I study firms' belief formation in a new market by examining private electric utilities' beliefs about the future sulfur dioxide allowance price under the Acid Rain Program, the first large-scale cap-and-trade program. Beliefs have important implications for implementing cap-and-trade programs under utility regulation, and change their efficiency relative to taxes.
This paper studies dynamic optimal allocation of R&D expenditure among multiple technologies with correlated successes and uncertain benefits. I apply this framework to R&D in low-carbon energy technologies and draw policy implications. In particular, I find that compared to unconditional subsidies, conditional subsidies can induce efficient private investment while saving on government expenditure.
Evaluating the Paris Agreement’s Mitigation Pledges with Statistical Forecasting Models
with Joseph Aldy and William Pizer
We develop forecasting tools, drawing from the economics and machine learning literatures, to produce country-specific emission forecasts to enable an assessment and comparison of expected mitigation effort by nearly every country participating in the Paris Agreement.
Pledge and Agree: The Path to Cooperation
with Antonio Alonso Arechar and Richard Zeckhauser
We augment a generic public good provision game with a pledge-and-agree structure, and study how this structure facilitates cooperation using theory and experiments.
On Identification in Infinitely Repeated Games
with Jose Miguel Abito, Joao Granja, and Arkadiusz Szydlowski
We derive a sharp identified set for structural parameters of infinitely repeated games without assumptions on equilibrium selection nor additional equilibrium restrictions beyond subgame perfect Nash equilibrium. We then investigate consequences of imposing equilibrium selection assumptions using experimental data.