The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity
Recent literature showed that the choice between a price or quantity control depends, in part, on the dynamic structure of cost uncertainty. Temporary shocks to abatement cost favors the use of a price control, while permanent shocks favor a quantity control. Unfortunately, the importance of this as...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Springer-Verlag
2014
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| Online Access: | http://hdl.handle.net/1721.1/85639 https://orcid.org/0000-0001-9313-4865 |
| _version_ | 1826206254401323008 |
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| author | Parsons, John E. Taschini, Luca |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Parsons, John E. Taschini, Luca |
| author_sort | Parsons, John E. |
| collection | MIT |
| description | Recent literature showed that the choice between a price or quantity control depends, in part, on the dynamic structure of cost uncertainty. Temporary shocks to abatement cost favors the use of a price control, while permanent shocks favor a quantity control. Unfortunately, the importance of this assumption to the optimal choice has not yet received wide attention among economists. We analyze the regulatory problem in an alternative setting and reproduce these results. Our contribution is the simplicity of the model and the accessibility of the results, which reinforce the critical role played by the assumed structure of uncertainty. |
| first_indexed | 2024-09-23T13:26:32Z |
| format | Article |
| id | mit-1721.1/85639 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T13:26:32Z |
| publishDate | 2014 |
| publisher | Springer-Verlag |
| record_format | dspace |
| spelling | mit-1721.1/856392022-10-01T15:17:25Z The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity Parsons, John E. Taschini, Luca Sloan School of Management Parsons, John E. Recent literature showed that the choice between a price or quantity control depends, in part, on the dynamic structure of cost uncertainty. Temporary shocks to abatement cost favors the use of a price control, while permanent shocks favor a quantity control. Unfortunately, the importance of this assumption to the optimal choice has not yet received wide attention among economists. We analyze the regulatory problem in an alternative setting and reproduce these results. Our contribution is the simplicity of the model and the accessibility of the results, which reinforce the critical role played by the assumed structure of uncertainty. MIT Center for Energy and Environmental Policy Research Massachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change Doris Duke Charitable Foundation 2014-03-14T17:50:34Z 2014-03-14T17:50:34Z 2012-11 2012-10 Article http://purl.org/eprint/type/JournalArticle 0924-6460 1573-1502 http://hdl.handle.net/1721.1/85639 Parsons, John E., and Luca Taschini. “The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity.” Environmental and Resource Economics 55.1 (2013): 71–86. https://orcid.org/0000-0001-9313-4865 en_US http://dx.doi.org/10.1007/s10640-012-9614-y Environmental and Resource Economics Creative Commons Attribution http://creativecommons.org/licenses/by/3.0/ application/pdf Springer-Verlag Springer |
| spellingShingle | Parsons, John E. Taschini, Luca The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity |
| title | The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity |
| title_full | The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity |
| title_fullStr | The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity |
| title_full_unstemmed | The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity |
| title_short | The Role of Stocks and Shocks Concepts in the Debate Over Price Versus Quantity |
| title_sort | role of stocks and shocks concepts in the debate over price versus quantity |
| url | http://hdl.handle.net/1721.1/85639 https://orcid.org/0000-0001-9313-4865 |
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