infonet-economy

In this paper we use the Cox, Ingersoll, and Ross (1985b) single-factor, term structure model and extend it to the pricing of American default-free bond puts. We provide a quasi-analytical formula for these option prices based on recently established mathematical results for Bessel bridges, coupled with the optimal stopping time method. We extend our results to another interest rate...

Environmental accidents such as extensive radioactive or chemical contamination can have more serious consequences for a population than any other kind of accidents known before. Owing to the serious consequences and the high number of people who may be affected, the selection of the best countermeasures to ameliorate the imminent impact is very difficult and the political...

It is proved that for public goods with zero income effects (also called Ziff public goods) tax evasion does not affect the optimal level of public expenditure. Further examples show that, in general, tax evasion may lead to less but also to more public expenditure.