This workshop is intended for researchers and doctoral students in economics who are interested in resource and environmental economics. The webinar is led by a team of researchers composed of Geir B. Asheim (Oslo University), Hassan Benchekroun (McGill University), Sophie Bernard (Polytechnique Montréal), Etienne Billette de Villemeur (Université de Lille, UQAM), Robert Cairns (McGill University), Justin Leroux (HEC Montréal), and Charles Séguin (UQAM).

This workshop on natural resource and environmental economics will host Élise Critoph (Université Concordia), and Alexandre Pavlov, PhD student at Université de Montréal.

→ This event will be in English.

• Élise Critoph (Université Concordia)
  Misperceived Outcomes and Biased Beliefs in Conflic

Abstract

We model a repeated contest in which players are subject to cognitive biases. Players with incomplete information about relative fighting ability engage re-peatedly in conflict and update beliefs according to subjective interpretationsof conflict outcomes. Cognitive biases distort players’ interpretations of out-comes and lead to biased beliefs. We propose two non-standard higher-order belief structures and characterize the equilibrium for specific identity-dependent, belief-dependent, and history-dependent cognitive biases.

• Alexandre Pavlov, PhD student at Université de Montréal
  Optimal Carbon Tax with Dynamic Skill Heterogeneity

Abstract 

How should a government design a carbon tax when it is not only concerned by mitigating carbon emissions, but also income redistribution? This article extends a dynamic Mirrlees taxation model, typically used to characterize optimal labor wedges and savings wedges, to study the optimal commodity wedge between two goods, one of which is polluting. First, starting with the basic case where there are two non-polluting goods, I derive the optimal commodity wedge with non-separable preferences in a dynamic environment. Second, in the case where one of the goods is polluting and pollution damages both output and utility, I derive a modified optimal carbon tax whose output damages component remains Pigouvian and whose utility damages component is distorted by the labor wedge as well as the gap in complementarity in utility between each good and labor supply. The optimal carbon tax is fully Pigouvian if the labor wedge is zero, if both goods are equally complementary with labor, or if utility is separable. Moreover, the structure of both the labor wedge and the savings wedge is unaffected by the presence of pollution, suggesting that a properly designed commodity wedge is fully capable of internalizing the externality while respecting the social planner's redistributive goals.