The Zonal and Seasonal CO2 Marginal Emissions Factors for the Italian Power Market

Environmental and Resource Economics - This paper estimates the seasonal and zonal $${\mathrm{CO}}_{2}$$ marginal emissions factors (MEFs) from electricity production in the Italian electricity...     

PROBABILITY AND UNCERTAINTY: THE LEGACY OF GEORGESCU‐ROEGEN

In this paper we consider Georgescu‐Roegen's approach to uncertainty, showing that his characterization of expectations cannot be reduced to any probabilistic decision‐making model. Drawing upon Georgescu‐Roegen's lesson a lexicographical utility function is proposed and analysed in the mark of his own peculiar scientific methodology. It is demonstrated that such a formulation can be useful in solving the usual failure of the expected utility model, such as the Ellsberg paradoxes. The epistemic limits of our re‐construction are considered.     

COURNOT OLIGOPOLY UNDER STRATEGIC UNCERTAINTY WITH OPTIMISTIC AND PESSIMISTIC FIRMS

In this paper the Cournot oligopoly under uncertainty is analyzed by means of the Choquet Expected Utility (CEU) theory. Firms are supposed to be either optimistic (CEU maximizers who hold concave capacities) or pessimistic (convex capacities). Reaction functions, equilibrium quantities, prices and profits are derived and compared for different degrees of uncertainty and uncertainty attitude (optimism or pessimism). It is proved that optimists make higher profits than pessimists whenever uncertainty is sufficiently low. If it is high just optimists participate in the market making losses. An interpretation of the main results in terms of the market's level of maturity is provided.     

A Rational Explanation for the Redistribution Paradox. Theory and Empirical Evidence

The paper provides a rational explanation for the redistribution paradox, whereby low‐income individuals seeking more social security prefer a lower taxation although this might imply a reduced welfare. A simple model of tax transfer and redistribution is presented, with various agents facing two different unemployment probabilities. We investigate how the preferred tax rate changes with the probability of being unemployed. We show that, when the probability of unemployment for the less‐skilled correlates negatively with that of the highly skilled, the relationship with the tax rate is not monotonic and depends on the level of risk aversion. This theoretical framework is confirmed in an empirical investigation based on microeconomic data, and in a robustness test based on macroeconomic data.     

Precautionary principle as a rule of choice with optimism on windfall gains and pessimism on catastrophic losses

The paper investigates a decision-making process involving both risk and ambiguity. Differently from existing papers [Basili, M., Chateauneuf, A., Fontini, F., 2005. Choices under ambiguity with familiar and unfamiliar outcomes, Theory and Decision 58, 195-207; Chichilnisky, G., 2000. Axiomatic approach to choice under uncertainty with catastrophic risks. Resources and Energy Economics 22, 221-231; Chichilnisky, G., 2002. In: El-Shaarawi, A.,H., Piegorsch, W.W. (Eds.), Catastropic Risks. Encyclopedia of Environmetrics, vol. 1. John Wiley & Sons, Ltd, Chichester, UK, pp. 274-279], we assume that, in a Choquet Expected Utility framework, the decision-maker is pessimistic with respect to unfamiliar (catastrophic) losses, optimistic with respect to unfamiliar (windfall) gains and ambiguity-neutral with respect to the familiar world. A representation of the decision-maker's choice is obtained that mimics the Restricted Bayes-Hurwicz Criterion. In this way a characterization of the Precautionary Principle is introduced for decision-making processes under ambiguity with catastrophic losses and/or windfall gains.