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Climate change poses significant challenges to the stability of hydropower systems, and the increased frequency of extreme weather events due to global warming further exacerbates these challenges. To reduce the climate vulnerability of hydropower systems, this study assessed the impact of temperature and precipitation variations on reservoir water level dynamics. Using daily water level data from 17 reservoirs in Sichuan Province, China, this study enhanced a benchmark model by incorporating nonlinear functions that more realistically represent actual conditions than linear functions. Within a linear regression framework, this study incorporated quadratic terms for temperature and precipitation. This constructed a model that accurately quantifies the relationship between climatic factors and the first-order difference of reservoir water level. The results demonstrate that both temperature and precipitation significantly and nonlinearly drive reservoir water level fluctuations. This study successfully characterized the complex relationship between water level fluctuations and climatic variables using a quadratic function and performed an in-depth analysis of the Marginal Rate of Substitution (MRS) between temperature and precipitation. A key finding reveals that the MRS exhibits dynamic dependency, with its numerical values and trends depending on specific temperature and precipitation levels. A turning point in the MRS trend occurs when precipitation reaches 17 centimeters and the temperature is 13.5 °C, which is a critical point for reservoir managers to monitor. Against the backdrop of global climate change threatening water security, this study quantitatively uncovers the dynamic nonlinear coupling mechanisms between climatic factors and reservoir water level. The identified critical tipping points offer deeper insights into climate impacts on reservoir operations, carrying significant theoretical and practical implications for building resilient, sustainable water resource management systems and optimizing hydropower system operations.

Revealed preference theory provides axiomatic tools for assessing whether individuals make observable choices “as if” they are maximizing an underlying utility function. The theory evokes a tradeoff between goods whereby individuals improve themselves by trading one good for another good to obtain the best combination. Preferences revealed in these choices are modeled as curves of equal choice (indifference curves) and reflect an underlying process of optimization. These notions have far-reaching applications in consumer choice theory and impact the welfare of human and animal populations. However, they lack the empirical implementation in animals that would be required to establish a common biological basis. In a design using basic features of revealed preference theory, we measured in rhesus monkeys the frequency of repeated choices between bundles of two liquids. For various liquids, the animals’ choices were compatible with the notion of giving up a quantity of one good to gain one unit of another good while maintaining choice indifference, thereby implementing the concept of marginal rate of substitution. The indifference maps consisted of nonoverlapping, linear, convex, and occasionally concave curves with typically negative, but also sometimes positive, slopes depending on bundle composition. Out-of-sample predictions using homothetic polynomials validated the indifference curves. The animals’ preferences were internally consistent in satisfying transitivity. Change of option set size demonstrated choice optimality and satisfied the Weak Axiom of Revealed Preference (WARP). These data are consistent with a version of revealed preference theory in which preferences are stochastic; the monkeys behaved “as if” they had well-structured preferences and maximized utility.

The paper studies how asset prices are determined in a decentralized market with asymmetric information about asset values. We consider an economy in which a large number of agents trade two assets in bilateral meetings. A fraction of the agents has private information about the asset values. We show that, over time, uninformed agents can elicit information from their trading partners by making small offers. This form of experimentation allows the uninformed agents to acquire information as long as there are potential gains from trade in the economy. As a consequence, the economy converges to a Pareto efficient allocation.

Macroeconomics is the study of the economy as a whole and of work and saving choices of individual economic agents from which macroeconomic activity emerges. This book takes an integrative approach to that topic, showing how short-run and long-run forces operate simultaneously to determine the behavior of key economic indicators such as employment and real, inflation-adjusted GDP.

Biased technological progress is the act of energy conservation and emission reduction by changing the marginal rate of substitution. In this study, we introduced renewable energy into a production function, and proposed a method of identifying biased characteristics of technological progress, based on marginal productivity theory. A panel dataset for the Asia–Pacific Economic Cooperation (APEC) economies from 2000 to 2017 was analyzed to explore the effect of biased technological progress in reducing particulate matter (PM 2.5 ). We found that input biased technological progress tended to use more non-renewable energy. Input biased technological progress aggravated haze pollution; however, this effect decreased as the PM 2.5 concentration increased. Output biased technological progress significantly reduced haze pollution in high-income economies, but increased it in low-income economies. The effect of neutral technological progress on haze pollution was the opposite of the effect from output biased technological progress. We also found that increasing renewable energy consumption and reducing energy intensity were separate effective paths for input and output biased technological progress, respectively, to mitigate haze pollution. For neutral technological progress, improving total factor productivity was an important way to mitigate haze pollution. Finally, several policy recommendations are proposed to mitigate haze pollution in APEC economies.

If asset returns have systematic skewness, expected returns should include rewards for accepting this risk. We formalize this intuition with an asset pricing model that incorporates conditional skewness. Our results show that conditional skewness helps explain the cross-sectional variation of expected returns across assets and is significant even when factors based on size and book-to-market are included. Systematic skewness is economically important and commands a risk premium, on average, of 3.60 percent per year. Our results suggest that the momentum effect is related to systematic skewness. The low expected return momentum portfolios have higher skewness than high expected return portfolios.

Given the choice of waiting for an adverse outcome or getting it over with quickly, many people choose the latter. Theoretical models of decision-making have assumed that this occurs because there is a cost to waiting--i.e., dread. Using functional magnetic resonance imaging, we measured the neural responses to waiting for a cutaneous electric shock. Some individuals dreaded the outcome so much that, when given a choice, they preferred to receive more voltage rather than wait. Even when no decision was required, these extreme dreaders were distinguishable from those who dreaded mildly by the rate of increase of neural activity in the posterior elements of the cortical pain matrix. This suggests that dread derives, in part, from the attention devoted to the expected physical response and not simply from fear or anxiety. Although these differences were observed during a passive waiting procedure, they correlated with individual behavior in a subsequent choice paradigm, providing evidence for a neurobiological link between the experienced disutility of dread and subsequent decisions about unpleasant outcomes.

Many studies on individual decision making have shown that a disproportionate number of respondents choose the status quo (SQ) alternative. But it is still unclear what motivates individuals to disproportionately select the SQ alternative. Using data from two choice experiments about forest biodiversity, we find evidence that a protest attitude, an attitude toward the good, and perceived choice task complexity influence the choice of the SQ. However, only the attitude toward the good in question and the protest attitude show significant effects across all econometric specifications. (JEL Q51, Q57)

The author blends historical narrative with a topical approach and discusses such aspects of the theory as measurement, total value, and imputation. Originally published in 1965. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

Nowhere has the divide between advocates and critics of globalization been more striking than in debates over free trade and the environment. And yet the literature on the subject is high on rhetoric and low on results. This book is the first to systematically investigate the subject using both economic theory and empirical analysis. Brian Copeland and Scott Taylor establish a powerful theoretical framework for examining the impact of international trade on local pollution levels, and use it to offer a uniquely integrated treatment of the links between economic growth, liberalized trade, and the environment. The results will surprise many. The authors set out the two leading theories linking international trade to environmental outcomes, develop the empirical implications, and examine their validity using data on measured sulfur dioxide concentrations from over 100 cities worldwide during the period from 1971 to 1986. The empirical results are provocative. For an average country in the sample, free trade is good for the environment. There is little evidence that developing countries will specialize in pollution-intensive products with further trade. In fact, the results suggest just the opposite: free trade will shift pollution-intensive goods production from poor countries with lax regulation to rich countries with tight regulation, thereby lowering world pollution. The results also suggest that pollution declines amid economic growth fueled by economy-wide technological progress but rises when growth is fueled by capital accumulation alone. Lucidly argued and authoritatively written, this book will provide students and researchers of international trade and environmental economics a more reliable way of thinking about this contentious issue, and the methodological tools with which to do so.