Michele Moretto

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We examine the effect of competition on investment decisions in an industry in which each firm has a completely irreversible investment opportunity and the product market has positive externalities for a small market size and negative externalities for a large market size. In the latter case, which corresponds to the traditional competitive industries,(More)
To avoid the extremely high profit levels found in recent experience of public utilities' regulation, some regulators have introduced a profit-sharing (PS) rule that revises prices to the benefit of consumers. However, in order to be successful, a PS rule should satisfy appropriate incentive conditions. In this paper, we study the incentive properties of a(More)
Which impact does ecological uncertainty have on agents' decisions concerning domestic emissions abatement, physical investments, and R&D expenditures? How sensitive are the answers to these questions when we move from exogenous to endogenous technical change? To investigate these issues we modify the ETC-RICE model described in Buonanno, Carraro,(More)
We analyse the effects of different regulatory schemes (price cap and profit sharing) on a firm's investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not delay a firm's start-up investment relative to a pure price cap scheme. Profit sharing does not necessarily affect total investment either, if(More)
Quality of health care is the product of several factors as the literature has long recognized. In this article we focus on the relationship between quality and investment in health technology by analysing the optimal investment decision in a new health care technology of a representative hospital that maximises its surplus in an uncertain environment. The(More)
In this paper stochastic dynamic programming is used to investigate habitat conservation by a multitude of landholders under uncertainty about the value of environmental services and irreversible development. We study land conversion under competition on the market for agricultural products when voluntary and mandatory measures are combined by the(More)
SUMMARY The government of common agricultural and forestry land is a topic that is currently enjoying a revival of interest. Many local communities have shown the ability to pursue sustainable use of natural resources thanks to their self-governed authorities. In this context the relationship between public and private interest which is established in use(More)