to the hierarchy of strategic reasoning in game theory and provides “agent-specific” results: it assigns one specific equilibrium stopping policy to each agent according to her initial behavior. In particular, it leads to a precise mathematical connection between the naive behavior and the sophisticated one. Our theory is illustrated in a real options model.
The cattle sector, both emissions- and land-intensive, represents a great opportunity for mitigation through reforestation. In this paper, we study the efficiency of land-use regulation. Our analytical results indicate that the subsidy is the best alternative policy to emissions tax, provided that the elasticities of land use and emissions to cattle feeding are close. Interestingly,...
The workshop aims to identify the key uncertainties and debates regarding the role of bioenergy in a climate neutral economy, at national and global scales, and the challenges for the design of climate policies. Speakers and precise time will be confirmed soon.