About

Larry Karp is a Distinguished Professor in the Department of Agricultural and Resource Economics at the University of California, Berkeley. His research focuses on using dynamic models to study optimal policy choices, such as pollution taxes and cap-and-trade systems. He employs hyperbolic discounting and overlapping generations models to analyze situations where environmental protection, including climate policy, provides benefits to currently living people in the future and to those not yet born. His educational background includes a Ph.D. in Agricultural Economics from the University of California, Davis, and a B.A. in Economics from the University of California at Berkeley. His research interests encompass international trade, the design of international environmental agreements, international investment agreements, trade liberalization and environment, instrument selection for pollution control, and alternative discounting models.

Research topics

• Computer Science
• Microeconomics
• Economics
• Political Science
• Econometrics
• Medicine
• Internal medicine
• Psychology
• Positive economics
• Mathematical economics
• Public economics
• Neoclassical economics
• Law
• Mathematical optimization
• Social psychology
• Virology
• Statistics
• Mathematics

Selected publications

• The Gains from International Carbon Trade and the Ranking of Suboptimal Climate Policies

  SSRN Electronic Journal · 2025-01-01

  preprintOpen access1st authorCorresponding
  PublisherDOI

• On the timing of moves in two-player games

  Journal of Economic Theory · 2025-11-08

  articleOpen access1st authorCorresponding
  PublisherDOI

• Taxes versus quantities reassessed

  Journal of Environmental Economics and Management · 2024-02-29 · 5 citations

  article1st authorCorresponding
  PublisherDOI

• Smart Cap

  Journal of the European Economic Association · 2024-05-07 · 7 citations

  article1st authorCorresponding

  Abstract Policymakers ‘imperfect knowledge about firms’ abatement costs leads to inefficient regulation, reducing the welfare gains from carbon markets around the world. We introduce a “smart” cap and trade system that eliminates these costs. This cap responds endogenously to technology or macroeconomic shocks, relying on the market price of certificates to aggregate information. It allows policy makers to modify existing institutions to achieve more efficient emissions reductions. The paper also shows that the slow diffusion of technology innovations typically makes the optimal carbon price a much steeper function of emissions than suggested by the Social Cost of Carbon.

  PublisherDOI

• Selfish Incentives for Climate Policy: Empower the Young!

  Journal of the Association of Environmental and Resource Economists · 2023-11-14 · 4 citations

  article1st authorCorresponding

  Reduced carbon emissions can improve the climate, raising young people’s future income and altering old people’s wealth via changes in asset prices. We show that a small level of abatement changes the old and young generations’ welfare in the same direction if and only if their elasticities of intertemporal substitution exceed one. Endogenous asset prices can change the sign and magnitude of the generations’ selfish incentives to undertake climate policy. Our quantitative model shows that the young generation’s concern for future consumption significantly reduces the equilibrium carbon trajectory, but the endogeneity of asset prices has a small effect.

  PublisherDOI

• Estimating a mixed strategy : United and American Airlines

  eScholarship (California Digital Library) · 2023-01-01 · 3 citations

  articleOpen access

  We develop a generalized maximum entropy estimator that can estimate pure and mixed strategies subject to restrictions from game theory. This method avoids distributional assumptions and is consistent and efficient. We demonstrate this method by estimating the mixed strategies of duopolistic airlines.

  PublisherDOI

• The Value of Information in a Congested Fishery

  World Bank, Washington, DC eBooks · 2023-08-15

  bookOpen access

  Congestion can reduce the value of a fishery, resulting in a lower total catch for the same amount of labor, fuel, and equipment expended in fishing activities. Absent the congestion externality, better information about the location and size of fish stocks enables fishers to make more efficient decisions. However, more precise information can cause fishers to converge on the same location or increase fishing at the same time. The cost of the resulting increased congestion can outweigh the direct benefit of better information. This paper identifies the circumstances where an increase in the precision of public and/or private information (about stock size or location) lowers industry profits. Using high-resolution data from Peru’s anchoveta fishery, the world’s largest by catch volume, the research reveals that despite considerable congestion, more precise private information would increase expected profits. On the other hand, the profit impact of more precise public information is positive but significantly smaller. This difference reflects the fact that public information increases congestion to a much greater extent, compared to private information. The policy implications are that improving private information about fish stocks—for example through firms investing in forecasting and decision-making technology—could increase industry profits. But anchoveta fishers would not necessarily benefit from more precise public information. As fishery managers control the accessibility and disclosure of information, decisions to make private information public, such as publishing near real-time catch data, could potentially lower fisher profits.

  PublisherDOI

• Taxes Versus Quantities Reassessed

  SSRN Electronic Journal · 2023-01-01 · 1 citations

  preprintOpen access1st authorCorresponding
  PublisherDOI

• Remote Sensing Technologies: Implications for Agricultural and Resource Economics

  Natural resource management and policy · 2022-01-01 · 4 citations

  book-chapterCorresponding
  PublisherDOI

• The value of information in a congested fishery

  SSRN Electronic Journal · 2022-01-01

  articleOpen access
  PublisherDOI

Frequent coauthors

• Jeffrey M. Perloff

  55 shared

• Amos Golan

  American University

  27 shared

• Carol McAusland

  University of British Columbia

  24 shared

• Emma Aisbett

  Australian National University

  24 shared

• Sandeep Sacheti

  24 shared

• Thierry Paul

  22 shared

• Jiangfeng Zhang

  Clemson University

  21 shared

• Konstantine Gatsios

  16 shared