Pollutant Abatement Investment under Ambiguity in a Two-Period Model

抄録

This paper investigates a pollutant abatement investment under ambiguity in a two-period setting. We consider a representative consumer and firm in an economy and formulate the social welfare maximization problem. Then we numerically derive the optimal level of abatement investment. Furthermore, we analyze the comparative static effects of the model parameters and find increased ambiguity encourages pollutant abatement investment.