This paper presents a simple model of auction equilibrium. The distinctive feature of the model is that each bidder may discover the value that the item represents for herself, provided she spends some amount in order to be well informed. For each agent, the decision of whether or not to acquire information depends on a private cost of information acquisition and on her conjectures regarding the behavior of other bidders. A rational expectations equilibrium is characterized.

This paper reviews the impact of the literature in depletable resources and energy economics over the period 1973-98, particularly the period of publication of the Journal of Environmental Economics and Management, 1974-98. A discussion of prominent policy issues in this arena is provided, along with an indication of what academic economics papers have contributed to that debate. This is followed by a citation analysis of contributions in the fields of energy and exhaustible resource economics. For each of these two fields, a list of the top papers in each five year period from 1974 to 1998 is presented, along with a list of the top journals in each decade, based on average citations per article. The top ten cited articles in the fields in the Journal of Environmental Economics and Management are also presented.

The Bush Administration followed its withdrawal from the Kyoto Protocol in March, 2001, by a February, 2002 proposal for unilateral action to reduce US greenhouse gas emissions. The February proposal has been widely criticized for having little content and no teeth. The lack of teeth is clearly a valid criticism. The proposal is unlikely to result in much in the way of changed behavior within the U.S. economy. However, a side benefit is that other actors, particularly states, are attempting to fill the void left by the Federal Government. Those actions are reviewed in this paper. Furthermore, there is an interesting idea within the Bush Proposal, an idea that may warrant further examination at the international level. Although the idea is probably not original, its emphasis by the Bush Administration gives it more prominence that it has had in the past. The idea is to focus on the rate of decline of the emissions intensity of the economy, rather than the total amount of emissions (though the two are obviously related). This has a number of advantages, including dynamic consistency, reduced uncertainty, and potential attractiveness to non-Annex I countries. These characteristics are reviewed in this paper.

This paper presents the results of an experiment on the economics of endogenous information acquisition. The experiment consists of a series of auctions where subjects compete for an object with private but unknown value. The information regarding the value of the object is costly. The experiment tests a theoretical model of bidding equilibrium and analyzes the effects of variations in the parameters (such as information costs and level of uncertainty) on the endogenous variables (such as the proportion of bidders who buy information and the winning bid). Bidders' decisions concerning the purchase of information are closely consistent with a Risk Neutral Rational Expectations model. The winning bids, however, are persistently above the equilibrium predictions suggesting the presence of risk aversion.

There has been considerable controversy over the empirical significance of the theoretically predicted pollution haven hypothesis. Generally, empirical papers have failed to find an effect on industrial location of weaker or stricter environmental regulations. In this paper we find strong confirmation of theoretical predictions. We present a statistical test of the impact of environmental regulations on the capital movement of polluting industries. The empirical study is conducted by examining foreign direct investment (FDI) of several US industries, representing industries with high pollution control costs (chemicals and primary metals) as well as industries with more modest pollution control costs (electrical and non-electrical machinery, transportation equipment, and food products). At issue is the effect of the laxity of environmental regulation on FDI. As laxity is not directly observed, we posit two equations, one for FDI determination and one for pollutant emissions, a variable positively correlated with the unobserved variable. We use aggregate national sulfur emissions as the pollutant. Using instruments for the unobserved variable, the statistical results show that the laxity of environmental regulations in a host country is a significant determinant of FDI from the US for heavily polluting industries and is insignificant for less polluting industries.

This paper presents a simple model of auction equilibrium. The distinctive feature of the model is that each bidder may discover the value that the item represents for herself, provided she spends some amount in order to be well informed. For each agent, the decision of whether or not to acquire information depends on a private cost of information acquisition and on her conjectures regarding the behavior of other bidders. A rational expectations equilibrium is characterized.

A standard assumption in integrated assessment models of climate change is that population and productivity are growing, but at a decreasing rate. We explore the signifcance of the assumption of population and productivity growth for greenhouse gas abatement. After all, there has been no long run slow down in the growth of productivity over the past few centuries, and the rate of population growth has actually been increasing for the past 19 centuries. Even if either of these growth rates were expected to slow, by how much is subject to great uncertainty. We show computationally that such continued growth greatly increases the severity of climate change. Indeed we nd that climate change is a problem in large part caused by exogenous population and productivity growth. Rapid reductions in growth make climate change a small problem; smaller reductions in growth imply climate change is a very serious problem indeed. Analogously, reductions in the growth rate of population can be effective in controlling climate change.

This dissertation considers the theoretical aspects of countries' incentives to cooperate on environmental good provision and resolve free-rider incentives, in particular with the formation of an International Environmental Agreement (IEA).

In the first chapter, "International Environmental Agreements with Cooperative Research & Development," I consider how allowing countries to invest in abatement cost-reducing R&D to make pollution abatement cheaper can change incentives to participate in the IEA. Since introducing R&D directly changes the incentives to abate pollution, I also consider two different cooperation regimes: pollution abatement and R&D investment can either be provided independently with two separate agreements, or countries may choose to negotiate provision of both goods in a single, joint agreement. I show that when the joint treaty achieves a high enough level of participation, which implies a threshold amount of R&D investment, even non-signatories find it individually rational to abate pollution. That is, the resulting technology lowers the cost of pollution abatement enough so that the behavior of non-signatories tips toward the full cooperative outcome for pollution abatement, eliminating the incentive to free-ride. In this case, a joint agreement for cooperation on the environment and R&D increases pollution abatement and aggregate welfare.

Following a short chapter reviewing the weakly renegotiation-proof equilibrium, the third chapter, "Sustaining Full Cooperation in an International Environmental Agreement through Learning and R&D," analyzes the effects of learning and R&D on an IEA by assuming that countries are uncertain regarding the benefits of pollution abatement. This paper shows that uncertainty improves the likelihood of obtaining a Pareto-optimal IEA, which is constructed as a weakly renegotiation-proof equilibrium in an infinitely repeated game, by allowing for a wider range of discount factors to sustain cooperation than in the no uncertainty case. Finally, this paper analyzes whether or not new knowledge gained through R&D is beneficial for sustaining cooperation and finds that achieving the Pareto-optimal IEA tends to be less likely if R&D reduces uncertainty. The mechanism driving these results is that uncertainty leads to a higher expected net loss from punishment to a defecting country, which implies that deviations are better deterred under uncertainty than with no uncertainty.

In the fourth chapter, titled "Renegotiation-Proof International Environmental Agreements with Social Preferences," I turn from purely self-interested agents and examine how social preferences, in particular, preferences for equity and efficiency, affect the likelihood of cooperation among countries to abate pollution when compared to the case of agents that are only self-interested. It is shown that an IEA with any level of cooperation, including full cooperation, exists as a weakly renegotiation-proof equilibrium for high enough discount factors. As social preferences grow stronger, the range of discount factors that can support cooperation increases, which implies that cooperation is more likely under social preferences. The key effect driving this result is that social preferences cause the net loss from the punishment of a defecting country to increase, which better deters deviations from cooperation.

This paper concerns computational models in environmental economics and policy, particularly so-called integrated assessment models. For the most part, such models are simply extensions of standard neoclassical growth models, extended by including the environment and pollution generation. We review the structure of integrated assessment models, distinguishing between finite horizon and infinite horizon models, both deterministic and stochastic. We present a new solution algorithm for infinite horizon integrated assessment models, relying on a neural net approximation of the value function within an iterative version of the Bellman equation.